HRM 1 introduction
Who does HRM depend on
Size of the company Characteristics of the workforce and industry - knowledge, what skills do they have, maybe they have certain lingo in work industry, they do know coding maybe --Being able to speak the same language, don't want training of reading to be higher level than what the employee can handle Organizational culture and values Etc... --software, culture
Compensation & benefits
Wage, & salary administration
Analyzing work processes:
Work processes are the activities that members of a work unit engage in to produce a given output. Team based care - •Medical teams that might include a nurse practitioner, physician's assistant, clinical pharmacist, plus a variety of technicians working alongside the primary physician. •Main challenge: effective coordination and communication between team members --cooperation, getting along •Presidents cabinet- many people involved in giving certain output •Can be as simple as assembling parts or team surgery
HRM Three product lines
administrative servics and transactions business partner services strategic partner
Goals
are what the organization hopes to achieve in the future. (closely tied to profit, margins, overhead costs, etc) -first, second, etc
administrative services and transactions
compensation, hiring and staffing --emphasis: resource efficiency and service quality --scan papers, payment on time, SSN info, etc
business partner services
developing effective HR systems and helping implement business plans, talent management -emphasis: knowing the business and excercizing influence- problem solving, desiging effective systems to ensure needed competencies --who is going to be better doing what inside company
•Technology
e-HRM (workday, online paperwork), e-commerce, employee online training- need to keep up and employees need to keep up (make sure everyone knows how to use it)
Strategic HRM
is a pattern of planned human resource developments and activities intended to enable an organization to achieve its goals.
KSAOs
knowledge, skills, abilities, and other characteristics
Five major components of the strategic management process:
mission--goal--strategic choice --externeral analysis: O and T --internal analysis: S and W --HR input everywhere !!
Analyzing work input: Human skills
needed to perform the tasks--the least capable person to do that job should be doing that do that job, don't overpay or underpay, have to make sure right skills matches people, most skilled to do complex, and least skilled to do easy tasks
What is the HRM ?
performance management--employee relations-- analysis and design of work-- HR planning---recruiting--selection--training and development--compensation---performance management Recruiting: flexibility within job and good recruitment strategy, cant do selection without recruitment
ROI
return on investment return/investments profit-costs/costs
HRM and strategic management
strategic choice-- HR needs (skills, behaviors, culture), HR practices (planning, recruiting, etc)---HR capiral (KAOS)--HR Actions-- performance
Strategy formulation SWOT analysis:
strengths, weaknesses, opportunities, threats -- S and W are internal, O and T are external (labor market, etc) --You have to know what your resources are: human physical, and organizational •For kite company, if mission is to decrease cost, need rope, plastic, assembly line, need space for assembly line •depends how much it costs, overhead costs can be a weakness, rental space, etc
organizational structure
the ways in which power and authority are distributed within an organization Hierarchy in a company - horizontal same compensation but work together vertical
example:
• Stable, predictable environments, where demand for resources can be well anticipated. : functional • Unstable, unpredictable environments, where it is difficult to anticipate demands for resources. : divisional (fast changes, Zara) • Organizations competing on differentiation or innovation. (divisional) • Coordination requirements between jobs can be refined and standardized over consistent repetitions of activity. (functional) • Coordination requirements between jobs are not consistent over time. (divisional)
Human Resource Management is ...
•"the policies, practices, and systems that influence employees' behavior, attitudes, and performance" AKA, "people practices"
•They look for three kinds of waste:
•1.movement that creates NO value- don't waste time on unnecessary thing •2.overburdening of specific people or machines - allocating sources •3.inconsistent production that creates excessive inventory - what is not getting done and getting done at each specific movement • •Organizations often work hard to minimize overstaffing via lean production techniques
Alternative work arrangements
•Can be a huge benefit for employees with little cost to organizations - COVID world
Netflix Case Study #1 notes
•Capitalize on the system that already exited, copied model of first company •Hire employees that have your mission in mind to fulfill your mission and goals •paying flat fee don't pay per DVD •Stakeholders- clients •Suppliers- postal services depended on •Second wave- hulu, amazon etc - no DVDs •People are still Loyal to Netflix because it's the first introduction + they are constantly making new stuff, Netflix originals, other streaming services don't have that - doing it yourself like a company within a company- they are innovation so they have a hook •Shows that other ones don't have like HBO or Hulu
Marriot: HR practices result in engaged employees and satisfied customers
•Fortune's "100 Best Companies to Work For" for 23 years •"Take care of associates and they will take care of customers" •"We put people first" - care enough to make customers feel welcome •"The work in a hotel isn't necessarily sophisticated..." •"Low turnover rate and no extra cost needed for recruitment and training"--having good performance -performance selection and performance evaluation •App to give new ideas + map •Good benefits--Provide medical and physical facilities + monetary •People are recognized for their work •Job versus career - growth within company •HRM- Taylor employees to do leadership growth and position people in right place •Help them out with
Functional structure
•Functional departmentalization (e.g., HR, Marketing, Accounting) •High level of centralization •High efficiency- a few people at the top makes things flow easier •Inflexible - don't know what to do without the boss, realy a lot on the people at the top •Insensitive to subtle differences across products/regions/clients - conflict cuz have to make budget right, etc less room for error •Problem: Individual units identify with their dept rather than considering the interest of the org. as a whole
Organizational structure contributed to GM's major recall in 2014
•GM recalled 2.7M vehicles due to failure in the ignition system •Deaths and injuries to more than 500 customers •Financial losses of over $400M •Financial was on one side, HR on the other- no synergy •People didn't know who to tell •Lack of responsibility- no one took responsibility for their problems •Communication is very important - people want to hear whats going on inside the company But, people were aware of the problem as far back as 2001... Two problems: 1.The structure created functional silos 2.Not clear who had decision-making authority
HR trend: HR Analytics Using information to make informed HR decisions
•HR databases •Financial statements •Employee surveys AKA, "workforce analytics" -decisions on statistical models -attraction, selection and retention (ASR) --what do they like ? Who do they trust? Give feedback, models, whos coming, who is staying, who is replying to your ad, what kind of people, then who are you selecting, retained= culture, helps predict/plan for future -injuries or absenteeism (not just performance and profits, personal and medical reasons taking off)
The power distance(level of respect) and interpersonal relationship also differ
•In functional structures: Value in rules and procedures - can't knock on CEO's door •In divisional structures: Value in outcome and relationships - lower power distance, more peers
HR Trends--Increase of intangible assets
•Intellectual assets - (KSAO) building human capital •Knowledge workers -going through the motions and adjusting tasks to do them better, really on workers to tell us how to make it better •Tacit knowledge (organizations are struggling to codify this knowledge)- doing stuff by going through the motions, cant write down
Talent management
•Planned, strategic effort to attract, retain and develop highly skilled employees and managers •Grooming for advancement
Benefits of studying workflow processes
•Private equity groups buy a failing company at a low price, revamp the workflow processes, and then sell the company at a higher price
Challenges HRM is facing
•Time spent on administrative tasks is decreasing Employee self-service and outsourcing- less administrative tasks cuz can look up stuff online •Participation in strategy formation and implementation -HRM should always be present •Evidence-based HR: Let the data speak!
Work flow analysis' purpose is to figure out...
•Work inputs •Work processes •Work outputs
2.Divisional structure
•Workflow departmentalization; not efficient due to redundancy •Low level of centralization •Semi-autonomous: "boss-free" -own unit level decisions •Flexible and innovative- more connected to customer base •Sensitive to subtle differences across products/regions/clients •Semi autonomys organizations •Benefits: they can detect and exploit opportunities in their respective consumer base faster (e.g. "fast fashion" industry such as H &M and Zara - fall campaign, spring campaign can pivot easy to come up with latest fashion) --P&G is an example; Each division has their own R and D, testing, etc bc want to be latest and greatest
Missions
•are statements of the organization's reasons for being it. - what do they want to offer, value(that is novel, that is rare and is hard to imitate) to stakeholders
Creating kite company example:
•need to hire people who have experience, done kites or similar to the past, •need to apply it to the knowledge of kites and if we don't need to find people who can learn from others. • Need both high skilled and low skilled employees.; people who are doing the kites, raw materials, putting them together, sales, •need to pay them all different-- Employees are usually paid by the unit they make - how is this determined? •All need to be done but who does what situation
Strategic management
"a process, an approach to addressing the competitive challenges an organization faces." •Different strategies and companies can take • •Ex: spirit is based on cheap cost, other airplines that focus on luxurious experience, like Delta, airline company focused on region, Nashville Frontier Alaskan Airlines, Aleageans • •Created it with a goal in mind, keep mission and goal in mind •Same with HR, not reactive but Proactive • •People fit with its strategy
Work Flow Analysis -
"the process of analyzing the tasks necessary for the production of a product or service, prior to allocating and assigning these tasks to a particular job category or person."
Organizational structure
"the relatively stable and formal network of vertical and horizontal interconnections among jobs that constitute the organization." - relationship between the people between the company, workflow analysis is more about the materials and work processes
If you know what kind of structure you have, you know what kind of job you need Implications for job analysis and job design •Jobs in functional structures ...
- Narrow and highly specialized with little decision-making authority -Require lower cognitive ability because of the relatively smaller scope and routine nature of jobs -Managers need to be more skilled cuz they are making decisions for their teams
Strategic HRM ensures that a firm's HR choices fit and support its strategy.
--
Jobs in divisional structures
-Require broader knowledge, more involvement and higher cognitive ability
Factors inside the company
-diversity of internal labor force (speak level of employees + need well being ) -Employees' psychological contract expectation (implicit contract- be respectful to me, assumption that you won't get fired without no explanation)
Lean thinking
-find creative ways to do more with less -can be cutting corners, outsource, ethics issues
Empowerment and continuous learning
-giving employees responsibility and authority -"learning organizations" -continually acquire and share knowledge
Two dimensions of organizational structure:
1.Centralization: Degree to which decision-making authority resides at the top of the organizational chart- central at the top, group project decentralized 2.Departmentalization: Degree to which work units are grouped based on functional similarity or similarity of work flow (e.g., MHBS- marketing, management, accounting, etc ) (inputs, outputs, what happens in the middle to get to the output)
Two basic options in deciding a strategy
1.Low cost leader 2.Differntiation --Can be a Walmart vs a Tesla or Apple, innovative and novel product, provide a brand, small percentage of market share being different and rare vs low cost chose what opportunities you take and which one you let go, chose to be different
Analyzing work input: Raw materials:
1.Materials that will be converted into the work unit's product.--not just about raw material, where are you housing material ? Pivoting is important, how much you need to stock up , move material, supply chain
Analyzing work input: Equipment:
1.Technology and machinery necessary to transform the raw materials into the product. E.g., auto pilot
googles 1/3rd tule
1/3 of them does people analytics, 1/3 of them doesn't do HRM they do sales or operation, 1/3 does workforce analytics (stat, analytics)
EVA
= net operating profit after tax - (capital used * cost of capital) Money made minus money spent or borrowed ---evidence based HR, shows how valuable our practices are
Matrix organizational structure:
A company structure in which the reporting relationships are set up as a matrix rather than in the traditional hierarchy (e.g., KPMG) Can be mixed, functional and divisional, just like Mcdonalds low cost and differentiation
Top HR executive Global HR manager Employee benefits manager Campus recruiter Compensation analyst Regional manager Supervisor of employees
All of them are doing HRM
Analyzing work outputs
An output is the product of a work unit, and, within manufacturing realms- have to determine the quality of output (do we care about quantity, quality, A grade, C grade) McDonald's restaurant - •Adding many new items to its menu: 121 items in 2012 vs. just 85 in 2007 •Resulted in slower service- created a friction in what they are used to doing, not all decisions are going to be as expected •Quality vs quantity, not over or under staffed + training The first step in deciding on the number of products or services offered is a critical step when it comes to structuring the work.
responsibilities of HR
Analysis & design of work Recruitment & selection Training & development Performance management Compensation & benefits Employee relations/labor relations Personnel policies Employee data & information systems Legal compliance Support for business strategy
External HR specialists
Consultants or lawyers specializing in legal issues- don't want to get in trouble with hiring, firing, etc (not discrimination, rules and regulations to keep up with) --can outsource to different companies to do the legal work for you
External HR specialists
Consultants specializing in benefits, job analysis, selection, training and development--IBM does this, externa, etc
strategic partner
Contributing to business strategy based on considerations of human capital, business capabilities, readiness, and developing HR practices as strategic differentiators Emphasis: Knowledge of HR and the business, competition, the market, and business strategies. --what does the labor pool look like: both inside and out, bigger market share
•Globalization
Develop global markets, prepare employees for global assignments, and work with a more diverse workforce- need to know language and culture, need prep otherwise they might quit
Training & development
Development program & orientation
Employee's high satisfaction rating toward the training session means that it is successful.
Doesn't mean they are satisfied with the content, might've taken 45 minutes but that doesn't make you satisfied - or conference at the beach for example, ask "what you think about training" not whether you are satisfied
Evidence-based HR
Evidence that links HR practices to company's bottom line- using evidence to link HR strategies an implementing it
Self-service HR
Giving employees control of HR transactions Employees take greater responsibility for their careers --doing paperwork yourself, chose salary, chose bank account, can do online= easier, requires less resources and don't have to meet HR (like workday for Miami)
4 characteristics of competitive advantage:
Human resources are valuable. Human resources are rare. Human resources cannot be imitated. Human resources have no good substitutes.
Second-mover advantage
If it can be easily copied, it will be!! -- Is successful because you don't have to educate your audience, don't have to show What you are offering the second time, and then you can improve It or think of the idea
Analysis & design of work
Job analysis & job description
Supervisors of employees
Performance management Training Recruitment Selection Don't want an HR rep to do performance evaluation bc they aren't the ones seeing the actual work - when you don't show the work that is done (delete stuff, brainstorming, etc)-- best to be evaluated by someone who does it with you • •Same thing with skills, HR reps aren't specialized in coding for example so don't want them to train them, more of a direct supervisor
Performance management
Performance measures & feedback
companies resources
Physical, organization, and human Geographic, tech, physical space-- planning, group relationship, network---human resource, skills and ability of employees
Legal compliance
Policies to ensure lawful behaviors & ethics
Personnel policies
Policy creation & communication
•Sustainability
Provide a return to stakeholders Social responsibility- supply chain can be easily disrupted, need a sustainable environment for a successful time, how do we protect each other, wearing masks
HR Analytics
Quantitative methods and scientific methods to analyze big data- the science
Recruitment & selection
Recruiting & interviewing
Employee relations/labor relations
Attitude surveys & labor law compliance
Factors outside of the company
Globalization(can be part of it or not, but have to keep up), Societal culture Characteristics of the industry Technology development Characteristics of workforce Legal and ethical issues
Employee data & information systems
HR information system & record keeping
Support for business strategy
HR planning & forecasting, talent mgt.
Outsourcing
Having another company manage certain HR functions
Evidence based HR Human resource practices à (+) stakeholders How? •Economic Value Added (EVA)
Measure of profits that remain after the cost of capital has been deducted from operating profits
Establish a competitive advantage
Must be an advantage and not a disadvantage Must not be easily imitated Inimitable
Components of strategic management process:
Strategy formulation
Strategy formulation
The process of deciding on a strategic direction
Components of strategic management process: Strategy implementation
The process of devising structures and allocating resources to enact the strategy a company has chosen. Make it come to life in its day-to-day workings. Everything a company needs required human skills, and people need to be motivated --designing the kite, marketing the kite, etc