Human Resource Management

1. Human Resource Management Presentation prepared by Buket Akyel Some power point slides are taken from textbook pps of David Lepak and Mary Gowan’s “Human Resources Management”, (international edition), 2010 and Gary Dessler’s “Human Resources Management”, (tenth edition) 2005

2. Human Resource Management Human resource management (HRM) is about managing people in organizations as effectively as possible for the good of : • the employees, • the company and • the society

3. Historical Change Historical shift from • Personnel approach (administrative)to • Human resource management approach to • People represented as an important resource • Human capital management approach • People are an asset of an organization rather than an expense • Assets to be employed in an optimum manner instead of expenses to be minimized People seen as a Cost vs. as a Resource vs. as an Asset Talent Management??

4. Changing Role of People in Organizations • 18th &19th century – • handcrafts, • one person completing the whole product, • people are important, respect for the skilled people, • Late 19th century & early 20th century – Industrial revolution, • machines are more important than the people, • Fredrick Taylor, the role of people is clearly defined and they can be easily substituted • workers only responsible from own job, • workers’ emotions, ideas and contribution are not important. • No personnel function in the organizations • Between WW I and WW II– poverty, economic depression, unemployment, • negative feelings, psychological disorder led to the foundation of psychoanalysis, (Freud, Jung and others) dealt mainly with negative behavior, try to normalize disturbed people. • Not much attention is given to individuals • Bureaucratic controll of personnel issues

5. Changing Role of People in Organizations • Late 40’s & 50’s- economies are recovering. • Management still searches the “one best way to manage people”, • train people to productively use the tools and the machines of the fast changing technology, • bureaucratic organizations, subordinates in need of managers’ instructions to do their jobs. • More attention is started to be given to people in organizations. • Organizational behavior, industrial psychology studies have begun. • Personnel functions and departments are emerging • Late 50’s and 60’s – democracy, peace movements, rights of women, freedom, independence movements throughout the world, • Social sensitivity is rising. Social psychology topics like cooperation, helping, altruism, caring etc. were started to be studied. • Interpersonal relationships and people’s psychological wellbeing were important as well as their physical skills. • Needs of people and how to motivate people were studied. • Studies on organizational structure and its relationship to productivity

6. Changing Role of People in Organizations • 70’s – systems approach. • Study of various management styles instead of only one. • Employees seen as recources to be used productively instead of only costs to be controlled. • Concept of Human Resources instead of Personnel • 80’ – 90’s Rapid technological advancements, start of the knowledge era. • Individual seen as knowledge worker. • Individual starting to play a central role in the organization. • Knowledge worker became an asset for the organization instead of only be seen as a resource to be used. • 2000 on- Strategic role of people in the organizations. HR seen as business partner and employee advocate

7. The Goals of HRM • Overall Goals • Productivity • Quality of Working Life • Legal Compliance • Competitive Advantage • Workforce adaptibility • Bottom Line • Survival • Competitiveness • Growth • Profitability • Flexibility • Specific Goals • Attract • Retain • Motivate • Retrain Human Resources Management Activities • Understanding the environment • Human Resources Planning • Recruitment and Placement • Training • Performance Management • Compensation Management • Career Management

8. HR’s Role in Competitive Advantage • A company’s ability to create more economic value than its competitors • Accomplished through: —managing employees effectively —training employees in skills they need —making employees feel valued —motivating employees to be productive

9. PERSONNEL MANAGEMENT VS HR MANAGEMENT

10. Primary HR Activities • Work design and workforce planning • Job Design and Job Analysis • How jobs are interconnected and aligned with the company’s objectives • Outsourcing • Reorganization • Personnel Planning • ensuring the right people are in the right placeat the right time • Managing employee competencies • Assessing knowledge, skills,abilities and other talents employees possess • Recruiting,selecting,training employees in skills they need for current and future positions • Managing employee attitudes and behaviors • Motivating workers to improve their performance • Performance Management • Compensation Management

11. HR Challenges • Organizational demands—strategy, culture, employee concerns • Environmental influences—labor force trends, globalization, technology, ethics and social responsibility • Regulatory issues—legislation protecting rights of individuals and the company with regard to employment processes • Employee Health&Safety regulations • Turkish Labour Law • .......

12. Organizational Demands: Strategy A plan for achieving a competitive advantage • Impacts types of jobs employees perform • Affects attitudes and behaviors employees display

13. Organizational Demands: Culture Assumptions, values and beliefs of a company that affect how employees behave • Bureaucratic cultures value rules,formalization, hierarchy • Entrepreneurial cultures value creativity, knowledge exchange, innovation Strong cultures provide clear, consistent signals Weak cultures are ambiguous and lack a clear message

14. Organizational Demands: Employee Concerns Psychological Contract—Perceived obligations employees believe they owe their company and the company owes them • Includes pay, benefits and training in exchange for commitment and performance • Governs how employees evaluate company decisions and how they act on the job Work/Life Balance - Demands of work and personal lives

15. Justice Employees expect to be treated fairly: • Distributive justice: • Fairness in what individuals receive for their efforts • Compensation for time and effort put into jobs • Procedural justice: • Determination that the process used to make decisions, rewards, and resolution of disputes is viewed as fair • Interactional Justice: • How employees feel they are treated by managers and supervisors When employees perceive company is not meeting its obligations, they respond by: • Speaking up • Silence • Neglect • Leaving • Destructive behaviors

16. Environmental Influences

17. Environmental Influences: Labor Force Trends Influences how companies recruit/select • Diverse in race, gender and age • Number of women expected to grow • Overall unemployment rate % 9.1 • % 17.4 unemployment rate among young people in Turkey • Size of group 55-and-older increasing due to the new retirement policy in Turkey

18. Environmental Influences: Technology • Requires many employees to possess basic computer proficiency • Challenges privacy issues and potential misuse by employees • Broadens access to recruit employees from larger market • Enables virtual workforce

19. Environmental Influences: Globalization • Blurs country boundaries in business activities • Enables international joint ventures and partnerships • Challenges companies with differences in values and beliefs • Encourages offshoring—sending work once performed domestically to other countries for lower costs

20. Environmental Influences:Ethics and Social Responsibility • Companies and their management being held accountable for ethical behavior • Corporate policies and procedures spell out ethical behavior • Involves how companies behave toward their stakeholders • Can help foster positive reputation and consumer support

21. HR’s Strategic Challenges • Strategic plan • A plan for achieving a competitive advantage • Strategic plans outline the firm’s long-range (often two to five years) organizational goals and set a course of action the firm will pursue to reach its goals. • Where are we going? • How do we get there? • What is the business environment going to be like?

22. The Strategic Management Process 1.Vision and Mission 2.Goals 3.External and Internal Analysis 4.Strategic Choice 5.Strategy Implementation Strategic Planning/Strategy Formulation 6.Strategy Evaluation

23. Types of Strategies • Corporate-level strategy • Identifies the portfolio of businesses and the ways in which these businesses relate to each other. • Business-level/competitive strategy • Identifies how to build and strengthen the business’s long-term competitive position in the marketplace. • Functional strategies • Identifies the basic courses of action that each department will pursue in order to help the business attain its competitive goals.

24. Types of Strategies Business-level/competitive strategy Identifies how to build and strengthen the business’s long-term competitive position in the marketplace. • Cost leadership: the enterprise aims to become the low-cost leader in an industry. i.e Dell • Differentiation: a firm seeks to be unique in its industry along dimensions that are widely valued by buyers.i.e Volvo and safety, Mercedes reliability and quality • Focus: a firm seeks tocarve out a market niche, and compete by providing a product or service customers can get in no other way.i.e Ferrari

25. Strategic Human Resource Management • Strategic Human Resource Management • The linking of HRM with strategic goals and objectives in order to improve business performance and develop organizational cultures that foster innovation and flexibility. • Formulating and executing HR systems—HR policies and activities—that produce the employee competencies and behaviors the company needs to achieve its strategic aims.

26. HR’S Strategic Roles • HR professionals should be part of the firm’s strategic planning executive team. • Identify the human issues that are vital to business strategy. • Help establish and execute strategy. • Provide alternative insights. • Are centrally involved in creating responsive and market-driven organizations. • Conceptualize and execute organizational change.

27. Offering the lowest costs for products and services Focus on efficiencies and cost reductions Minimize overhead and costs Economies of scale are realized High concern for quantity Short term focus To be comfortable with stability Risk averse Providing something unique for which customers are willing to pay Unique product may include features, location, innovation, reputation, status,customer service or quality Offering something competing firms do not provide and customers value Creative & cooperative Long term focus Tolerance for ambiguity Risk taker Cost Leadership / Differentiation Strategies

28. Low cost strategy Jobs are narrow in focus and emphasize standardized and repetitive actions Individuals are hired with basic skills Behaviors are fairly well understood Employees pay based on jobs they perform Internal promotion Differentiation strategy Jobs geared toward creativity or customer service Employees hired with specific skills and new perspectives Jobs require cooperation, creativity and knowledge sharing Pay based on individual potential or team accomplishments Find people from outside Strategy and Managing Employees

29. Linking Corporate and HR Strategies Administrative Linkage One-Way Linkage Two-Way Linkage Integrative Linkage Strategic Planning Strategic Planning Strategic Planning Strategic Planning -------------- HR Function HR Function HR Function HR Function • Integrative Linkage • Strategic planners consider all the people related business • issues before making a strategic choice.

30. The Prerequisites for Effective Strategy Execution Linking the following strategies: • Business Strategy • Workforce Strategy • HR Strategy Workforce strategy exists conceptually between business strategy and HR strategy • Developed by identifying the business strategyand the people and culturenecessary to effectively execute that strategy

31. The Prerequisites for Effective Strategy Execution: Workforce Strategy • Strategic culture • Strategic capabilities (information, technology and people that create a firm’s competitive advantage), • Strategic positions (“A” positions) • Strategic players (“A” players) • Workforce philosophy. Serves as a system of governance for decision making with respect to the workforce by both line managers and HR. Examples: • Place A players in A positions • Exit C work and C players • Develop B players with A potential • Differential investments • Line manager’s workforce accountability • Workforce allocation • Cost structure (compensation) • .......

32. Who is Responsible for Managing HR There is a saying at Merck that goes like this, “Human Resources are too important not to be left to the HR Department” Then Who is Responsible????

33. Cooperative Line and Staff HR Management Line managers are more accountable than ever for HR. Collaboration with HR professionals is needed Example: • The line manager’s responsibility is to specify the qualifications employees need to fill specific positions. • HR staff then develops sources of qualified applicants and conduct initial screening interviews • HR administers the appropriate tests and refers the best applicants to the supervisor (line manager), who interviews and selects the ones he or she wants.

34. Line Managers’ HRM Responsibilities • Placing the right person on the right job • Starting new employees in the organization (orientation) • Training employees for jobs new to them • Improving the job performance of each person • Gaining creative cooperation and developing smooth working relationships • Interpreting the firm’s policies and procedures • Controlling labor costs • Developing the abilities of each person • Creating and maintaining department morale • Protecting employees’ health and physical condition

35. Meeting Today’s HRM Challenges The New Human Resource Managers Find new ways to provide transactional services Focus more on “big picture” (strategic) issues Acquire broader business knowledge and new HRM proficiencies

36. A New Disipline for the HR Profession • Strategic partner who contributes to an organization’s financial performance or bottom line • This transition calls for a change in the perspective of HRM from a behavioral field anchored in social and organizational psychology to a field rooted in measurement and analytical tools as well. That is a human capital management perspective

37. Evidence-Based HRM Providing Evidence for HRM Decision Making Existingdata Actual measurements Research studies

38. A New Disipline for the HR Profession • Without measurement, the human capital notion is just a concept and difficult to apply in the real world • Key to make this approach operational is the measurement of • Costs • Replacement cost • Economic value of human resources or human capital • Measurement difficulties of human resources as assets

39. A New Disipline for the HR Profession • HR is NOT just common sense anymore! • As the theory and research escelates on HR, common sense answers will no longer be acceptable. • Researchers are turning their attention to how HR can use measurement analytics to define, make and accomplish decisions with exactness and confidance. • Scientific measurement and grounding is needed as well as the art of HR. • Implication is that new roles and competencies are expected from HR leaders.

40. The New HR Manager • New Proficiencies • HR proficiencies • Business proficiencies • Leadership proficiencies • Learning proficiencies

41. Role of HR in the Organizations In an changing world HR is put in the spotlight: • HR professionals need to go beyond accepting or reponding to change and appreciate and master change • Winning the hearts as well as the minds of the employees is a big challenge

42. Organization structure / processes Work Flow/Job Analysis Organizational Structure BUSINESS STRATEGY Succession Planning Workforce Planning Recruiting and Selection INTELLECTUAL CAPITAL STRATEGY People Knowledge Skills Competencies Appraising Performance Career Planning and Development Attract and retain -productive -motivated -high performance people to have a performance driven culture Compensation Training and Developmentı Industrial Relations Culture Climate Values Principles Employee Satisfaction Building Employee Commitment Social Responsibility/ Ethics

43. Seven Characteristics of Transformational HR • Understands the business of the agency • Builds business partnerships • Relies on data • Becomes a change agent for agency improvement • Knows HR “inside and out” • Understands how HR can contribute to the achievement of the agency’s strategic outcomes • Exhibits determined leadership