HR Chapter 2

outsourcing

Contracting with another company, usually abroad, to have it perform an activity the organization previously performed itself

Define employee empowerment, and explain its role in the modern organization.

Employee empowerment means giving employees responsibility and authority to make decisions regarding all aspects of product development or customer service. The organization holds employees accountable for products and services, and in exchange, the employees share in the rewards (or losses) that result. Selection decisions should provide employees who have the necessary decision-making and interpersonal skills. Job design should give employees latitude for decision making. Employees should be trained to handle their broad responsibilities. Feedback and rewards must be appropriate for the work of empowered employees. HRM can also play a role in giving employees access to the information they need.

Summarize areas in which human resource management can support the goal of creating a high-performance work system.

To find and keep the best possible fit between their social system and technical system, HRM recruits and selects employees with broad skills and strong motivation, especially in organizations that rely on knowledge workers. Job design and appropriate systems for assessment and rewards have a central role in supporting employee empowerment and teamwork.

total quality management (TQM)

a companywide effort to continually improve the ways people, machines, and systems accomplish work

reengineering

a complete review of the organization's critical work processes to make them more efficient and able to deliver higher quality

human resource information system (HRIS)

a computer system used to acquire, store, manipulate, analyze, retrieve, and distribute information related to an organization's human resources

psychological contract

a description of what an employee expects to contribute in an employment relationship and what the employer will provide the employee in exchange for those contributions

high-performance work systems

an organization in which technology, organizational structure, people, and processes work together seamlessly to give an organization an advantage in the competitive environment

internal labor force

an organization's workers (its employees and the people who have contracts to work at the organization)

expatriates

employees assigned to work in another country

knowledge workers

employees whose main contribution to the organization is specialized knowledge, such as knowledge of customers, a process, or a profession

employee empowerment

giving employees responsibility and authority to make decisions regarding all aspects of product development or customer service

external labor market

individuals who are actively seeking employment

alternative work arrangements

methods of staffing other than the traditional hiring of full-time employees (for example, use of independent contractors, on-call workers, temporary workers, and contract company workers)

reshoring

reestablishing operations back in the country where a company is headquartered due to quality and flexibility concerns

self-service

system in which employees have online access to information about HR issues and go online to enroll themselves in programs and provide feedback through surveys

artificial intelligence (AI)

technology that simulates human thinking, applying experience to deliver better results over time

teamwork

the assignment of work to groups of employees with various skills who interact to assemble a product or provide a service

cloud computing

the practice of using a network of remote servers hosted on the Internet to store, manage, and process data, rather than a local server or a personal computer.

Discuss how the need for flexibility affects human resource management.

Organizations seek flexibility in staffing levels through alternatives to the traditional employment relationship—outsourcing and temporary and contract workers who might be hired on a project basis as part of the new "gig economy." The use of such workers can affect job design and also the motivation of the organization's permanent employees. Organizations also may seek flexible work schedules, including shortened workweeks, which can be a way for employees to adjust work hours to meet personal and family needs. Organizations also may move employees to different jobs to meet changes in demand.

Summarize ways in which human resource management can support organizations expanding internationally.

Organizations with international operations hire employees in foreign countries where they operate, so they need knowledge of differences in culture and business practices. At home, qualified candidates include immigrants, so HRM needs to understand and train employees to deal with differences in cultures, as well as to ensure laws are followed. HRM helps organizations select and prepare employees for overseas assignments. To support efficiency and growth, HR staff can prepare companies for offshoring, in which operations are moved to countries where wages are lower or demand is growing. HR experts can help organizations determine whether workers in offshore locations can provide the same or better skills, how offshoring will affect motivation and recruitment of employees needed in the United States, and whether managers are prepared to manage offshore employees.

Explain how the nature of the employment relationship is changing.

The employment relationship takes the form of a "psychological contract" that describes what employees and employers expect from the employment relationship, including unspoken expectations that are widely held. In the traditional version, organizations expected their employees to contribute time, effort, skills, abilities, and loyalty in exchange for job security and opportunities for promotion. Modern organizations' needs are constantly changing, so organizations require top performance and longer work hours but cannot provide job security. Instead, employees seek flexible work schedules, comfortable working conditions, greater autonomy, opportunities for training and development, and performance-related financial incentives. For HRM, the changes require planning for flexible staffing levels. For employees, the changes may make job hopping look attractive, but this career strategy often backfires. Union membership has been declining, which is consistent with the idea of taking personal responsibility for one's career.

Describe trends in labor force composition and how they affect human resource management.

An organization's internal labor force comes from its external labor market—individuals actively seeking employment. In the United States, the labor market is aging and becoming more racially and ethnically diverse, with women constituting roughly half of the total. To compete for talent, organizations must be flexible enough to meet the needs of older workers and must recruit from a diverse population; establish bias-free HR systems; and help employees understand and appreciate cultural differences. Organizations need employees with skills that may be hard to find: decision making, customer service, and teamwork, as well as technical skills. To meet this challenge, organizations may hire employees who lack certain skills, then train them for their jobs.

Identify ways HR professionals can support organizational strategies for growth, quality, and efficiency.

HR professionals should be familiar with the organization's strategy and may even play a role in developing the strategy. In a merger or acquisition, HRM must lead efforts to manage change with skillful employee relations and meaningful rewards. HR professionals can bring "people issues" to the attention of the managers leading change, provide training in conflict-resolution skills, and apply knowledge of the other organization's culture. HR professionals also must resolve differences between the companies' HR systems, such as benefits packages and performance appraisals. For empowering employees to practice total quality management, job design is essential. Cost control may focus on a specific issue, such as managing health benefits, or on support for a strategic move such as downsizing, reengineering, or outsourcing. To support cost control through downsizing, the HR department can develop voluntary programs to reduce the workforce or can help identify the least valuable employees to lay off. Employee relations can help maintain the morale of employees who remain after a downsizing. In reengineering, the HR department can lead in communicating with employees and providing training. It will also have to prepare new approaches for recruiting and appraising employees that are better suited to the reengineered jobs. Outsourcing presents similar issues related to job design and employee selection.

Discuss how technological developments are affecting human resource management.

Information systems for HRM are widely used and often are provided through the Internet. Internet applications include searching for talent globally, using online job postings, screening candidates online, providing career-related information on the organization's website, and delivering training online. Online information sharing enables employee self-service for many HR needs, from application forms to training modules to information about the details of company policies and benefits. Using computers to analyze large amounts of data is often called people analytics. Some of the most powerful applications of people analytics apply artificial intelligence (AI), which simulates human thinking. AI applications can improve decision making or smooth processes in many areas of HRM.

offshoring

Moving operations from the country where a company is headquartered to a country where pay rates are lower but the necessary skills are available.