How is the HRM Function Changing?

Time devoted to administrative tasks - decreasing & roles as a strategic business partner, change agent, & employee advocate - increasing Focus shifting from current operations to strategies for the future & preparing non-HR managers to develop & implement HR practices, HR managers face two important challenges:

Self-service refers to giving employees online access to information about HR issues Outsourcing refers to the practice of having another company provide services

The HR department has a responsibility to be a proactive, integral component of management & the strategic planning process

HRMs Place in Management

HRM must:

ascertain specific organizational needs for the use of its competence

evaluate the use & satisfaction among other depts

educate mgt & employees about the availability & use of HRM services

Competitive Challenges Influencing HRM

3 competitive

challenges that Cos now face will increase the importance of HRM practices:

The Challenge of Sustainability The Technology Challenge

The Global Challenge

The Global Challenge

Cos - to survive must compete in intnl markets as well as fend off foreign corporations attempts to gain ground Offshoring - exporting jobs from developed countries to less developed countries Many Cos entering intnl markets - exporting products overseas, building manufacturing facilities in other countries, entering into alliances with foreign companies, & engaging in ecommerce

The Technology Challenge

Advances in technology have: resulted in high-performance models of work systems,

changed skill requirements, increased working partnerships, led to changes in Co. structure & reporting relationships,

increased the availability of HRIS, used to acquire, store, manipulate, analyze, retrieve, & distribute HR information,
increased the availability of e-HRM.

The Sustainability Challenge

Sustainability - ability of a Co. to survive & succeed in a dynamic competitive envt. It includes the ability to: deal with economic & social changes,

engage in responsible & ethical business practices,

provide high quality products & services, & put in place methods to determine if the Co. is meeting stakeholders needs

Changing Demographics Diversity of the Workforce

Internal labor force is the labor force of current employees. External labor market includes persons actively seeking employment. The workforce is becoming increasingly diverse Women Minorities Disabled workers Immigrants

Managing a Diverse Workforce

Managers - a new set of skills, including: Communicating effectively with employees from a wide variety of cultural backgrounds. Coaching & developing employees of different ages, ednl backgrounds, ethnicity, physical ability, & race. Providing performance feedback that is based on objective outcomes. Creating a work envt that makes it comfortable for employees of all backgrounds to be creative & innovative.

HRS STRATEGIC CHALLENGES

The central challenge facing HR is to provide a set of services that make sense in terms of the companys strategy.

A strategy is the companys plan for how it will balance its internal strengths & weaknesses with external opportunities & threats in order to maintain a competitive advantage

Relationship Between Strategy, Objectives, Policies, & Rules:

Strategy The plan that integrates major objectives More specific Objectives Goals that are specific & measurable More specific Policies Guides to decision making More specific Procedures/Rules Specific directions for decision making

STRATEGIC CHOICES
What business should we be in?
Corporate objectives, strategic plans, vision, & values

How do we win (gain competitive advantage) in those businesses?

How should HR help us win?

Business unit strategies

HR strategies

Employee attitudes & behaviours

Competitive advantage

Generic Business-level Strategies

Innovator Cost Cutter Customer Focused

TAILOR THE HR SYSTEM TO THE STRATEGY

Strategy Business Response
Product Leadership Shift to Mass Customization & Innovation Cycle Time

HR Program Alignment
Committed to Agile, Risk Taking, Innovative People

Innovator: Increase Product Complexity & Shorten Product Life Cycle

Cost Cutter: Focus on Efficiency

Operational Excellence Pursue Cost-effective Solutions

Do More with Less

Customer Focused: Increase Customer Expectations

Customer Intimacy: Deliver Solutions to Customers

Delight Customer, Exceed Expectations

Strategic Importance of HRM

The increased strategic importance of HRM means that:

Human resource specialists must show that they contribute to the goals & mission of the firm

The actions, language, & performance of the HRM function must be:

Measured Precisely communicated Evaluated

Traditional HRM versus Strategic HRM

Traditional HRM

Strategic HRM

Responsibility for HRM Staff specialists

Focus Role of HR Initiative Time horizon Control Job design Key Investments Accountability Employee relations Transitional, change follower, and respondent Slow, reactive, fragmented Short term Bureaucratic-roles, policies, procedures Tight division of labour, independence, specialization Capital, products Cost center

Line managers
Partnerships with internal and external customers Transformational, change leader and initiator Fast, proactive, integrated Short, medium, long (as necessary) Organic-flexible, crosstraining, teams Broad flexible, crosstraining, teams People, knowledge Investment center

Source: Jeffrey A. Mello, Strategic Human Resource Management, Thomson, 2003, p.102.

The new strategic positioning of HRM means that accountability must be taken seriously

Key Strategic HRM Concepts

Analyzing & solving problems from a profitoriented point of view Assessing & interpreting costs or benefits of HRM issues Using planning models that include realistic, challenging, specific, & meaningful goals

Key Strategic HRM Concepts

Preparing reports on HRM solutions to problems encountered by the firm Training the human resources staff

Emphasizing the strategic importance of HRM Emphasizing the importance of contributing to the firms profits

The Balanced Scorecard

The balanced scorecard gives managers the opportunity to look at the Co. from the perspective of internal & external customers, employees & shareholders. It should be used to: Link HRM activities to the Cos business strategy. Evaluate the extent to which the HR function is helping the Co meet its strategic objectives. Measures of HR practices primarily relate to productivity, people, & processes.

The Balanced Scorecard

Customer

How do customers see us?

Time, quality, performance, service, cost.

Processes that influence customer satisfaction, availability of information on service &/or manufacturing processes. Improve operating efficiency, launch new products, continuous improvement, empowering of workforce, employee satisfaction. Profitability, growth, shareholder value.

Internal

What must we excel at?

Innovation & Learning

Can we continue to improve & create value? How do we look to shareholders?

Financial

Meeting Competitive Challenges Through HRM Practices

HRM

practices that help co.s deal with the 4 competitive challenges:

The HR envt. Acquiring & preparing human resources Assessment & devt of human resources Compensating human resources