1. The Challenge of Human Resources Management
Human Resource Management Snell • Bohlander
Copyright © 2007 Thomson/South-Western. All rights reserved.

2. 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 © 2007 Thomson South-Western. All rights reserved.

3. 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 © 2007 Thomson South-Western. All rights reserved.

4. Why Study Human Resources Management
Human Resources Management (HRM)
The process of managing human resources (human capital and intellectual assets) to achieve an organization’s objectives.
“Why Study HRM?”
Staffing the organization, designing jobs and teams, developing skillful employees, identifying approaches for improving their performance, and rewarding employee successes—all typically labeled HRM issues—are as relevant to line managers as they are to managers in the HR department.
Copyright © 2007 Thomson South-Western. All rights reserved.

5. 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 © 2007 Thomson South-Western. All rights reserved.

6. Figure 1–1 Overall Framework for Human Resource Management
Copyright © 2007 Thomson South-Western. All rights reserved.

7. Competitive Challenges and Human Resources Management
The most pressing competitive issues facing firms:
Going global
Embracing new technology
Managing change
Managing talent, or human capital
Responding to the market
Containing costs
Copyright © 2007 Thomson South-Western. All rights reserved.

8. Challenge 1: Going Global
Globalization
The trend toward opening up foreign markets to international trade and investment
Impact of globalization
“Anything, anywhere, anytime” markets
Partnerships with foreign firms
Lower trade and tariff barriers
NAFTA, EU, APEC trade agreements
WTO and GATT
Copyright © 2007 Thomson South-Western. All rights reserved.

9. Challenge 1: Going Global (cont’d)
Corporate Social Responsibility
The responsibility of the firm to act in the best interests of the people and communities affected by its activities
Impact on HRM
Different geographies, cultures, laws, and business practices
Issues:
Identifying capable managers and workers
Developing foreign culture and work practice training programs.
Adjusting compensation plans for overseas work
Copyright © 2007 Thomson South-Western. All rights reserved.

10. Challenge 2: Embracing New Technology
Knowledge Workers
Workers whose responsibilities extend beyond the physical execution of work to include planning, decision making, and problem solving.
Knowledge-Based Training
Online instruction
“Just-in-time” learning via the Internet on company intranets
Copyright © 2007 Thomson South-Western. All rights reserved.

11. Influence of Technology in HRM
Human Resources Information System (HRIS)
A computerized system that provides current and accurate data for the 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, increased productivity and response times.
Copyright © 2007 Thomson South-Western. All rights reserved.

12. Highlights in HRM 2 Most Common HR Information Systems Applications
Payroll 76.7%
Benefits administration 57.1
Benefits enrollment 41.4
Recruiting—applicant tracking 39.1
Personnel administration 39.1
Training and development 31.6
Employee self-service 24.8
Manager self-service 18.0
Other 3.8
Source: “How HR Managers Use Technology Applications to Control HR Department Costs,” Human Resource Department Management Report, no. 4–5 (May 2004).
Copyright © 2007 Thomson South-Western. All rights reserved.

13. HRM IT Investment Factors
Fit of the application to the firm’s employee base.
Ability to upgrade Increased efficiency and time savings
Compatibility with current systems
Availability of technical support
Time required to implement and train staff members to use HRIS
Initial and annual maintenance costs
Training time required for HR and payroll
Copyright © 2007 Thomson South-Western. All rights reserved.

14. Challenge 3: 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
Managing Change through HR
Formal change management programs help to keep employees focused on the success of the business.
Copyright © 2007 Thomson South-Western. All rights reserved.

15. Challenge 3: Managing Change (cont’d)
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 © 2007 Thomson South-Western. All rights reserved.

16. Challenge 4: Managing Talent, or 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 © 2007 Thomson South-Western. All rights reserved.

17. Challenge 5: 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 © 2007 Thomson South-Western. All rights reserved.

18. Challenge 5: Responding to the Market (cont’d)
Reengineering and HRM
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 © 2007 Thomson South-Western. All rights reserved.

19. Challenge 6: Containing Costs
Downsizing
The planned elimination of jobs (“head count”).
Layoffs
Outsourcing
Contracting outside the organization to have work done that formerly was done by internal employees.
Offshoring
The business practice of sending jobs to other countries.
Copyright © 2007 Thomson South-Western. All rights reserved.

20. Figure 1–2. Estimated Number and Types of U. S
Figure 1–2 Estimated Number and Types of U.S. Jobs Moving Offshore by 2015
Source: Near-Term Growth of Offshoring Accelerating, Forester Research, Inc., May 2004.
Copyright © 2007 Thomson South-Western. All rights reserved.

21. Challenge 6: Containing Costs (cont’d)
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 © 2007 Thomson South-Western. All rights reserved.

22. Challenge 6: 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 © 2007 Thomson South-Western. All rights reserved.

23. Challenge 6: 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 © 2007 Thomson South-Western. All rights reserved.

24. Figure 1–3 U.S. Productivity/Output per Worker
Source: Derived from U.S. Department of Commerce data
Copyright © 2007 Thomson South-Western. All rights reserved.

25. Figure 1–4 Productivity Enhancements
Copyright © 2007 Thomson South-Western. All rights reserved.

26. Highlights in HRM 4
Copyright © 2007 Thomson South-Western. All rights reserved.

27. Figure 1–5 Growth of the U.S. Minority Population
Source: U.S. Census Bureau
Copyright © 2007 Thomson South-Western. All rights reserved.

28. Figure 1–6 Labor Force and Gender Distributions
LABOR FORCE PARTICIPATION RATE BY SEX, PROJECTED 1950–2012 Continuing a historical trend, the labor force participation rate for men will decline as the rate for women increases.
LABOR FORCE GROWTH BY SEX, PROJECTED 2002–2012
The number of women in the labor force is expected to grow at a higher rate than that for men.
Source: U.S. Department of Labor
Copyright © 2007 Thomson South-Western. All rights reserved.

29. Figure 1–7 Education Pays
Source: U.S. Department of Labor
Copyright © 2007 Thomson South-Western. All rights reserved.

30. Figure 1–8 Model of Diversity Management Strategy
Source: Reprinted by permission of Elsevier from “Managing for Effective Workforce Diversity” by Kathleen Iverson from The Cornell Hotel and Restaurant Administration Quarterly 41, no. 2 (April 2000): 31–38.
Copyright © 2007 Thomson South-Western. All rights reserved.

31. Highlights in HRM 5
Source: Survey data from Gail Robinson and Kathleen Dechant, “Building a Business Case for Diversity,” Academy of Management Executive 11, no. 3 (August 1997): 21–31; permission conveyed through the Copyright Clearance Center, Inc.
Copyright © 2007 Thomson South-Western. All rights reserved.

32. Attitudes towards Work Balancing Work and Family
Cultural Changes
Employee Rights
Concern for Privacy
Attitudes towards Work
Balancing Work and Family
Cultural Changes
Copyright © 2007 Thomson South-Western. All rights reserved.

33. 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 © 2007 Thomson South-Western. All rights reserved.

34. Figure 1–9 Human Resource Competency Model
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) , Fax: (212)
Copyright © 2007 Thomson South-Western. All rights reserved.

35. Key Terms corporate social responsibility downsizing employee leasing
globalization
human capital
human resources information system (HRIS)
human resources management (HRM)
knowledge workers
managing diversity
offshoring
outsourcing
proactive change
reactive change
reengineering
Six Sigma
total quality management (TQM)
Copyright © 2007 Thomson South-Western. All rights reserved.