CMS1 Assignment 1: Nature and Challenges of Human Resources Management

Productivity can be defined as ______.

"the output gained from a fixed amount of inputs"

Explain (a) how employee absenteeism rates can be compared and (b) how the costs of employee absenteeism should be calculated.

(a) The Bureau of Labor Statistics and other government agencies, as well as various private reporting services, make available detailed employee absenteeism data that firms can use for comparison purposes. (b) Calculation of the costs of employee absenteeism should be based on the hourly weighted average salary, costs of employee benefits, supervisory costs and incidental costs. Traditional accounting and human resources information systems do not generate this data. However, there are computerized systems available for computing employee absenteeism costs on this basis.

Sustainability

(closely related to corporate social responsibility) refers to a company's ability to produce a good or service without damaging the environment or depleting a resource

Examples of competitive challenges:

-Changes in the marketplace and economy -Globalization -Technology -Cost containment -Leveraging employee differences

Examples of employee concerns:

-Job security -Healthcare issues -Age and generational work issues -Retirement issues -Gender issues -Educational levels -Employee rights -Privacy issues -Work attitudes -Family concerns

Organizations that have been successful in engineering change:

-Link the change to the business strategy -Show how the change creates quantifiable benefits -Engage key employees, customers, and their suppliers early when making a change -Make an investment in implementing and sustaining change

Potential benefits from "no layoffs" policies:

1. A fiercely loyal, more productive workforce 2. Higher customer satisfaction 3. Readiness to snap back with the economy 4. A recruiting edge 5. Workers who, knowing their jobs are safe, are not afraid to innovate

Competencies human resources managers require:

1. Business mastery 2. HR mastery 3. Personal credibility

Summarize three areas of competency that are required of HR managers by their top executives.

1. Business mastery: HR professionals need to know the business of their organization thoroughly, including an understanding of its economic and financial capabilities. 2. HR mastery: HR professionals must be experts in areas such as staffing, development, appraisal, rewards, team building and communication. 3. Personal credibility: HR professionals must establish personal credibility in the eyes of their internal and external customers.

State four areas of cultural change that have impacted employers in the past few decades.

1. Employee rights 2. Concern for employee privacy 3. Changing attitudes toward work 4. Balancing work and family situations

The following factors are key considerations HR managers need to consider when their firms are evaluating a human resources information system (HRIS)

1. Fit of the application to the firm's employee base 2. Ability to upgrade or customize the software 3. Compatibility with current systems 4. User friendliness 5. Availability of technical support 6. Time required to implement and train staff members to use the HRIS, including HR and payroll personnel, managers, and employees 7. Initial costs and annual maintenance costs

What approaches are available to firms looking to lower labor-related costs?

1. Management of employee benefits 2. Downsizing 3. Outsourcing 4. Offshoring 5. Furloughing 6. Employee leasing

Top trends and challenges in human resource management:

1. Responding strategically to changes in the marketplace 2. Competing, recruiting, and staffing globally 3. Setting and achieving corporate social responsibility and sustainability goals 4. Advancing HRM with technology 5. Containing costs while retaining top talent and maximizing productivity 6. Responding to the demographic and diversity challenges of the workforce 7. Adapting to educational and cultural shifts affecting the workforce

Hidden costs of downsizing include:

1. Severance and rehiring costs 2. Accrued vacation and sick day payouts 3. Pension and benefit payouts 4. Potential lawsuits from aggrieved workers 5. The loss of institutional memory and trust in management 6. A lack of staffers when the economy rebounds 7. Survivors who are risk averse, paranoid, and focused on corporate politics.

The major activities for which a HR manager is typically responsible:

1. Strategic advice and counsel 2. Service 3. Policy formulation and implementation 4. Employee advocacy

The three ways in which technology has affected human resources management:

1. operational 2. relational 3. transformational

human resources information system (HRIS)

A computerized system that provides current and accurate data for purposes of control and decision-making

Six Sigma

A process used to translate customer needs into a set of optimal tasks that are performed in concert with one another.

Six Sigma quality

A set of principles and practices whose core ideas include understanding customer needs, doing things right the first time, and striving for continuous improvement.

change management

A systematic way of bringing about and managing both organizational changes and changes on the individual level.

Describe the shift from "touch labor" to knowledge workers.

Advanced technology continues to reduce the number of jobs that require little skill and to increase the number of jobs that require considerable skill. This transformation has been referred to as a shift from "touch labor" to knowledge workers, in which employee responsibilities expand to include a richer mix of activities such as planning, decision making, and problem solving.

Describe how education levels are expected to change in the immediate future.

Although the overall educational level of the workforce has risen dramatically, there is an increasing gap in the educational levels among employees. Many firms still have to deal with employees who are unable to read, write, calculate or solve problems at a level that enables them to perform even the simplest technical tasks.

Describe the transformational effect of information systems on human resources.

By changing the way HR processes are designed and executed.

Describe the way in which information technology is affecting human resources management in a relational nature.

By connecting people with each other and HR data they need. Companies are using software to recruit, screen, and pretest applicants online before hiring them as well as to train, track, and promote employees once hired.

proactive change

Change initiated to take advantage of targeted opportunities.

reactive change

Change that occurs after external forces have already affected performance.

outsourcing

Contracting outside the organization to have work done that formerly was done by internal employees.

Describe how downsizing has been used by firms as a means of lowering labor costs.

Downsizing (or rightsizing) is the planned elimination of jobs. In the 1990s, virtually every major corporation within the country underwent some cycle of downsizing. Nevertheless, downsizing's value is mixed. While some firms improve efficiency (and lower costs) from layoffs, many others do not obtain such benefits. From an HR standpoint, in addition to poor morale among survivors, downsizing incurs additional costs to the company such as severance pay, accrued vacation and sick-day payouts, pension and benefit payoffs, potential litigation expenses and other administrative costs.

What is a human resources information system (HRIS)? Explain

Effective HR management requires an information system to provide current and accurate data for purposes of control and decision making. The use of a human resources information system (HRIS) has been enhanced by advances in computer technology. Because HR affects the entire workforce—everyone who works for the company must be hired, trained and paid, usually through HR—the impact of HRIS has been dramatic. It has become a potent weapon for lowering administrative costs, increasing productivity, speeding up response times, improving decision making and tracking a company's talent. The most obvious impact has been operational—that is, automating routine activities, alleviating administrative burdens, reducing costs, and improving productivity internal to the HR function itself. The most frequent uses include automating payroll processing, maintaining employee records and administering benefits programs. "Self-service," setting up systems, usually on an intranet, allows managers to access employee records themselves and allows employees to change their own benefits and other personal information. Computers are being used not only for storage and retrieval of information but also for broader applications such as producing reports, forecasting HR needs, strategic planning, career and promotion planning, and evaluating HR policies and practices.

What is a human resources information system (HRIS)? Explain.

Effective HR management requires an information system to provide current and accurate data for purposes of control and decision making. The use of a human resources information system (HRIS) has been enhanced by advances in computer technology. Because HR affects the entire workforce—everyone who works for the company must be hired, trained and paid, usually through HR—the impact of HRIS has been dramatic. It has become a potent weapon for lowering administrative costs, increasing productivity, speeding up response times, improving decision making and tracking a company's talent. The most obvious impact has been operational—that is, automating routine activities, alleviating administrative burdens, reducing costs, and improving productivity internal to the HR function itself. The most frequent uses include automating payroll processing, maintaining employee records and administering benefits programs. "Self-service," setting up systems, usually on an intranet, allows managers to access employee records themselves and allows employees to change their own benefits and other personal information. Computers are being used not only for storage and retrieval of information but also for broader applications such as producing reports, forecasting HR needs, strategic planning, career and promotion planning, and evaluating HR policies and practices.

What is employee leasing?

Employee leasing is the process of dismissing employees who are then hired by a leasing company and contracting with the leasing company to lease back the former employees. As an alternative to downsizing, outsourcing and offshoring, many companies, especially small ones, have decided to sign employee leasing agreements with professional employer organizations (PEOs). (There are legal issues with leased employees that can be minimized by the company making sure that the PEO retains as much control as possible over the terms and conditions of the leased employee's employment.)

reengineering

Fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in cost, quality, service, and speed.

Describe how furloughing has been used by firms as a means of lowering labor costs.

Furloughing is an alternative to downsizing. When a company furloughs employees, it asks them to take time off for either no pay or reduced pay. Some companies are utilizing creative furlough strategies to avoid downsizing and losing talent to competitors. The strategy does have its disadvantages, though. Costs are not cut as significantly as they would be in downsizing because employees generally retain their benefits while they are furloughed and those employees not furloughed often are required to do more work.

Identify six competitive issues that hr management must face.

HR management faces all the following issues: (1) Changes in the marketplace and economy (2) Competing, recruiting and staffing globally (3) Advancing HR technology (4) Containing costs while retaining top talent and maximizing productivity (5) Responding to the demographic and diversity challenges of the workforce (6) Adapting to educational and cultural shifts affecting the workforce

Describe the interrelated roles of hr managers and line managers.

HR staff have the responsibility for coordinating programs and policies pertaining to people- related issues, but successful organizations combine the experience of line managers with the expertise of HR managers to develop and utilize the talents of employees to their greatest potential. Line managers are non-HR managers who are responsible for overseeing the work of other employees.

line managers

Non-HR managers who are responsible for overseeing the work of other employees.

Describe how offshoring has been used by firms as a means of lowering labor costs.

Offshoring, also referred to as global sourcing, involves shifting work to overseas locations. Cost reduction has been among the key motivators for offshoring decisions; however, now companies are finding they can grow their businesses by offshoring. Sometimes this occurs because an offshoring arrangement allocates work more efficiently across the multiple countries in which the company does business. In other cases, managers are finding that if they save money by offshoring, they can rescue failing businesses, make better use of skilled talent in the host country, and deliver products more cheaply and quickly because they have people across the globe working 24/7 on them.

To what does the term six sigma quality refer?

One of total quality improvement initiatives, Six Sigma quality is a set of principles and practices whose core ideas include understanding customer needs, doing things right the first time and striving for continuous improvement. (Six Sigma is a statistical method of translating a customer's needs into separate tasks and defining the best way to perform each task in concert with the others. Six Sigma catches mistakes before they happen.)

Describe how outsourcing has been used by firms as a means of lowering labor costs.

Outsourcing is hiring someone outside the company to perform business processes that could be done internally. Firms often hire the services of accounting organizations, for example, to take care of financial services. Interest in outsourcing has been spurred by executives who want to focus on what they do best—their core competencies. Activities such as maintenance, security, catering and payroll are being outsourced in order to increase flexibility, lower overhead costs and gain access to expertise that others may have.

Distinguish between reactive change and proactive change as the terms apply to human resources (hr) management actions.

Programs that are focused on total quality, continuous improvement, downsizing, reengineering, outsourcing, etc., are examples of organizations making changes to operate more successfully. Some of these changes are reactive, resulting when external forces have already affected an organization's performance. Others are more proactive, initiated by managers to take advantage of targeted opportunities.

The method for computing the employee turnover rate that reflects avoidable separations.

S equals the total separations in the selection period, US equals the unavoidable separations and M equals the midmonth workforce: (S-US)/M X 100

collaborative software

Software that allows workers to interface and share information with one another electronically.

What are the costs of employee turnover?

The costs of employee turnover, that is, the costs of replacing employees, can be expensive. The costs generally are of three types: separation costs for the departing employee plus replacement and training costs for the new employee. The costs of employee turnover are conservatively estimated to be two or three times the monthly salary of the departing employee. These estimates do not include indirect costs such as low productivity prior to quitting, lower morale and overtime for other employees because of the vacated job.

human capital

The knowledge, skills, and capabilities of individuals that have economic value to an organization.

Identify and describe the major types of activities for which an HR manager is responsible.

The major activities for which an HR manager typically is responsible are: 1. Advice and counsel - Advice and counsel are provided to line managers within functional areas of expertise. 2. Service - Functional, technical and/or professional services are available to other areas of the organization. 3. Policy formulation and implementation - Proposals are drafted and presented to the top executives for consideration and their acceptance or rejection. HR policies are monitored within the organization and interpreted for the organization. 4. Employee advocacy - Listen to employees' concerns and represent their needs to managers. Provide a support structure for employees when disruptive changes interfere with normal activities.

human resources management (HRM)

The process of managing human talent to achieve an organization's objectives.

corporate social responsibility

The responsibility of the firm to act in the best interests of the people and communities affected by its activities

What has been the motivation behind firms' growing interest in pursuing corporate social responsibility policies?

The term corporate social responsibility is widely used to define how firms behave in terms of aligning their policies with the best interests of the people and communities affected by their activities. Firms are focusing on corporate social responsibility as they recognize that being socially responsible both domestically and abroad can not only help them avoid lawsuits but also improve their earnings. Customers are considering a company's social reputation when deciding where to shop. Also, prospective workers are saying corporate responsibility is now more important to their job selection.

globalization

The trend toward opening up foreign markets to international trade and investment

What is an employee turnover rate as the term applies to HRM? Explain.

The turnover rate for an organization is an indicator of how employees respond to their work environment. The U.S. Department of Labor suggests the following formula for computing employee turnover rates: Number of separations during the month/Total number of employees at midmonth X 100

How is employee absenteeism computed?

There is neither a uniform definition of employee absenteeism nor a uniform method for computing absenteeism. The method most frequently used is the approach recommended by the U.S. Department of Labor: Number of worker-days lost through job absence during period/ (Average number of employees X Number of work days) X 100

Describe how human capital can be built within organizations.

To build human capital in organizations, managers develop strategies for ensuring superior knowledge, skills and experience within their workforce. Staffing programs focus on identifying, recruiting and hiring the best talent available. Training programs complement these staffing practices. In addition, employees need opportunities for development on the job. Consequently, managers have to provide developmental assignments to employees and make certain that job duties and requirements are flexible enough to allow for growth and learning.

Describe how human capital can be built within organizations.

To build human capital in organizations, managers develop strategies for ensuring superior knowledge, skills and experience within their workforce. Staffing programs focus on identifying, recruiting and hiring the best talent available. Training programs complement these staffing practices. In addition, employees need opportunities for development on the job. Consequently, managers have to provide developmental assignments to employees and make certain that job duties and requirements are flexible enough to allow for growth and learning.

knowledge workers

Workers whose responsibilities extend beyond the physical execution of work to include planning, decision-making, and problem-solving

Describe how background diversity is expected to change in the immediate future.

Workers will continue to be a diverse group. Minorities will make up a larger share of the workforce. In fact, the U.S. Census Bureau estimates whites will no longer make up a majority of Americans by 2050. As the component percentage of white males in the workforce continues to decline, the percentages of Hispanics and Asian-Americans are increasing.

Firms do a better job of fostering talent when there is ________ to do so rather than when the task is 'owned' by the HR department.

commitment, involvement, and accountability by a company's supervisors

Providing an overall environment that values and utilizes a diverse workforce or managing diversity involves being acutely aware of characteristics __________ to employees, while also managing these employees as __________________.

common individuals

Employee productivity is the result of a combination of ________.

employee's abilities, motivation, and work environment and the technology they use to work.

Among the most significant challenges to managers are the demographic changes occurring such as changes in employee ________, _________ and ____________.

ethnicity age education

The term ___________ describes the economic value of employees' knowledge, skills and capabilities.

human capital

Offshoring, also referred to as global sourcing

involves shifting work to overseas locations. Cost reduction has been among the key motivators for offshoring decisions; however, now companies are finding they can grow their businesses by offshoring. Sometimes this occurs because an offshoring arrangement allocates work more efficiently across the multiple countries in which the company does business. In other cases, managers are finding that if they save money by offshoring, they can rescue failing businesses, make better use of skilled talent in the host country, and deliver products more cheaply and quickly because they have people across the globe working 24/7 on them.

Furloughing

is an alternative to downsizing. When a company furloughs employees, it asks them to take time off for either no pay or reduced pay. Some companies are utilizing creative furlough strategies to avoid downsizing and losing talent to competitors. The strategy does have its disadvantages, though. Costs are not cut as significantly as they would be in downsizing because employees generally retain their benefits while they are furloughed and those employees not furloughed often are required to do more work.

Outsourcing

is hiring someone outside the company to perform business processes that could be done internally. Firms often hire the services of accounting organizations, for example, to take care of financial services. Interest in outsourcing has been spurred by executives who want to focus on what they do best—their core competencies. Activities such as maintenance, security, catering and payroll are being outsourced in order to increase flexibility, lower overhead costs and gain access to expertise that others may have.

Downsizing (or rightsizing)

is the planned elimination of jobs. In the 1990s, virtually every major corporation within the country underwent some cycle of downsizing. Nevertheless, downsizing's value is mixed. While some firms improve efficiency (and lower costs) from layoffs, many others do not obtain such benefits. From an HR standpoint, in addition to poor morale among survivors, downsizing incurs additional costs to the company such as severance pay, accrued vacation and sick-day payouts, pension and benefit payoffs, potential litigation expenses and other administrative costs.

downsizing

planned elimination of jobs

The fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in cost, quality, service and speed is called ___________ in HRM.

reengineering

Total quality improvements (TQM), reengineering, downsizing, and outsourcing are examples of

the means organizations use to modify the way they operate in order to be more successful

HR planing depends on having an accurate picture of both the supply of and the demand for employees. Two factors, employee ________ and ________, have a direct impact on HR planning strategy and recruitment processes.

turnover absenteeism