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Unit 1 Syllabus
HR Environment HRM in Knowledge Economy Concept of SHRM Investment Perspective of SHRM Evolution of SHRM Strategic HR vs. Traditional HR Barrier to Strategic HR Role of HR in Strategic Planning
HR Environment
1. Business Environment Globalization and Increased Competition Mergers and Acquisitions Downsizing 2. Changing Nature of work Industrial and occupational shifts Technological Advancements Outsourcing Flexible work Arrangements
HR Environment
3.Demographic, Societal and Workforce trends Workforce Diversity
Workforce Composition Workforce Availabity
Ageing Population and Workforce Educated and Knowledge Workforce Women in Workforce Changing Family structures Global Workforce Contingent Workforce/Workforce flexibility 4. Changing nature of Employment Relationship
HR Environment
5. Labour market 6. Legal Considerations 7. Society 8. Unions 9. Shareholders 10. Competition 11. Customers 12. Technology 13. Cyber work 14. Economy 15. Anticipated Event
Unions
Legal Considerations
Society
Technology
Marketing
Economy
Finance
Shareholders
Customers
Competition
Labor Market
Labor Market
Potential employees located within geographic area from which employees are recruited are always changing
Society
No longer content to accept, without question, the actions of business Ethics - Discipline dealing with what is good and bad, or right and wrong, or with moral duty and obligation Corporate social responsibility - Implied, enforced or felt obligation of managers to serve or protect interests of groups other than themselves
Unions
Group of employees who have joined together for purpose of dealing collectively with their employer
Becomes a third party when dealing with the company
Shareholders
Owners
of corporation
Because
they have invested money in firm, they may at times challenge programs considered by management to be beneficial to organization
Competition
Firms may face intense competition in both their product or service and labor markets
Customers
People who actually use firms goods and services Management has task of ensuring its employment practices do not antagonize members of market it serves
Technology
The world has never before seen technological changes occur as rapidly as they are today. Created new roles for HR professionals Additional pressures on them to keep abreast of technology In 2010 survey of CEOs worldwide, 83% ranked Change as most important issue confronting their organization
Cyberwork
Possibility of never-ending workday BlackBerrys, cell phones, text messaging, and e-mail create endless possibilities for communication Some workers believe their employer wants them available 24/7
Economy
In general, when economy is booming, it is often more difficult to recruit qualified workers. When a downturn is experienced, more applicants are typically available.
Unanticipated Events
Occurrences in external environment that could not be foreseen Every disaster, whether manmade or by nature, requires a tremendous amount of adjustment with regard to human resource management
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
Creates an environment and culture in which employees voluntarily contribute skills, ideas, and energy Human capital is to be nourished by organization
Knowledge facilitator
Procures necessary employee knowledge and skill sets that allow information to be acquired, developed, and disseminated Provides a competitive advantage Must be part of strategically designed employee development plan
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builder
Develops structure, work practices, and culture that allow individuals to work together Develops networks that focus on strategic objectives
Rapid
deployment specialist
Creates fluid and adaptable structure and systems Global, knowledge-based economy mandates flexibility and culture that embraces change
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Stages
of knowledge management
Generating or capturing knowledge Structuring and providing value to gathered knowledge Transferring knowledge Establishing mechanisms for use and reuse of knowledge for individuals and groups
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Fombrun, Tichy and Devana were the first to formulate the concept of Strategic HRM in 1984. SHRM involves the planned and effective use of human resources by an organization to help it to gain or maintain an edge over its competitors. Wright and McMahan (1992) defined SHRM as the pattern of planned human resource deployment and activities intended to enable the firm to achieve its goals.
The use of planning in Human Resource Management An integrated approach to the design and implementation of HR systems Matching HR policies and activities with the business strategy of the organization Viewing people as a strategic resource for the achievement of competitive advantage
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Involves development of consistent, aligned collection of practices, programs, and policies to facilitate achievement of strategic objectives Requires abandoning mindset and practices of personnel management, and focusing on strategic issues, rather than solely on operational issues
Integration of all HR programs within larger framework, facilitating mission and objectives
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HRs success as true strategic business partner dependent on five specific competencies:
Strategic contribution - development of strategy Business knowledge - understanding nuts and bolts of organization Personal credibility - measurable value demonstrated in programs and policies HR delivery - serving internal customers through effective and efficient programs HR technology - using technology to improve organizations management of people
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Outcomes of Strategic HR
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Management Values Attitude towards Risk Nature of skills needed by employees Utilitarian or Bottom-line Perspective Availability of Outsourcing
Technical Knowledge
Investment Orientation
Organizational Characteristics Sees people as central to its mission/strategy. Has a mission statement and strategic objectives that espouse the value of human assets in achieving goals. Has a management philosophy that encourages the development and retention of human assets and does not treat or regard human assets in the same ways as physical assets.
An organizations willingness to invest in its human resources is determined by the investment orientation of its managers. Investment in human resources is inherently riskier due to lack of absolute ownership of the asset.
The more likely that skills developed by employees are marketable outside the firm, the more risky the firms investment in the development of those skills.
An attempt is made to quantify employee worth to the organization through a cost-benefit analysis. The soft benefits of HR programs and polices are difficult to objectively quantify because they affect many different organizational areas and have differential effects on individual employees.
If cost-effective outsourcing is available, investments will be made only in HR activities producing the highest returns and largest sustainable competitive advantages.
Availability of Outsourcing
Evolution of SHRM
Personal Management (Part of mechanistic organization, bureaucratic, high centralization, high formalization, low flexibility) HRM (Part of organic organization, crosshierarchical and cross-functional teams, decentralized, low formalization, flexible)
SHRM (Convergence between HRM and business strategy, Proactive HRM, Concerned with organizational sustained competitive advantage)
PROFESSIONALIZATION OF HR MANAGEMENT
84% 80%
68%
40% 40% 34% 28% 26% 24% 20% 18%
MANAGEMENT STAFFING
HR STRATEGIC PLANNING EMPLOYEE COMMUNICATIONS WORKFORCE MANAGEMENT BENEFITS PERFORMANCE EVALUATION EMPLOYEE RELATIONS PERSONNEL POLICIES LABOR RELATIONS
16%
4% 9%
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Barriers to Strategic HR
Short-term mentality/focus on current performance Inability of HR to think strategically Lack of appreciation for what HR can contribute Failure to understand line managers role as an HR manager Difficulty in quantifying many HR outcomes Perception of human assets as higher-risk investments Incentives for changes that might arise Lack of proper expertise
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HR Planning Process
The process of analyzing and identifying the need for and availability of human resources so that the organization can meet its objectives. Top HR executive and subordinates gather information from other managers to use in the development of HR projections for top management to use in strategic planning and setting organizational goals
HR Planning Responsibilities
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HR Planning Process
HR Strategies
The means used to anticipate and manage the supply of and demand for human resources.
Provide overall direction for the way in which HR activities will be developed and managed.
Benefits of HR Planning
An Effective HRP
Is
a subcomponent of the business plan Is driven by the business strategy Line Managers should identify key components HR provides the technical roadmap HR consults on the technical and legal appropriateness of the HRP
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Line management has the final decision on the HRP Prioritize what is most important and where you can actually make a difference Organizations HRP HR dept. business plan
HRP
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QUESTIONS ANSWERS