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© 2010 South-Western, a part of Cengage Learning
All rights reserved.
PowerPoint Presentation by Charlie Cook
The University of West Alabama
Chapter Objectives
After studying this chapter, you should be able to
Identify how firms gain a 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.
Describe HR’s role in developing intellectual
capital.
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
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Chapter Objectives (cont’d)
After studying this chapter, you should be able to
Explain how TQM, Six Sigma, and reengineering
affect HR systems.
Discuss how cost pressures affect HR policies.
Discuss the primary demographic and employee
concerns pertaining to HRM.
Provide examples of the roles and competencies
of today’s HR managers.
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
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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.
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
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FIGURE
1.1
Overall Framework for Human Resources Management
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Competitive Challenges and
Human Resources Management
• The most pressing competitive issues facing
firms:
 Competing, recruiting, and staffing globally
 Embracing new technology
 Managing change
 Managing talent, or human capital
 Responding to the market
 Containing costs
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
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Challenge 1: Competing, Recruiting, and
Staffing Globally
• Globalization
 The trend toward opening up foreign markets to
international trade and investment
• Impact of Globalization
 “Anything, anytime, anywhere” markets
 Partnerships with foreign firms
 Lower trade and tariff barriers


NAFTA, EU, APEC trade agreements
WTO and GATT
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Challenge 1…(cont’d)
• Corporate Social Responsibility (CSR)
 The responsibility of the firm to act in the best
interests of the people and communities affected by
its activities
• Globalization’s 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
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
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A Guide to HR Internet Sites
HR professionals can access the following Web sites for current information related
to human resources.
Codes of Conduct
Asia-Pacific Economic Cooperation Forum Business Code of Conduct
(http://www.cauxroundtable.org/
APECForumBusinessCodeofConduct.html)
Caux Round Table Principles for Business (http://www.cauxroundtable.org/principles.html)
Fair Labor Association Workshop Code of Conduct (http://www.fairlabor.org)
Global Sullivan Principles (http://www.thegsp.org)
ILO Tripartite Declaration of Principles Concerning Multinational Enterprises and Social
Policy (http://www.ilo.org)
OECD Guidelines for Multinational Enterprises (www.oecd.org/daf/investment/guidelines)
OECD, Principles of Corporate Governance (http://www.oecd.org)
Rules of Conduct on Extortion and Bribery in International Business Transactions
(International Chamber of Commerce, http://www.iccwbo.org)
United Nations Universal Declaration of Human Rights (http://www.un.org)
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A Guide to HR Internet Sites (cont’d)
General
AFL-CIO (http://www.aflcio.org/home.htm)—Union news, issue papers, press releases, links to
labor sites.
American Management Association (http://www.amanet.org/index.htm)—AMA membership,
programs, training, and so on.
FedWorld (http://www.fedworld.gov)—A gateway to many government Web sites.
HR Professional’s Gateway to the Internet (http://www.hrprosgateway.com)—Links to HR-related
Web pages.
Occupational Safety and Health Resources (http://www.osh.net)—OSHA-related sites,
government pages, resources, and so on.
Society for Human Resource Management (http://www.shrm.org)—Current events, information,
connections, and articles.
Telecommuting, Telework, and Alternative Officing (http://www.gilgordon.com)—Telecommuting
and flexible hours.
Training & Development Resource Center (http://www.thetrainingworld.com)—Job mart, training
links, and T&D electronic mailing list links.
U.S. Department of Labor (http://www.dol.gov)—Job bank, labor statistics, press releases, grants,
and contract information.
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
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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
 Virtual learning
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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:

Automation of routine tasks, lower administrative costs,
increased productivity and response times.

Self-service access to information and training for managers
and employees

Online recruiting, screening, and pretesting of applicants

Training, tracking, and selecting employees based on their
record of skills and abilities

Organization-wide alignment of “cascading” goals
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Automation of Talent Management Functions
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HRM IT Investment Factors
• Fit of the application to
the firm’s employee
base.
• Ability to upgrade
Increased efficiency and
time savings
• Compatibility with
• Time required to
implement and train staff
members to use HRIS
• Initial and annual
maintenance costs
• Training time required
for HR and payroll
current systems
• Availability of technical
support
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
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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.
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
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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.
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
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Challenge 4: Managing Talent, or Human Capital
• 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.
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
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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.

HR facilitates organizational development of Six Sigma.

HR helps balance the opposing needs for order and control
with the needs for growth and creativity.
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
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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.
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
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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 (Global Sourcing)
 The business practice of sending jobs to other
countries.
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
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Challenge 6: Containing Costs (cont’d)
• Hidden Costs of a 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
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
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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.
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
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FIGURE
1.2
Estimated Number and Types of U.S. Jobs Estimated to
Move Offshore between 2010 and 2015
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
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Challenge 6: Containing Costs (cont’d)
• Employee Leasing
 The process of dismissing employees who are then
hired by a leasing company (which handles all HRrelated activities) and contracting with that
company to lease back the employees.
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FIGURE
1.3
Productivity Enhancements
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Demographic and Employee Concerns
• Demographic Changes
 More diverse workforce

Ethnic and cultural challenges
 Aging workforce
 More educated workforce

Necessity of basic skills training
• Managing Diversity
 Being aware of characteristics
common to employees, while
also managing employees as
individuals
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3
Social Issues in HRM
Changing Demographics: The coming decades will bring a more diverse and aging workforce to
developed countries such as the United States. This has major implications for all aspects of HRM
because it alters traditional experience and expectations regarding the labor pool. Among the
issues in this area are:
• Globalization
• Diversity strategies
• Shrinking pool of skilled entry-level workers • Social Security and retirement issues
• Rising health care costs for employees
• Continual skills development and retraining
• Outsourcing, offshoring, and the use of temporary and part-time employees
Employer/Employee Rights: This area reflects the shift toward organizations and individuals
attempting to define rights, obligations, and responsibilities. Among the issues here are:
• Relationship employment versus transactional-based employment
• Concern for the privacy of employees
• Whistle-blowing
• Employer-employee ethics
• Legal compliance
• Comparable worth
• Mandated benefits
Attitudes toward Work and Family: Because of the increase of working women as well as
employee mobility and a growing concern about family issues, there is demand for recognizing
and supporting family-related concerns. Among the issues are:
• Day care and elder care
• Alternative work schedules
• Parental leave
• Job sharing
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• Flextime
• Job rotation
• Telecommuting
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FIGURE
1.4
Composition of U.S. Population
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FIGURE
1.5
Labor Force and Gender Distributions
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FIGURE
1.6
Education Pays
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FIGURE
1.7
Model of Diversity Management Strategy
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4
Why Diversity?
The primary business reasons for diversity management include . . .
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Impact of Cultural Changes
Employee
Rights
Concern for
Privacy
Jobs and
Organizations
Balancing Work
and Family
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Attitudes
towards Work
1–33
Qualities of HR Managers
• Responsibilities
1. Advice and counsel
2. Service
3. Policy formulation
and implementation
4. Employee advocacy
• Competencies
1. Business mastery
2. HR mastery
3. Change mastery
4. Personal credibility
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
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FIGURE
1.8
Human Resource Competency Model
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5
SHRM Code of Ethical and Professional Standards
in Human Resource Management
Society for Human Resource Management
CODE PROVISIONS
Professional Responsibility
Core Principle
As HR professionals, we are responsible for adding value to the organizations we serve and
contributing to the ethical success of those organizations. We accept professional responsibility
for our individual decisions and actions. We are also advocates for the profession by engaging in
activities that enhance its credibility and value.
Intent
• To build respect, credibility and strategic importance for the HR profession within our
organizations, the business community, and the communities in which we work.
• To assist the organizations we serve in achieving their objectives and goals.
• To inform and educate current and future practitioners, the organizations we serve, and the
general • public about principles and practices that help the profession.
• To positively influence workplace and recruitment practices.
• To encourage professional decision-making and responsibility.
• To encourage social responsibility.
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corporate social responsibility
managing diversity
downsizing
offshoring
employee leasing
outsourcing
globalization
proactive change
human capital
reactive change
human resources information
system (HRIS)
reengineering
human resources management
(HRM)
Six Sigma
total quality management
(TQM)
knowledge workers
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
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