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York University
Administrative Studies
ADMS 2600

Chapter 1 • Human resources management - the process of managing human talent to achieve an organization’s objectives • Human resources specialists design application forms, interview formats, amount of money being paid to employees, benefits, bonuses, training, work conditions Competitive Challenges and Human Resources Management 1. Going Global • Globalization – the trend toward opening up foreign markets to international trade and investment • Corporate social responsibility – the responsibility of the firm to act in the best interests of the people and communities affected by its activities Effects of Globalization on HRM • HRM have to determine the knowledge and skills of foreign workforces and figure out how best to hire and train them • Must also relocate managers and other works to direct the efforts of a foreign workforce 2. Embracing New Technology • Computer networks (storing & retrieving data), and internet (business transactions through e-commerce) • Virtual workers – those who work from home, in hotels, in their cars, wherever their work takes them From Touch Labour to Knowledge Workers • Knowledge workers – workers whose responsibilities extend beyond the physical execution of work to include planning, decision making, and problem solving • Advanced technology explains the shift from touch labour to knowledge workers, where employee responsibilities expand to include a richer array of activities Influence of Technology in HRM • Human resources information system (HRIS) – a computerized system that provides current and accurate data for purposes of control and decision making • HRM is a powerful weapon for lowering costs, increasing productivity, speeding up response times, and improving decision making and customer service • When an effective HRIS is implemented the biggest advantage gained is that HR personnel can concentrate more effectively on the firm’s strategic direction instead of on routine tasks (i.e. forecasting personnel needs, planning for career/employee promotions, evaluating the impact of the firm’s policies) – help improve the firm’s earnings and strategic direction 3. Managing Change • Change is a core competency of organizations especially in highly competitive environments Types of Change • Reactive change – change that occurs after external forces have already affected performance • Proactive change – change initiated to take advantage of targeted opportunities Managing Change through HR • Successful change rarely occurs naturally or easily • Some of the major reasons as to why change efforts fail come down to HR issues: o No sense of urgency o Not creating powerful coalition to guide the effort o Lack leaders who have a vision o Lack leaders who communicate the vision o Not removing obstacles to the new vision o Not systematically planning for/creating short term “wins” o Declaring victory too soon o Not anchoring changes in the corporate culture • People resist change because it requires them to modify/abandon ways of working that have been successful or familiar to them • To manage change those in HR need to envision the future, communicate this vision to employees, set clear expectations for performance, and develop the capability to execute by reorganizing people and reallocating assets • These key elements are built into successful organizations change management: o They link the change to the business strategy o They create quantifiable benefits o They engage key employees, customers, and their suppliers o They integrate required behaviour changes o They lead clearly, unequivocally and consistency o They invest to implement and sustain change o They communicate continuously and personally o They sell commitment to the change, not communication about the change 4. Managing Talent, or Human Capital • Human capital – the knowledge, skills and capabilities of individuals that have economic value to an organization • Human capital has a tremendous influence on an organization’s performance Human Capital and HRM • To build human capital, managers must develop superior knowledge, skills and experience within their workforce • If a valued employee leaves a company, they take their human capital with them • Efforts to empower employees and encourage their participation and involvement more fully utilize the human capital available • Developmental assignments can be a valuable way of facilitation knowledge exchange and mutual learning • Effective communication is instrumental in sharing knowledge and making it widely available throughout the organization • HR managers play an important role in creating an organization that understands the value of knowledge, documents the skills and capabilities available to the organization, and identifies ways of utilizing that knowledge to benefit the firm 5. Responding to the Market • Managers must meet customer requirements of quality, innovation, variety and responsiveness • “Better, faster, cheaper” Total Quality Management, Six Sigma, and HRM • Total Quality Management (TQM) – a set of principles and practices whose core ideas include understanding customer needs, doing things right the first time, and striving for continuous improvement • Six Sigma – a process used to translate customer needs into a set of optimal tasks that are performed in concert with one another • Six Sigma – systematic approach to quality and includes major changes in management philosophy and HR programs • Six Sigma can have a powerful effect on the quality of products, the performance of customer service, and the professional development of employees • The importance of HR to Six Sigma begins with the formation of teams, and extends to training, performance management, communication, culture, and even rewards Reengineering and HRM • Reengineering – fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in cost, quality, service and speed • Reengineering is a more radical approach to process redesign • Requires managers to start from scratch in rethinking how work should be done, how people/technology should interact, how organizations should be structured • How is it related to HRM? o HR issues drive change and reengineering requires that managers create an environment for change o Reengineering efforts depend on effective leadership and communication processes, two other areas related to HRM o Selection, job descriptions, training, career planning, performance appraisal, compensation, and labour relations (HR) are all candidates for change to complement and support reengineering efforts 6. Containing Costs • Increasing pressures on companies to lower costs and improve productivity to maximize efficiency • Organizations are taking many approaches to lower labour-related costs (downsizing, outsourcing, off shoring and engaging in employee leasing) Downsizing • Downsizing – planned elimination of jobs • Instead of layoffs, other alternatives are early retirement, voluntary severance and attrition • Has become a tool continually used by companies to adjust to changes in technology, globalization, and the firm’s business direction • Some firms benefit from layoffs, some don’t • Advocates of no-layoff policies note that layoffs may backfire after taking into account some hidden costs like: o Severance and rehiring costs o Accrued vacation and sick day payouts o Pension and benefit payoffs o Potential lawsuits from aggrieved workers o Loss of corporate memory and trust in management o Lack of staffers when the economy rebounds o Survivors who are risk averse, paranoid, and political • Companies that avoid downsizing get some important benefits from these policies: o A fiercely loyal, more productive workforce o Higher customer satisfaction o Readiness to snap back with the economy o A recruiting edge o Workers who aren’t afraid to innovate, knowing their jobs are safe • To approach downsizing more intelligently, companies have made special efforts to reassign and retrain employees for new positions when their jobs are eliminated (consistent w/ the notion that employees are ASSETS, human capital) Outsourcing, Offshoring, and Employee Leasing • Employment relationship between companies and employees has shifted from relationship-based to transaction-based • Outsourcing – contracting outside the organization to have work done that formerly was done by internal employees o Evidence of the trend that people are choosing to work freelance, on a contract basis or part-time o Hire someone outside the company to perform tasks that could be done internally
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