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Chapter 01

MGHB12 Chapter 01-Intro to HRM.docx

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University of Toronto Scarborough
Management (MGH)
Joanna Heathcote

Chapter 01 the World of HR Management Outcome #1: Explain how HR managers can help their organizations gain a sustainable competitive advantage through the strategic utilization of people - What is HR Management? The process of managing human talent to achieve an organization’s objectives - What is HR Capital? HR Capital describes the economic value of employee’s knowledge, skills, and capabilities. It is intangible and cannot be managed the way organizations manage jobs, products, and technologies because employees, not the organizations, own the human capital To build human capital in organizations, managers must continue to develop superior knowledge, skills, and experience within their workforces and retain and promote top performers - Why Study HR Management? Staffing the organization, designing jobs and teams, developing skillful employees, identifying approaches for improving their performance, and rewarding employee successes—all typically labeled HRM issues— are as relevant to line managers as they are managers in the HR department Outcome #2: Explain how globalization is influencing human resources management Overall Framework for HR Management: - What are 9 Competitive Challenges in HR Management? 1. Responding Strategically to Changes in the Marketplace and Economy:  Due to the highly competitive environments, in which competition is global and innovations is continuous, being able to adapt has become the key to capturing opportunities and overcoming obstacles, as well as the vary survival of organizations  In meeting customer expectations, managers must focus on quality, innovation, variety, and responsiveness  HR professionals can help organizations improve not only a company’s bottom line by streamlining employment costs, but also the top line by forecasting labor trends, designing new ways to acquire and utilize employees, measuring their effectiveness, and helping managers enter new markets  Six Sigma: is a set of principles and practices whose core ideas include understanding customer needs, doing things right the first time, and striving for continuous improvements 2. Managing Change:  Reengineering, Total Quality Improvement, Downsizing, and Outsourcing, Cost-cutting, Benefit Programs are examples of organizations use to modify the way they operate to be more successful: 1) Reengineering: the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in cost, quality, services, and speed 2) Downsizing: the planned elimination of jobs 3) Outsourcing: hiring someone outside the company to perform business processes that were previously done within the firm  All above strategies require organizations to engage in change management  Change Management: is a systematic way to bringing about the managing both organizations’ changes and changes on the individual level (Is the Biggest Challenges because although most employees understand that change is continuous – responsibilities, job assignments, and work processes change – people often resist it because it requires them to modify or abandon ways of working that have been successful or at least familiar to them)  To Manage Change, organizations has to envision the future, communicate this vision to employees, set clear expectations for performance, and develop capacity to execute by reorganizing people and reallocating assets,  Organizations that have been successful in engineering change, they 1) link the change to the business strategy; 2) show how the change creates quantifiable benefits; 3) engage key employees, customers, and their suppliers early when making a change; 4) make an investment in implementing and sustaining changes  Reactive Changes: it results when external forces, such as the competition, a recession, a law change, or a crisis, have already affected an organization’s performance  Proactive Changes: initiated by managers to take advantage of targeted opportunities, particularly in fast- changing industries in which followers are not successful  Good HR Managers know that they can be key players when it comes to driving the business strategies of their organization’s to make changes, that is why CEOs, such as WestJet, Starbucks, and GE require their top HR executives report directly to them and help them address key issues  Why Change Efforts Fail: 1) Not establishing a sense of urgency 2) Not creating a powerful coalition to guide the effort 3) Lacking leaders who have a vision 4) Lacking leaders who communicate the vision 5) Not removing obstacles to the new vision 6) Not systematically planning for and creating short-term ―wins.‖ 7) Declaring victory too soon 8) Not anchoring changes in the corporate culture 3. Globalization (Competing, Recruiting, and Staffing Globally):  The trend toward opening up foreign markets to international trade and investment  Partnerships and Mergers are two ways companies are going globally  The Opportunities: greater target market  The Difficulties: cultures are different; how to achieve collaboration among employees across the world; safety standard while employees working abroad  Impacts of Globalization on HRM: 1) Issues related to different geographies, including different cultural, employment laws, and business practices 2) Gauging the knowledge and skill base of international workers and figuring out how best the hire and train them  Solutions: 1) Identifying capable managers and workers 2) Developing foreign culture and work practice training programs 3) Adjusting compensation plans for overseas work 4) Knowing about the labor laws in different countries Outcome #3: Describe how technology can improve how people perform and how people are managed 4. Advancing HR Management with new Technology:  Advancements in information technology have enabled organizations to take advantage of the information explosion  Computer Networks have made it possible for nearly unlimited amounts of data to be stored, retrieved, and used in a wide variety of ways 1) Collaborative Software: allows workers anywhere anytime to interface and share information with one another electronically 2) Document-Sharing platforms have changed how and where people and companies do business  The Internet and Social Media networking has become the new way to find employees and check them out to see if they are acceptable candidates  Knowledge Workers: employee responsibilities expand to include a richer array of activities, such as planning, decision making, and problem solving  Technology, transportation, communications, and utilities industries tend to spend he most on training  Impacts of Technology on HRM: 1) Human Resource Information System (HRIS): the central use of technology in HRM 2) HRIS has benefits for lowering administrative costs, increasing productivity, speeding up response times, improving decision making, and tracking a company’s talent 3) First way information technology is affecting HRM is operational: automating routine activities, alleviating administrative burdens, reducing costs, and improving productivity internal to HR itself. Most common HRIS applications: Payroll; Benefit Administration; Benefits Enrollment; Recruiting- Applicant tracking; Personnel Administration; Training and Development; Employee Self-Service; Manager Self-Service 4) Second way is relational in nature: connecting people with each other and with HR data they need 5) Third way is transformational in nature: changing the way HR processes are designed and executed Outcome #4: How cost pressures affect HR management policies 5. Containing Costs while retaining top talent and Maximizing productivity:  Most Canadian firms spend 40% to 70% of operating budgets on compensation for employees  For most firms, compensation is the single most/largest operating expenditure  Canadian employers spend $ 600/- billion in wages and $ 77/- billion in benefits  Approaches the organizations to cut labor-related costs: 1) Downsizing:  It is now a tool continually used by organizations to adjust to changes in technology, globalization, and organization’s business direction  Hidden Costs of Layoff: a) Severance and rehiring costs b) Accrued vacation and sick day payouts c) Pension and benefit payoffs d) Potential lawsuits from aggrieved workers e) Loss of institutional memory and trust in management f) Lack of staffers when the economy rebounds g) Survivors who are risk-averse, paranoid, and political  Benefits of a No-Layoff Policy:
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