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shrm1 Introduction

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shrm1 Introduction

  1. 1. Strategic Human Resource Management Dr. George S. Benson [email_address]
  2. 2. Human Resource Management Planning and Job Design Compensation Employee Relations Recruiting and Selection Training and Development Performance Management
  3. 3. Who performs the HR function? <ul><li>Companies need around 100 employees to have dedicated HR staff </li></ul><ul><li>HR to staff ratio around 1 to 100 for larger businesses </li></ul><ul><li>Supervisors perform many HR functions </li></ul><ul><li>Professionalism of HR staff </li></ul><ul><ul><li>75% of HR Executives have backgrounds in HR </li></ul></ul><ul><ul><li>Specialization within fields </li></ul></ul><ul><ul><ul><li>Compensation and Benefits </li></ul></ul></ul><ul><ul><ul><li>Training and Development </li></ul></ul></ul><ul><ul><ul><li>HR Information Systems </li></ul></ul></ul><ul><ul><ul><li>Organizational Development </li></ul></ul></ul>
  4. 4. <ul><li>“ We want to have more people selling instead of watching people sell and fewer human resource people watching – God only knows that they watch.” </li></ul><ul><li>Bob Lipp -- Citigroup Cost Cutter </li></ul><ul><li>Fortune Magazine January 11, 1999 </li></ul>
  5. 5. Bathroom Breaks at Jim Beam <ul><li>“Workers on the bottling line are fuming about being limited to four breaks per 8 1/2 hour shift, only one of which can be unscheduled.” </li></ul><ul><li>&quot;Our policy is fair and reasonable and it does respect the real needs that our employees have,&quot; said Jack Allen, human resources director at the Clermont plant. </li></ul><ul><li>CNN Aug 28, 2002 </li></ul>
  6. 6. Changing Views of HR <ul><li>Business strategies require specific skills and behaviors to be successful. </li></ul><ul><li>HR practices can be crafted to develop certain types of skills and encourage behaviors. </li></ul><ul><li>HR practices should support the “core competencies” and strategy of the organization. </li></ul>
  7. 7. Strategic View of Human Resources <ul><li>Employees are human assets that increase in value when appropriate policies and programs are applied. </li></ul><ul><li>Effective organizations recognize that their employees do have value, much as same as the organization’s physical and capital assets have value. </li></ul><ul><li>Employees are a source of sustainable competitive advantage. </li></ul>
  8. 8. Sources of Employee Value <ul><li>Technical Knowledge </li></ul><ul><ul><li>Markets, Processes, Customers, Environment </li></ul></ul><ul><li>Ability to Learn and Grow </li></ul><ul><ul><li>Openness to new ideas </li></ul></ul><ul><ul><li>Acquisition of knowledge and skills </li></ul></ul><ul><li>Decision Making Capabilities </li></ul><ul><li>Motivation </li></ul><ul><li>Commitment </li></ul><ul><li>Teamwork </li></ul><ul><ul><li>Interpersonal skills, Leadership ability </li></ul></ul>
  9. 9. Implications for Organizations <ul><ul><li>Job and work design </li></ul></ul><ul><ul><li>Training and employee development </li></ul></ul><ul><ul><li>Determination of compensation </li></ul></ul><ul><ul><li>Integrated performance management </li></ul></ul><ul><ul><li>Advancement opportunities </li></ul></ul><ul><ul><li>Development of retention strategies </li></ul></ul><ul><ul><li>Measuring the impact of HR </li></ul></ul>
  10. 10. The Investment-Oriented Organization <ul><li>Organizational Characteristics </li></ul><ul><ul><li>Sees people as central to its mission/strategy. </li></ul></ul><ul><ul><li>Has a mission statement and strategic objectives that espouse the value of human assets in achieving goals. </li></ul></ul><ul><ul><li>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. </li></ul></ul>
  11. 11. Investment Orientation Factors <ul><li>Senior Management Values and Actions </li></ul><ul><ul><li>An organization’s willingness to invest in its human resources is determined by the “investment orientation” of its managers. </li></ul></ul><ul><li>Attitude Toward Risk </li></ul><ul><ul><li>Investment in human resources is inherently riskier due to lack of absolute “ownership” of the asset. </li></ul></ul><ul><li>Nature of Skills Needed by Employees </li></ul><ul><ul><li>The more likely that skills developed by employees are marketable outside the firm, the more risky the firm’s investment in the development of those skills. </li></ul></ul>
  12. 12. Investment Orientation Factors <ul><li>Utilitarian (“Bottom Line”) Mentality </li></ul><ul><ul><li>An attempt is made to quantify employee worth to the organization through a cost-benefit analysis . </li></ul></ul><ul><ul><li>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. </li></ul></ul><ul><li>Availability of Outsourcing </li></ul><ul><ul><li>If cost-effective outsourcing is available, investments will be made only in HR activities producing the highest returns and largest sustainable competitive advantages. </li></ul></ul>
  13. 13. The Strategic Importance of HRM <ul><li>Competitive Advantage </li></ul><ul><ul><li>When all or part of the market prefers the firm’s products and/or services. </li></ul></ul><ul><li>Ways firms can use HRM to gain sustainable competitive advantage: </li></ul><ul><ul><li>Maximize the value added by employees </li></ul></ul><ul><ul><li>Acquire rare employees </li></ul></ul><ul><ul><li>Develop a culture that can’t be copied. </li></ul></ul><ul><li>Performance requires HR practices that: </li></ul><ul><ul><li>Match the business strategy </li></ul></ul><ul><ul><li>Are internally consistent </li></ul></ul><ul><ul><li>Fit with organizational values and beliefs </li></ul></ul>