Copyright © 2014 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin CHAPTER 2 TRENDS IN HUMAN RESOURCE MANAGEMENT FUNDAMENTALS OF HUMAN RESOURCE MANAGEMENT 5 TH EDITION BY R.A. NOE, J.R. HOLLENBECK, B. GERHART, AND P.M. WRIGHT

Copyright © 2014 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 2-2 NEED TO KNOW 1. Labor force composition trends and technological developments how they affect HRM. 2. Areas HRM can support the goals of creating a high- performance work system and expanding internationally. 3. Employee empowerment and its role. 4. Ways HR professionals can support organizational strategies for quality, growth, and efficiency. 5. How the nature of employment relationship is changing. 6. How the need for flexibility affects HRM.

2-3 The Labor Force  An organization’s workers  Its employees  People who have contracts to work at the organization  Internal labor force has been drawn from the external labor market. Individuals who are actively seeking employment. Number and kinds of people in external labor market determine kinds of human resources available to an organization. Internal Labor ForceExternal Labor Market

Copyright © 2014 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 2-4 Change in the Labor Force Aging WorkforceDiverse WorkforceSkill Deficiencies

Copyright © 2014 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 2-5 Generations Today’s workforce Generation Y Generation X or Millennials Silent Generation Baby boomers

Copyright © 2014 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 2-6 FIGURE 2.1: AGE DISTRIBUTION OF U.S LABOR FORCE, 2010 AND 2020

Copyright © 2014 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 2-7 HRM Implications of an Aging Workforce HR professionals spend much time on concerns related to retirement planning, retraining older workers, and motivating workers whose careers have reached a plateau. Organizations struggle to control rising costs of health care and other benefits. Managers will supervise employees much older than themselves. Organizations must find ways to attract, retain, and prepare youth labor force.

2-8 As more of the workforce reaches retirement age, some companies have set up mentoring programs between older and younger workers so that knowledge is not lost but passed on.

Copyright © 2014 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 2-9 Figure 2.2: Projected Racial/Ethnic Makeup of the U.S. Workforce, 2018

Copyright © 2014 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 2-10 Figure 2.3: HRM Practices That Support Diversity Management

2-11 Skill Deficiencies of the Workforce Employers are looking for skills:  mathematical  verbal  interpersonal  computer Gap between needed and available skills has decreased companies ability to compete. Sometimes lack the capacity to upgrade technology, reorganize work, and empower employees. Gap between needed and available skills has decreased companies ability to compete. Sometimes lack the capacity to upgrade technology, reorganize work, and empower employees.

Copyright © 2014 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 2-12 High-Performance Work Systems

Copyright © 2014 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 2-13 Table 2.2 HRM Applications for Social Networking

2-14 Top 10 Occupations for Job Growth

2-15 Knowledge Workers Employees whose contribution to the organization is specialized knowledge of: Customers Processes Profession Employees whose contribution to the organization is specialized knowledge of: Customers Processes Profession They are especially needed for jobs in: health services business services social services engineering management They are especially needed for jobs in: health services business services social services engineering management

Copyright © 2014 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 2-16 Test Your Knowledge Ensuring that knowledge workers will share information and store it so that it is easily retrieved by others is the concern of which of the following HR activities. A. Turnover B. Employee Empowerment C. Knowledge Management D. Employee Selection

2-17 Employee Empowerment  Giving employees responsibility and authority to make decisions regarding all aspects of product development or customer service. Full involvement in one’s work and commitment to one’s job and company. This is associated with: higher productivity better customer service lower employee turnover Full involvement in one’s work and commitment to one’s job and company. This is associated with: higher productivity better customer service lower employee turnover Employee Empowerment Employee Engagement

2-18 Teamwork The assignment of work to groups of employees with various skills who interact to assemble a product or provide a service. Work teams often assume many of the activities traditionally reserved for managers: selecting new team members scheduling work coordinating work with customers and other units of the organization

Copyright © 2014 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 2-19 Test Your Knowledge Sharon is a very smart and conscientious worker. Lately, she has felt that her ideas were disregarded and she was denied autonomy in completing her work. This situation is probably caused by a lack of A. Employee Empowerment B. Knowledge Management C. Turnover D. Teamwork

Copyright © 2014 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 2-20 Figure 2.4: Strategic Business Issues Affecting HRM

Copyright © 2014 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 2-21 Total Quality Management (TQM) TQM is a companywide effort to continuously improve the ways people, machines, and systems accomplish work. TQM approach provides guidelines for all the organization’s activities, including HRM.

Copyright © 2014 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 2-22 TQM Core Values Methods and processes are designed to meet the needs of internal and external customers. Every employee receives training in quality. Quality is designed into a product or service so that errors are prevented from occurring. Organization promotes cooperation with vendors, suppliers, and customers to improve quality and hold down costs. Managers measure progress with feedback based on data.

Copyright © 2014 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 2-23 Figure 2.5: Number of Employees Laid Off During the Past Decade

Copyright © 2014 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 2-24 Mergers and Acquisitions HRM should have a significant role in carrying out a merger or acquisition.  Dif ferences between businesses involved in the deal make conflict inevitable.  Training should include conflict resolution skills.  There is a need to sort out differences in the two companies’ practices regarding compensation, performance appraisal, and other HR systems. HRM should have a significant role in carrying out a merger or acquisition.  Dif ferences between businesses involved in the deal make conflict inevitable.  Training should include conflict resolution skills.  There is a need to sort out differences in the two companies’ practices regarding compensation, performance appraisal, and other HR systems.

Copyright © 2014 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 2-25 Reengineering  A complete review of the organization’s major work processes to make them more efficient and able to deliver higher quality, including HRM.  Reengineering affects HRM in two ways:  How HR accomplishes its goals may change.  Change requires HR to help design and implement change so that alll employees will be committed to the reengineered organization’s success.

Copyright © 2014 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 2-26 Outsourcing Outsourcing – the practice of having another company (a vendor, third-party provider, or consultant) provide services. Outsourcing gives the company access to in-depth expertise and is often more economical as well. HR helps with a transition to outsourcing. Outsourcing – the practice of having another company (a vendor, third-party provider, or consultant) provide services. Outsourcing gives the company access to in-depth expertise and is often more economical as well. HR helps with a transition to outsourcing.

2-27 Expanding into Global Markets Moving operations from the country where a company is headquartered to a country where pay rates are lower but the necessary skills are available. Hiring at home may may involve selection of employees from other countries. Immigration. Hiring at home may may involve selection of employees from other countries. Immigration. Offshoring International Labor Pool

2-28 Figure 2.6: Where Immigrants to U.S. Came from in 2010

Copyright © 2014 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 2-29 HR Information System (HRIS) A computer system used to acquire, store, manipulate, analyze, retrieve, and distribute information related to an organization’s human resources. HRIS can: support strategic decision making help the organization avoid lawsuits provide data for evaluating programs or policies support day-to-day HR decisions

Copyright © 2014 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 2-30 Table 2.1: New Technologies Influencing HRM Internet Portal Shared Service Centers Cloud computing, such as application service providers Business Intelligence Data mining

Copyright © 2014 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 2-31 Electronic Human Resource Management (e-HRM) e-HRM: processing and transmission of digitized HR information especially using computer networking and Internet. e-HRM has potential to change all traditional HRM functions. Self-Service: System in which employees have online access to information about HR issues and go online to enroll themselves in programs and provide feedback through surveys

Copyright © 2014 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 2-32 CHANGE IN THE EMPLOYMENT RELATIONSHIP  The employment relationship takes the form of a “psychological contract” that describes what employees and employers expect from the employment relationship.  In the traditional version, organizations expected employees to contribute time, effort, skills, abilities, and loyalty in exchange for job security and opportunities for promotion.

Copyright © 2014 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 2-33 CHANGE IN EMPLOYMENT RELATIONSHIP A New Psychological Contract Flexibility Flexible Staffing Levels Flexible Work Schedules

Copyright © 2014 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 2-34 Nature of the Employment Relationship is Changing Organizations are requiring top performance and longer work hours but cannot provide job security. Instead, employees are looking for: – flexible work schedules – comfortable working conditions – greater autonomy – opportunities for training and development – performance-related financial incentives This requires planning for flexible staffing levels.

Copyright © 2014 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 2-35 Flexibility: A Family-Friendly Work Arrangement

Copyright © 2014 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 2-36 Ned for Flexibility Affects HRM  Organizations seek flexibility in staffing levels through alternatives to traditional employment relationship: outsourcing, temporary, and contract workers flexible work schedules – including shortened work weeks allowing employees to adjust work hours to meet personal and family needs moving employees to different jobs to meet changes in demand

Copyright © 2014 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 2-37 Summary An organization’s internal labor force comes from its external labor market U.S. labor market is aging and becoming more racially and ethnically diverse. Organizations must recruit from a diverse population, establish bias-free HR systems, and help employees understand and appreciate cultural differences. HRM can help organizations find and keep the best possible fit between their social system and technical system. An organization’s internal labor force comes from its external labor market U.S. labor market is aging and becoming more racially and ethnically diverse. Organizations must recruit from a diverse population, establish bias-free HR systems, and help employees understand and appreciate cultural differences. HRM can help organizations find and keep the best possible fit between their social system and technical system.

Copyright © 2014 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 2-38 Summary (continued) Job design and appropriate systems for assessment and rewards have a central role in supporting employee empowerment and teamwork. Employee empowerment means giving employees responsibility and authority to make decisions regarding all aspects of product development or customer service. HRM must design jobs to give employees latitude for decision-making and interpersonal skills. Job design and appropriate systems for assessment and rewards have a central role in supporting employee empowerment and teamwork. Employee empowerment means giving employees responsibility and authority to make decisions regarding all aspects of product development or customer service. HRM must design jobs to give employees latitude for decision-making and interpersonal skills.

Copyright © 2014 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 2-39 Summary (continued) HR professionals should be familiar with the organization’s strategy and may even play a role in developing the strategy. Specific HR practices vary according to type of strategy. Organizations with international operations hire employees in foreign countries where they operate, so they need knowledge of differences in culture and business practices. HR professionals should be familiar with the organization’s strategy and may even play a role in developing the strategy. Specific HR practices vary according to type of strategy. Organizations with international operations hire employees in foreign countries where they operate, so they need knowledge of differences in culture and business practices.