Business 3058Human Resources ManagementDr. Changquan JiaoFaculty of Business AdministrationLakehead UniversityIntroduction To HRMObjectivesqUnderstand HRMqUnderstand Strategic HRMqUnderstand the impacts of Strategic HRM on organizationsqVideo: Southwest Airlines: Competing Through PeopleSample definitions of HRMqIs a set of interrelated functions and processes whose goal is to attract, socialize, motivate, maintain, and retain an organizations employees (Belcourt et al., 2002)qThe management of people in organizations through formulating and implementing human resources management systems that are aligned with organizational strategy in order to produce the workforce competencies and behaviours required to achieve the organizations strategic goals (Dessler et al., 2007). qAims to improve the productive contribution of individuals while simultaneously attempting to attain other societal and individual employee objectives (Textbook: Schwind et al., 2007)qThe strategic and coherent approach to the management of an organizations most valued assets - the people working there who individually and collectively contribute to the achievement of the objectives of the business (Armstrong, (2006). HR department or HR manager is solely responsible for HRM?True/False?Sample HR and Line Manager HR Activities/ResponsibilitiesUnderstanding HRM: a historical perspectiveqIndustrial RevolutionChanged the nature of workLarge numbers of people to work togetherqThe personnel administration movementBy the late 1800s and early last centuryThe personnel profession (e.g., welfare secretary) began to emergeBasic personnel management functions, such as employee selection, training and compensation and benefits. qScientific Management (Frederick Taylor )Time and motion studiesJob specialization and simplificationPersonnel department started to appear Work itself as far more important than the people doing itUnderstanding HRM: a historical perspectiveqHuman relations movementsHawthorne Studies, conducted between 1924 and 1932 at the Hawthorne Works of Western Electric Plant by Mayo and colleagues. Found a much greater link between employee productivity and the level of attention managers paid to employees and their behavior Concluded that human factors were often more important than physical conditions. qHuman capital movementHuman capital resources include such things as KSAs, motivation of the firms employees.“A company that lost all of its equipments, but kept the skills and knowledge of its workforce could be back in business relatively quickly. A company that has lost its workforce, while keeping its equipments, will never recover”Human resources or human resources department New HR Roles (Ulrich, 1998)qAn expert in delivering administrative efficiency qA champion for employees, representing their concerns qA partner with senior and line managers in strategy formation and executionqAn agent of continuous transformation Operational FocusStrategic FocusStrategic PartnerChange AgentAdministrative ExpertEmployee ChampionWhat Is Strategic HRM?q“Best practices approach Employment securitySelectivity in recruitingHigh WagesIncentive PayEmployee ownershipInformation sharingParticipation and empowermentSelf-managed teamsTraining and skill developmentCross-utilization and Cross-Training Symbolic egalitarianismWage compressionPromotion from withinWhat Is Strategic HRM?q“Best fit approach Consistent with other aspects of the organization, particularly with organizations strategyOrganizational StrategyCost Leadership strategyTight cost controlProduction efficiencyProducts designed for ease of manufactureIntense supervision of labourDifferentiation strategyEmphasis on marketingProduct engineeringR&DFocus on qualityTechnological innovationHighly skilled labourHR strategyControl HR StrategyClear job descriptionsDetailed work planningEmphasis on technical skillsJob-specific trainingJob-based payPerformance evaluations for controlCommitment HR StrategyEmphasis on innovation and flexibilityBroad job classesLoose work planningFocus on recruitment, careful selectionTeam-based trainingIndividual (skill)-based payPerformance evaluations for developmentDoes Strategic HRM Matters? EvidenceqThe 100 Best Companies to Work For Fulmer, Gerhart, & Scott (2003) compared Fortune 100 companies with other comparable companies not on the listMore positive work attitudeSignificantly higher return on assets and higher overall return to stockholdersCommon HR practicesSignificant resources on trainingOffering free or low cost healthcare, providing on-site athletic facilities, cafeteriaGiving employee stock options Practicing open-book managementRecognizing excellent performanceGoenner and & Room (2008) Fortune 100 had a higher investment return by 11% annually than the S&P 500 Does Strategic HRM Matters? EvidenceqThe Case of the IPOs (Welbourne & Andrews, 1996 )The fate of 136 companies in 1993 that made their initial public offerings in 1988. General HR value in 1988Strategy and mission statements cited employees as a competitive advantageA training program for employees was mentionedAn executive with responsibility for human resource management was presentFull-time employees, rather than temporary or contract employees, were regularly usedEmployers ratings of employee relations climateOrganization-based rewardsStock options for all employees or stock options for key employees and managementProfit sharing for all employees or profit sharing for key employees and managementOther forms of group-based incentives (e.g., gainsharing) for all employees or for management 60% of them were still in business and 40% were not.Does Strategic HRM Matters? EvidenceqThe Case of the IPOs (Welbourne & Andrews, 1996 )Mean HR values and Reward Values for Survivors and NonsurvivorsMean HR Value for Survivors2.74/6Mean HR Value2.57/6Mean HR Value Nonsurvivors2.30/6Mean Reward Value for Survivors2.10/5Mean Reward Value1.79/5Mean Reward Value Nonsurvivors1.34/5Does Strategic HRM Matters? EvidenceqThe Case of the IPOs (Welbourne & Andrews, 1996 )5 Year Survival Probability of Top and Bottom CompaniesHR ValueTop 16% firms79%Bottom 16%60%Reward ValueTop 16% firms87%Bottom 16%45%HR Value & Reward ValueHigh on both values92%Low on both values34%Does Strategic HRM Matters? EvidenceqThe Financial Return to HR (Huselid, 1995)Components of a High-Performance Work System1. What proportion of the workforce is included in a formal information-sharing program, such as a newsletter?2. What proportion of workers have had a formal job analysis?3. What proportion of non-entry-level jobs have been filled from within in recent years?4. What proportion of the workforce is administered attitude surveys regularly?5. What proportion of the workforce participates in Quality of Work Life (QWL) programs, Quality Circles (QC) and/or labor-management teams?6. What proportion of the workforce has access to company incentive plans, profit-sharing plans and/or gain-sharing plans?7. What is the average number of hours of training for a typical employee over the last 12 months?8. What proportion of the workforce has access to a formal grievance procedure and/or complaint resolution system?9. What proportion of the workforce takes an employment test prior to hiring?10. What proportion of the workforce has performance appraisals to determine compensation?11. What proportion of the workforce receives formal performance appraisals?12. Which of the following promotion decision rules is used most often?a. Merit of performance rating alone. b. Seniority only if merit is equal. c. Seniority among employees who meet a minimum merit requirement. d. Seniority.13. For each of the five positions that your firm hires most frequently, how many qualified applicants are there, on average?Does Strategic HRM Matters? EvidenceqThe Financial Return to HR (Becker and Huselid, 1999) I. Development of a professional HR capability; II. Development of administrative excellence; III. Both operational excellence and alignment with strategic goals. StageIStageIIStageIIIMarket Value per employeeVideoSouthwest Airlines: Competing Through People Questions:qThink about how Southwests HRM practices have contributed to the companys competitive advantage.