Human resource management _Lecture 2.ppt

Human resource management _Lecture 2.ppt

1. HR MANAGEMENT FUNDAMENTALSHR MANAGEMENT FUNDAMENTALS
Basic definitions,
tactical and strategic Human Resources ,
historical context and main stages of evolution

2. WHAT IS HUMAN RESOURCE MANAGEMENT
The science and the practice that deals with the nature of
the employment relationship and all of the decisions,
actions and issues that relate to this relationship.
It involves an organization’s acquisition, development and
utilization of employees, as well the employee relationship
to an organization and its performance.
Sources: D.T. Barnum, S. Rosen, G.R. Ferris “Handbook of Human Resource Management”, 1995
J.W. Boudreau, P.M. Ramstad “Beyond HR : the new science of human capital”, 2007
Whatever it is called, the resource that lies within employees Whatever it is called, the resource that lies within employees
and how they are organized is critical to strategic success and how they are organized is critical to strategic success
and competitive advantageand competitive advantage

3. WHAT IS HUMAN RESOURCE MANAGEMENT
A strategic and coherent(logical,consistent) approach to the
management of an organization’s most valued assets - the
people working there - who individually and collectively
contribute to the achievement of its objectives
Source: M. Armstrong “A Handbook of Human Resource Management Practice”, 2006
HRM can be regarded as a “set of interrelated policies withHRM can be regarded as a “set of interrelated policies with
an ideological and philosophical underpinning”, made of:an ideological and philosophical underpinning”, made of:
•a particular constellation of beliefs and assumptionsa particular constellation of beliefs and assumptions
•a strategic thrust informing decisions about people managementa strategic thrust informing decisions about people management
•the central involvement of line managersthe central involvement of line managers
•reliance upon a set of “levers” to shape the employment relationshipreliance upon a set of “levers” to shape the employment relationship
The overall purpose of HRM is to ensure that the organization
is able to achieve success through people

4. WHAT IS HUMAN CAPITAL MANAGEMENT
The Human Capital of an organization consists of
the people who work for it and on whom
the success of the business depends
Human Capital represents the human factor in the
organization: the combined intelligence, skills and expertise
that give the organization the distinctive character
Source: M. Armstrong “A Handbook of Human Resource Management Practice”,
2006
The human elements are those that are capable of learning, The human elements are those that are capable of learning,
changing, innovating and providing the creating thrust changing, innovating and providing the creating thrust
which can ensure the long term survival and prosperity which can ensure the long term survival and prosperity
of the organization of the organization

5. THE IMPORTANCE OF HUMAN CAPITAL
business leaders recognize that managing people is vital to
organizational success and it is among their top concerns
top HR officers are respected by boards of directors
financial research shows that increasing amounts of market value are
driven by intangible(not physical in nature) assets, including human
capital
consulting firms that built their reputation on strategy, finance and
operations, now have leadership and talent management practices
successful CEOs write memoirs that focus the connections between
their success and their talent management processes
Being one of the best place to work is a goal of top management, Being one of the best place to work is a goal of top management,
not just HR leadersnot just HR leaders
Today, more and more:

6. TRENDS THAT HAVE MADE “TALENT” A TOP PRIORITY
DIGITIZATION
LABOR SHORTAGES
GROWTH THROUGH ACQUISITIONS
SIMOULTANEOUS DOWNSIZING AND EXPANSION
WORKFORCE DEMOGRAPHIC TRASFORMATIONS
CONSTANT HYPERCOMPETITION AND CHANGE
Business decisions must happen more quickly,Business decisions must happen more quickly,
they increasingly depend on talent and its organization,they increasingly depend on talent and its organization,
the employment relationship is under unprecedented pressure to adaptthe employment relationship is under unprecedented pressure to adapt

7. THE “WAR FOR TALENT”
The impelling need for organizations to attract, retain andto attract, retain and
engage the key peopleengage the key people they need so to become known in
the talent marketplace as a magnet for the best peoplemagnet for the best people
Source: M. Shumann, L. Sartain “Brand for talent”, 2009
The ultimate trend is to make your talent as famous asto make your talent as famous as
your brandyour brand in order to reach - beyond what you invest to
be known for what you do - to be known for
who wants to work with you
Every business is challenged to build a marketing-focused
organization that pursues brand loyalty among workersbrand loyalty among workers as
aggressively as it pursues brand loyalty among customers

8. “BRAND FOR TALENT”
A company needs three brands:
• customer brandcustomer brand that articulates a compelling reason for customer
to buy
• employer brandemployer brand that represents what value proposition it offers as
a place to work
• talent brandtalent brand that consists in a strategic tool to secure and engage
workers drawing, attracting and mantaining a hold with them
Source: M. Shumann, L. Sartain “Brand for talent”, 2009
To brand for talentbrand for talent means to aggressively and creatively
market the company to continuosly fill a pipeline
of potential and current workers in various segments
of traditional and nontraditional work needs

9. CHANGES IN TALENT
Looking at what it’s happening today in talent and in business, there are fivefive
fundamental changesfundamental changes to how business finds and keeps the workers it needs:
1.1.generational changegenerational change (grew up with technology and all things digital, looking to web as
a gateway to everything; possessing skills as brand-conscious shoppers; aware that
brand is a universal way to simplify, evaluate and choose)
2.2.consumers of work consumers of work (coming to work as new consumers of an experience; wanting to fill
their CVs with the names of well branded organizations; feeling empowered, once at
work, to demand what they want; looking for more than work: shopping for life)
3.3.marketplace for talentmarketplace for talent (both businesses and workers looking for an open exchange in
a new territory whithout geographical bounderies that technology makes possible with a
number of websites, blogs, social networks)
4.4.social media social media ( new transparency needed vs the traditional corporate communication
control: social media tools are making any business the star of 24/7 reality show)
5.5.brand loyalty brand loyalty (it differs from the traditional engagement; it represents what an
organization is, what it stands for, what delivers; It must last longer)
Source: M. Shumann, L. Sartain “Brand for talent”, 2009
The traditional views of talent supply & demand - rooted in the idea of one
employee for one job - are replaced by a free marketplace where a consumer
of work uses technology to search the world

10. THE WAR FOR TALENT IS CREATING A NEW BUSINESS
REALITY
OLD NEW
People need companies … … companies need people
Machine, capital and geography … talented people are the competitive
are the competitive advantage… advantage
Better talent make some difference…… better talent make a huge difference
Jobs are scarce… … talented people are scarce
Employees are loyal and jobs are … people are mobile and their commitment
secure… is short term
People accept the standard package … people demand much more
they are offered

11. HOW TALENT DECISIONS ARE MADE TODAY
Compliance. Observance of rules, regulations or standards that
must be met
Fads and fashions. HR innovations follow patterns more similar to
fashions than to rational strategic logic
Equality. “All our employees are important; it would be unfair to
treat some of them differently: everything we do must be fair and
applied equally to everyone”
OFTEN DRIVEN BY ONE OF THESE APPROACHES:
Strategic logic. A decision framework with a deep, logical
connection to organizational effectiveness and strategic success

12. MARKETS’ EVOLUTION FROM PROFESSIONAL
PRACTICE TO THE DECISION SCIENCE
Source: J.W. Boudreau, P.M. Ramstad “ Beyond HR “, 2007
Value
creation
strategy
Organization/

talent
Human
Resources
AccountingSales
TalentshipTalentship FinanceMarketing
Financial
Capital
Products and
customers
Professional
practice
Decision
science
Vital
markets
Improving the decision about talent resource is the domain of talentshiptalentship: the right
talent is the fundamental building block to create an organization capable of
innovating and changing and using this as a source of competitive advantage

13. THE COMPLEXITY OF THE BUSINESS CHALLENGE
GLOBALIZATION
THE INCREASING PRESSURE ON EMPLOYEES
THE CONTINUE DECLINE IN EMPLOYEE LOYALTY
THE STRENUOS(requiring or using great effort or exertion) INTERVENTION OF
SHAREHOLDERS AND BOARDS OF DIRECTORS
THE INCREASED SPEED OF CHAN GES
THE ONGOING DECLINE IN CUSTOMER LOYALTY
THE WAR FOR TOP TALENT

14. ARE HR LEADERS UP TO THE CHALLENGE ?
They spend too much time discussing the details of HR
They seek line management’s directions and leadership and don’t
provide enough leadership themselves
They lack the detailed business knowledge: they don’t understand
the customers, the technology, the industry, the competitors, the
channels, etc…
MAIN PROBLEMS
They don’t tie HR initiatives to the bottom line(the fundamental and
most important factor.) well enough

15. ARE HR LEADERS UP TO THE CHALLENGE ? (cont.)
They use a unique language that doesn’t appeal to the
employee or management
They don’t bring enough to the strategic conversation: they move
too quickly to the details of executions
AS A RESULT:
Weak connections among customer requirements,
business strategies and human resources responses

16. TACTICAL AND STRATEGIC HUMAN RESOURCES
Baseline administration of people issues and data:
• compensation and benefits administration
• employee records and reporting
• policy development and enforcement
TACTICAL HR
Implementation of traditional human resource programs and
work:
•hiring
•basic skills training
•salary surveys and compensation program design
•employee relations work of resolving day-to-day employee
concerns and problems

18. The painting's subject is explained in
the tablet suspended from the heavens :
“Alexander the Great defeating the last
Darius, after 100,000 infantry and more
than 10,000 cavalrymen had been killed
amongst the ranks of the Persians. Whilst
King Darius was able to flee with no more
than 1,000 horsemen, his mother, wife,
and children were taken prisoner.”
The battle (333 BC) was not fought at
Issus, it was fought on the Pinarus River
on the south-eastern coast of the
Mediterranean Sea.The Persians had
600,000 men, Alexander only had 75,000.
In all 124,950 soldiers died during the
battle, 110,000 Persians, 450
Macedonians died and 4500 were
wounded, and 10,000 Greek mercenaries
(Modern historians estimate that his
Macedonian army lost 7,000 (perhaps
16%) against 30,000 deaths in Darius III's
Persian army)
Albrecht ALTDORFER (German Northern
Renaissance Painter, ca.1480-1538):
“The Battle of Alexander at Issus”, 1529
(Alte Pinakotek, Munich, Germany)

19. Focuses on the path between human talent and winning in the
market place:
•stimulating dialogue among the executive team on the appropriateness
of business strategy
•aligning reward systems across the organization consistently with the
fulfillment of customer needs
•defining talent needs on the basis of the latest business strategy
STRATEGIC HR
TACTICAL AND STRATEGIC HUMAN RESOURCES
• redesigning work processes to eliminate what doesn’t add value and/
or increases cost for the end customer

20. •Developing training solutions to build organizational capabilities
required by the business strategy
•Redesigning aspects of the organizational culture that obstacles the
delivery of what the customer desires in terms of speed, creativity,
quality, service levels or whatever needs improvement
STRATEGIC HR WORK CONNECTS TO:
Building competitive advantage, enabling business
strategy, fullfilling customer needs
TACTICAL AND STRATEGIC HUMAN RESOURCES

21. HR STAGES OF DEVELOPMENT
Function Function
Usually Known asUsually Known as:: PRIMARY FOCUSPRIMARY FOCUS TALENT BACKGROUNDTALENT BACKGROUND
Source: R. Christensen ”Roadmap to Strategic HR”, 2006
Hiring and firing at best costs
Negotiating with unions representing
company employees; negotiating talent
for least costs
Administering employee issues such as
benefits, compensation, and employee
relations; tends to have a strong
enphasis on control
In many cases, represents primarily a
name change with little substantive
difference, regardless of the implication
of a move toward being more strategic
Managing organization and employee
performance towards the business
success
Purchasing
Labor
relations
Personnel
Human
resources (hr)
Strategic HR
Contract negotiations; little focus
on human sensitivity(select right one)
Legal and negotiating background
Administrative background
Both administrative and employee
relations background; increasing
focus on business processes
Background in business strategy,
people, systems, and organization

22. ORGANIZATION AS A COMPETITIVE ADVANTAGE
Finding, acqiring and retaining the right talent is a necessary - but not
sufficient - step in creating an organization with a sustainable competitive
advantage. For this, it is also mandatory to have the right systems,
processes, and practices in place.
Too often organizations have great people but do not manage or support
them correctly, with systems and processes that:
- restrict experimentation
- limit learning
- hinder the transfer of knowledge
- fail to motivate
- suppress innovation

23. ORGANIZATION AS A COMPETITIVE ADVANTAGE (cont.)
If talent workers are not managed properly they will leave. Often falling
straight in the welcoming arms of the competition, with potentially
devastating effects.
Organizations then have to spend further time and money on recruiting
replacements.
AS A RESULT:
Organizations fail to capitalize on the talent they have
and in the long run perform poorly

24. 1. Incident
The exit interviews and employee retentionThe exit interviews and employee retention

25. Deficient exit interview data; low morale and high turnover among registered
nurses
The exit interview data are of poor quality and follow up for problems
identified is practically non existent .
Systematic input from employees (both continuing and departing) is
necessary to assist the organization in improving its HRM.
Either the quality of data generated by exit interviews need to be improved or
alternative data sources need to be developed and utilized
1. INCIDENT: “Exit interview and employee retention”
ANSWERS TO INCIDENT QUESTIONS
Discuss the nature and causes of the problem

26. Exit interviews are key to determine causes for dissatisfaction and
suggestions for countering undesired turnover(the rate at which employees
leave a workforce and are replaced.)
James should consider modifications such as the following:
use focus groupsuse focus groups of registered nurses to learn about the major causes of
nurse frustration and stress; then develop a structured exit interviewer form
train the exit interviewertrain the exit interviewer to probe and obtain better information concerning
problems in the organization and their potential solutions
assure departing employeesassure departing employees that the information they provide will not benot be
discloseddisclosed to supervisor or others in the organization
provide recommendationsprovide recommendations for other organizations priorprior to conducting the
exit interview
use new company personneluse new company personnel to conduct exit interviews or contract them out
conduct exit interviewsconduct exit interviews several months aftermonths after the employee has left the work

1. INCIDENT: “Exit interview and employee retention”
ANSWERS TO INCIDENT QUESTIONS
Should James attempt to improve the exit interview process?
If so, how should this be done?

27. The major alternative source of employee input is a systematic, periodic
employee attitude survey
Attitude surveys elicit input from all the employees (non just who are leaving).
Giving these surveys periodically, comparisons can be made over time for
particular department or groups of employees.
The data generated should be used to make positive changes; if ignored by
management, employee cynicism will result, participation on the survey will
decline and the input obtained will be much less useful.
In addition to attitude surveys, group meetings or one-to-one meetings also
allow employees to provide input
An atmosphere of openness and trust must be created and not penalize
employees who provide negative input
It is crucial to follow through with constructive change once a problem has
been identified
1. INCIDENT: “Exit interview and employee retention”
ANSWERS TO INCIDENT QUESTIONS
What other alternatives should be considered in addition to exit interviews?

28. He should improve the existing process for exit interviews and introduce a
new attitude survey process
While enhancing both the existing process and the new one, he should strive
to exploit the job attributes that reduce retention and to eliminate or minimize
those that cause turnover
1. INCIDENT: “Exit interview and employee retention”
ANSWERS TO INCIDENT QUESTIONS
How can James use the information generated about why nurses stay or leave
to improve nurse retention?

29. WHY PEOPLE LEAVE: WHAT MANAGERS BELIEVE
vs. THE REALITY
Source: Unpublished Saratoga Institute research, 2003
89% 89% of managers believe employeesof managers believe employees
leave for more moneyleave for more money
88%88% of employees leave for of employees leave for
reasons other than moneyreasons other than money
11%11%
of managers of managers
believebelieve
employeesemployees
leave for leave for
other reasonsother reasons
12% 12%
of employeesof employees
leave for leave for
more moneymore money

30. 7 HIDDEN REASONS OF UNPLEASANT TRUTH
THE JOB OR WORKPLACE WAS NOT AS EXPECTED
THE MISMATCH BETWEEN JOB AND PERSONS
TOO LITTLE COACHING AND FEEDBACK
FEELING DEVALUATED AND UNRECOGNIZED
STRESS FROM OVERWORK AND WORK - LIFE IMBALANCE
TOO FEW GROWTH AND AD VANCEMENT OPPORTUNITIES
LOSS OF TRUST AND CONFIDENCE IN SENIOR LEADERS
Source: L. Branham “The 7 hidden reasons Employees leave”, 2005

31. A SET OF PRINCIPLES FOR STRATEGIC HR
1.Talent is the engine behind the creation of all value
2.Every business issue - problem or opportunity - is a symptom of
deeper human or organizational issue
3.Talent will be the resource of scarcity in the future
4.All human resources work must be directly connected to the
business strategy and customer needs
5.Line management is responsible for human resources work in
the organization

32. A SUCCESSFUL PARTNERSHIP BETWEEN HR LEADERS
AND LINE MANAGERS
A true A true HR BUSINESS PARTNERHR BUSINESS PARTNER has these has these
qualities:qualities:
• is first a business leader who works
“people issues”
•has a clear business point of view
•participates fully in the developement of strategy
•identifies and leads significant change actions
•takes and manages risks
•measures success by impact upon the business
A A LINE MANAGERLINE MANAGER effectively engaged in human effectively engaged in human
resources work displays these qualitiesresources work displays these qualities ::
• walks and talks the talk about people issues
• is willing to devote time to working on people
issues
• intuitively sees the people implications of business
strategies
• is personally able to do the hard people
management issues well
• manages performance and differentiates it from
pay
• develops self and others to deliver excellence