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HR M Class 2 Strategy and Retention
HR M Class 2 Strategy and Retention
Strategy in Human Resource Management Organization/Individual Relations and Retention Pcs, 2013. 12 February
Identify ways HR professionals can support organizational strategies for quality, growth, efficiency, and international operations.
Define HR planning and outline the HR planning process.
Identify why HR metrics must consider both strategic and operational HR measures.
Identify the changing nature of the psychological contract. Discuss how motivation is linked to individual performance. List the five major drivers of retention and activities related to them. Describe different kinds of absenteeism and turnover.
Core competency: a unique capability that creates high value and that differentiates the organization from its competition
The source of an organizations sustainable competitive advantage
Information sharing/participation
FIGURE 2-2
Operationalizing HR Strategy
Thinking Strategically
FIGURE 2-3
HR As Organizational Contributor
HR Contributions to Organization Effectiveness
Organization productivity
Financial contributions
Organizational Productivity
Productivity
Measure of the quantity and quality of work done, considering the cost of the resources used. Metrics example: employee wages +benefits sales
2-4
Efficiency
The degree to which operations are done in an economical manner.
HR Planning Responsibilities
Top HR executive and subordinates gather information from other managers to use in the development of HR projections for top management to use in strategic planning and setting organizational goals
Zsuzsanna Vitai HRM 2013 spring
Purpose of HR Planning
FIGURE 2-7
HR Planning Process
HR Planning Process 2
HR Strategies
The means used to anticipate and manage the supply of and demand for human resources.
Provide overall direction for the way in which HR activities will be developed and managed.
Benefits of HR Planning
Better view of the HR dimensions of business decisions Lower HR costs through better HR management. More timely recruitment for anticipate HR needs More inclusion of protected groups through planned increases in workforce diversity. Better development of managerial talent
Zsuzsanna Vitai HRM 2013 spring
Methods:
judgmental mathematical
?
Zsuzsanna Vitai HRM 2013 spring
Periods:
short, intermediate, long
Judgmental methods
Judgmental
Estimatesasking managers opinions, top-down or bottom-up Rules of thumbusing general guidelines Delphi techniqueasking a group of experts Nominal groupsreaching a group consensus in open discussion
Mathematical methods
Statistical regression analysis Simulation models Productivity ratios Staffing ratios
HR Forecasting
Workforce realignment
Layoff:
in response to shortfall in demand for products employees are put on unpaid leaves of absence
Laid - off employees may be rehired if demand becomes stronger! Downsizing: planned elimination of large number of personnel with the goal of enhancing the organizations competitiveness - workers are not rehired!
Zsuzsanna Vitai HRM 2013 spring
Objectives:
Downsizing 1
reducing costs replacing labor with technology mergers and acquisitions moving to more economical locations
Effects:
not all positive! Does not generate additional revenue - cuts costs only in the short run remaining employees are overburdened and demoralized
Zsuzsanna Vitai HRM 2013 spring
Downsizing 2
Attrition:
people who quit, die, or retire are not replaced in addition companies use hiring freezes
Downsizing 3
How to?
Investigate alternatives to downsizing involve people necessary for success in the planning for downsizing develop comprehensive communication plans nurture the survivors outplacement pays off
Definition:
Outplacement services
a group of services provided to displaced employees to give them support and assistance
personal career counseling resume preparation typing services interviewing workshops referral assistance special severance pay arrangements medical benefit coverage retraining for different jobs establishing on-site career centers contacting other employers for job placement opportunities
Zsuzsanna Vitai HRM 2013 spring
Outsource work
Reduce turnover
Note: An FTE is a measure equal to one employee working full-time for one year.
C ROI A B
A = Operating costs for a new or enhanced system for the time period
B = One-time cost of acquisition and implementation C = Value of gains from productivity improvements for the time period
Common Benchmarks
Total compensation as a percentage of net income before taxes Percent of management positions filled internally Dollar sales per employee Benefits as a percentage of payroll cost
Zsuzsanna Vitai HRM 2013 spring
Assessing HR effectiveness
RECORDS!
Must be kept current and properly organised Important documentation if legal problems occur Basis for research
Examples:
HR expense per employee Compensation as a percent of expenses HR dept. expense as a % of total expenses Cost of hires Turnover rate Absence rate Workers compensation cost per employee
Zsuzsanna Vitai HRM 2013 spring
HR audit
Definition:
A formal research effort that evaluates the current state of HR management in an organisation
Legal compliance Current job descriptions and specifications Valid recruiting and selection processes Wage/salary and benefits systems Absenteeism and turnover control measures Training and development effort Performance management system Employee handbook policies Health, safety and security issues
Zsuzsanna Vitai HRM 2013 spring
Web pages
http://www.ilo.org/public/english/bureau/stat/ http://epp.eurostat.ec.europa.eu/portal/page/portal /eurostat/home/ http://www.bls.gov/ http://www.kormany.hu/hu http://www.ksh.hu/ http://www.fedstats.gov/ http://www.oecd.org/statistics/
Individual/Organizational Relationships
The Psychological Contract
The unwritten expectations employees and employers have about the nature of their work relationships.
Affected by age of employee and changes in economic conditions. Focuses on expectations about fairness that may not be defined clearly by employees.
Psychological Ownership
When individuals feel that they have some control and perceived rights in the organization, they are more likely to be committed to the organization.
Zsuzsanna Vitai HRM 2013 spring
Competitive compensation and benefits Flexibility to balance work and home life
Continuous skill improvement and increase productivity Reasonable time with the organization
FIGURE 3-1
Job Satisfaction
FIGURE 3-2
Individual Motivation
Motivation
The desire within a person causing that person to act to reach a goal.
Repetition: Motivation
Definition:
the desire within a person causing that person to act
Content theories
Abraham Maslows need hierarchy Clayton Alderfer ERG theory Frederick Herzberg - motivation-hygiene David McClelland achievement motivation Emphasis on what motivates individuals
Process theories
Cognitive evaluation theory Equity theory Expectancy theory Goal setting theory Reinforcement theory
Equity theory - Stacy Adams Explanation of behaviour on perceptions of social comparisons The theory is based on the perception of inequity We are motivated to act in situations which we perceive to be inequitable or unfair Equity situation:
The perceived fairness of what the person does compared with what the person receives
Underreward Inequity
Equity condition
Overreward Inequity
Outcomes
Inputs
Zsuzsanna Vitai HRM 2013 spring
Outcomes
Inputs
action to resolve
equity restored
Zsuzsanna Vitai HRM 2013 spring
Value of Rewards
how valuable the rewards are to the employee
Attractive job
Freedom and autonomy, exciting challenges, and career advancement and growth
FIGURE 3-3
Drivers of Retention
FIGURE 3-4
Employee Absenteeism
Absenteeism
Any failure to report for work as scheduled or to stay at work when scheduled. Involuntary absenteeism
Unavoidable with understandable cause (e.g., actual illness)
Voluntary absenteeism
Avoidable without justifiable cause (e.g., feigning illness)
Zsuzsanna Vitai HRM 2013 spring
FIGURE 3-5
Source: Based on data from 2006 CCH Unscheduled Absence Survey, CCH, Inc., October 26, 2006, www.cch.com/press/news/2006. All Rights Reserved. Reprinted with permission.
Controlling Absenteeism
Disciplinary approach Positive reinforcement
Controlling Absenteeism
Paid time-off (PTO) Combination approach
No fault policy
FIGURE 3-6
Employee Turnover
Turnover
The process in which employees leave an organization and have to be replaced.
Impact of Turnover
Inability to achieve business goals
Loss of image to attract other individuals
Types of Turnover
Involuntary
Controllable
Voluntary
Turnover
Uncontrollable
Functional
Dysfunctional
Number of employee separations during the month 100 Total number of employees at midmonth
Costs of Turnover
Separation costs
Replacement costs Training costs
Hidden costs
Job and job levels Department, units, and location Reason for leaving Length of service Demographic characteristics Education and training Knowledge, skills and abilities Performance ratings/levels
Zsuzsanna Vitai HRM 2013 spring
FIGURE 3-7
(40%)
FIGURE 3-8
Managing Retention
FIGURE 3-9
Spot cash awards for good work Develop profiles of successful employees and hire to the profile Learning bonuses Focus groups on employee issues Voluntary job sharing Realist job avenues Excellent employee development Payback agreement for moving expenses Clear goals Accurate performance appraisals Competitive benefits Career counseling Mentoring Diverse workplace Sabbatical leaves
Facilitate promotion/transfer Reward managers with low turnover Fair pay Fulfilling work Avoid hiring those with a history of turnover Tuition reimbursement and promotion for education Retention bonuses Subsidized child/elder care Retrain for promotion/transfer Pay tied to performance Telecommuting Recognize good work Good working conditions Friendly work culture/co-workers Considerate supervisors