fundamentals of

Human Resource Management 4th

by R.A. Noe, J.R. Hollenbeck, B. Gerhart, and P.M. Wright

edition

CHAPTER 2

Trends in Human Resource Management

McGraw-Hill/Irwin

Copyright 2011 by The McGraw-Hill Companies, Inc. All Rights Reserved.

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What Do I Need to Know?

1. Describe trends in the labor force composition and how they affect human resource management. 2. Summarize areas in which human resource management can support the goal of creating a high-performance work system. 3. Define employee empowerment and explain its role in the modern organization.

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What Do I Need to Know? (continued)

4. Identify ways HR professionals can support organizational strategies for quality, growth, and efficiency. 5. Summarize ways in which HRM can support organizations expanding internationally. 6. Discuss how technological developments are affecting human resource management.

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What Do I Need to Know? (continued)

7. Explain how the nature of the employment relationship is changing. 8. Discuss how the need for flexibility affects human resource management.

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The Labor Force

Internal Labor Force
An organizations workers
Its employees The people who have contracts to work at the organization

External Labor Market

Individuals who are actively seeking employment. The number and kinds of people in the external labor market determine the kinds of human resources available to an organization.

The internal labor force has been drawn from the external labor market.

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Change in the Labor Force

An Aging Workforce

A Diverse Workforce

Skill Deficiencies of the Workforce

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Figure 2.1: Age Distribution of U.S Labor Force, 2008 and 2018

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HRM Implications of the Aging Workforce

HR professionals will spend much of their time on concerns related to retirement planning, retraining older workers, and motivating workers whose careers have reached a plateau. Organizations will struggle with ways to control the rising costs of health care and other benefits. Many of tomorrows managers will supervise employees much older than themselves. Organizations will have to find ways to attract, retain, and prepare the youth labor force.
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 As more and more of the workforce reaches retirement age, some companies have set up mentoring programs between older and younger workers so that knowledge is not lost but passed on.

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Figure 2.2: Projected Racial/Ethnic Makeup of the U.S. Workforce, 2018

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Figure 2.3: HRM Practices That Support Diversity Management

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Skill Deficiencies in Workforce

A = True B = False Use of computers to do routine tasks has changed the kinds of skills needed by employees. A college degree is not as important as it once was. U.S. production jobs require intelligence and skills as much as strength.
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Skill Deficiencies of the Workforce

Today, employers are looking for:
mathematical skills verbal skills interpersonal skills computer skills

The gap between skills needed and skills available has decreased companies ability to compete. They sometimes lack the capacity to upgrade technology, reorganize work, and empower employees.
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High-Performance Work Systems

Organizations that have the best possible fit between their:
social system (people and how they interact); and technical system (equipment and processes).

Key trends occurring in todays highperformance work systems:

reliance on knowledge workers the empowerment of employees to make decisions the use of teamwork

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Knowledge Workers
Employees whose contribution to the organization is specialized knowledge, such as:
knowledge of customers knowledge of a process knowledge of a profession

They are especially needed for jobs in:

health services business services social services engineering management

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Top 10 Occupations for Job Growth

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Test Your Knowledge

Ensuring that knowledge workers will share information and store it so that it is easily retrieved by others is the concern of which of the following HR activities.
A. B. C. D. Turnover Employee Empowerment Knowledge Management Employee Selection

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Employee Empowerment
Employee Empowerment Giving employees responsibility and authority to make decisions regarding all aspects of product development or customer service. Employee Engagement Full involvement in ones work and commitment to ones job and company. This is associated with:
higher productivity better customer service lower employee turnover

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Teamwork
The assignment of work to groups of employees with various skills who interact to assemble a product or provide a service. Work teams often assume many of the activities traditionally reserved for managers:
selecting new team members scheduling work coordinating work with customers and other units of the organization

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Test Your Knowledge

Sharon is a very smart and conscientious worker. Lately, she has felt that her ideas were disregarded and she was denied autonomy in completing her work. This situation is probably caused by a lack of
A. B. C. D. Employee Empowerment Knowledge Management Turnover Teamwork
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Figure 2-4: Strategic Business Issues Affecting HRM

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Total Quality Management (TQM)

TQM is a companywide effort to continuously improve the ways people, machines, and systems accomplish work.
The TQM approach provides guidelines for all the organizations activities, including HRM.

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TQM Core Values

Methods and processes are designed to meet the needs of internal and external customers. Every employee in the organization receives training in quality. Quality is designed into a product or service so that errors are prevented from occurring. The organization promotes cooperation with vendors, suppliers, and customers to improve quality and hold down costs. Managers measure progress with feedback based on data.
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Mergers and Acquisitions

HRM should have a significant role in carrying out a merger or acquisition.
Differences between the businesses involved in the deal make conflict inevitable. Training should include developing conflict resolution skills. There is a need to sort out differences in the two companies practices with regard to compensation, performance appraisal, and other HR systems.
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Figure 2.5: Number of Employees Laid Off During the Past Decade

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Reengineering
A complete review of the organizations critical work processes to make them more efficient and able to deliver higher quality. Involves reviewing all the processes performed by all the organizations major functions.
This includes human resources management.

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Reengineering (continued)
Reengineering affects human resource management in two ways:
1. The way the HR department itself accomplishes its goals may change dramatically. 2. The fundamental change throughout the organization requires the HR department to help design and implement change so that all employees will be committed to the success of the reengineered organization.

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Outsourcing
Outsourcing the practice of having another company (a vendor, third-party provider, or consultant) provide services. Outsourcing gives the company access to indepth expertise and is often more economical as well. HR departments help with a transition to outsourcing.
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Expanding into Global Markets

Offshoring Moving operations from the country where a company is headquartered to a country where pay rates are lower but the necessary skills are available. The International Labor Pool Hiring at home may may involve selection of employees from other countries. The beginning of the 21st century has seen significant immigration.

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Figure 2.6: Where Immigrants to the U.S. Came from in 2008

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International Assignments
Besides hiring an international workforce, organizations must be prepared to send employees to other countries. This requires HR expertise in selecting and preparing employees for international assignments. Employees who take assignments in other countries are called expatriates.
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Table 2.1: New Technologies Influencing HRM

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Human Resource Information System (HRIS)

A computer system used to acquire, store, manipulate, analyze, retrieve, and distribute information related to an organizations human resources. An HRIS can:
support strategic decision making help the organization avoid lawsuits provide data for evaluating programs or policies support day-to-day HR decisions

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Electronic Human Resource Management (e-HRM)

e-HRM: the processing and transmission of digitized HR information especially using computer networking and the Internet. e-HRM has the potential to change all traditional HRM functions.
Self-Service: System in which employees have online access to information about HR issues and go online to enroll themselves in programs and provide feedback through surveys
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Table 2.2: Implications of e-HRM for HRM Practices

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Change in the Employment Relationship

A New Psychological Contract Flexible Staffing Levels

Flexibility

Flexible Work Schedules

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The Nature of the Employment Relationship is Changing

The employment relationship takes the form of a psychological contract that describes what employees and employers expect from the employment relationship. In the traditional version, organizations expected employees to contribute time, effort, skills, abilities, and loyalty in exchange for job security and opportunities for promotion. Today, organizations needs are constantly changing.

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The Nature of the Employment Relationship is Changing (continued)

Today, organizations are requiring top performance and longer work hours but cannot provide job security. Instead, employees are looking for:
flexible work schedules comfortable working conditions greater autonomy opportunities for training and development performance-related financial incentives

This requires planning for flexible staffing levels.

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Flexibility: A Family-Friendly Work Arrangement

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The Need for Flexibility Affects HRM

Organizations seek flexibility in staffing levels through alternatives to the traditional employment relationship:
outsourcing, temporary, and contract workers flexible work schedules including shortened work weeks allowing employees to adjust work hours to meet personal and family needs moving employees to different jobs to meet changes in demand

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Summary
An organizations internal labor force comes from its external labor market In the U.S., this labor market is aging and becoming more racially and ethnically diverse. Organizations must recruit from a diverse population, establish bias-free HR systems, and help employees understand and appreciate cultural differences. HRM can help organizations find and keep the best possible fit between their social system and technical system.
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Summary (continued)
Job design and appropriate systems for assessment and rewards have a central role in supporting employee empowerment and teamwork. Employee empowerment means giving employees responsibility and authority to make decisions regarding all aspects of product development or customer service. HRM must design jobs to give employees latitude for decision-making and interpersonal skills.

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Summary (continued)
HR professionals should be familiar with the organizations strategy and may even play a role in developing the strategy. Specific HR practices vary according to type of strategy. Organizations with international operations hire employees in foreign countries where they operate, so they need knowledge of differences in culture and business practices.

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Summary (continued)
Information systems have become a tool for more HR professionals, and often these systems are provided through the Internet. Online information sharing enables employee selfservice for many HR needs. The employment relationship takes the form of a psychological contract that describes what employees and employers expect from the employment relationship. The traditional employment relationship is changing.
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Summary (continued)
Organizations seek flexibility in staffing levels through alternatives to the traditional employment relationship. Organizations also may seek flexible work schedules.
Shortened workweeks Adjust work hours as a way for employees to meet personal needs

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