Chapter 2

A Strategic
Approach to
Human
Resource
Management

McGraw-Hill/Irwin Copyright 2013 by The McGraw-Hill Companies, Inc. All rights reserved.
1. Analyze how an ARDM model can be used to
organize, examine, and solve people problems.
2. Understand the difference between external and
internal environmental forces that affect HRM
problems.
3. Examine the role that HRM can play in
accomplishing an organizations strategic plan.
4. Give Examples of how HRM activities contribute
to a firms productivity.

2-2
2-2
 HRM strategies
Greater focus on strategic thinking and
processes
Make HR management a top priority
Integrate HRM with the companys overall
strategy, mission, and goals
Be included in strategic planning from the
onset
Determine what must be done to achieve
priority objectives

2-3
2-3
 Three
Threetotofive
fiveyear
yeartimeline
timeline

Annual
Annualmonitoring
monitoring&&modification
modification

Fit
Fitbetween
betweenorg
orgstrategy
strategy&&HRM
HRM
policies/programs
policies/programs
Recruitment, selection,
outsourcing, telecommuting,
performance evaluation, compensation

2-4
2-4
Details Follow 2-5
2-5
External Influences Internal Influences
Government Strategy
requirements, Goals
regulations, laws
The union Organizational culture
Economics Nature of the task
Competitiveness Work group
Labor force Leaders style and
composition experience
Location

2-6
2-6
 ADRM
Focus on People and Results

Maintaining
Acquiring Developing Rewarding and
Protecting

2-7
2-7
 Desirable End Results

Socially
Competitive Competitive
responsible,
high quality high quality
ethical
product(s) service(s)
practices

2-8
2-8
 Employees
Employees are
are the
the best
best
qualified
qualified
Success
Success of of
any
any HRM
HRM They
They perform
perform jobs
jobs that
that suit
suit
activity their
their needs,
needs, skills,
skills, abilities
abilities
activity
Matching
Matching people
people and
and activities
activities is
is
easier
easier to
to accomplish
accomplish with
with aa
diagnostic
diagnostic approach
approach

2-9
2-9
2-10
2-10
 Available resources

Guidelines Competencies
Internal
Internal
Influences
Influences

The labor External

External Government
force Influences
Influences laws, regulations

Economic Union procedures,

conditions requirements

2-11
2-11
 Finance Accounting

R&D HRM Marketing

Production

2-12
2-12
Government regulation directly affects:

Recruiting

Selection

Evaluation

Promotion

2-13
2-13
EEO & HR rights legislation indirectly affects:

Employment planning

Orientation

Career planning

Training

Employee development

2-14
2-14
 Other areas of legislation and regulation
Employment of illegal aliens
Discrimination based on sex, age, disability
Compensation regulation
Benefits regulation
Workers' compensation and safety laws
Labor relations laws and regulations
Privacy laws

2-15
2-15
 Government regulation has
increased substantially
In 1940, the U.S. Dept. of Labor
administered 18 regulatory programs
In 2004, it administered more than 135
And that is just one government agency

2-16
2-16
Government regulation impacts a managers job

Encourages simplistic thinking on complicated issues

Complexity leads to slow decision making

Leads to complicated legal maneuvering

Many regulations are outdated, with little purpose

Overlap, contradiction among regulatory agencies

2-17
2-17
 Working
conditions
Work Wages and
hours salaries
Union
Impacts
Grievance Fringe
processes benefits
Employee
rights

2-18
2-18
 Unions are no longer
concentrated in a few sectors

The fastest-growing sectors are the

public sector and the third sector

Unionized employees are no longer

just blue-collar factory workers

2-19
2-19
 Two economic factors affect HRM
programs:
Productivity
The work sector of the organization

Productivity is:
A big part of a nation's economic condition
Representative of an organizations overall
efficiency
The output of goods and services per unit of
input (resources) used in a production process

2-20
2-20
 Determine
output costs

Compare
Isolate the Measuring
current &
outputs productivity
previous year

Productivity measures are crude and subject to short-

term error, but over time can show a trend

2-21
2-21
Suggested Solutions for
Increasing Productivity

Reduce government Potential

controls Negative Impacts

Develop favorable income Toxic waste

tax incentives
Radiation
Reindustrialize
Air pollution

Others

2-22
2-22
Influence productivity through sound HRM programs

Diagnose, prescribe, implement, evaluate

Recruitment and selection

Motivational techniques

Compensation

Training and development

2-23
2-23
Private
Private Sector
Sector Public
Public Sector
Sector Third
Third Sector
Sector
60%
60% 30%
30% 10%
10%

Profit-oriented
Profit-oriented Government
Government Museums,
Museums, social
social
businesses
businesses clubs,
clubs, orchestras,
orchestras,
schools,
schools,
churches
churches

2-24
2-24
 The degree to which a nation can,
under free and fair market conditions,
produce goods and services that meet
the test of international markets
while simultaneously maintaining or
expanding the real incomes
of its citizens

Organizational competitiveness substitute organization

for nation, and employees for citizens

2-25
2-25
How effectively do we produce the product?

How good are our services or goods?

Can workers handle new technology?

Can the production costs be lowered?

Do we have enough workers for global
production levels?
Will working harder and faster increase
turnover, absenteeism, and defects?

2-26
2-26
 Competitive Sustainable Competitive
Advantage Advantage

Having a superior Dealing effectively with

marketplace position employees, customers,
relative to competitors suppliers, competitors

How HRM activities are implemented and modified

can provide these advantages

2-27
2-27
2-28
2-28
Activities that enhance/sustain competitive advantage
Employment security Employee ownership

Selective recruiting Information sharing

High wages Participation, empowerment

Incentive pay Teams and job redesign

Training (skill development) Cross-utilization, cross-training

Symbolic egalitarianism Wage compression

Promotion from within Long-term perspective

Measurement of practices Overarching philosophy

2-29
2-29
Competitors can adopt and/or
improve on successful HRM
activities
A firm with fair and equitable treatment of
human resources is less susceptible to
losing its competitive advantage
A few HRM activities can be copied, but
imitation of an entire culture and system
of HRM is difficult

2-30
2-30
2-31
2-31
In 2010, 157+ million Americans
were in the civilian workforce

Not in the military

16 years or older

Employed or actively seeking work

2-32
2-32
In 2010, about
A 280%
47% of U.S.
increase since
workforce was
1947
female

Most have They still face

professional workplace
jobs discrimination

2-33
2-33
 The
The situation
situation for
for racial
racial && ethnic
ethnic minorities
minorities
is
is similar
similar to
to that
that for
for women
women

Few
Few Hispanics,
Hispanics, African-Americans,
African-Americans, oror Native
Native
Americans
Americans have
have high-status,
high-status, high-paying
high-paying jobs
jobs

The
The most
most recent
recent immigrant
immigrant groups
groups
take
take the
the lowest-level
lowest-level jobs
jobs

Minorities
Minorities lived
lived in
in the
the U.S.
U.S.
long
long before
before immigrants
immigrants arrived
arrived

2-34
2-34
 Workers 45+ have no
more accidents than younger ones

Until age 55, absenteeism

rates are the same or lower

Older employees are just as effective

as younger ones

Insurance premiums are higher,

making them more costly to employ

With aging comes a loss

of some faculties

2-35
2-35
2-36
2-36
The location of the organization
impacts hiring practices and
HRM activities
Rural versus urban
International versus local
Education
Behavior
Legal-political factors
Economics
Inter-cultural training

2-37
2-37
 Corporate strategy Work groups

Corporate goals Company Culture

The nature of the tasks Leader style/experience

2-38
2-38
 What
Whatkey
keyexecutives
executiveshope
hopetoto
accomplish
accomplishininthe
thelong
longrun
run

Concerned
Concernedwithwithcompetition
competitionand
and
aligning
aligningthe
theresources
resourcesofofthe
thefirm
firm

Long-term
Long-termsuccess
successlinked
linkedtotohelping
helping
employees
employeesachieve
achieve
work-life
work-lifebalance
balance

2-39
2-39
 Most departments have
Goals
Goals differ
differ similar goals
within
within and
and
among
among Differences arise from the
departments importance placed on goals
departments
If profits take precedence, HRM
goals receive little attention

Effectiveness
problems

2-40
2-40
Diversity refers to any mixture of themes
characterized by differences and similarities
Diversity in organizations means focusing on the
collective picture of differences and similarities

2-41
2-41
 Form a diversity steering team
Wisconsin
Power and
Lights Create a diversity training team
approach to
diversity Select training project manager
training
Complete cultural audit

Design training program

Implement and evaluate the training

2-42
2-42
 System of shared
meaning held by
organization members

Degree of loyalty Autonomy or freedom in

expressed by employees departments or offices

How employees and How business

customers are treated is conducted

2-43
2-43
 Impacts No one best
expectations culture

Perceptions of
culture held by
employees
Provides
Impacts
benchmark for
behavior,
performance
productivity
standards

2-44
2-44
HRM is the effective matching of
the nature of the task (job)
with the nature of the employee

2-45
2-45
 Human
Job design
interaction

Physical Physical Degree of

exertion location knowledge

Task variety Time dimension Environmental

pleasantness

Degree of Physical
empowerment Task identity
exertion

2-46
2-46
 Often work Consider
next to each themselves a
other group

Interact Two or more Work inter-

continuously people dependently

2-47
2-47
 Effective Work Groups Effective Group Members

Full member participation Few in number (7 to 14)

Clearly defined goals Work closely together

Adequate resources Have similar backgrounds

Members furnish suggestions Depend on the group to

leading to goal achievement satisfy their needs

Stable membership Support management

Supports organization goals Function as a team

2-48
2-48
 Changing
Changingaagroups
groupsnorms
normsand
and behavior
behavior

Managers Member
leadership Rewards transfers
and
discipline

2-49
2-49
The experience/leadership style of the operating
manager directly affects HRM activities

Orchestrating the skills, experiences,

personalities, and motives of individuals

Facilitating interaction within work groups

Providing direction, encouragement, and

authority to evoke desired behaviors

Reinforcing desirable behavior

2-50
2-50
2-51
2-51
Strategic HRM planning
Leads to growth, profits,
business survival
Expands awareness of possibilities
Identifies strengths and weaknesses
Reveals opportunities
Points to the need to evaluate the
impact of internal and external forces

2-52
2-52
 Matching

Strategic plans Competitive

= products and
Employee services
characteristics

HRM activities

2-53
2-53
Involved in all aspects of organizations operation

Makes everyday contributions

Comprehensive programs

Adaptive to organizations culture

Responsive to employee needs

Optimizes employee skills, talents, creativity

Responsive to global challenges

2-54
2-54
 Technology Trends

Growing Shift in human Global market

knowledge needs competencies connection

Business Quicker
Rapid response
streamlining innovation

Quality Industrial
improvement revolution

2-55
2-55
 Changes in U.S. Workforce
Slower growth in number of Caucasian workers

White males no longer dominate workforce

Almost half the workforce is female

Baby boomers are staying in workforce longer

Gen X is vying with Boomers for jobs

More Hispanic, Asian, older workers

2-56
2-56
 More emphasis on
Child and elder care
Diversity understanding, training
Fair, ethical, prompt issue handling
Recruiting/developing skilled labor

2-57
2-57
 Facts About Downsizing

Half of downsized firms end up with as many workers

Downsizing in manufacturing is not new

Positively correlated to foreign competition

Encourages firms to reduce their costs

Profits increase in the short-run, but not productivity

Leads to lower compensation/wages within the firm

2-58
2-58
 Changing the A reduction in a
reporting and companys
authority workforce
relationships Can result in
within stress-related
a firm health problems

Restructuring Downsizing

2-59
2-59
Temporary Part time Contract Leased
Highest growth rate home health care; medical assistants;
computer hardware, data communication, and software

2-60
2-60
 Abilities
Abilities

Way
Way of
of Attitudes,
Attitudes,
doing
doing jobs
jobs preferences
preferences

Intellectual
Intellectual Styles
Styles
capacities
capacities

2-61
2-61
 Abilities/Skills

Mechanical

Motor coordination

Mental Abilities resulting from

genetic factors can rarely
Creative be changed

2-62
2-62
 Attitude Preference

Characteristic, Evaluating an
long-lasting way object, idea, or
of thinking, person in a
feeling, and positive or
behaving negative way

Object, idea,
person, or group

2-63
2-63
 Allows expression of both aggressive and
pleasure-seeking drives
A way to channel energy
Provides income
Offers justification for existence
A way to achieve self-esteem, self-worth

The amount of energy directed toward work is directly

linked to the amount directed to family, interpersonal
relations, and recreation

2-64
2-64
 AAset
setofofattitudes
attitudesthat
thatpredisposes
predisposesaaperson
persontoto
act
actininaaspecific,
specific,goal-directed
goal-directedway
way

An
Aninner
innerstate
statethat
thatenergizes,
energizes,channels,
channels,and
and
sustains
sustainsbehavior
behaviortotoachieve
achievegoals
goals

Work
Workmotivation
motivationchannels
channelsaaperson's
person's
behavior
behaviortoward
towardwork
workand
andaway
awayfrom from
recreation
recreationororother
otherareas
areasofoflife
life
The motivation to work changes as other life
activities change

2-65
2-65
 Managers
Managers who
who determine
determine the
the work
work motivations
motivations
of
of employees
employees make
make better
better HRM
HRM decisions
decisions

Work-oriented
Work-oriented Those
Those motivated
motivated toto do
do aa
employees
employees are
are usually
usually better
better job
job benefit
benefit from
from
motivated
motivated by
by incentive
incentive performance
performance evaluation
evaluation
compensation
compensation systems
systems techniques
techniques

2-66
2-66
 Traits
Emotional
Values
reactivity

Self-image Motives

Personality

Visible Genetic
behavior blue print

Intelligence Attitudes
Abilities

2-67
2-67
 Employees are both rational and intuitive

They act in response to

Internal Environmental
inclinations influences

Choices

2-68
2-68
 Goals of Human Resource Processes

Socially Competitive, Competitive,

responsible, high-quality high-quality
ethical practices products services

2-69
2-69
 Organizational effectiveness is critically influenced
by HR management practices
Improvements in productivity, quality, and customer
satisfaction typically depend on changes in multiple
management systems
Changes in staffing, training, and compensation are
integral to a coordinated change effort
HR management systems drive behavior; they must
align with other management systems
The HR department must be a central player in a
company's competitive efforts

2-70
2-70
1. Analyze how an ARDM model can be used to
organize, examine, and solve people problems.
2. Understand the difference between external and
internal environmental forces that affect HRM
problems.
3. Examine the role that HRM can play in
accomplishing an organizations strategic plan.
4. Give Examples of how HRM activities contribute
to a firms productivity.

2-71
2-71