Unit 2.1
Starter activity
Learning Objectives
1. Innovation in HRM
How
innovation
influences
human
resource
practices and
strategies
HRM has been transformed in recent years by innovations in managing people. These
include: team working, regular appraisals, quality circles, information sharing,
empowerment, performance-related pay and job enrichment
The experience of many businesses is that HR managers can achieve:
Higher productivity
Higher labour retention
Attraction of high-quality employees
Greater contribution from employees to problem-solving at work and the generation
of new ideas.
Innovation through HRM
Innovative products and processes create competitive advantage. Many analysts now argue that
HRM can influence the success of strategy of innovation. The approaches to managing HR that
are most likely to lead to a culture of innovation include:
1.
2.
3.
4.
Organisational structure that allows for project teams to work together
Delegations to junior managers to give them the authority to show initiative and take
important decisions
Extensive and continuous training programmes
Regular appraisals to identify training needs and career plans
How does the consideration
of ethics impact human
resource management?
Discuss in your groups!
How ethical considerations influence
human resource practices and strategies
Human resource managers must ensure the company is operating within acceptable ethical and cultural
practices in each country in which it operates
Ethical considerations when operating away:
1. Lack of cultural awareness
Training and cultural classes help to educate employees about different customs and practices in other
countries.
2. Bribery
Most countries have laws that make bribes illegal in business transactions. However, these laws are weakly
applied in some countries.
HR managers must prepare employees travelling to countries with high bribery rate on how to properly
interact with clients, supplies and authorities
3. Pay
- The relative pay levels for each country.
- Multinationals often have offices in both developed and developing countries where the
salaries are quite different. For example, a german transferred to china might make 3 to 4
times as much as their chinese counterpart doing to the same job.
In these cases, human resource managers may face the ethical issue of whether to narrow the
gap in compensation by increasing pay of native workers in foreign locations.
How cultural differences influence human
resource practices and strategies
HRM strategies can be influenced in two main ways by cultural differences:
1. Culture of organisation
Hard HRM - an approach to managing staff that focuses on cutting costs, e.g. using
temporary and part-time employment contracts, offering maximum flexibility but with
minimum training costs.
Soft HRM – an approach to managing staff that focuses on developing staff so that they
reach self-fulfilment and are motivated to work hard and stay with the business.
2. National culture
Hr management practices may need to be adapted to suit national conditions and
culture. Different national cultures approach HR management in very different
ways.
There is certainly no one way of managing human resources and as globalisation
integrates the world's economies, developing sensitivity to how other cultures
operate in business is becoming essential, especially for multinational businesses.
Is hard HRM better than
soft HRM?
Limitations
Soft HRM
◈ Increased global competition makes low-cost
operations one of the main ways to stay
competitive – and labour costs can be cut by
employing labour on flexible contracts
◈ If workers compete for jobs and do not
have permanent job security then this
could encourage them to work harder and
be more productive
◈ Workers who are trained and developed fully
by an organisation can more easily gain
employment - perhaps at higher pay in other
companies
Hard HRM
◈ Increase recruitment and induction training costs in
the long-term as temporary workers have to be
frequently recruited.
◈ Demotivated workers with little job security might
be unproductive. This could reduce company
efficiency.
◈ Bad publicity regarding the treatment of
workers might lead to negative consumer and
pressure group actions
◈ It is not suitable to professional, qualified
employees, e.g.Accountants or research scientists,
as these workers must be retained and developed
to allow them to contribute fully to the
organisation