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Human Resource Management, MBA 552

Session 2

Strategic HR Management - Part 2

Key Concepts of Human Resource Management

H Human resources are the capabilities and potentials that people bring to a workplace.

U Uniting people and resources (systems, processes, equipment) with a strategic intent to accomplish the mission

M Managers and HR professionals making daily CHOICES on how to respond to human resourcing matters within the confines that they find themselves in socially, economically and politically. Managers making choices to follow the best practices of HRM which is considered “high commitment” or choose “low commitment” strategies in the key HR functions of:

Workforce (HR) planning Rewards and Compensation

Recruitment and selection Training & Development Performance Management Employment Legislation

A An analytical approach in which you see strategic direction as very much evolving moving toward high commitment, whenever possible

N Navigating toward high commitment human resourcing in the strategic planning of the enterprise

Session 1, Strategic Human Resources Management

Technology? Finances? People?

Human resources are the “capabilities and the potential that people bring to work situations - capabilities that are strategically necessary for the continuation of the work enterprise in which those resources are deployed.” (Ibid, p. 3)

Which one is the greatest resource?

1. Understand the importance of the Mission, Vision, and Strategy in an organization

2. Know the greatest resource in gaining a competitive advantage

3. Recognize that human resources is best understood as the capabilities that human beings bring to work situations

4. Understand the complexities of human resources at a workplace and the value of each person

5. Identify the role human resource management plays within an organization

6. See how human resource strategies strive for high commitment within an organization

Learning outcomes

Sam is chairman of a small family firm that

makes sausages and chicken pies.

The business is starting to grow.

Eva (daughter) wants to keep the

company business local (no globalization).

Juan, Managing Director, trying to reduce labour costs by “hiring and firing” as needed. Sam does not like his approach.

Frank, Operations Manager wants higher volume and lower quality output.

Hal, Marketing Director does not like Frank’s approach or Frank. Hal does not like Juan’s approach to human resource strategy.

Ivan, Finance Director sympathetic with reservations of others, but also aware of increasing profit levels.

Jean, Human Resource (HR) Director wants company to stay true to its high quality; however, she tries to stay neutral and mediate between factions.

Frustrations start to grow.

Moddens Foods – Case 1.2a (p. 17)

“The way an organization attracts, secures, develops, retains, and dispenses (distributes) with the human resources it requires to carry out work tasks in a way that ensures that it continues successfully into the long term” (Leopold, p. 21)

What is Human Resource Management?

Attracts…..Secures…..Develops…..Retains…..Dispense

Workforce (HR) Planning

Organization Structure

Rewards & Compensation

Recruitment & Selection

Performance Management

Employee & Labour Relations

Training & Development

Human Resources Management functions (activities):

In order to do the functions you need to know some concepts such as: employment legislation, diversity management, employee engagement

The CEO (boss)?

The managers?

The human resources professionals?

All of the above?

Who is responsible for Human Resource Management?

Annotate:

Put a check mark beside the correct answer

High versus Low Commitment Human Resources Strategies

Follow “best practice” HR model

Follow “hire and fire” principles

Different focus between line managers and Human Resource managers. HR manager’s focus is essentially “strategic” (big picture)

Reasons for differences:

Strategic focus of Human Resources (HR) managers

Function/Operational/Line Managers	Human Resources Manager
Focus on local or departmental performance	Consider the whole organization
Focus on immediate or short term performance	Consider the long term

Jean, HR Director, concerns are about quality of products, company reputation, keeping good employees, environmentally friendly, equal opportunity, different types of workforces, lay offs of current employees, lower wages.

Remember Moddens? Case 1.2b (p.22)

Avoid internal conflicts over

perceived unfairness

Develop skills for the future and the present

Keep the organization “in line” with the law and public perceptions

With this strategic focus, Human resource managers must:

Human Resources best practices (Table 1.1):

Concern for all managers

Keep discussions at strategic level

Build a strong culture which encourages high employee commitment

Build high trust relations and teamworking

Encourage employees to develop their skills

Involved in strategic planning to serve the business strategies (Develops policies and procedures toward best practices)

How do human resource managers keep the strategic focus?

1. What are some of the challenges at Moddens? (Name at least 3)

2. What are some strategic principles and practices that should be considered and developed?

3. Based on the chapter review, what would you suggest that Sam do to try and resolve the frustration?

4. What are some ways that Sam can move the company forward and still keep the managers engaged?

Questions Assignment 2B – Topic Review Questions

Table 1.3 Components of high commitment and low commitment HR strategies, p. 31

COMPONENTS OF LOW COMMITMENT COMPONENTS OF HIGH COMMITMENT

Definition

Follow “hire and fire” principles with employees being

acquired at the point when they are immediately needed.

Employees are allocated to tasks for which they need very

little training and being terminated when those tasks no

longer needed. The working r elationship is at an “arms

length” and often a calculatingly instrumental one.

Follow the “best practice’ HR model with the

employer seeking a close relationship with

employees who become emotionally involved with

the company. Opportunities for personal and career

development are built into people’s employment,

which is expected to continue over a long term

period, potentially covering a variety of tasks.

Culture

 Rule-based

 Emphasis on authority

 Task focused

 Mistakes punished

 Shared values

 Emphasis on problem solving

 Customer focused

 Learning from mistakes

Structure

 Layered hierarchy

 Top-down influence

 Centralization

 Mechanistically bureaucratic ( rigid)

 Flat hierarchy

 Mutual (top-down/bottom-up) influence

 Decentralization/devolution

 Organically bureaucratic (flexible)

Job Design

 De-skilled, fragmented jobs

 Doing/thinking split

 Individual has single skill

 Direct control of individual by supervisor

 Whole, enriched jobs

 Doing/thinking combined

 Individual multi-skilled

 Indirect control within semi-autonomous

teams

Performance

Expectations

 Objectives met to minimum level

 External controls

 External inspection

 Pass quality acceptable

 Objectives “stretch” and develop people

 Self-controls

 Self/peer inspection

 Continuous improvement in quality sought

Rewards

 Pay may be varied to give individuals incentives

 Individual pay linked to job evaluation

 Pay may be varied to give group

performance

 Individual pay linked to skills, “mastery”

Communica-

tion

 Management seek and give information

 Information used for sectional advantages

 Business information given on “need to know’

basis

 Two-way communication initiated by any

party

 Information shared for general advantage

 Business information widely shared

Employment

relations

 Adversarial

 Collective voice

 Win/lose

 Trade unions tolerated as inconvenient constraints

 OR unions used as convenient intermediaries

between managers and employees

 Mutual

 Individual

 Win/win

 Unions avoided OR unions increasingly by -

passed in the hope of their eventual

withering away

 OR unions involved in partnership relations

with employers to give a “voice” to

employees in working towards employment

security, innovative work practices, fair

rewards and investment in training

Employee

Develop-

ment

 Training for specific purposes

 Emphasis on courses

 Appraisal emphasizes managerial setting and

monitoring of objectives

 Focused on the job

 Training to develop employees’ skills and

competence

 Continuous learning emphasis

 Appraisal emphasizes negotiated setting and

monitoring of objectives

 Focus on career

Department

 Marginal, and restricted to “welfare” and

employment administrative tasks

 Reactive and ad hoc

 Staffed by personnel specialists

 Integrated into management, and working

as “partners” with other managers

 Proactive and strategic

 Staff interchange with the “line” or other

functions

Reference: The Strategic Managing of Human Resources, 2

Edition, Leopold, 2009