Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall14-1 Human Resource Management Chapter Fourteen Creating High-Performing HR Systems

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall14-2 Axioms for Effectively Managing Employees No two companies are the same There is no one best way to manage employees Using the wrong practice, or using the right practice poorly, can cause more harm than good

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall14-3 High-Performing HR Systems External alignment—managers select HR activities that help company meet its organizational demands, cope with environmental factors and comply with regulatory issues Internal alignment—focuses on how well a firm’s employee management practices support one another

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall14-4 External Alignment Company’s strategy influences: How jobs are designed Workforce planning tactics Recruitment and selection practices Types of training and development Performance evaluation methods Decisions concerning compensation and benefits Safety and wellness plans

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall14-5 Other External Factors Labor force trends Diversity of the labor force Ethical and social responsibilities of the firm Laws and regulations

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall14-6 Internal Fit of HR Practices Each decision influences other choices companies make about managing employees Synergies occur when combined with other HR practices Powerful connections occur when practices support and reinforce each other

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall14-7 Managing the Employment Portfolio HR systems may target a variety of employee contributions like: Safety Customer service Productivity Creativity Quality

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall14-8 Strategic Value Employees contribute different things to their firms As the strategic value of an employee’s contributions decreases, the potential return from his/her contributions diminishes This is often when employers turn to external sources (outsourcing)

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall14-9 Uniqueness The extent to which contributions employees make are specialized or unique to a company and not readily available in the open market Employers more willing to invest in employees to realize those contributions Transactional relationships—economic relationships that focus on both parties meeting the terms of the agreement they have with each other Relational relationships—involve much greater commitment to the individual by the company and vice versa

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall14-10 The Employment Relationship Uniqueness of Employee Contributions and the Employment Relationship

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall14-11 Employment Portfolio Strategic value of certain positions influences the following types of HR systems: Commitment-based Productivity-based Compliance-based Collaborative-based

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall14-12 Core Employees Most likely to contribute directly to a firm’s core competencies based on their knowledge Companies invest in them for their long- term success Firms may invest extensively in developing their competencies and empower them

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall14-13 Job-Based Employees Do not contribute in a unique manner and are likely to be from the external labor market Managers use a productivity–based HR system that involves standardized jobs and people who can contribute in these jobs Focus is on efficiency and productivity improvements

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall14-14 Contract Workers External workers who perform tasks that are neither strategically valuable nor unique Use compliance-based HR systems focus on meeting preset rules, regulations, and/or procedures. They focus on short-term productivity and efficiency Compensation of these workers likely to be hourly wages

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall14-15 Alliance Partners Individuals who make unique contributions of limited value in terms of strategy Managers use a collaborative-based HR system and turn to external labor on a long- term basis Example of this type of employee is a consultant