Assignment 94
Meeting Present and
Emerging Strategic
Human Resources Challenges
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Whether in good economic times or challenging ones, companies must compete for talent. In order to achieve and sustain a competitive advantage, companies that are capable and effective at attracting, retaining, and motivating good employees are more likely to succeed.
Chapter 1 is an overview of the challenges that organizations and Human Resources Managers face in any economic environment. In this chapter, we will define core human resources concepts and identify current issues. Following chapters will expand upon these core concepts. We’ll begin to see that Human Resources Management is a growing and dynamic field that is critical to the strategic partnership initiatives within companies.
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The Managerial Perspective
Managers must understand the legal issues when making the following decisions:
Which employees to hire
How to compensate employees
What benefits to offer
How to accommodate employees with dependents
How and when to fire employees
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The legal environment is vast, complex, and dynamic, meaning that HR professionals must stay on top of the latest laws and understand how each affects the organization and decisions that will be made within the organization. Additionally, HR must help equip managers to work with employees in the best manner possible to ensure a positive relationship with employees. The legal environment will affect:
Which employees to hire;
How to compensate employees;
What benefits to offer;
How to accommodate employees with dependents; and
How and when to fire employees.
We will cover these issues in this chapter.
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Challenges to Legal Compliance
A dynamic legal landscape
The complexity of laws
Conflicting strategies for fair employment
There are many challenges to complying with the law due to the dynamic and constantly changing legal landscape. In this chapter, we’ll see the many laws that affect the practices of HRM. Several have been passed in the last decade. Griggs v. Duke Power, for example, placed a heavy burden of proof on the employer in employment discrimination cases.
The complexity of laws: For example, the ADA law is spelled out in a manual that is several hundred pages long and includes 1,000 different disabilities affecting over 43 million Americans.
Conflicting strategies for fair employment: Society at large, political representatives, government employees, and judges all have different views regarding the best ways to achieve equitable HR laws. We’ll look closer at the conflicting strategies.
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Equal Employment Opportunity Laws
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The Equal Pay Act of 1963
Title VII of The Civil Rights Act of 1964 and 1991 amendment
The Age Discrimination in Employment Act of 1967
The American with Disabilities Act of 1990
The Vietnam Era Veterans Readjustment Act of 1974
These are the major employment laws that we will discuss in detail in this chapter:
The Equal Pay Act of 1963
Title VII of The Civil Rights Act of 1964 and 1991 amendment
The Age Discrimination in Employment Act of 1967
The American with Disabilities Act of 1990
The Vietnam Era Veterans Readjustment Act of 1974
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EEO Laws Continued
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The Vocational Rehabilitation Act of 1973
The Vietnam Era Veterans Readjustment Act of 1974
The Vocational Rehabilitation Act of 1973 is the precursor to the ADA. However, this act applies only to the federal government and its contractors. This act prohibits discrimination and requires that covered organizations have an affirmative action plan to promote the employment of individuals with disabilities.
The Vietnam Era Veterans Readjustment Act of 1974 prohibits discrimination against Vietnam-era veterans by federal contractors. The law also protects the rights of military veterans who served on active duty during a war, campaign, or expedition.
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Key HR Challenges
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Organizations today must be aware of all dimensional forces that affect the organization and its strategies. Environment: These are forces external to the organization that affect the organization’s performance, but are beyond the control of management. These forces include globalization, natural disasters, skill shortages, technological changes, and workforce diversity, to name a few. Human resources managers must be aware of these challenges and work with the organization while adapting to changes that occur rapidly and increasingly.
Organization: Because of the environmental challenges, organizations must adapt to survive within the environmental changes. For example, downsizing or organizational restructuring may be needed in order for the organization to survive.
Individual: Human resource issues at the individual level address the decisions most pertinent to specific employees. Individual challenges almost always reflect what is happening in the larger organization. For example, technology affects individual productivity. Note that there is a two-way relationship between the organization and individual challenges. How the organization treats its individuals will affect the organization when key employees leave for personal evolving family roles or leave to work for competitors.
Overcoming the challenges is what HR department does in working with managers. For example, using the Internet to help screen applicants is just one way to work with the changes and challenges of the environment.
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Strategic HR: Choices
Work Flows
Staffing
Employee Separations
Performance Appraisal
Training and Career Development
Compensation
Employee Rights
Employee and Labor Relations
International Management
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Strategic HR choices are the options an organization has in designing its human resources system. Work flows: These are the ways tasks are organized to meet production.
Staffing: Finding the right employees at the right place and time are key to HR strategies.
Employee separations: May be voluntary or involuntary. Include activities such as early retirement options, hiring freezes, providing support to terminated employees, or rehiring.
Performance appraisals: Managers assess how well employees are performing assigned duties.
Training and career development: These activities are designed to help organizations meet their needs. Training may be in-house or externally sourced.
Compensation: This is payment employees receive in exchange for their labor (wages and benefits are some examples).
Employee rights: Concern the relationship between employee and organization. Developing policies that protect all interests is key.
Employee and labor relations: Refers to the interaction between workers and management. Some organizations have unions to support such relationships.
International management: Many organizations operate outside the domestic boundaries and face a set of strategic HR options regarding how to manage human resources on a global basis.
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HR Fit with Organizational Strategies
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Corporate Strategies
Evolutionary Business
Steady State
Porter’s Business Unit Strategies
Cost Leadership
Differentiation
Focus
Miles & Snow’s Business Strategies
Defender
Prospector
The strategies adopted by human resources need to fit with organizational strategies.
Corporate strategy: Refers to the mix of businesses a corporation decides to hold and the flow of resources among those businesses.
Evolutionary business strategy: Engage in aggressive acquisitions of new businesses, even if they are totally unrelated.
Steady state strategy: Organizations are very choosy about how they grow.
Porter’s business unit strategies: include cost leadership (focus is on lower-cost structures), in which HR strategies align to focus on low overhead costs and efficiencies;
differentiation (focus is on unique product or service), in which HR strategies align to focus on innovation, flexibility, and attracting higher-skilled employees;
and focus (relies on both low cost and differentiation), in which HR strategies will need to combine both.
Miles & Snow’s business strategies: Another classification of business unit strategy.
Defenders: Conservative business units that prefer to maintain a secure position in relatively stable product or service areas instead of looking to expand in unchartered territories.
Prospectors: Emphasize growth and innovation, development of new products, and an eagerness to be the first in new-product or market areas.
Thus, HR strategies must align with the organizational strategies.
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HR Fit with Environment
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Degree of Uncertainty
Magnitude of Change
Volatility
Complexity
In addition to reinforcing overall organizational strategies, HR strategies should help the organization better exploit environmental opportunities or cope with unique environmental forces that affect it. The four dimensions of environment are:
Degree of uncertainty
Magnitude of change
Volatility
Complexity
Now let’s look at each of these dimensions as they relate to a firm’s rating of “high” or “low” on different environmental characteristics.
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HR Audit Periodic HR Audits should ask:
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Is the turnover rate exceptionally low or high?
Are employees who quit good employees or marginal?
What is the firm’s ROI regarding recruitment, training, and performance plans?
Is the firm complying with government regulations?
How well is the company managing employee diversity?
Are HRM policies and procedures helping the firm reach long-term goals?
Companies should periodically conduct an HR audit to evaluate how effectively they are using their human resources. These types of questions include all of the above.
The HR audit addresses these and other important issues systematically so that effective programs can be maintained and ineffective programs corrected or eliminated.
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Summary and Conclusions
HR Challenges Facing Managers
Environmental Challenges
Organizational Challenges
Individual Challenges
Planning and Implementing Strategic HR Policies
Policies and procedures should be congruent
Selecting HR Strategies to Increase Firm Performance
The Important Partnership of HR and Managers
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To summarize, there are many challenges and unique environments in which HR managers operate. It is vitally important for HR managers to partner with strategic organizational team members and actively participate in all initiatives of the firm. It is clear that HR strategies must be aligned and congruent with and organization’s strategies.
Because of the many organizational challenges, it is very important for HR managers to work closely with the organization in aligning the human resources to meet the challenges and objectives of the organization in an efficient and effective manner.
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