Competitive challenges

We discuss how these competitive challenges are influencing HARM. The chapter concludes by highlighting the HARM practices covered in this book and the ways they help companies compete. Learning Objectives After studying this chapter, the student should be able to: 1. Discuss the roles and activities of a company’s human resource management function. 2. Discuss the implications of the economy, the makeup of the labor force, and ethics for company sustainability. 3. Discuss how human resource management affects a company’s balanced scorecard. 4. Discuss what companies should do to compete in the global racetrack. . Identify the characteristics of the workforce and how they influence human resource management. 6. Discuss human resource management practices that support high performance work systems. 7. Provide a brief description of human resource management practices. Extended Chapter Outline Note: Key terms are boldface and are listed in the “Chapter Vocabulary” section. Opening Vignette: Struck: HRS Practices Help Focus on the Brew, Weather the Recession and Prepare for Growth Struck is Seattle- based coffee store with a mission to “inspire and nurture the human spirit.

Its stores, which number 17,000 operating in the United States and 50 other countries, provide an inviting place for customers to enjoy fresh brewed coffee as well as smoothies, teas, pastries, sandwiches, salads, oatmeal, parfaits and fruit cups. The company has experienced come challenges from the economic downturn In 200/ when ten recession as well as competently cut Into Its pronto I nee company had to close stores, retool practices for greater efficiency, and launch a new marketing campaign. Struck believes that its employees, whom it calls “partners,” are vital to its success.

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The company wants its partners to have coffee knowledge, product expertise, and provide excellent customer service. The company also believes in investing in its partners. It provides comprehensive health care benefits for partners who work 240 hours per quarter. Struck has a “total pay’ package that includes programs that embrace diversity, providing all employees and their opposite-sex or same-sex partners with comprehensive health care benefits that include medical, dental, and vision care as well as tuition reimbursement, stock options, a discounted stock purchase plan, vacations and a 401 (k) retirement plan.

Struck’ CEO Howard Schultz places a high importance on partners. This is evidenced by his response to an institutional investor who, during the worst time for the company during the recent recession to consider cutting employee health care benefits. Schultz indicated he would not so do, and suggested that the investor invest elsewhere. Discussion Questions 1. Think about the emphasis that even the face of economic challenges and stiff competition such as McDonald’s’ and Dunking Donuts, Struck places a heavy emphasis on treating its employees with care.

Struck cares about knowledgeable employees, and it also training, comprehensive medical benefits as well as other benefits. Why do you think that CEO Howard Schultz is willing to persist in the provision of such benefits, even in the face of these external challenges? L. Introduction A. Competitiveness refers too company’s ability to maintain and gain market share in its industry. 1. Competitiveness is related to effectiveness, which is determined by whether the company satisfies the needs of stakeholders (groups affected by business practices). B.

Human Resource management (HARM) refers to policies, practices and systems that influence employees’ behaviors, attitudes and performance. (See Figure 1 . 1) 1. Effective HARM practices have been shown to relate to company performance by contributing to employee and customer satisfaction, innovation, productivity, and development of a favorable reputation in the community in which the firm is located. The HARM contribution has only recently been recognized. 2. . What responsibilities and roles do HRS departments perform? Responsibilities that the HRS department is solely responsible for include A. Outplacement, Largo Law compliance, record Keeping, testing, unemployment insemination, and some aspects of benefit administration. (See Table 1 . 1). B. Many different roles and responsibilities can be performed by the HRS department depending on the size of the company, the characteristics of the workforce, the industry, and the value system of the company’s management. C. HARM as a Business with Three Product Lines: 1. Administrative services and transactions: compensation, hiring, staffing. Emphasis is placed on resource efficiency and service quality. 2.

Business partner services: developing effective HRS systems and helping An implement business plans, talent management. An emphasis is placed on knowing the business and exercising influence—problem solving, designing effective systems to ensure needed competencies. 3. Strategic partner: contributing to business strategy based on considerations of human capital, business capabilities, readiness, and developing HRS practices as strategic differentiation. An emphasis is placed on knowledge of HRS and of the business, competition, the market, and business strategies.

Ill. What competencies do HRS professionals need? Figure 1. 3 shows the six competencies that are needed for the HRS profession. 1. Credible activist: delivers results with integrity, shares information, builds trusting relationships, and influences others, providing candid observation, taking appropriate risks. 2. Cultural steward: facilitates change, develops and values the culture, and helps employees navigate the culture. 3. Talent manager/organizational designer: develop talent, design reward systems, and shapes the organization. 4.

Strategic architect: recognizes business trends and their impact on the business, evidence-based HRS, and develops people strategies that contribute to the business strategy. 5. Business Ally: understands how the business makes money and the language of the business. 6. Operational executor: implements workplace policies, advances HRS technology, and administers day-to-day work of maintaining people. Lb. How Is ten HARM Tunnel canalling• A. The amount of time that the HRS function is devoting to administrative tasks is decreasing and its role as a strategic business partner, change agent, and employee advocate are increasing.

B. Advancement in technology is enhancing self-service. Self-service is the process of giving employees control of HRS transactions. This allows employees to take greater accessibility for their own careers. C. Outsourcing refers to the practice of having another company provide services. D. Evidence-based HRS refers to demonstrating that human resources practices have a positive influence on the company’s bottom line or key stakeholders. E. In-house HRS activities are likely to be performance management, employee communications, plans and strategies, and policy development and implementation.

V. The HARM Profession 1. There are many different types of Jobs in the HARM profession. (See Table 1. 3) 2. The primary professional organization for HARM is the Society for Human Resource Management (SHIRR). VI. Competitive Challenges Influencing Human Resource Management (See Figure 1. 4) A. The Sustainability Challenge 1. Sustainability refers to the ability off company to survive and succeed in a dynamic competitive environment. 2. Company success is based on how well the company meets the needs of its stakeholders.

Stakeholders refer to shareholders, the community, customers, and all of the other parties that have an interest in seeing that the company succeeds. 3. Several changes in the economy have important implications for human resource management. Some key statistics about the economy and the workforce are shown in Table 1. 4. 4. The competition for labor is affected by the growth and decline of industries, Jobs, and occupations. Competition for labor is also influenced by the number and skills of persons available for full-time work. (See Table 1. 5) a.

The most significant percentage change in employment from 2004 to 2014 is expected to De none Neal aloes Ana computer steward engineers, applications. B. Personal and home health care aids and home health care aids also represent the largest number of Job openings. 5. Increased Value Placed On Intangible Assets and Human Capital a. Intellectual assets refer too type of company asset including human capital, customer capital, social capital, and intellectual capital. (See Table 1 . 7). B. Knowledge workers are employees who own the intellectual meaner of producing a product or service. . Empowerment meaner giving employees responsibility and authority to make decisions regarding all aspects of product development or customer service. D. As more companies become knowledge-based, they must promote and capture learning at the employee, team, and company levels. E. A changing environment meaner that all employees must embrace a philosophy of learning. A learning organization embraces a culture of lifelong learning, enabling all employees to continually acquire and share knowledge. 6. Changes in the Employment Expectations a.

The need for companies to make rapid changes has played a major role in changing the employment relationship. The psychological contract describes what an employee expects to contribute and what the company will provide to the employee for these contributions. B. In the new economy a new type of psychological contract is emerging. Companies emend excellent customer service and high productivity levels. Employees are expected to take more responsibility for their own careers, from seeking raining to balancing work and family.

In exchange, employees want companies to provide flexible work schedules, comfortable working conditions, more autonomy in accomplishing work, training and development opportunities, and financial incentives based on how the company performs. 7. Concerns with Employee Engagement a. Employee engagement refers to the degree in which employees are fully involved in their work and the strength of their Job and company commitment. See Table 1. 8). B. Employees who are engaged in their work and committed to the company they work Tort give companies competitive advantages (enlarger protractor customer service, lower turnover).

Evidence-Based HRS: United Health Care United Health Care is a company comprised of six businesses focused on individual, community, and state health care plans and services. The company uses employee engagement surveys to learn about the relationship between Human Resource Management practices and the company’s business strategy. When recent survey results revealed that managers’ performance, communication, and understanding of owe each employee’s Job contributes to business strategy, the executive vice president of human capital took action.

This action included initiating personal and monthly communications with managers about how to engage employees and explain what employees can do to positively impact the business strategy. As a result, employee turnover has decreased by nine percent, rates of internal promotion have increased by 13 percent, and the rates of first year attrition have dropped by ten percent. 8. Talent Management a. Talent management involves attracting, retaining, developing, and motivating giggly skilled employees and managers. B.

Companies report that one of the most important talent management challenges they face is developing existing employees for managerial positions and attracting and retaining top level managers in leadership positions. 9. Use of Alternative Work Arrangements a. Alternative work arrangements include use of independent contractors, on call workers, temporary workers, and contract company workers. 10. Demanding Work, but with More Flexibility a. The globalization of the world economy and the development of e-commerce have made the notion of a 40-hour work week obsolete. Many companies are taking steps to provide more flexible work schedules, protect employees’ Tree time, Ana more productively use employees’ work time. B. The balanced scorecard: Measuring performance to stakeholders (See Table 1. 9) 1. The balanced scorecard gives managers the opportunity to look at the company from the perspective of internal and external customers, employees and shareholders. The balanced scorecard should be used to: a. Link human resource management activities to the company’s business strategy. B. Evaluate the extent to which the human resource function is helping the company’s et its strategic objectives.

C. Social Responsibility. 1 . Social Responsibility is the recognition by companies that by engaging in business practices that take into account their effects on all stakeholders, they boost their image, gain access to new markets, and attract and retain talented employees. 2. Several companies such as Microsoft, Whole Foods, Monika, Motorola, and Palm have been lauded for their socially responsible efforts. Competing Through Sustainability Volunteerism and Going Green are Reaping Dividends for Employees, Communities, and the Environment

Companies such as General Mills, pharmaceutical company Innovations, and General Electric are becoming increasingly socially conscious through sustainability efforts as well as volunteerism. General Mills’ Chairman and CEO wants the company to be the most socially responsible consumer food company in the world. For example, Finance and Information Technology employees from General Mills Canada picked more than 7000 apples and pears as part of a demodulating exercise, and they donated the fruit to food banks in the Niagara region of Canada.

General Electrics health care unit identified maternal and infant mortality as frequent causes of death in India and in response, it developed a product that provides heat for cradles. Innovations supports REPRESS, which is an African-based philanthropic organization that provides emotional and financial support for children who lose their parent’s or guardians to AIDS. Discussion Question 1. What are the benefits for these corporations who encourage volunteerism? Can you identify an organization in your own community that engages in socially responsible practices such as encouraging employee volunteerism?

C. Customer Service and Quality emphasis customer excellence requires attention to pr coast Ana service Treasures as well as to interactions with customers. 2. Total Quality Management can be defined as “a cooperative form of doing business that relies on the talents and capabilities of both labor and management to continually improve quality and productivity using work teams. ” This is one strategy companies are currently using. A. The TTS movement has alerted management to the key role HARM plays in the achievement of quality. B.

The Malcolm Baldrics National Quality Award was established by President Reagan to publicize successful quality strategies. See Table 1. 10 for the award criteria) Example: Two of the 2007 Baldric award winners were Sharp HealthCare of San Diego, California and PRO-ETC Coating company of Ellipse, Ohio. Sharp HealthCare is a not-for-profit organization that employs 14,000 staff members, 2600 affiliated physicians, operates seven hospitals, three medical groups, 19 outpatient clinics, and manages its own health insurance plan.

Sharp HealthCare meets and exceeds patients expectations by providing high-quality health care. PRO-ETC Coating Company is an industry leader in developing high-strength steel that inhibits corrosion. From 2002-2005, the company produced an estimated 85% of the high- strength steel supply in the U. S. Their employees work in self-directed teams and are empowered to use continuous improvement processes to fix problems as they occur. C. The ISO 9000:2000 standards were developed by the International Organization for Standardization in Geneva, Switzerland.

ISO 9000 is the name of a family of standards (ISO 9001, ISO 9004) that includes requirements such as how to establish quality standards and document work processes to help workers understand quality system requirements. ISO 9000:2000 has been adopted as a quality standard in early 100 countries. D. The Six Sigma process refers too system of measuring, analyzing, improving, and then controlling processes once they have been brought within the narrow Six Sigma quality tolerances or standards.

The objective of Six Sigma is to create a total business focus on serving the customer—that is, deliver what customers really want when they want it. D. Changing demographics and diversity of the workplace 1. The labor force of current employees is often referred to as the internal labor force. 2. I nee external largo mar et K Includes persons actively seeking employment. 3. Aging of the workplace a. Figure 1. 5 compares the projected distribution of the age of the workforce in 2006 and 2016. B. The labor force will continue to age, and the size of the 16-24 youth labor force will decrease to its lowest level in thirty years. . The labor force participation of those 55 years and older is expected to grow because older individuals are leading healthier and longer lies than in the past. Additionally, the high cost of insurance and the decrease in health benefits causes many employees to keep working to keep their employer-based insurance. 4. As figure 1. 6 shows, the U. S. Workforce is becoming increasingly diverse. To successfully manage a diverse workforce, managers must develop a new set of skills, including: a. Communicating effectively with employees from a wide variety of cultural backgrounds. . Coaching and developing employees of different ages, educational backgrounds, ethnicity, physical ability, and race. C. Providing performance feedback that is based on objective outcomes rather than values and stereotypes that work against women, minorities, and handicapped persons by prejudging the persons’ abilities and talents. D. Creating a work environment that makes it comfortable for employees of all grounds to be creative and innovative. 5. Managing cultural diversity can provide a competitive advantage to companies (see Table 1. 12). E. Legal and Ethical Issues 1.

Five main areas in the legal nevi ornament have influenced HARM practice: equal opportunity legislation, safety and health legislation, pay and benefits legs lotion, employee privacy, and Job security. Most recently, the Americans with Disabilities Act regulations require employers to accommodate mental and physical limitations of otherwise qualified individuals, unless undue expense would be incurred. 2. Ethical criteria should be used in company and employee interactions. Ethical principles include the emphasis of mutual benefits, employees assuming response ODL fairness. Y Tort company octagons, a melting corporate villas Tort employees, Ana Example: The Raytheon Company has a checklist including several questions that is distributed to each employee to use when considering whether an action is ethical. Raytheon reinforces its ethics codes with formal training programs, a toll-free “ethics line,” and full-time ethics offices and officers in all of its major business units. Mandatory one-hour ethics training for all employees uses case studies to make employees aware of the ethical problems that may occur at work. A.

The Serbians-Solely Act of 2002 sets strict rules for corporate behavior especially in regards to accounting procedures. F. The Global Challenge – In order to survive, U. S. Companies must, improve HARM practices, develop global markets and better prepare employees for global assignments. 1. Development of Global Markets. The most admired and successful companies in the world have not only created multinational corporations, but have created organizations with workforces and corporate cultures that reflect the characteristics of the global markets in which they operate.

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