Strategic Human Resource Management in a Changing Environment

Chapter

McGraw-Hill/Irwin

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

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Human Resource Management

Products
job

and services of HRM for personnel

restructuring

organizational

designing personnel planning recruiting hiring evaluating training developing promoting compensating terminating

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High-Performance Work Systems (HPWS)

Characteristics
evaluate

of HPWS

large numbers of highly qualified applicants for each strategic

position use validated selection and promotion models/procedures implement extensive cross training and development of new employees use formal performance appraisal and management use multi-source (360 degree) performance appraisal and feedback link merit increases to formal appraisal processes above-market compensation for key positions high percentage of entire workforce included in incentive system high difference in pay between high and low performers high percentage of workforce working in self-managed, project-based work teams low percentage of employees covered by union contract high percentage of jobs filled from within

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Sustained Competitive Advantage

Keys

to sustained competitive advantage

building

and sustaining core competencies within the organization maintaining flexibility react quickly to the changing global marketplace and the advances in technology

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Discrepancies Between Academic Research Findings and HRM Practice

Academic Research Findings
RECRUITMENT Quantitative analysis of recruitment sources using yield ratios can facilitate efficiencies in recruitment STAFFING Realistic job previews can reduce turnover. Weighted application blanks reduce turnover. Structured, behavioral, or situational interviews are more valid. Use actuarial model of prediction with multiple measures. Graphology is invalid and should not be used. PERFORMANCE APPRAISAL Do not use traits on rating forms. Train raters (for accuracy, observation bias). Make appraisal process important element of managers job.

HRM Practice

Less than 10% calculate yield ratios. Less than 25% know how.

Less than 20% of companies us RJPs in high-turnover jobs. Less than 30% know what WAB is; less than 1% use WABs. 45% of companies use structured interviews Less than 5% use actuarial model. Use is on the increase in the United States.

More than 70% still use traits. Less than 30% train raters. Less than 35% of managers are evaluated on performance appraisal.

COMPENSATION Merit-based systems should not be tied into a base salary. Gainsharing is an effective PFP system

More than 75% tie merit pay into base. Less than 5 % of companies use it where they could.

Source: H. J. Bernardin. A Survey of Human Resource Practices, Working Paper, 2005

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Major Domains of HRM

Four

major domains of HRM

acquiring

human resource capability developing human resource capability rewarding and compensating human resources managing human resources and enhancing productivity and quality of worklife

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Major Activities of HR Management

Organizational
human

Design

resource planning job analysis job design information systems

Staffing
recruiting/interviewing/hiring affirmative

action promotion/transfer/separation outplacement services induction/orientation employee selection methods

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Major Activities of HR Management

Employee

Training and Organizational Development

management/supervisory

development career planning/development employee assistance/counseling programs attitude surveys training delivery options diversity programs
Performance

Management and Appraisal

management

appraisal/management by objectives productivity/enhancement programs customer-focused performance appraisal multi-rater systems

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Major Activities of HR Management

Reward
safety

Systems, Benefits, and Compliance

programs/OSHA compliance health/medical services complaint/disciplinary procedures compensation administration wage/salary administration insurance benefits administration unemployment compensation administration pension/profit-sharing plans labor relations/collective bargaining

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Major Trends Affecting HRM

Five

major trends enhancing the importance of human resource management.

increased

globalization of the economy technological changes, challenges, and opportunities need for flexible response to changing business environments increase in litigation related to HRM changing characteristics of the workforce

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Management by Measurement System

Management

by measurement systemensuring all functional business units subscribe to guidelines for sound, strategic measurement
criteria

to measure performance (e.g., individual, team, unit) quantity, quality, timeliness, cost-effectiveness, effects on others productivity customer satisfaction absenteeism turnover/retention/tenure/intentions to stay/leave employee theft

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Management by Measurement System

criteria

to measure (continued) violence in the workplace job stress (e.g., role conflict, ambiguity) job satisfaction/motivation/attitudes/commitment creativity perceived fairness (procedural, interactional) error rates accidents, health-related variables (worker stress, injuries) organizational citizenship behavior

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The Workforce Scorecard

Huselid, Becker, and Beatty (2005) state that a workforce that can execute strategy is the most critical and underperforming asset in most organizations. three challenges organizations must take on to maximize workforce potential call for the development of a workforce scorecard to determine how well the workforce executes strategy outlines three challenges that face a successful workforce measurement and management system

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Competitive Advantage
Competitive

advantagethe ability of an organization to formulate strategies that place it at a favorable position relative to other companies in the industry
three

major principles determine the extent of a businesss competitive advantage

customer

value uniqueness

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Competitive Advantage & Customer Value

Customer

valuecustomers feel that they receive more value from their transaction with an organization than from its competitors
factors

in understanding the customers needs and expectations

particular

product or service tangible variablescorporate responsibility, environmental impacts, diversity policies, political issues, and affiliation with other products or services

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Competitive Advantage & Uniqueness

Uniquenessoffering
four

a product or service that your competitor cannot easily imitate or copy

mechanisms for offering uniqueness financial or economic capabilitya business receives special access to financial funding or is able to produce a good or service cheaper than someone else strategic or product capabilitya business needs to offer a product or service that differentiates it from other products or services technological or operational capabilitya business can have a distinct way of building or delivering its product or service organizational capabilitythe businesss ability to manage organizational systems and people in order to match customer and strategic needs