Introduction

1. Intro video – Jack Welch

- Named “Manager of the Century” by Fortune magazine and coined “The CEO of
CEOs” in Forbes' 100 Greatest Business Minds feature, Jack Welch was one of the
world’s most respected and celebrated CEOs
- HR is the driving force behind what makes a winning team. We make the
argument that the team that fields the best players win. HR's involved in making
sure we field the best players.
- Pastor in keeping secrets and parents in telling secrets

2. Assets and value

Business organizations must meet competitive challenges in their external environment by
managing their resources effectively, and this includes human resources, which is what this
class is all about – effectively managing a firm’s workforce, the human capital of a firm.

Your textbook suggests that resources can generally be organized into Physical,
Organizational and Human.

Sometimes it is the case indeed that human resources are the most valuable resources a firm
has, but is likely depends on some other factors or variables. For instance, the relative
importance of a set of resources depends on the competitive strategy of a firm.
If, for instance, a firm has what we call a “cost cutter” competitive strategy and that same firm has
compensation policies to match, e.g., paying workers at or below market, this firm may not value its human
resources and thus they may not be managed in a way that provides the firm competitive advantage. If, however, a
firm has a competitive strategy based on differentiation, which we will talk about later in the course, the firm will
try to make itself different in some way from other firms, in a way that consumers value and will pay a premium
price for.
It is often the case that firms will need highly talented, skilled and motivated employees –
and will need to manage these employees effectively – in order to differentiate, i.e., in order to
deliver an exceptional product or service.

How valuable a particular resource or set of resources is to a firm can be operationalized in

terms of the Resource Based View of the firm. This is a theory or model that says that resources
that are Rare, Valuable, Inimitable and Non-Substitutable are valuable in the specific sense
that they can potentially provide a firm with a source of sustained competitive advantage. Of
course, for this to be the case the resource would need to be managed effectively in order for its
value and thus its source of advantage to be sustainable.
You might think of a diamond as a resource that is valuable: it is rare (at least, they aren’t widely available in
general, although this may be the cause of certain companies’ power in the market, such as DeBeers); it is
inimitable (although synthetic diamonds can be and are made, they are never as desirable as the “real thing”); it is
valuable (in the sense that they are sought after, desired and consumers will pay a premium for them as compared
to other gemstones); and it is non-substitutable (in the sense that if a diamond is what is desired, a ruby or other
gem usually won’t suffice).

If we apply this same model and analysis to human resources, we can see that these resources
can indeed be valuable.
For instance, certain skills and talents are rare; human knowledge can be non-substitutable (in the sense of
specific knowledge that is gained through experience working for a particular industry or a specific firm) and so on.
That said, knowledge and skills are often transferrable between firms: An employee that has spent several years
working for Google can be poached by Yahoo and Yahoo can try to leverage that employee’s knowledge, skills and
abilities in general, as well as the industry- and firm-specific knowledge that employee developed to the benefit of
Google.

This being the case, human resources can be particularly valuable when the unique
knowledge, skills and abilities and other characteristics of a workforce are uniquely tailored to a
specific firm.
For instance, Apple and Microsoft are both firms that value computer programming knowledge and analytical
skills, yet one firm – Microsoft – relatively values competition between employees and the other – Apple – relatively
values collaboration and group-based work. Thus, when it comes to human resources and human resources
management, these two firms will try to recruit, select, develop and retain potentially very different types of workers .
This is a large part of why HRM is important: it allows a firm to manage human resources
in a way that is of competitive advantage for that particular firm. HRM poses a variety of
unique and interesting challenges. Perhaps foremost among them would be trying to design
policies and practices that are effective and that help a firm gain and sustain competitive
advantage. A related challenge is that different types or groups of workers and different
workers individually will respond differently to the same policy or practice. So part of what
HR is or does is to manage HR policies and practices as well as the way in which workers
respond to these policies and practices.

When it comes to measuring how well a firm is managing human resources, different types
of firms might emphasize different measures or metrics—but firms tend to look at the same types
of metrics. These would include, for instance, size of the workforce and labor costs; turnover
and turnover costs; employee attitudes, such as job satisfaction and work engagement;
workforce productivity. A challenge here is that, unlike with other business functions like
marketing or sales, measuring the value or impact of human resources in general or of a
particular HRM function, such as a training program, is difficult– difficult in the sense that there
often isn’t as obvious or quantifiable and outcome.
We can measure customer satisfaction and firms do this to be sure, but connecting this to a
return on investment or ROI is a challenge.
For instance, in the sense that one would have to connect the training to changes in customer satisfaction and hence
to changes in financial performance of a firm—links which are difficult to demonstrate and tenuous due to
alternative explanations to changes in satisfaction and performance.
 3. What HR is and its role in organizational effectiveness
Albertson’s example
Albertson's grocery store in Southern California strategically adapted to increasing
pressure from competitors like Walmart. Recognizing their inability to compete solely on price,
they shifted their strategy to prioritize customer service, essentially becoming integrators. The
top management team, with input from HR executives, conceptualized this strategy by aligning it
with the firm's strengths and weaknesses. To implement this change, Albertson's revamped their
HR strategy, particularly in the selection process. They collaborated with the IT department to
develop computer programs allowing applicants to input information at in-store kiosks, including
resumes and selection tests. The system helped select employees based on desired traits like
customer service experience and agreeableness. This initiative not only improved their
competitive position but also demonstrated a positive return on investment (ROI), showcasing
the effectiveness of the strategic shift.

Human resource management is “the policies, practices, and systems that influence
employees’ behavior, attitudes, and performance”, and this is a general but useful definition.
One might add that these policies and practices are generally designed by human resource
management departments and staff for the purpose of positively influencing employee
attitudes and behaviors
HR is comprised of several functions.
HR departments can be organized around four major dimensions, which include:
1. managing the human resource environment (this deals with legal compliance,
designing work that is engaging; and strategic HRM);
2. acquiring and preparing human resources (this deals with HR planning and
recruitment, employee selection and placement and employee training)
3. assessment and development of human resources (this deals with measuring
performance or performance appraisal, employee development and retention)
4. compensating human resources (this deals with creating compensation and benefits
systems).

Today, the function in most sophisticated organizations in industrialized societies is much

more advanced and plays a much more strategic role in organizations. This is perhaps typified by
organizations that have a Chief Human Resource Officer, which would report to the CEO of a
firm, the same as a CFO or other C-level officer. The HR function can create value in a variety
of specific ways, as is discussed in the first chapter and the subsequent chapters of your book.
That said, at a high level the way in which HR creates value is to create policies and programs
that align employee attitudes and behaviors with business goals. When you think about it,
what could be more important, more valuable and more strategic than that, at least for firms that
operate with a reasonably sized workforce relative to the size of their business, which most firms
do. Although demonstrating value has always been the purview of other business functions, such
as finance and marketing/sales, this is absolutely the purview of HR today in firms that
emphasize HR management. There is great variability between firms in terms of the emphasis
they place on and the resources invested in HR departments. But for those firms that value HR, it
is increasingly the case that HR managers and practitioners must demonstrate the value of their
work, partner with other business functions, and support business and line managers in their day-
to-day operations.

4. Responsibilities and roles of the HR department

The HR department can be likened to a business within a company, offering:
1. administrative services (e.g., compensation, staffing)
2. business partner services (e.g., HR systems, talent management)
3. strategic partnership (contributing to business strategy).
5. Links to organizational performance
Historically, HR, then known as "personnel," focused on administrative tasks like managing
payroll and employee benefits. However, automation and technology reduced the emphasis on
these services, leading to increased outsourcing for efficiency and cost-effectiveness.
The modern HR landscape has shifted towards a proactive approach, emphasizing both
business partner services and acting as a strategic partner. Business partner services involve
collaboration with line managers to address workforce needs, while a strategic partner aligns HR
strategies with company-level strategies to maximize performance.
For instance, if a line manager is facing an upcoming labor shortage, an HR practitioner could provide advice
about how to best address this challenge.
Challenges persist, as not all firms allow or support HR in executive-level decision-making.
The influence of HR in strategic planning varies among organizations, highlighting the dynamic
nature of the field.

6. How HR is changing
Given the evolution of the HR field towards a more proactive role, the responsibility of HR
departments to demonstrate value has become crucial. HR metrics, which measure the
effectiveness of HR policies and practices, play a significant role. These metrics can range from
employee attitudes, engagement, and job performance to broader business-level metrics like
labor costs and productivity.

In the realm of HR Analytics, scientific methods are employed to establish connections

between HR actions and various metrics.
For instance, Farmers’ Insurance used HR analytics to link employee personality traits with customer
satisfaction in their call centers. Employees with specific traits were found to contribute to better customer service,
leading to changes in the selection process.

Several challenges confront HRM today, and three key sets are outlined in many sources.
 The first is the sustainability challenge, encompassing the need for shareholder returns,
high-quality products and services, employee experiences, social responsibility, and adapting to
new work arrangements. Sometimes, what's good for society might not be the most efficient way
for a company to make a profit, creating a challenge.
This challenge is closely linked to how companies manage their people (HRM). In the US,
there's been a big shift from making things to providing services. Skilled workers are in
demand, but there are fewer of them because many people are retiring, and there aren't as many
new workers. This makes it important for companies to find skilled workers from other
countries.
Healthcare costs in the US are going up, making companies rethink the benefits they give to
workers. There's also a "war for talent" as companies compete for skilled workers. Workers
today want more flexible work options, like working from home. Research shows that companies
offering these options tend to do better than those that don't. So, having good systems to
manage people is crucial for companies facing these challenges.
The global challenge emphasizes the necessity for U.S. companies to enhance HRM
practices, explore global markets, and prepare employees for international assignments. In
today's competitive global landscape, firms face challenges from both domestic and international
rivals. HR plays a pivotal role in helping organizations strategically navigate these
challenges. It assists in identifying the skills needed for specific strategies, whether it's growth,
technology acquisition, business expansion, or downsizing. As businesses go global, HR
provides specialized knowledge for successful international operations, aiding in designing
and facilitating work assignments. Additionally, HR helps firms make strategic decisions
regarding offshoring, guiding choices in location, sourcing, recruitment, and training to
balance cost reduction with maintaining service levels and customer satisfaction.
Ultimately, the proactive involvement of HR is crucial for firms aiming to thrive amidst
increased competition and evolving workforce dynamics.

Lastly, the technology challenge compels companies to adapt to technological advances,

redefine work roles, establish high-performance work systems, and embrace e-commerce and e-
HRM. Managers now handle decisions about using technology in the workplace, adapting work
methods, and integrating technology into organizational systems. This brings opportunities and
challenges for HR practitioners, such as deciding on the use of social networking sites for
employee communication and recruitment. HR systems are becoming more tech-focused, using
computer programs for monitoring and evaluation. Work dynamics have shifted towards team
organization, often virtually dispersed, and many HR services are available online through e-
HRM systems. Managers and HR teams need to navigate these changes effectively for
organizational benefit.

7. Careers for HR managers

According to the textbook, HR managers should possess six key competencies organized in
a three-tier pyramid.
 Strategic HRM
Strategic Management is a process for analyzing a company's competitive situation, developing
the company's strategic goals, and devising a plan of action and allocation of resources that will
help a company achieve its goals.
1. Video with D. Beatty – Differentiated Workforce

1. Strategy types
Cost Uniqueness
Broad Target Cost Leadership Differentiation
Narrow Target Focused Cost Leadership Focused Differentiation
Firms generally compete in two ways: price leadership, offering competitively low
prices, or differentiation, excelling in a valuable aspect of a product or service and charging a
premium. Market scope varies, with examples like:
Walmart, a price leader in a broad market, and Nordstrom, a differentiator in customer service for a wide
market. Patagonia competes based on quality but targets a niche market of environmentally conscious outdoor
enthusiasts.
Niche-focused cost leaders are rarer, but TJ Maxx targets bargain-seeking customers, competing on price with
designer retailers. Some firms, like Target, adopt an integrated approach, competing on both price (with Walmart)
and differentiation (offering exclusive product lines).

2. Strategic Decisions
Top management teams and entrepreneurs face three crucial questions when it comes to
strategy: Where will we compete, how will we compete, and with what? Industry
competitiveness varies, with some industries having fierce rivalries and powerful suppliers,
making profitability challenging.
For example, the airline industry is notoriously difficult due to fierce competition, customer options, and
powerful suppliers.
Managers must decide on their competitive strategy, aligning with the firm's strengths and
the industry's characteristics. The choice of "what will we compete" involves deciding on the
most valuable sets of resources, how to acquire, deploy, and manage them. Human resources
are generally valuable, but their significance varies based on industry and strategy. Managing
human resources in alignment with the overall strategy is crucial for success.
Strategic decisions are influenced by a SWOT analysis. Firms analyze their external and
internal environments to determine strengths and weaknesses and assess potential
opportunities and threats. Human resources issues, such as labor supply and demand, play a
critical role in this analysis. Labor supply considerations, including how other firms leverage
human capital, are vital competitive factors, emphasizing the importance of incorporating HR
management into strategic planning.
 Competing based on price requires a firm to achieve efficiencies and economies of scale.
Walmart, known for leveraging technology in inventory management and aggressive supplier dealings, keeps
costs low to attract a large customer base, achieving greater profits than competitors.
Competing based on differentiation involves offering a unique experience valued by
consumers, charging a premium price for a competitive advantage.
Sustaining this advantage requires continuous efforts, such as Nordstrom's focus on treating employees well.
An integrated strategy demands minimizing costs while successfully differentiating, a
challenging combination. Firms with a focus approach aim to excel in a specific niche market,
gaining a competitive edge through success in that niche.

Strategic management goes beyond generic strategies. Executives must effectively manage
their most valuable resources—physical, organizational, and human resources. Organizational
structure and work design play a crucial role in shaping competitive advantage.
For instance, a firm pursuing price leadership may benefit from a functional structure, emphasizing efficiency
in stable environments. HR policies align with organizational and work designs, emphasizing specific behaviors and
low-cost training to support the chosen strategy.

3. Strategy formulation and implementation

- Strategy Formulation: Strategic planning groups decide on a strategic direction by
defining the company’s mission and goals, its external opportunities and threats, and
its internal strengths and weaknesses.
- Strategy Implementation: The organization follows through on the strategy that has
been chosen. This includes structuring the organization, allocating resources, ensuring
that the firm has skilled employees in place, and developing reward systems that align
employee behavior with the strategic goals

4. Strategic HRM – its role in strategy and strategic management

Strategic Human Resource Management is defined as the planned deployment of human
resources to achieve organizational goals. The emphasis lies on both strategy formulation and
implementation, highlighting the collaborative efforts of top management teams and HR in
addressing business and HR issues. Successful firms fully leverage HR by involving the Chief
Human Resource Management Officer (CHRO) in strategic planning, granting HR a seat at the
table to influence strategy.
Despite the changing landscape, many firms still do not fully integrate HR into strategic
planning. However, sophisticated and competitive firms, especially in knowledge-based
industries, are increasingly recognizing the importance of leveraging HR.
EG: Pepsico and TacoBell.
The strategic management process involves key steps, starting with determining the overall
vision, progressing through mission formulation, and concluding with strategy implementation.
A vision is a future-oriented statement, while a mission provides more detailed insights into
a firm's values, culture, and competitive approaches. The vision, mission, and a SWOT
analysis influence specific competitive objectives, with strategies formulated to achieve these
objectives. Implementation and consistent evaluation follow, and strategies may evolve based on
marketplace experiences.

5. The role of HR in strategy formulation

The diagram outlines four potential ways in which Human Resource Management (HRM) is
involved in strategy formulation.

In the first scenario, termed "administrative linkage," HR is entirely detached from strategic
planning, reminiscent of the old "personnel" days. The absence of mutual influence between
strategy and HR practices characterizes this approach.
Moving to the one-way linkage, strategic planning remains separate from HR, yet HR
strategies are shaped by the firm's overall strategy. While an improvement over the
administrative linkage, this approach lacks HR's direct influence on strategic planning.
The two-way linkage allows strategic planning and HR planning to influence each other to
some extent, creating a bidirectional flow of information.
However, the most effective approach is the integrative linkage, where strategic planning
and HR planning are intertwined. In this collaborative model, HR executives actively participate
in strategic planning alongside the top management team. This integrated approach not only
enhances efficiency but also provides HR with a prime opportunity to influence the firm's
competitive strategies and resource management. While not the norm, some sophisticated firms
embrace the integrative linkage, showcasing the synergy between leadership and HR
departments.

6. Directional strategies & HRM

Understanding competitive strategies is crucial, and while generic competitive strategies
provide a high-level view, directional strategies focused on growth are equally important. Four
key directional strategies include concentration, internal growth, merger & acquisition, and
downsizing.
A concentration strategy entails focusing on a specific market or niche, requiring a
workforce with specialized skills. HR management aligned with this strategy involves selecting
employees based on specific KSAOs, implementing training programs for skill maintenance,
adopting behavior-based performance appraisals, and possibly introducing skill-based
compensation systems.
Internal growth strategies emphasize venturing into new markets and product development,
necessitating an innovative and adaptable workforce. HR strategies for internal growth involve
recruiting and developing creative individuals, selecting based on openness and problem-solving,
incorporating result-oriented appraisals, and aligning compensation systems with outcomes
related to new markets or innovations.
Mergers and acquisitions involve blending the strategic planning and operations of two
firms. HR plays a critical role in ensuring the success of such transitions, requiring extensive
planning to address skill redundancies and labor surpluses, as well as effective change
management to navigate cultural differences.
Downsizing, a strategy in response to global competition and market challenges, places HR
at the forefront of managing the process. Strategic downsizing involves retaining the most
qualified workers while parting ways with less qualified or lower-performing individuals,
contributing to overall organizational effectiveness and success.

7. Emergent strategies and the role of HRM

A firm's chosen process for implementing a competitive strategy is not fixed and can
undergo changes over time. The overall competitive strategy of a firm is also subject to
evolution.
For example, Honda initially entered the U.S. market with a strategy focused on selling motorcycles with larger
engines, believing there was limited opportunity in the market for smaller motorcycles. However, a shift occurred
when attention grew for their smaller-cc motorcycles, leading Honda to realize a missed opportunity that they
successfully pursued.

Emergent strategies, often originating from lower levels of an organization, highlight the
importance of HR in facilitating communication and managing continuous improvement
processes. Instances like the introduction of the Frappuccino at Starbucks, driven by employees
lower in the hierarchy, emphasize the need for HR to support the flow of ideas and ensure their
realization. In the realm of strategic HRM, it is not only crucial for the Chief Human Resource
Officer (CHRO) to be involved in formulating intended strategies but also for HR to consistently
promote continuous improvement, encourage strategy reassessment, and facilitate effective
information flow and communication between various organizational levels.

8. Customer oriented perspective

Understand the needs of the business in general and the needs of the business partners – the line
managers – that they are working with. It is the expertise of the HR practitioner to undertand
how to design and implement different configurations of HR policies and practices that are
tailored to a business- its strategy and goals. Line managers, too, must collaborate and work
closely with HR practitioners in order to succeed.

9. Tests of competitive advantage

- Alignment: The HR strategy must align with both the firm's business strategy and
external conditions. Achieving alignment is challenging but essential for success.
- Differentiation: The HR strategy must be distinct from competitors, offering unique
value. Both HR and business strategies should be uniquely tailored to each other to
prevent easy replication by competitors.
- Value Addition: The HR strategy should demonstrate added value. This involves
showcasing the Return on Investment (ROI) of HR practices, such as employee
 selection and training, through advanced approaches like audits or analytics.
Demonstrating value is the most sophisticated aspect of this evaluation.
10. Ways to evaluate HRM
a. Audit Approach:
- Focuses on reviewing the various outcomes of the HR functional areas.
- Both key indicators and customer satisfaction measures are typically collected.
- Employee assessment.
- Surveys of top-line executives.
b. Analytic Approach:
- Focuses on either:
(1) determining whether the introduction of a program or practice has the intended
effect
(2) estimating the financial costs and benefits resulting from an HR practice
- More demanding than the audit approach because it requires the detailed use of
statistics and finance
 Diversity: Fact or Fiction
- Errors/biases in perception
- Confirmation bias
248…
- Visual illusion as a metaphor for person perception
Đôi lúc những gì mắt chúng ta nhìn thấy chưa chắc đã là sự thật
Điều tương tự áp dụng cho quan điểm cá nhân
- Age and technology
Assumptions: Older = worse at technology
Có rất nhiều variables ảnh hưởng đến việc 1 người có giỏi công nghệ hay không (tuổi tác, giới
tính, môi trường làm việc, động cơ, … )
Yếu tố quan trọng nhất là interest (sở thích)
- Millennials and narcissism
Assumption: Millennials có cái tôi cao, very narcissistic
Trên thực tế: Nghiên cứu chỉ ra rằng chúng ta cần phải so sánh millennials, gen x, gen y, … ở
cùng độ tuổi (20-25)
Kết quả: Thế hệ nào cũng có mức độ narcissism tương đương nhau
Bài học: Sau này đi làm nhiều, dần dần ai cx sẽ trưởng thành và biết lắng nghe, học hỏi, tiếp thu
hơn
- Gender wage gap
Cần phải đảm bảo hai đối tượng nam - nữ được so sánh với nhau phải làm cùng 1 vị trí và output
của họ là tương đương nhau
1 vài yếu tố gây ra gender wage wap: Discrimination
- Power posing (aka wonder woman pose)
Áp dụng power pose trong 2 phút giúp bạn cảm thấy tự tin hơn và giảm căng thẳng (dopamine
tăng cao, cortisol giảm)
VD: Nên làm trước khi đi phỏng vấn (khi ở 1 mình trong phòng vệ sinh)
- Asian Americans better and test scores/math
rõ ràng là thế
- Ethnic capital
Chủng tộc (races) không di truyền một cách sinh học (0%)
- ‘Fat’ people and laziness
assumptions: fat people are lazy, less willing to exert more effort
“fat” = proportion of fat; not exactly bodyweight
- How body weight is determined
80% là do di truyền (hereditary); 20% là do ăn uống, tập luyện
 Work Design/Analysis
1. Work design & competitive advantage
Job analysis is considered the “bedrock” of human resources management in the sense that
it lays the groundwork for all other HR activities. As we will discuss, the result of a job analysis
is a job description – and it is difficult to determine what criteria to use in selection for a
particular job without knowing what the description of that job is.
A job is a collection of tasks, duties and responsibilities.

For a strategy to succeed, effective implementation is crucial, and the organization and
design of work play a vital role. Job design is one of the key variables in strategy
implementation. The connection between strategy and job design significantly influences a firm's
success. Consider a scenario where a firm aims to differentiate itself by offering a diverse and
unique product line. This strategic decision has direct implications for how work is organized.
For example, in the latter part of the last century, U.S. automobile manufacturers shifted from
a mechanistic approach, characterized by assembly lines, to a more motivational approach,
implementing self-directed work teams. This shift allowed manufacturers like GM to produce a
more varied range of cars in response to diverse consumer demands.
In this story, the Times quotes the Chairman of Volvo as having said:
''I want the people in a team to be able to go home at night and really say, 'I built that car,' ‘ ''That is my
dream.'’ As we will see later in this lesson, this is highly representative of a motivational approach to work design.
Thus, how work is designed should very much be influenced by and supportive of a firm’s
business strategy, culture and broader approach to managing human resources. At Volvo, there
has long been a people-oriented culture, and the relatively early move toward a team-based
motivational approach to work design is, in hindsight, no big surprise. If you look at their
website, Volvo will tell you the same: They say that “The Volvo Way is based on the conviction
that every individual has the capability and the determination to improve our business”. As your
textbook explains, the reason that auto manufacturers in Asia (namely, Japan – at Toyota) and
Europe (namely, Volvo) were successful when US auto manufacturers were getting hit hard
competitively was due to early movement to adopt more motivational work design, and to do
so in a way that was consistent with the external environment, the strengths, weaknesses and
unique characteristics of these firms. They had smart management- which helped them be so
successful at that time.

2. Work flow analysis

Work-unit analysis is a common organizational practice, focusing on defining work outputs,
quality standards, and the processes and inputs required for quality product creation. This
approach breaks down inputs into raw materials, equipment, and human skills. Every work
unit, be it a department or an individual, aims to produce tangible or intangible outputs.
Conducting work-flow analysis is crucial for HR and line managers, providing insights into
essential tasks and qualifications needed for product or service generation at the department or
business unit level. Subsequent discussions on job analysis will offer a more detailed
examination at the job level.
3. Organization structure

4. Job analysis; job descriptions; job specification

Job analysis is the process of obtaining detailed information about jobs, leading to the
creation of job descriptions that encompass tasks, duties, and responsibilities within a specific
job. This analysis serves various purposes, including organization design, HR management, and
work design. Smaller companies often adopt more flexible job designs, while larger
organizations tend to formalize work procedures due to specialization.

Key terms to understand include tasks (distinct work activities with a specific purpose), jobs
(collections of tasks), job families (groups of jobs with similar characteristics), and occupations
(higher-level professions, e.g., "accounting"). Job analysis methods vary, with standardized
approaches like O*Net and the Position Analysis Questionnaire discussed in detail. Customized
methods, such as the task inventory approach, involve gathering information about job tasks
from subject matter experts and job incumbents to create a reliable picture of job requirements.

In job analysis, two key types of information are crucial: job descriptions and job
specifications.
- A job description is a comprehensive list of tasks, duties, and responsibilities
(TDRs) associated with a specific job. TDRs are observable actions, providing
detailed insights into the work performed. A well-constructed job description should
balance breadth and specificity, including job title, activities, procedures, working
conditions, social environment, and conditions of employment.
- A job specification outlines the knowledge, skills, abilities, and other
characteristics (KSAOs) essential for an individual to perform the job. Knowledge
refers to necessary factual or procedural information, skills denote proficiency in
specific tasks, and abilities represent enduring capabilities. Other characteristics may
encompass personality traits like achievement motivation. Job specifications identify
the indispensable elements of a job, guiding recruitment, selection, and placement.
They may be included in a job description or exist as a separate document.
5. PAQ
The Position Analysis Questionnaire (PAQ) is a standardized tool with six sections,
examining various facets of a job: information input, relationships, mental processes, job
context, work output, and other characteristics. Comprising 194 questions, the PAQ is
versatile, applicable across diverse job types, industries, and organizations. Respondents assess
the relevance of each item to the specific job using six scales, and the resulting scores undergo
computer analysis at PAQ headquarters.
 Research shows that the PAQ gauges 32 specific dimensions and 12 global overall
dimensions of jobs, linking scores to subtests of the General Aptitude Test Battery (GATB). This
linkage aids in understanding the required abilities for the job. The PAQ offers a standardized
and comprehensive format, facilitating comparisons across different jobs, whether similar or
dissimilar. An additional advantage is its coverage of work context, inputs, outputs, and
processes.

Despite its benefits, the PAQ has limitations. Its length of 194 questions along six
dimensions makes it time-consuming. Due to its complexity, only individuals familiar with the
tool should use it for job analysis, necessitating specialized knowledge. Furthermore, as a
standardized and less customized tool, the PAQ may present an abstract view of a job and might
not suit certain work types, particularly white-collar positions. Therefore, it may not be ideal for
developing job descriptions or redesigning jobs, but it remains widely used in job analysis.
6. O*NET
ONet, or the Occupational Information Network, has replaced the Department of Labor's
Dictionary of Occupational Titles (DOT). Unlike the DOT, which relied on fixed job titles and
narrow descriptions, ONet employs a flexible language system applicable to various types of
work, describing qualifications, work styles, activities, and contexts for around 1,000 broadly
defined occupations. This adaptability is valuable in the dynamic, complex, and globalized job
market. O*Net is widely utilized by employers, employment agencies, vocational counselors,
and job seekers, providing valuable insights into the qualifications and skills required for diverse
occupations. Its availability and comprehensive approach make it a prominent resource in
navigating today's evolving employment landscape.
7. Work re-design
- Job design is the process of defining the way work will be performed and the tasks
that will be required in a given job.
- Job redesign refers to changing the tasks or the way work is performed in an existing
job.
- Four approaches used in job design are:
o mechanistic approach
o motivational approach
o biological approach
o perceptual-motor approach

Characteristics
Mechanistic - Specialization
Approach - Skill variety
- Work methods autonomy
Definition
- identifying the simplest way to
structure work that maximizes
efficiency
- reducing the complexity of the work
=> more efficiency => train quickly
 and easy to perform
Motivational - Decision-making - Focus on the psychological meaning
Approach autonomy and motivational potential
- Task significance - Aims to boost employee motivation
- Interdependence by increasing job complexity,
implementing strategies like job
enlargement, job enrichment, and
constructing jobs around
sociotechnical systems => a more
meaningful and challenging work
environment.
Biological Approach - Physical demands - Identify clearly the outputs of work,
- Ergonomics to specify the quality and quantity
- Work conditions standards for those outputs, and to
analyze the processes and inputs
necessary for producing outputs that
meet the quality standards.
Perceptual-motor - Job complexity - Focus on human mental capabilities
Approach - Information processing and limitations.
- Equipment use - The goal is to design jobs in a way
that ensures that they do not exceed
people's mental capabilities =>
improve reliability, safety, and user
reactions => decreasing the job’s
cognitive demands.

8. In-class exercise
 HR Planning

1. War for talent

HR planning, also known as workforce planning or strategic workforce planning, can be
thought of as processes and practices used to ensure that individuals with the KSAOs are in place
at the right time to meet an organization’s current and future labor force needs. In other words,
HR planning helps firms to develop plans and strategies for addressing labor supply and
demand, as well as avoiding and mitigating labor shortages and surpluses. HR planning can
include a variety of dimensions including talent inventories, workforce forecasts, action plans
and program evaluations. We need HR planning for organizations to be effective and efficient, to
follow EEO requirements and also to support the KSAs of employees as well as the work that
employees and their managers are doing on a day-to-day basis. HR planning is important in
terms of making sure operating budgets are adhered to, and will directly affect a company’s
effectiveness.
HR planning can be – and really should be – a strategic function. HR planning that is more
strategic than operational is longer-range, it is more flexible than fixed, and it requires resource
commitments. It should flow directly from a firm’s business strategy and its broader HR strategy.
HR planning is in fact part of the strategic management process. That is, forecasting labor
demand is part of a firm’s external analysis, which is part of a larger SWOT analysis that is
necessary for strategic planning. The strategic planning process in general determines a firm’s
talent-related needs, which then influence the implementation of a firm’s strategic plan vis a vis
HR policies and practices. So HR planning really is a strategic function, assuming it is done as
part of a larger strategic management function. HR managers are often responsible for HR
planning, but in many organizations, especially those that are decentralized, line managers are
responsible as well. To avoid the process being too fixed, it may be important that HR planning
be democratic, involving input and responsibility from HR and line managers. That said, in small
firms, line managers are often responsible for HR planning themselves.
 2. HR Planning process
The model above is a diagram of the HR planning process.
HR planning begins with forecasting, which means forecasting labor supply and demand
for various positions. The main purpose in this stage of the planning process is to make useful
predictions about where there will be future labor surpluses and shortages so as to be able to
avoid them or to develop plans for remedying them.
Next is goal setting and strategic planning. Once forecasts have been made, the second step
in the HR planning process is to set specific, quantitative goals for increasing or decreasing
human resource units (i.e., people) in different positions across a specified period of time. For
instance, if a forecast has been made that there will likely be a labor surplus in a particular
position, the firm may set a goal to reduce hiring or promoting into that position by a certain
percent.
As with any other set of processes, the goals and strategies need to be implemented with
specific HR policies and practices, which need to be evaluated. This is the last step in the HR
planning process. There are a variety of competitive pressures that can impact HR planning,
and these need to be considered vis a vis a firm’s business and HR strategies as well as the HR
planning process. These can include, for instance, expansion into new markets, mergers &
acquisitions, industry trends and economic factors, as well as actions of competitors.

3. Forecasting
Predictions about labor demand are usually done around specific jobs or skill categories. .
Recent research – the Differentiated Workforce - suggests that firms should focus on those
jobs or skillsets that are key to the organization’s success. Organizations will typically use
multiple methods to forecast – including both statistical and judgmental methods. In terms of
determining labor demand, firms (usually larger, more sophisticated firms) will use sophisticated
statistical models to predict labor demand. Leading indicators are essentially variables that
explain a significant portion of variance in labor demand. Since leading indicators are not always
right, pooled judgment of experts (e.g., HR practitioners and managers) will be used to try to
predict labor demand.

Determining the supply of labor for key positions is crucial after establishing labor demand.
Internal labor supply analysis, predominantly for existing roles, involves statistical or judgmental
methods. Staffing and HR metrics, including retirements, promotions, and turnovers, guide
predictions. Transitional matrices, illustrating employee movement between related jobs, aid in
understanding historical trends and planning for the future. By analyzing such matrices, HR
analysts can identify the sources of labor supply and make informed adjustments. They are
particularly useful for affirmative action and EEO purposes, providing insights into labor supply
by subgroup. Workforce utilization reviews compare subgroup proportions within a job to
external labor markets, revealing potential underutilization.
 As firms compete for talented workers, external benchmarks, such as industry growth
projections and government agencies like the Department of Labor, become crucial for assessing
labor supply. Talent inventories, databases containing employee records, including skills,
interests, and career goals, offer valuable insights for succession planning. This internal labor
supply analysis helps identify successors for key positions. Firms must decide between internal
and external sourcing, each with its pros and cons. Internal sourcing may necessitate
training, while external recruitment incurs additional costs. Balancing these factors is
essential for effective workforce planning.

4. Labor surplus, labor shortage

a. Labor Surplus
OPTIONS SPEED HUMAN SUFFERING
Downsizing Fast High
Pay Reductions Fast High
Demotions Fast High
Transfers Fast Moderate
Work Sharing Fast Moderate
Hiring Freeze Slow Low
Natural Attrition Slow Low
Early retirement Slow Low
Retraining Slow Low
Methods differ in the speed by which they can be implemented, as well as the extent of
human suffering that is likely to be encountered.
Work sharing is when a firm adopts a shorter work week with less pay for each worker, which is a situation
which workers generally share in. In this way, each worker’s pay is reduced, but the firm can avoid layoffs.
Early retirement, have relatively little human suffering, but need to be planned for far in advance because they
are much slower in terms of implementation.
Downsizing: planned elimination of large numbers of personnel to enhance organizational competitiveness.
Downsizing:
4 Reasons for Downsizing:
- reduce labor costs
- technological changes reduce need for labor
- mergers and acquisitions reduce bureaucratic overhead
- organizations change location of where they do business
 short-term benefit: lower costs and increased profits
 can hurt firms in the long run: loss of key talent and institutional knowledge, reduced
job attitudes and performance, hurt a firm’s image and attractiveness -> damaging its
ability to recruit qualified workers.
Downsizing seems to be particularly damaging to firms that engage in high performance
work practices, that are R&D-oriented, or for service-oriented, high customer contact
businesses. Downsizing obviously needs to be done in a very deliberate, strategic and careful
way so as to maximize benefits to the firm and reduce adverse outcomes to workers.

Early Retirement:
 The average age of U.S. workforce is increasing.
 Baby boomers are not retiring early due to:
 improved health
 fear that Social Security will be cut
 mandatory retirement is outlawed
 collapse of the financial and housing markets made it economically unviable to
retire
 Many employers try voluntary attrition among older workers through early retirement
incentive programs.
b. Labor Shortage:
OPTIONS SPEED REVOCABILITY
Overtime Fast High
Temporary employees Fast High
Outsourcing Fast High
Retrained transfers Slow Moderate
Turnover reductions Slow Moderate
New external hires Slow Low
Technological innovation Slow Low
Temporary Employees:
- Hiring temporary workers helps eliminate a labor shortage and affords flexibility
needed to operate efficiently during demand swings.
3 Advantages:
1. Temporary workers free a company from administrative tasks and financial
burdens.
2. Temporary workers are often times tested by a temporary agency.
3. Many temporary agencies train employees before sending them to employers.

Outsourcing & Offshoring:

 To help ensure the success of outsourcing:
 Choose an established, large outsourcing vendor.
 Jobs that are proprietary or require tight security should not be outsourced.
 Start small and monitor constantly.
 Plunkett Research Video

5. Program Implementation & Evaluation

An important point here is that progress needs to be consistently monitored and HR
leaders need to be aware of the progress being made towards achieving the goals of
the HR planning process.
6. In-class exercise