Chapter 1: Managing Employees for Competitive Advantage Gowan Lepak © 2020 Chicago Business Press. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 1 Learning Objectives After reading this chapter, you should be able to: 1. 2. 3. 4. 5. 6. 7. 8. Discuss the potential costs and benefits associated with managing employees. Explain what it means to manage employees strategically. Identify and explain the three primary human resource (HR) activities. Discuss the management practices associated with each primary HR activity. Explain the importance of HR activities alignment. Discuss how organizational demands influence the management of employees. Describe how the external environment influences the management of employees. Understand the importance of regulatory issues in establishing HR practices. 2 Gowan Lepak © 2020 Chicago Business Press. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part Gowan Lepak © 2020 Chicago Business Press. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 3 Gowan Lepak © 2020 Chicago Business Press. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 4 Primary HR Activities: Work Design and Workforce Planning Focus: Design jobs in a way that ensures that employees perform tasks and responsibilities that have the most potential to add value to the company Ensure the right people are in the right place in the company, at the right time, to meet company goals Common HR Practices: Job Design Workforce Planning Gowan Lepak © 2020 Chicago Business Press. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 5 Job Design • Deciding what employees will do on a day-today basis and how jobs are interconnected • No one design fits all situations • Efficiency versus Motivation • Questions to consider: − − − − What tasks to emphasize? How simple or complex are these tasks? How many tasks can employees perform? How much flexibility do you provide? Gowan Lepak © 2020 Chicago Business Press. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 6 Workforce Planning • Maintaining the necessary number of employees is constant and challenging • How to allocate employees – through promotions, demotions, and transfers • Strategic changes (e.g. reorganization of operation, new product/service) influence labor demands throughout a company • Hire full-time, outsource, or independent contractor/gig workers Gowan Lepak © 2020 Chicago Business Press. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 7 Workforce Planning (continued) • Important decisions include: − − − − How to address a labor shortage or a labor surplus Overtime vs. Hiring additional full-time staff Outsourcing vs. Hiring new employees How to minimize negative effects of downsizing • Challenge is to understand when different options are likely to be most effective for each company’s unique situation Gowan Lepak © 2020 Chicago Business Press. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 8 Primary HR Activities: Managing Employee Competencies Focus: Ensure employees have the necessary competencies -- knowledge, skills, abilities, and other talents -- to effectively perform their tasks and responsibilities Common HR Practices: Recruitment Selection Learning & Development Gowan Lepak © 2020 Chicago Business Press. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 9 Recruitment • Process of generating a qualified pool of potential employees or encouraging current employees to pursue other positions within the company • Where and how companies recruit influences the type and quality of candidates Gowan Lepak © 2020 Chicago Business Press. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 10 Recruitment (continued) • Key issues to address in a recruitment strategy: − For what competencies do you recruit? − What groups do you target? − Do you recruit internally, externally, or both? − How do you offer an employee value proposition that will attract the right applicants? Gowan Lepak © 2020 Chicago Business Press. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 11 Selection • Choosing the best person from the recruited pool • Assessing employee competencies required for a particular job • Key issues include: • How do you generate the information you need for hiring decision? • Which test is most effective? • What questions should be asked during an interview? • What makes the ultimate hiring decision? Gowan Lepak © 2020 Chicago Business Press. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 12 Learning and Development • Ensuring new and current employees know the ins and outs of the organization and have the necessary skills • Includes activities to develop individuals for future positions • Important decisions: − Which employees need training? − How do you design an effective training program? − Which training methods are most effective? − How do you know if your training efforts have been successful? Gowan Lepak © 2020 Chicago Business Press. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 13 Primary HR Activities: Managing Employee Attitudes and Behaviors Focus: Encouraging the right employee attitudes and behaviors Motivating workers to continually improve their performance Common HR Practices: Performance Management Compensation & Incentives Benefits Gowan Lepak © 2020 Chicago Business Press. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 14 Performance Management • Evaluating attitudes and behaviors managers expect of their employees • Feedback and employee development • Clear communication of performance criteria • Critical issues are: − What is the best way to measure employee performance? − How should you communicate the information? − How can managers give employees developmental feedback? − How should you manage poor performers? Gowan Lepak © 2020 Chicago Business Press. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 15 Compensation & Incentives • Base pay, rewards, and incentive system • Type and size of an incentive indicates how a firm values different particular performance dimensions • Key questions are: − What determines the salary range for a job? − How much should employees should be paid? − How much of that pay should be guaranteed and how much should be based on incentives? − What types of incentives should be used to encourage the employee attitude and behaviors that firms want? Gowan Lepak © 2020 Chicago Business Press. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 16 Employee Benefits, Health, and Wellness • Employee benefits, health and wellness programs serve as a recruitment and retention tool and may help ensure the health and well-being of a company’s workforce • Some critical issues when considering employee benefits, health, and wellness are: − Which benefit programs are most appropriate for your workforce? − What are the legal requirements regarding benefit programs? − How can you ensure the safety of your employees? Gowan Lepak © 2020 Chicago Business Press. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 17 HR Alignment Activities • Internal Alignment — practices within each HR activity are consistent with each other • External Alignment — practices work in concert with one another as well as with external challenges companies face Gowan Lepak © 2020 Chicago Business Press. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 18 19 Gowan Lepak © 2020 Chicago Business Press. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part Gowan Lepak © 2020 Chicago Business Press. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 20 Business Strategy A set of integrated and coordinated commitments and actions intended to achieve stated business goals. Strategy answers the questions: • • • • What is our business? Who is the customer? What is the value to the customer? What should (or can) our business be? Gowan Lepak © 2020 Chicago Business Press. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 21 Company Characteristics • • • • Size Resources available Company life cycle stage Company success Gowan Lepak © 2020 Chicago Business Press. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 22 Company Culture • The unique pattern of shared assumptions, values, and norms that shape the socialization activities, language, symbols, and ceremonies of people in the organization • Assumptions, values, and norms that form the base of a culture can only be inferred from a culture’s more visible elements—its socialization activities, language, symbols, and ceremonies Gowan Lepak © 2020 Chicago Business Press. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 23 Employee Concerns Some issues: • Single parents; caring for aging parents • Dual career; balancing demands of work and personal lives • Attractiveness of flexible scheduling, family-friendly benefits and telecommuting Some Topics of Interest • Work/Life Balance • Justice/Fairness • Engagement/Commitment Gowan Lepak © 2020 Chicago Business Press. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 24 25 Gowan Lepak © 2020 Chicago Business Press. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part Labor Force Trends • Diversity in race, gender and age • Number of women expected to grow 5.4% from 2012 to 2022 • Fastest-growing group: Hispanics and Asians • Aging of the workforce - Size of group 55 and older increasing dramatically • Occupational trends Gowan Lepak © 2020 Chicago Business Press. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 26 Technology • Factories and Mass Production • Upskilling versus Deskilling – Sometimes - Requires many employees to possess basic computer proficiency – Sometimes – eliminates jobs • Challenges privacy issues and potential misuse by employees • Reach – Broadens access to labor market – Enables virtual workforce Gowan Lepak © 2020 Chicago Business Press. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 27 Globalization • Blurs country boundaries in business activities • Enables international joint ventures and partnerships • Challenges companies with differences in values and beliefs • Encourages offshoring—sending work once performed domestically to other countries for lower costs Gowan Lepak © 2020 Chicago Business Press. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 28 Ethics and Social Responsibility • Companies and their management being held accountable for ethical behavior • Corporate policies and procedures spell out ethical behavior • Social Responsibility takes ethics to a new level Gowan Lepak © 2020 Chicago Business Press. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 29 Regulatory Issues Some Examples: • Federal, state, and local legislation as well as executive orders • Employment and the rights of individuals • Title VII of the Civil Rights Act of 1964 • Americans with Disabilities Act of 1990 • OSHA • Civil Rights Act of 1992 Gowan Lepak © 2020 Chicago Business Press. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part 30 31 Gowan Lepak © 2020 Chicago Business Press. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part
