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HRM - Lecture 2

This document provides an introduction to human resource management (HRM). It discusses what HRM is, how it has evolved from a traditional personnel function to focus on strategic management of people. It also summarizes approaches to revitalizing HR, including accounting for human resources and managing people for competitive advantage through high-performance work systems. External influences on HRM like the economy, legal issues, demographics, and technology are also outlined. The key HR functions of planning, staffing, training, rewards, and labor relations are listed.

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Lara Mae Gayeta
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75 views18 pages

HRM - Lecture 2

This document provides an introduction to human resource management (HRM). It discusses what HRM is, how it has evolved from a traditional personnel function to focus on strategic management of people. It also summarizes approaches to revitalizing HR, including accounting for human resources and managing people for competitive advantage through high-performance work systems. External influences on HRM like the economy, legal issues, demographics, and technology are also outlined. The key HR functions of planning, staffing, training, rewards, and labor relations are listed.

Uploaded by

Lara Mae Gayeta
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPT, PDF, TXT or read online on Scribd
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Introduction to Human

Resource Management

Lecture 2
Introduction to HRM
• What is HRM?
• Organization’s methods and procedures for
managing people to enhance skills and
motivation

• Activities to enhance the organization’s


ability to attract, select, retain and
motivate people
The Decline of HR ?
• Traditional “personnel” function
• Recordkeeping
• Perceived as a dumping ground
• The decline of HR?
• HR’s rebirth

Sources: Caudron (2003); Schuler (1990); Schuler & Walker (1990); Stewart (1996);
Sunoo & Laabs (1999); Ulrich (2000); Wells (2003)
Outsourcing HR
• Would it just make more sense to
outsource HR functions?
• Many organizations are doing just this
• Recordkeeping and administrative, perhaps
• Hiring
• Basic functions…..

Sources: Caudron (2003); Stewart & Woods (1996); Zimmerman (April 2001)
Approaches to Revitalizing HR

• Accounting for human resources


• Managing people for competitive
advantage
Accounting for Human Resources
• Costing approach:
• Cost accounting for employee outcomes
• Calculate cost of interventions and outcomes on individual
basis
• Tracking costs and contributions to firm net
profitability
• Human capital approach
• Employees are intangible assets, but can still be valued
• Based on assumed contribution of employees to corporate
earnings
Costing HR: Example
• The costs of turnover per individual:
• Exit interviews
• Unemployment tax Calculated
• Recruitment advertising per person,
• Staff time to interview applicants then
• Reference checking, medical exams totaled
• Training new employees
• Costs of reducing turnover
• Additional training
• Realistic job previews
• Net savings

Source: Cascio (1982)


Human Resources and
Competitive Advantage
• The basic idea: establishing and maintaining
competitive advantage through people.
• Competitive advantage:
• Valuable, rare, non substitutable
• Achieved not through strategy, but
strategy implementation

Source: Pfeffer (1994, 1998)


Traditional Sources of Competitive
Advantage…and Where They’ve Gone

• Product and process technology


• Technological innovations make innovation easier and faster
• Development and manufacturing technology freely available
• Protected and regulated markets
• Move to global economy
• Deregulation
• Access to financial resources
• Global capital market
• Venture capital
• Economies of scale
• Fragmented markets
• Less important with advances in technology
• So, what’s left…people
Competitive Advantage Through
People
• Viewing the work force as an asset, not an
expense
• The result:
• Harder work, from increased involvement and
commitment
• Smarter work, through enhanced skills and
competence
• Lower overhead, by pushing responsibility
downward
• High performance work systems
High-Performance Work Systems:
The Seven Practices
• Employment security
• Selective hiring
• Self managed teams and decentralized decision
making
• High compensation, based on organizational
performance
• Extensive training
• Reduced status distinctions
• Extensive information sharing (both financial and
performance)
Critical to remember that all of these
are part of a system
The Downward Performance Spiral
Performance Problems Organizational Response
Low profits Reduce training
High costs Layoffs
Poor customer service Salary freeze
Low stock price Contingent staffing

Individual Behaviors
Decreased motivation
More accidents
Higher turnover
Reduced effort
Aligning Strategy and HR
• Determine the firm’s strategy
• Determine the competencies needed to carry
out the strategy
• Examine current management practices
• Determine congruence
• Do the current practices work to enhance
needed competencies?
• Are the current practices internally consistent?
Source: Pfeffer (1998)
External Influences on HRM
• Economic conditions
• Legal requirements and constraints
• Demographics
• Technology
General Economic Conditions
• Global economy
• Lower wage levels vs. quality and productivity
• Ethical issues and political considerations
• Domestic factors
• Move from manufacturing economy to service / information
economy
• Mergers  duplication of functions  layoffs
• Supply and demand of labor influences price
• Supply and demand of company’s product, which
determines available resources
Demographics
• Supply of labor (number of people, skills, etc.)
• New skills needed, but are they present in workforce?
• Basic skills availability?
• Different needs of different groups in the population
• Increasing number of women in paid workforce
• Dual-earner families
• Family friendly benefits
• Aging population

Sources: Challenger (2003); Cole, et al. (2003)


Technology
• New jobs; old jobs vanish
• Need for new skills
• Need for continuous skills development
• Managing the HR function
• Data management
• Employee communications
HR Functions: What We’ll Be
Looking At
Planning
Employee and
Legal
Labor Relations
Compliance

Training
and
Staffing
Development

Reward
Systems

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