Chapter 1 The Rewards and Challenges of Human Resource Management

Learning Outcomes Explain how human resources managers and other managers can have rewarding careers by helping their firms gain a sustainable competitive advantage through the strategic utilization of people Explain how good human resources practices can help a firm’s globalization, corporate-social responsibility, and sustainability efforts Describe how technology can improve how people perform and are managed

Learning Outcomes Explain the dual goals HR managers have in terms increasing productivity and controlling costs Discuss how firms can leverage employee differences to their strategic advantage and how educational and cultural changes in the workforce are affecting how human resources manager engage employees Provide examples of the roles and competencies of today’s HR managers and their relationship with other managers

Human Resource Management Process of managing human talent to achieve an organization’s objectives Employees and managers with better understanding of the firm’s business Help achieve its strategies through effective utilization of people and their talents

Human Capital and HRM Human capital: Knowledge, skills, and capabilities of individuals that have economic value to an organization Managers should develop strategies for: Identifying, recruiting and hiring the best available talent Developing employees in firm specific ways Helping employees generate new ideas and generalize them throughout the company Encouraging information sharing Rewarding collaboration and teamwork

Figure 1.1 - Overall Framework of Human Resource Management

Responding Strategically to Changes in the Marketplace Making adjustments to the labor force via: Downsizing: Planned elimination of jobs Outsourcing: Hiring outside the company to perform business processes previously done within the firm Offshoring: Sending jobs to other countries Adopting cost-cutting strategies Enhancing benefit programs Improving quality Expanding market shares and product lines

Responding Strategically to Changes in the Marketplace An organization that successfully engineers change: Links it to the business strategy Shows how it creates quantifiable benefits Engages key employees, customers, and suppliers early Makes an investment to implement and sustain it

Competing, Recruiting, and Staffing Globally Companies make it possible for consumers to buy anything, anytime, anywhere Engage in partnerships, mergers, and acquisitions Globalization is blurring national identities of products Lower trade barriers with free-trade agreements General Agreements on Tariff and Trade (GATT) paved the way for North American Free Trade Agreement (NAFTA) and the European Union GATT was replaced by the World Trade Organization (WTO)

Competing, Recruiting, and Staffing Globally Issues relating to different geographies affect HRM Different cultures, employment laws, and business practices Safety of employees and facilities abroad

Setting and Achieving Corporate Social Responsibility and Sustainability Goals Corporate social responsibility: Responsibility of firms to act in the best interests of the people and communities affected by its activities Sustainability: Ability to produce goods or services without damaging the environment and depleting the world’s resources Good reputation for pursuing such efforts can enhance company revenues and improve their ability to attract good talent

Technology Challenges Organizations are leveraging information explosion Collaborative software: Allows workers to interface and share information with one another electronically Shift from touch labor to knowledge workers Knowledge workers: Workers whose responsibilities extend beyond the physical execution of work to include planning, decision-making, and problem-solving Human resources information system (HRIS) Streamlines HR processes, makes information readily available to managers and employees, and enables HR departments to focus on the firm’s strategies

Productivity and Cost Challenges Productivity - Output gained from a fixed amount of inputs Can be increased by reducing inputs and adding more human and physical capital to the process Size of workforce should be managed to maximize productivity and contain costs Offshoring Outsourcing Nearshoring: Bringing jobs closer to domestic countries

Productivity and Cost Challenges Homeshoring: Outsourcing work to domestic workers who work out of their homes Furloughing: Practice of requiring employees to take time off for either no pay or reduced pay Hiring part-time employees Employee leasing: Dismissing employees who are then hired by a leasing company and contracting with that company to lease back the employees

Employee Challenges Workforce is increasing in diversity Organizations are doing more to address employee concerns and maximize benefits of different employees HR managers should be aware of the educational abilities of employees in the organization Shift of cultural dynamics in labor force are affecting: Employee rights and privacy concerns Attitudes towards work Employee engagement: Extent to which employees are enthused about their work and committed to it Efforts to balance work and family

Role of HR Managers and Their Partnership with Other Managers Responsibilities of HR managers Strategic advice and counsel Service Policy formulation and implementation Employee advocacy Successful organizations combine the experience of line managers with the expertise of HR managers To develop and utilize the talents of employees to their greatest potential Line managers: Non-HR managers who are responsible for overseeing the work of other employees

Figure 1.7 - Human Resource Competency Model