Copyright © 2004 South-Western. All rights reserved.

Objectives After studying this chapter, you should be able to: Identify how firms gain sustainable competitive advantage through people. Explain how globalization is influencing human resources management. Describe the impact of information technology on managing people. Identify the importance of change management. State HR’s role in developing intellectual capital. Differentiate how TQM and reengineering influence HR systems. Copyright © 2004 South-Western. All rights reserved.

Objectives (cont’d) After studying this chapter, you should be able to: Discuss the impact of cost pressures on HR policies. Discuss the primary demographic and employee concerns pertaining to HRM. Provide examples of the roles and competencies of today’s HR managers. Copyright © 2004 South-Western. All rights reserved.

Competitive Advantage through People Core Competencies Integrated knowledge sets within an organization that distinguish it from its competitors and deliver value to customers. Sustained competitive advantage through people is achieved if these human resources: Have value. Are rare and unavailable to competitors. Are difficult to imitate. Are organized for synergy. Copyright © 2004 South-Western. All rights reserved.

Overall Framework for Human Resource Management COMPETITIVE CHALLENGES Globalization Technology Managing change Human capital Responsiveness Cost containment HUMAN RESOURCES Planning Recruitment Staffing Job design Training/development Appraisal Communications Compensation Benefits Labor relations EMPLOYEE CONCERNS Background diversity Age distribution Gender issues Educational levels Employee rights Privacy issues Work attitudes Family concerns Copyright © 2004 South-Western. All rights reserved. Presentation Slide 1–1 Figure 1.1

Competitive Challenges and Human Resources Management The most pressing competitive issues facing firms: Going global Embracing technology Managing change Developing human capital Responding to the market Containing costs Copyright © 2004 South-Western. All rights reserved.

Going Global Globalization Impact of Globalization The trend toward opening up foreign markets to international trade and investment. Impact of Globalization Partnerships with foreign firms “Anything, anywhere, anytime” markets Lower trade and tariff barriers NAFTA, EU, APEC trade agreements WTO and GATT Copyright © 2004 South-Western. All rights reserved.

Going Global (cont’d) Impact on HRM Different geographies, cultures, laws, and business practices Issues: Identifying capable expatriate managers. Developing foreign culture and work practice training programs. Adjusting compensation plans for overseas work. Copyright © 2004 South-Western. All rights reserved.

Embracing New Technology Knowledge Workers Workers whose responsibilities extend beyond the physical execution of work to include planning, decision making, and problem solving. The Spread of E-commerce The Rise of Virtual Workers Copyright © 2004 South-Western. All rights reserved.

Influence of Technology in HRM Human Resources Information System (HRIS) Computerized system that provides current and accurate data for purposes of control and decision making. Benefits: Store and retrieve of large quantities of data. Combine and reconfigure data to create new information. Institutionalization of organizational knowledge. Easier communications. Lower administrative costs, increase productivity and response times. Copyright © 2004 South-Western. All rights reserved.

Major Uses For HR Information Systems Source: HR and Technology Survey, Deloitte & Touche and Lawson Software, 1998. Copyright © 2004 South-Western. All rights reserved. HRM 1

Transformational Impact Impact of IT on HRM Operational Impact Relational Impact HRM Transformational Impact Copyright © 2004 South-Western. All rights reserved.

A Guide To Internet Sites American Management Association (http://www.amanet.org/start.htm) AMA membership, programs, training, etc. Society for Human Resource Management (http://www.shrm.org) Current events, information, connections, articles. HR Professional’s Gateway to the Internet (http://www.hrisolutions.com/index2.html) Links to HR-related web pages. Training and Development Homepage (http://www.tcm.com/trdev/) Job mart, training links, T&D electronic mailing list links. Copyright © 2004 South-Western. All rights reserved. HRM 2

A Guide To Internet Sites (cont’d) FedWorld (http://www.fedworld.gov) A gateway to many government web sites. U.S. Department of Labor (http://www.dol.gov) Job bank, labor statistics, press releases, grants, contract information. Occupational Safety and Health Resources (http://osh.net) OSHA-related sites, government pages, resources, etc. AFL-CIO (http://www.aflcio.org/home.htm) Union news, issue papers, press releases, links to labor sites. Copyright © 2004 South-Western. All rights reserved. HRM 2

HRM IT Investment Factors Initial costs and annual maintenance costs Fit of software packages to the employee base Ability to upgrade Increased efficiency and time savings Compatibility with current systems User-friendliness Availability of technical support Needs for customizing Time required to implement Training time required for HR and payroll Copyright © 2004 South-Western. All rights reserved.

Managing Change Types of Change Reactive change Change that occurs after external forces have already affected performance Proactive change Change initiated to take advantage of targeted opportunities Formal change management programs help to keep employees focused on the success of the business. Copyright © 2004 South-Western. All rights reserved.

Managing Change Why Change Efforts Fail: Not establishing a sense of urgency. Not creating a powerful coalition to guide the effort. Lacking leaders who have a vision. Lacking leaders who communicate the vision. Not removing obstacles to the new vision. Not systematically planning for and creating short-term “wins.” Declaring victory too soon. Not anchoring changes in the corporate culture. Copyright © 2004 South-Western. All rights reserved.

Developing Human Capital The knowledge, skills, and capabilities of individuals that have economic value to an organization. Valuable because capital: Is based on company-specific skills. Is gained through long-term experience. Can be expanded through development. Copyright © 2004 South-Western. All rights reserved.

Responding to the Market Total Quality Management (TQM) A set of principles and practices whose core ideas include understanding customer needs, doing things right the first time, and striving for continuous improvement. Six Sigma A process used to translate customer needs into a set of optimal tasks that are performed in concert with one another. Copyright © 2004 South-Western. All rights reserved.

Responding to the Market Reengineering Fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in cost, quality, service, and speed. Requires that managers create an environment for change. Depends on effective leadership and communication processes. Requires that administrative systems be reviewed and modified. Copyright © 2004 South-Western. All rights reserved.

Containing Costs Downsizing Outsourcing Employee Leasing The planned elimination of jobs (“head count”). Outsourcing Contracting outside the organization to have work done that formerly was done by internal employees. Employee Leasing The process of dismissing employees who are then hired by a leasing company (which handles all HR-related activities) and contracting with that company to lease back the employees. Copyright © 2004 South-Western. All rights reserved.

Downsizing and Upsizing Percent of companies reporting that they: Source: Gene Koretz, “Hire Math: Fire 3, Add 5,” Business Week Online (March 13, 2000). Copyright © 2004 South-Western. All rights reserved. *All annual readings are for 12 months ending at midyear. Categories are not mutually exclusive. Figure 1.2

Containing Costs (cont’d) Hidden Costs of Layoff Severance and rehiring costs Accrued vacation and sick day payouts Pension and benefit payoffs Potential lawsuits from aggrieved workers Loss of institutional memory and trust in management Lack of staffers when the economy rebounds Survivors who are risk-averse, paranoid, and political Copyright © 2004 South-Western. All rights reserved.

Containing Costs (cont’d) Benefits of a No-Layoff Policy A fiercely loyal,more productive workforce Higher customer satisfaction Readiness to snap back with the economy A recruiting edge Workers who aren’t afraid to innovate, knowing their jobs are safe. Copyright © 2004 South-Western. All rights reserved.

Productivity Enhancements ENVIRONMENT Empowerment Teams Leader support Culture Perf = f (A,M,E) MOTIVATION Job enrichment Promotions Coaching Feedback Rewards ABILITY Recruitment Selection Training Development Copyright © 2004 South-Western. All rights reserved. Presentation Slide 1–2 Figure 1.3

Social Issues and HRM Changing Demographics Shrinking pool of entry-level workers Productivity Individual differences Retirement benefits Social Security contributions Skills development Use of temporary employees Copyright © 2004 South-Western. All rights reserved. HRM 4

Social Issues and HRM (cont’d) Employer/Employee Concerns Job as an entitlement Right to work Whistle-blowing Employment at will AIDS Comparable worth Concern for privacy Mandated benefits Copyright © 2004 South-Western. All rights reserved. HRM 4

Social Issues and HRM (cont’d) Attitudes Toward Work and Family Day care Flextime Job sharing Alternative work schedules Elder care Job rotation Parental leave Telecommuting Copyright © 2004 South-Western. All rights reserved. HRM 4

Labor Force and Racial Distribution Source: “Labor Force,” Occupational Outlook Quarterly 45. no. 4 (Winter 2001/2002): 36–41. Copyright © 2004 South-Western. All rights reserved. Figure 1.4a

Labor Force Growth By Race And Hispanic Origin, Projected 2000–2010 Source: “Labor Force,” Occupational Outlook Quarterly 45. no. 4 (Winter 2001/2002): 36–41. Copyright © 2004 South-Western. All rights reserved. Figure 1.4b

Labor Force Share By Race And Hispanic Origin, 2000 And Projected 2010 Source: “Labor Force,” Occupational Outlook Quarterly 45. no. 4 (Winter 2001/2002): 36–41. Copyright © 2004 South-Western. All rights reserved. Figure 1.4c

Labor Force Participation Rate By Sex, 1950–2000 And Projected 2000–2010 Copyright © 2004 South-Western. All rights reserved. Figure 1.5a

Labor Force Growth By Sex, Projected 2000–2010 Copyright © 2004 South-Western. All rights reserved. Figure 1.5b

Labor Force Share By Sex, 1990, 2000, And Projected 2010 Copyright © 2004 South-Western. All rights reserved. Figure 1.5c

Education Pays Copyright © 2004 South-Western. All rights reserved. Source: U.S. Department of Labor. Figure 1.6

Model of Diversity Management Strategy Source: Kathleen Iverson, “Managing for Effective Workforce Diversity,” Cornell Hotel and Restaurant Administration Quarterly 41, no. 2 (April 2000): 31–38. Copyright © 2004 South-Western. All rights reserved. Figure 1.7

Why Diversity? The primary business reasons for diversity management include… Increased marketplace understanding (80%) Better utilization of talent (93%) Enhanced creativity (53%) Increased quality of team problem solving (40%) Breadth of understanding in leadership positions (60%) Source: Association of Executive Search Consultants (member survey). Used with permission of the Association of Executive Search Consultants, http://www.aesc.org. Presentation Slide 1–3 Copyright © 2004 South-Western. All rights reserved. HRM 5

Top Issues for Managers in Balancing Work and Home Executive recruiters say 75 percent of senior management candidates and 88 percent of middle managers raised concerns about balancing work and home. Top issues: Source: Association of Executive Search Consultants (member survey). Used with permission of the Association of Executive Search Consultants, http://www.aesc.org. Copyright © 2004 South-Western. All rights reserved. Figure 1.8

Qualities of Human Resources Managers Responsibilities Advice and counsel Service Policy formulation and implementation Employee advocacy Competencies Business mastery HR mastery Change mastery Personal credibility Copyright © 2004 South-Western. All rights reserved.

Human Resource Competency Model Business Mastery Business acumen Customer orientation External Relations Human Resource Competency Model HR Mastery Staffing Performance appraisal Rewards system Communication Organization design Change Mastery Interpersonal skills and influence Problem-solving skills Innovation and creativity Personal Credibility Trust Personal relationships Lived values Courage Source: Arthur Yeung, Wayne Brockbank, and Dave Ulrich, “Lower Cost, Higher Value: Human Resource Function in Transformation.” Reprinted with permission from Human Resource Planning, Vol. 17, No. 3 (1994). Copyright 1994 by The Human Resource Planning Society, 317 Madison Avenue, Suite 1509, New York, NY 10017, Phone: (212) 490-6387, Fax: (212) 682-6851. Presentation Slide 1–4 Copyright © 2004 South-Western. All rights reserved. Figure 1.9