CHAPTER 2:
CHALLENGES IN
STRATEGIC HUMAN
RESOURCE
MANAGEMENT
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Major Factors Affecting HRM
Technological
Advancement
Demographics
and Diversity
Strategic
HRM
Globalization
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1–2
Exhibit 2-1
Issues for Integrating New Technologies
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1–3
Exhibit 2-2
Impact of Technology on Organizations
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1–4
Technology Challenges for HRM
• Telecommuting
• Employee surveillance & monitoring
• e-HR
• Ethical behavior
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1–5
Telecommuting
• Dramatic growth in
number of Americans
working from home
– 3.4 million in 1990
– 19.6 million by beginning of
2000
• Issues affecting success of
telecommuting programs
– Clear performance
measurement system is key
– Deciding which employees
will be offered participation
– Equipment expense
– Some managers
uncomfortable having direct
reports away from office
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1–6
Employee Surveillance and Monitoring
• More than 80% of large employers utilize
monitoring technology, e.g.,
–
–
–
–
–
Internet usage
E-mails
Computer files
Voice-mail
Telephone usage
• Under Electronic Communications Privacy Act
(ECPA), employees have only limited privacy
rights
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1–7
E-HR
• Opportunity to deliver transactional types
of services online:
–
–
–
–
–
–
Payroll
Employee benefits
Scheduling
Recruiting
Training
Career development
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1–8
Ethical Behavior
• Majority of jobs are
considered to be “atwill”
• Movement toward
greater protection for
employees in regard to
off-duty behavior
• Ownership of work
• Fairness of
noncompete clauses
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• Sarbanes-Oxley Act of
2002:
– Seeks to eliminate
deception in accounting
& management practices
by increasing
government oversight
– Holds senior executives
more directly responsible
for violations
– Protects “whistleblowers”
1–9
Workforce Demographic Changes:
“Graying” of Workforce
• Negative aspects of
older workers
– Perceived resistance to
change by older workers
– Increased health-care
costs for senior workers
– Blocking advancement
opportunities for younger
workers
– Higher wage and salary
costs for senior workers
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• Positive aspects of
older workers
– As productive or more
productive than younger
workers
– Have more
organizational loyalty
than younger workers
– Possess broader
industry knowledge and
professional networks
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Workforce Demographic Changes
• Baby Boomers (1945–1962)
– Currently in excess supply in middle management
ranks
– HR challenge is to manage “plateaued” workers
• Baby Busters (1963–mid-1970s)
– Are often career bottlenecked by Boomers
– Many have skills in high demand; are doing and will
do well
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1–11
Workforce Demographic Changes
• Generation “X”ers (late 1970s–early 1980s)
– Have life-long exposure to technology and constant change
– Seek self-control, independence, personal growth, creativity
– Not focused on job security or long-term employment
• Generation “Y”: “Baby Boom Echo” (after 1979)
–
–
–
–
–
High comfort level with technology
Global and tolerant outlook on life
Highly entrepreneurial
Shorter attention span
Opting for more transient and variable project work
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1–12
Workforce Demographic Changes
• Sexual orientation
– More than 200 Fortune 500 employers offer full benefits for
domestic partners
– Sexual orientation issues can impact bottom line
• Disabilities
– 54 million Americans with disabilities
– Often not included in diversity initiatives
– Many supervisors do not understand needs of employees
with disabilities
– Stereotypes
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1–13
New Employee/Workplace Dynamics
• Emphasis on management of professionals
– Establishment of separate career tracks
• Technical/Professional, Managerial /Administrative
– Use of project teams
• Less employee loyalty, more loyal to self
– Staying with employers for shorter periods;
demanding more meaningful work and involvement
in organizational decisions
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1–14
New Employee/Workplace Dynamics
• Increased personal and family dynamic
effects
– More single-parent families, dual-career couples, &
domestic partners
• Increased nontraditional work relationships
– Part-time, consulting, and temporary employment
flexibility
– Outsourcing and entrepreneurial opportunities
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1–15
Ethnicity
• In 2005:
• By 2025:
– Ethnic minority
share of workforce
roughly 28%
– African-Americans will
represent 14% of population
• Up from 22% in
1990 and 18% in
1980
– Hispanics will represent 17%
of population
• By 2050:
– Close to 50% of US
population will be
non-Caucasian
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• Up from 12% in 1994
• Up from 10% in 1994
– Asians & Pacific Islanders
will represent 8% of
population
• More than double from
1994
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Managing Workplace Diversity
• Understanding and
appreciating diversity
– Critical to effectively
marketing to ethnic and
minority groups
– Promoted by having diverse
workforce at all levels
– Helps ensure hiring and
promotion decisions are
unbiased by personal
differences
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• Diversity management
programs or initiatives
– Must be integrated with
organization’s mission and
objectives
– Help key decision makers
identify diversity’s benefits to
organization
– Make critical decisions about
implementing optimal
program/initiative contingent
on organization and its
people, mission and culture.
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Exhibit 2-6
Individual Dimensions of Diversity
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1–18
Strategic Management of Diversity
• Determine why diversity is important
• Articulate how diversity relates to mission and strategic
objectives
• Define diversity and determine how inclusive its efforts
will be
• Make a decision as to whether special efforts should be
extended to attract diverse workforce
• Assess how existing employees, customers, and other
constituencies feel about diversity
• Determine specific types of diversity initiatives that will
be undertaken
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1–19
Reading 2.1 (Kirkman et al.)
Five Challenges to Virtual Team Success
• Virtual teams:
– Groups of people who work interdependently with shared
purpose across space, time, and organization boundaries,
using technology to communicate and collaborate
• Types of virtual teams
– Global virtual teams
– Teams assigned to accomplish specific projects
– Cross-functional teams
• Challenge: Recognize obstacles confronting teams
that are both cross-functional and virtual
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1–20
Reading 2.1
Five Challenges to Virtual Team Success
• Building trust within virtual teams
• Maximizing process gains and minimizing process
losses on virtual teams
• Overcoming feelings of isolation and detachment
associated with virtual teamwork
• Balancing technical and interpersonal skills
among virtual team members
• Assessment and recognition of virtual team
performance
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1–21
Reading 2.2 (Starkman)
Impact of the Sarbanes-Oxley Act
• New whistleblower protections
– No public company may discriminate against an
employee because of any lawful act
– Retaliation against employee because of any lawful
act done to assist a proceeding relating to alleged
violation is prohibited
– If DOL determines that violation has occurred,
employer may be ordered to reinstate employee and
provide compensatory damages
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1–22
Reading 2.2
Impact of the Sarbanes-Oxley Act
• The Act dramatically affects officer compensation
programs
– Executive bonuses subject to forfeiture under Act
– Personal loans to executives are regulated by Act
– SEC can remove or temporarily freeze payments to
executives and directors
– Public accounting firms are precluded from auditing
company if highly placed executive was employed by
auditing firm and participated in company’s prior year’s audit
– Attorneys have new rules of professional responsibility
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1–23
Reading 2.2
Impact of the Sarbanes-Oxley Act
• The Act requires new employment policies and
procedures
– Procedures for receiving and handling complaints of
corporate fraud have to be established
– Compensation program bonus policies and stock option
plans have to take account of new forfeiture provisions
– Hiring and recruitment strategies and background checks
will have to be revamped to avoid hiring executives whose
employment is precluded by the Act
– Training required to properly implement all of the Act’s
mandates
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1–24
Reading 2.3 (J. Schramm)
Employee Satisfaction
• Potential impact of
demographic changes
– Aging population increases
emphasis on health care
benefits, retirement planning,
and job security
– Women are attaining higher
proportion of professional
qualifications
– Future skills shortages may
cause industrialized countries
to compete for skilled
immigrant labor
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• Industrial base shifting to
service and health care
sectors
• Wider political and
economic trends affecting
job satisfaction
– Health care costs
– Job security
– Pensions
1–25
Reading 2.3
Employee Satisfaction
• Two groups of issues:
– Those depending on financial position of company
• Benefits
• Wages
• Job security
– Those less costly to implement through changing
practices, processes, and culture
•
•
•
•
Communication with management
Work/life balance
Employee’s relationship with immediate supervisor
Career development
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