Human Resource Management

Chapter Two
Organizational Demands and Environmental Influences

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

2-1

Managing Employees Strategically

Helps companies: Use HR tools and practices appropriately Realize no two companies are alikethere is no best way Understand using the wrong practice or the right practice poorly can cause harm

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

2-2

Meeting Organizational Demands

Factors inherent within a company that influence how employees are managed

These include:

Strategy Company characteristics Organizational culture Employee concerns

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

2-3

Strategy
A plan for achieving a competitive advantage

Influences how employees add value Impacts types of jobs employees perform Affects attitudes and behaviors employees display

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

2-4

Cost Leadership Strategy

Offering the lowest costs for products and services

Focus on efficiencies and cost reductions Minimize overhead and costs Economies of scale are realized Only one cost leader in an industry

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

2-5

Differentiation Strategy
Providing something unique for which customers are willing to pay
Unique product may include features, location, innovation, reputation, status, customer service or quality Offering something competing firms do not provide and customers value

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

2-6

Low-Cost Strategy and Managing Employees

Jobs are narrow in focus and emphasize standardized and repetitive actions Behaviors are fairly well understood Individuals are hired with basic skills Employees trained to understand expectations Employees paid based on jobs they perform

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

2-7

Differentiation Strategy and Managing Employees

Jobs geared toward creativity or customer service Employees hired with specific skills and new perspectives Jobs require cooperation, creativity and knowledge sharing Pay based on individual potential or team accomplishments
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 2-8

Company Size
Small businesses: Have generated 60-80% of new jobs in past 10 years Hire 40% of high-tech workers Represent over 99% of all employers Have line managers perform the HR functions Are challenged to provide competitive wages, benefits and training Enable each employee to directly impact companys success
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 2-9

Stages of Development

Young companies: -focus on growth and survival -face pressure to hire people to help the company grow Mature companies: -focus on customer retention and future opportunities -have more resources and established policies and procedures -are more bureaucratic
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 2-10

Organizational Culture

Assumptions, values and beliefs of a company that affect how employees behave Informal or unwritten Observed in how employees talk to one another Seen in employees interaction with customers

Bureaucratic cultures value rules, formalization, hierarchy Entrepreneurial cultures value creativity, knowledge exchange, innovation Other cultures value competition, teamwork, cooperation, fun
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 2-11

What Shapes Culture?

Values and beliefs of a companys founders Important decisions made in companys history HR practices that signal values and behavior Management practices and actions Mergers and acquisitions Strong cultures provide clear, consistent signals Weak cultures are ambiguous and lack a clear message

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

2-12

Employee Concerns
Psychological ContractPerceived obligations employees believe they owe their company and the company owes them

Includes pay, benefits and training in exchange for commitment and performance Governs how employees evaluate company decisions and how they act on the job

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

2-13

Work/Life Balance

Demands of work and personal lives 60% of mothers in U.S. workforce have children under the age of 3 57% of workforce are dual-career households Many caring for older family members or dealing with traffic and long commutes Flexible work schedules, telecommuting, family-friendly benefits help attract and retain employees
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 2-14

Justice
Employees expect to be treated fairly:

Distributive justice:

Fairness in what individuals receive for their efforts Compensation for time and effort put into jobs Determination that the process used to make decisions, rewards, and resolution of disputes is viewed as fair

Procedural justice:

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

2-15

Understanding Procedure Justice

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

2-16

Interactional Justice

How employees feel they are treated by managers and supervisors When employees perceive company is not meeting its obligations, they respond by:

Speaking up Silence Neglect Leaving Destructive behaviors

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 2-17

Environmental Influences
Aging Workforce

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

2-18

Aging Workforce

Baby boomers are approaching retirement There is competition for a limited supply of workers to replace them Some companies are recruiting older workers who bring experience and skills to workplace

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

2-19

Demographic Diversity

Number of women expected to grow 9% from 2006 to 2016 Fastest-growing group: Hispanics and Asians Foreign-born population in the U.S. has increased 57% from 1990 to 2000 Companies must manage diversity to leverage the benefits and eliminate bias and discrimination
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 2-20

Technology

Increased reliance on the Internet Some computer proficiency may be required in all jobs Broadens recruitment efforts beyond local market Enables virtual workforcetelecommuting, videoconferencing, e-mail Can also negatively affect the emotional connection employees feel to co-workers and the company
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 2-21

Globalization

Influenced by trade agreements: NAFTA, EU, APEC Blurs country boundaries in business activities Enables international joint ventures and partnerships

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

2-22

International Strategies

Domestic strategyserving markets within a particular country International strategyexpanding to markets in multiple countries Multinational strategyestablishing autonomous business units in multiple countries Global strategynot aligning with a particular country, but across countries to gain efficiencies Transnational strategyshared vision and coordination across business units yet tailoring products to meet local country needs
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 2-23

Global Factors

Locations of operations Proximity to target market Access to resources Labor costs Availability of qualified labor Unemployment levels

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

2-24

Cultural Differences

Individualism vs. Collectivism Power Distance Uncertainty Avoidance Masculinity vs. Femininity Long-term vs. Short-term Orientation

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

2-25

Managing Employees in a Global Environment

Cultural differences affect HR and management practices and activities International experiences may benefit companies entering new markets and in building relationships with stakeholders

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

2-26

Ethics and Social Responsibility

Involves how companies behave toward their stakeholders Includes consistent monitoring of all facets of operations Can help foster positive reputation and consumer support Companies rated as best corporate citizens financially outperform their counterparts
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 2-27

Pressure Points for Unethical Behavior

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

2-28

How to Encourage Ethical Behavior

Appoint an ethics officer Monitor aspects of companys value system Provide ethics training Perform background checks on incoming employees Devote time at meetings to talk about ethics Have a written code of conduct
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 2-29

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 2-30