A Strategic Management Approach to HRM

McGraw-Hill/Irwin Human Resource Management, 10/e

© 2007 The McGraw-Hill Companies, Inc. All rights reserved.


 Taking

a strategic HRM approach means:  Making human resources management a top priority  Integrating HRM with the company’s strategy, mission, and goals  HRM can make significant contributions if included in the strategic planning process from the outset  The strategic management process helps determine:  What must be done to achieve priority objectives  How they will be achieved

selection. telecommuting. performance evaluation.1-4 Introduction  Many strategic plans use:  A three to five year timeline  Annual monitoring and modification  Good HR strategy results in a fit between organizational strategy and HRM policies and programs  Recruitment. outsourcing. compensation .

1-5 A Model to Organize HRM  ARDM means:  Acquiring  Rewarding  Developing  Maintaining and protecting goals of the ARDM model are:  Socially responsible and ethical practices  The .

skills.1-6 A Model to Organize HRM  The eventual success of any HRM activity is:  The organization's employees are the best qualified  They perform jobs that suit their needs. and abilities  Matching people and activities in order to accomplish goals is easier with a diagnostic approach .

1-7 Taking a Diagnostic Approach to HRM  The ARDM model has four specific steps:  Diagnosis  Prescription  Implementation  Evaluation  Managers typically diagnose a work situation by observing and identifying key factors  A prescription is then made to translate the diagnosis into action  Most human resource problems are too complex to have a single correct prescription .

1-8 Taking a Diagnostic Approach to HRM  Implementing a solution is the next step. it is likely to achieve:  Socially responsible. ethical behaviors  Competitive. high-quality products and services ARDM model calls for thorough. timely. followed by evaluation  Evaluation tells managers whether improvement in the ARDM process is needed  If an organization teaches its members to focus on ARDM plus the environment. and systematic review of each situation  The .

1-9 External Environmental Influences  HRM processes are influenced by both the internal and external environments  External influences include:  Government laws and regulations  Union procedures and requirements  Economic conditions  The labor force  HR planning must operate within:  Guidelines  Limits of available resources  Competencies .

1-10 External Environmental Influences  HRM is one important function among others:  Finance  Accounting  Research and development  Marketing  Production  The interaction of these internal programs sets the tone for the entire organizational system .

1-11 Government Law and Regulations  Government  Hiring regulations affect:  Promotion diversity  Downsizing  Discipline  Major areas of legislation and regulation include EEO and human rights legislation  These directly affect recruiting. evaluation. and promotion  Managing . selection.

1-12 Government Law and Regulations  EEO and human rights legislation indirectly affects:  Employment planning  Orientation  Career planning  Training  Employee development .

age. and disability  Compensation regulation  Benefits regulation  Workers' compensation and safety laws  Labor relations laws and regulations  Privacy laws .1-13 Government Law and Regulations  Other areas of legislation and regulation include:  Employment of illegal aliens  Discrimination based on sex.

the U. it administered more than 135  And that is just one government agency .1-14 Government Law and Regulations  Government regulation has increased substantially  In 1940. of Labor administered 18 regulatory programs  In 2004. Dept.S.

leading to slow decision making  Regulation leads to complicated legal maneuvering  Many regulations are out of date and serve little social purpose  There is regulatory overlap and contradiction among regulatory agencies .1-15 Government Law and Regulations  Government regulation impacts a manager’s job:  Regulation encourages simplistic thinking on complicated issues  Designing and administering regulations is complex.

including:  Working conditions  Wages and salaries  Fringe benefits  Employees’ rights  Grievance processes  Work hours  There are cooperative unions and combative unions .1-16 The Union A union directly affects most aspects of HRM.

professional football players. college professors.1-17 The Union  Unions were once concentrated in a few sectors of the economy  Today. secretaries. salespersons. and even physicians belong to unions . nurses. the fastest-growing sectors are the public sector and the third sector  It is no longer useful to think of unionized employees as blue-collar factory workers  Engineers. teachers.

1-18 Economic Conditions  Two economic factors affect HRM programs:  Productivity  The work sector of the organization is:  An important part of a nation's economic condition  Representative of an organization’s overall efficiency  The output of goods and services per unit of input (resources) used in a production process  Productivity .

1-19 Economic Conditions  Before productivity can be managed and improved. it must be measured  Isolate the outputs  Determine the costs that went into producing the output  Compare the current year's figures with those of the previous year  Productivity measures are crude and subject to short-term error. but over time can show a trend .

air pollution. and other forms of destruction must be carefully controlled .1-20 Economic Conditions  Suggested solutions for increasing productivity:  Reduce government controls  Develop more favorable income tax incentives  Reindustrialize the business-industrial complex  Reducing legislative controls can adversely affect the quality of life and society for decades to come  Toxic waste. radiation.

prescription. implementation.1-21 Economic Conditions  Managers can influence productivity through sound HRM programs  Diagnosis. and evaluation  Recruitment and selection  Motivational and compensation techniques  Training and development .

and reporters all exert outside pressure .1-22 The Work Sector of HRM  60 percent of HR specialists work in the private sector  30 percent work in the public sector. 10 percent work in the third sector  Private. special interest groups. the public.and third-sector HRM are structured similarly  HRM in the public sector is structurally different  A manager moving from the private or third sector to the public sector finds a more complicated job  Politicians.


 At

the macroeconomic level, competitiveness is:  The degree to which a nation can, under free and fair market conditions, produce goods and services that meet the test of international markets while simultaneously maintaining or expanding the real incomes of its citizens  If you substitute organization for nation, and employees for citizens, you have the definition of organizational competitiveness


 At

the organizational level, competitiveness is an important issue  How effectively do workers produce the product?  How good is the quality of the services or goods?  Can employees handle new technology and produce the product at lower costs?  Does the firm have the human resources needed to increase manufacturing to a global level?  Will the push to work harder and faster raise turnover, absenteeism, and the number of defects?




competitive advantage means having a superior marketplace position relative to competitors  A sustainable competitive advantage means dealing effectively with employees, customers, suppliers, and competitors  The way HRM activities are implemented and modified can provide competitive advantages

1-26 Competitiveness  Activities that can enhance and sustain competitive advantage:  Employment security  Selective recruiting  High wages  Incentive pay  Employee ownership  Information sharing  Participation and empowerment  Teams and job redesign .

1-27 Competitiveness  Activities that can enhance and sustain competitive advantage (continued):  Training as skill development  Cross-utilization and cross-training  Symbolic egalitarianism  Wage compression  Promotion from within  Long-term perspective  Measurement of practices  Overarching philosophy .

1-28 Competitiveness  Competitors can adopt and/or improve on successful HRM activities  A firm with fair and equitable treatment of human resources is less susceptible to losing its competitive advantage  A few HRM activities can be copied. but imitation of an entire culture and system of HRM is difficult .

over 146 million Americans were in the workforce  As .1-29 Composition & Diversity of Labor Force  The labor force of the United States comprises all people age 16 years or older who are:  Not in the military  Employed or actively seeking work of 2004.

about 47 percent of the full-time U.1-30 Women in the Workforce  In 2002. workforce consisted of women  This is a 235 percent increase since 1947  The number of married male employees has increased by only 30 percent  Women should have equal job opportunities  However.S. they still face workplace discrimination  There are signs that more women will have professional jobs .

is similar to that for women  Few Hispanics. African-Americans.S.1-31 Minorities in the Workforce  The situation for racial and ethnic minorities in the U. or Native Americans are found in high-status. long before the immigrants arrived . the most recent immigrant groups take the lowest-level jobs  Minorities were living in the U.S. high-paying jobs  Historically.

we lose some of our faculties  This is an ongoing process  The key is to match employees with jobs  As .1-32 Older Employees  The percent of older employees is growing  One of the toughest employment problems today is the older employee who loses a job through no personal fault  Higher insurance premiums for older employees make them more costly to employ we age.

older employees are just as effective as younger ones .1-33 Older Employees  Contrary to stereotypes:  Employees 45+ have no more accidents than younger ones  Until age 55. absenteeism rates are the same or lower  Employees under 35 have the worst accident rate  When total performance is considered.

engineers. systems software  Network and computer system administrators  Network systems and data communication analysts  Desktop publishers  Database administrators  Personal and home care aides  Computer systems analysts  Medical assistants .1-34 Employment Projection  The ten fastest-growing occupations:  Computer software. engineers. applicants  Computer support specialists  Computer software.

1-35 Geographic Location of the Organization  The location of the organization influences hiring practices and HRM activities  Rural versus urban  International versus local  Education  Behavior  Legal-political factors  Economics  Inter-cultural training .

1-36 Internal Environmental Influences  HRM programs are influenced by:  Strategy  Goals  Organizational culture  Nature of the task  Work groups  The leader’s style and experience .

1-37 Strategy A strategy:  Indicates what an organization's key executives hope to accomplish in the long run  Is concerned with competition and aligning the resources of the firm  Some companies believe long-term success is linked to helping employees achieve work-life balance .

high grievance rates) . performance decrements. HRM goals receive little attention  This results in effectiveness problems (absenteeism.1-38 Goals  Organizational goals differ within and among departments  Most departments have similar goals  Differences arise from the importance placed on the goals  In organizations where profits take precedence.

1-39 Goals  Diversity refers to any mixture of themes characterized by differences and similarities  Diversity in organizations is more than demographics  Dealing with workforce diversity means focusing on the collective picture of differences and similarities .

1-40 Goals  Wisconsin Power and Light uses a six-step approach to diversity training:  Form a diversity steering team  Create a diversity training team  Select a diversity training project manager  Complete a cultural audit  Design a training program  Implement and evaluate the training .

1-41 Organization Culture A firm's organizational culture is shown by:  The way it does business  How it treats customers and employees  The autonomy or freedom that exists in the departments or offices  The degree of loyalty expressed by employees .

1-42 Organization Culture  Organization culture represents the perceptions held by the employees  There is no one "best" culture for the development of human resources can:  Impact behavior. expectations  Provide a benchmark for standards of performance  Culture . productivity.

1-43 Nature of the Task HRM is the effective matching of the nature of the task (job) with the nature of the employee .

1-44 Nature of the Task  Job factors that attract or repel workers:  Degree of knowledge and ability to use information  Degree of empowerment  Degree of physical exertion  Degree of environmental unpleasantness  Physical location of work  Time dimension of work  Human interaction on the job  Degree of variety in the task  Task identity  Task differences and job design .

1-45 Work Group  An employee’s experiences are largely influenced by the work group  A group is two or more people who:  Consider themselves a group  Work interdependently to accomplish a purpose  Communicate and interact with one another on a continuous basis  In many cases. work next to each other .

1-46 Work Group  An effective group is one in which:  Members function and act as a team  Members participate fully in group discussion  Group goals are clearly developed  Resources are adequate to accomplish group goals  Members furnish suggestions leading to achievement of goals .

unless it conflicts with their own .1-47 Work Group  Most most effective work groups:  Are small (7 to 14 members)  Have stable membership  Have  Members: eye contact and work closely together  Have similar backgrounds  Depend on the group to satisfy their needs  Effective groups support management and the organization's goals.

1-48 Work Group  Changing the group's norms and behavior requires:  The manager's leadership  The manager's power to reward or discipline  The transfer of some group members groups are directly related to the success of HRM activities  If a group opposes HRM programs. it can ruin them  Consider permitting work-group participation in designing and implementing HRM  Work .

and motives of individuals  Facilitating interaction within work groups  Providing direction. personalities. encouragement. experiences.1-49 Leader’s Style and Experience  The experience and leadership style of the operating manager directly affects HRM activities  Orchestrating the skills. and authority to evoke desired behaviors  Reinforcing desirable behavior .

1-50 Strategic HRM: A Key to Success  Three levels of strategy apply to HRM activities:  Strategic (long term)  Managerial (medium term)  Operational (short term) HRM activities are:  Employee selection/placement  Rewards  Appraisal  Development  The .

1-51 Strategic HRM: A Key to Success  Strategic  Growth HRM planning leads to:  Profits  Survival  Planning also:  Expands awareness of possibilities  Identifies strengths and weaknesses  Reveals opportunities  Points to the need to evaluate the impact of internal and external forces .

resources. environment.1-52 Strategic HRM: A Key to Success  Organizational strategic plans permit HR to prepare for internal and external environment changes  Each organization should adopt a strategy that best fits its goals. and people  An organization must match its:  Strategic plan  Employees' characteristics  HRM activities .

1-53 Strategic HRM: A Key to Success  The days of viewing HRM as only a highly specialized and technical staff are over  HRM must be involved in all aspects of an organization's operation  It must make everyday contributions to the organization programs must be:  Comprehensive  Adapted to the organization's culture  Responsive to employee needs  HRM .

and creativity of every employee  Failure to do so will mean the firm cannot compete in a globally interconnected world .1-54 Strategic Challenges Facing HRM  Global competition has become intense  HRM professionals are now being asked to optimize the skills. talents.

1-55 Strategic Challenges Facing HRM  Technology trends:  Growth in knowledge needs  Shift in human competencies  Global market connection  Business streamlining  Rapid response  Quicker innovation  Quality improvement  Industrial revolution .

white males will no longer dominate the workforce  Women are entering the workforce in record numbers  The number of Hispanic. workforce is changing in dramatic ways:  There is a slower increase in the number of Caucasian workers than other groups  By 2006. and older workers will continue to rise .S. Asian.1-56 Building a Cooperative Workforce  The U.

age. ethical. and needs of the workforce have resulted in more concern about:  Child care  Elder care  Diversity understanding and training  Understanding diversity is an obvious need  Most firms are not yet "diversity-friendly”  The negative financial impact can be significant  There will be increased demand for fair. and prompt handling of diversity issues .1-57 Building a Cooperative Workforce  The changing look.

and reasoning skills  Strategic HR planning models must carefully weigh deficiencies and shortages in skills  The skills gap impacts more than HRM societies must face the consequences of not having the workforce needed to compete in a global economy  Whole . math.1-58 Caliber of the Workforce  Recruiting and developing skilled labor is important  A growing number of jobs require higher levels of education. language.

1-59 Restructuring and Downsizing  Facts about downsizing:  Half of all downsized firms end up with at least as many employees again within a few years  Downsizing in manufacturing is not new  It is positively correlated to foreign competition  It encourages firms to reduce their costs  Profits increase in the short-run. but not productivity  It leads to lower compensation/wages within the downsized firm .

1-60 Restructuring and Downsizing  Restructuring means changing the reporting and authority relationships within a firm  Downsizing is a reduction in a company's workforce  Downsizing has a human face and can result in stressrelated health problems  There is a growing sense that job security is a thing of the past .

1-61 Contingent Workers  Contingent workers include:  Temporaries  Part-timers  Contract or leased workers  Others who are hired to handle extra tasks or workloads  The number of contingent workers has increased steadily since the early 1970s .

1-62 Contingent Workers  Outsourcing means hiring another firm to do work  This includes HRM activities  The outsource firm provides the employees to complete the job  Professional employee organizations (PEOs) are growing in popularity because they can:  Save a firm money  Reduce its risks  Improve efficiency  Allow the company to focus on its core business .

1-63 People & the HRM Diagnostic Framework  Employees are the most important concern in the diagnostic model  Even the best HRM activities can backfire if adjustments for individual differences aren’t built in  People differ in their:  Abilities  Attitudes and preferences  Styles  Intellectual capacities  Ways of doing the job .

1-64 Abilities of Employees  Abilities or skills are classified as:  Mechanical  Motor coordination  Mental  Creative  Abilities that are the result of genetic factors can rarely be changed through training  Abilities such as interpersonal skills and leadership are more subject to change .

long-lasting way of thinking. and behaving toward an object.1-65 Employee Attitudes and Preferences  An attitude is:  A characteristic. or person in a positive or negative way . or group A preference means:  Evaluating an object. person. idea. idea. feeling.

interpersonal relations. and recreation .1-66 Employee Attitudes and Preferences  Work:  Allows for the expression of both aggressive and pleasure-seeking drives  Offers a way to channel energy  Provides income  Offers a justification for existence  Is a way to achieve self-esteem and self-worth  The amount of energy directed toward work is related to the amount directed to family.

channels.1-67 Motivation of Employees  Motivation is a set of attitudes that predisposes a person to act in a specific. goal-directed way  It is an inner state that energizes. and sustains human behavior to achieve goals  Work motivation channels a person's behavior toward work and away from recreation or other areas of life  The motivation to work changes as other life activities change .

hard working employees are usually motivated by incentive compensation systems  Those consciously motivated to do a better job benefit from performance evaluation techniques .1-68 Motivation of Employees  Managers who can determine the work motivations of employees will make better HRM decisions  Work-oriented.

 Genetic blue print it is unlikely that a single set of HRM activities or  Attitudes leadership approaches  Emotional reactivity will be equally successful  Abilities for all employees  Self-image  Intelligence  Visible behavior patterns .1-69 Personality of Employees  Personality is how a person thinks and behaves  It includes the person's:  Traits  Values Because each employee  Motives has a unique personality.

1-70 Personality of Employees  Behavioral scientists have found that:  The employee is both rational and intuitive  A person acts in response to internal inclinations. and environmental influences  Each person is unique and acts/thinks in a certain way because of:  Personality  Abilities  Attitudes  Motives . choices.

1-71 Desirable End Results  HRM must make decisions and solve problems in a socially responsible and ethically sound way  It must help the firm satisfy its customers and employees  It is a demanding job. but an exciting challenge .

1-72 Comments to Reflect On  Organizational effectiveness is critically influenced by HR management practices  Improvements in productivity. they must align with other management systems  It is hard to improve organizational performance without paying attention to HR management  The HR department must be a central player in a company's competitive efforts . and customer satisfaction typically depend on changes in multiple management systems  HR management systems drive behavior. quality.

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