* How is the HRM Function Changing?

* Time devoted to administrative tasks - decreasing & roles as a strategic business partner,
change agent, & employee advocate - increasing

* Focus shifting from current operations to strategies for the future & preparing non-HR
managers to develop & implement HR practices, HR managers face two important
challenges:

* Self-service refers to giving employees online access to information about HR issues

* Outsourcing refers to the practice of having another company provide services

 Competitive Challenges
Influencing HRM

*3 competitive challenges that

Co’s now face will increase The Challenge of
the importance of HRM Sustainability
practices:
The Technology
Challenge

The Global
Challenge
 *The Global Challenge
* Co’s - to survive must compete in international markets as well as fend off foreign
corporations’ attempts to gain ground

* Offshoring - exporting jobs from developed countries to less developed countries

* Many Co’s entering intnl markets - exporting products overseas, building

manufacturing facilities in other countries, entering into alliances with foreign
companies, & engaging in e-commerce
 * The Technology Challenge
* Advances in technology have:
* resulted in high-performance models of work systems,

* changed skill requirements,

* increased working partnerships,

* led to changes in Co. structure & reporting relationships,

* increased the availability of HRIS, used to acquire, store, manipulate, analyze, retrieve, &
distribute HR information,

* increased the availability of e-HRM.

 *The Sustainability Challenge
* Sustainability - ability of a Co. to survive & succeed in a dynamic competitive envt.
It includes the ability to:
* deal with economic & social changes,

* engage in responsible & ethical business practices,

* provide high quality products & services, &

* put in place methods to determine if the Co. is meeting stakeholders’ needs

 * Changing Demographics
Diversity of the Workforce
* Internal labor force is the labor force of current employees

* External labor market includes persons actively seeking employment.

* The workforce is becoming increasingly diverse
* Women
* Minorities
* Differently abled workers
* Immigrants
 * Managing a Diverse Workforce

* Managers - a new set of skills, including:

* Communicating effectively with employees from a wide variety of
cultural backgrounds.
* Coaching & developing employees of different ages, ednl backgrounds,
ethnicity, physical ability, & race.
* Providing performance feedback that is based on objective outcomes.
* Creating a work envt that makes it comfortable for employees of all
backgrounds to be creative & innovative.
* HR’S STRATEGIC CHALLENGES
*The central challenge facing HR is
to provide a set of services that
make sense in terms of the
company’s strategy.
*A strategy is the company’s plan for
how it will balance its internal
strengths & weaknesses with
external opportunities & threats in
order to maintain a competitive
advantage
* Relationship Between Strategy, Objectives,
Policies, & Rules:
Strategy – The plan that integrates
major objectives

More specific
Objectives – Goals that are specific &
measurable

More specific

Policies – Guides to decision making

More specific

Procedures/Rules – Specific directions

for decision making
 STRATEGIC CHOICES
 What business Corporate objectives,
should we be in? strategic plans,
vision, & values

 How do we win (gain

competitive advantage) Business
Business unit
unit
in those businesses? strategies
strategies

 How should HR help HR

HR strategies
strategies
us win?

Employee
Employee attitudes
attitudes
& behaviours
& behaviours

Competitive
advantage
 *Strategic Management Process
Phase I Phase II Phase III
Diagnosis Formulation Implementation
• Define mission • Formulating a • Implement
• Situation new business strategies
analysis statement • Monitor
• Gap analysis • Translate implementation
mission into and revise
strategic goals strategies
accordingly
*Generic Business-level Strategies

*Innovator

*Cost Cutter

*Customer Focused
TAILOR THE HR SYSTEM TO THE STRATEGY
Business HR Program
Strategy Response Alignment

Innovator:  Product Leadership  Committed

Increase Product  Shift to Mass to Agile,
Complexity & Customization & Risk Taking,
Shorten Product Innovation Innovative
 Cycle Time People
Life Cycle

Cost  Operational
Cutter: Excellence  Do More
Focus on  Pursue Cost-effective with Less
Efficiency Solutions

Customer
Focused:
 Customer Intimacy:  Delight
 Deliver Solutions to Customer,
Increase Customers Exceed
Customer Expectations
Expectations
* The increased strategic importance of HRM means that:
* Human resource specialists must show that they contribute to
the goals & mission of the firm
* The actions, language, & performance of the HRM
function must be:
* Measured
* Precisely communicated
* Evaluated

*Strategic Importance of HRM

 * Traditional HRM versus Strategic HRM

Traditional HRM Strategic HRM

Responsibility for HRM Staff specialists Line managers

Focus Employee relations Partnerships with internal & external

customers
Role of HR Transitional, change follower, & Transformational, change leader &
respondent initiator
Initiative Slow, reactive, fragmented Fast, proactive, integrated

Time horizon Short term Short, medium, long (as necessary)

Control Bureaucratic-roles, policies, procedures Organic-flexible, cross-training,

teams
Job design Tight division of labour, independence, Broad flexible, cross-training, teams
specialization
Key Investments Capital, products People, knowledge

Accountability Cost center Investment center

* Analyzing & solving problems from a profit-oriented
point of view

* Assessing & interpreting costs or benefits of HRM issues

* Using planning models that include realistic,

challenging, specific, & meaningful goals

* Key Strategic HRM Concepts

* Preparing reports on HRM solutions to problems encountered
by the firm

* Training the human resources staff

* Emphasizing the strategic importance of HRM
* Emphasizing the importance of contributing to the firm’s profits

* Key Strategic HRM Concepts

 *The Balanced Scorecard
* The balanced scorecard gives managers the opportunity to look at the Co.
from the perspective of internal & external customers, employees &
shareholders.

* It should be used to:

* Link HRM activities to the Co’s business strategy.
* Evaluate the extent to which the HR function is helping the Co meet it’s
strategic objectives.

* Measures of HR practices primarily relate to productivity, people, &

processes.
 *The Balanced Scorecard
Customer How do customers see us? Time, quality, performance,
service, cost.

Processes that influence customer

Internal What must we excel at? satisfaction, availability of
Processes information on service &/or
manufacturing processes.

Can we continue to improve Improve operating efficiency,

launch new products, continuous
Innovation & create value?
improvement, empowering of
& Learning workforce, employee satisfaction.
How do we look to
shareholders? Profitability, growth, shareholder
Financial value.
 *HR Scorecard
* The HR scorecard uses the concept of the balanced scorecard to manage the
performance of HR. It is a tool which allows a business to:
* Manage HR as a strategic contributor to the maintenance of competitive edge of the
organization through its people.
* Measure the contribution of HR to the firm’s financial results by quantifying this
contribution.
* Createan HR architecture which is aligned to the business strategy and measure its
degree of alignment.
 *Benefits of HR Scorecard
* It clearly distinguishes HR doable from HR deliverable.

* It empowers HR managers to control costs and create value.

* It measures the firm’s leading indicators.

* It clarifies HR’s contribution to profitability.

* It allows HR professionals to manage better.

* It encourages flexibility and ongoing change.