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Human ResourceManagement
TENTH EDITON 2003 Southwestern College Publishing. All rights
reserved.PowerPoint Presentation by Charlie CookStrategic Human
Resource ManagementSECTION 1 Nature of Human Resource Management
Chapter 2Robert L. Mathis John H. Jackson
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2002 Southwestern College Publishing. All rights reserved.
2*Learning ObjectivesAfter you have read this chapter, you should
be able to:Discuss why human resources can be a core competency for
organizations.Define HR planning, and outline the HR planning
process.Specify four important HR benchmarking measures.Identify
factors to be considered in forecasting the supply and demand for
human resources in an organization.
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2002 Southwestern College Publishing. All rights reserved.
2*Learning Objectives (contd)Discuss several ways to manage a
surplus of human resources.Identify what a human resource
information system (HRIS) is and why it is useful when doing HR
planning.
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2002 Southwestern College Publishing. All rights reserved.
2*Human Resources as a Core CompetencyStrategic Human Resources
ManagementOrganizational use of employees to gain or keep a
competitive advantage against competitors.Core CompetencyA unique
capability in the organization that creates high value and that
differentiates the organization from its competition.
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Possible HR Areas for Core CompetenciesFigure 21
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2*HR-Based Core CompetenciesOrganizational CultureThe shared values
and beliefs of the workforceProductivityA measure of the quantity
and quality of work done, considering the cost of the resources
used.A ratio of the inputs and outputs that indicates the value
added by an organization.Quality Products and ServicesHigh quality
products and services are the results of HR-enhancements to
organizational performance.
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Customer Service DimensionsFigure 22
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Factors That Determine HR PlansFigure 23
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Linkage of Organizational and HR StrategiesFigure 24
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2002 Southwestern College Publishing. All rights reserved.
2*Human Resource PlanningHuman Resource (HR) PlanningThe process of
analyzing and identifying the need for and availability of human
resources so that the organization can meet its objectives.HR
Planning ResponsibilitiesTop HR executive and subordinates gather
information from other managers to use in the development of HR
projections for top management to use in strategic planning and
setting organizational goals
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Typical Division of HR Responsibilities in HR PlanningFigure 25
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2*Human Resource Planning (contd)Small Business and HR Planning
IssuesAttracting and retaining qualified outsidersManagement
succession between generations of ownersEvolution of HR activities
as business growsFamily relationships and HR policies
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2002 Southwestern College Publishing. All rights reserved. 2* HR
Planning ProcessFigure 26
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2002 Southwestern College Publishing. All rights reserved. 2*HR
Planning ProcessHR StrategiesThe means used to anticipate and
manage the supply of and demand for human resources.Provide overall
direction for the way in which HR activities will be developed and
managed.
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2002 Southwestern College Publishing. All rights reserved.
2*Benefits of HR PlanningBetter view of the HR dimensions of
business decisionsLower HR costs through better HR management.More
timely recruitment for anticipate HR needsMore inclusion of
protected groups through planned increases in workforce
diversity.Better development of managerial talent
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2002 Southwestern College Publishing. All rights reserved.
2*Scanning the External EnvironmentEnvironmental ScanningThe
process of studying the environment of the organization to pinpoint
opportunities and threats.Environment Changes Impacting
HRGovernmental regulationsEconomic conditionsGeographic and
competitive concernsWorkforce composition
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Employers Use of Part-Time WorkersFigure 27Source: Adapted from
Part-Time Employment, (NY: The Conference Board, n.d.) vol. 6
#1.
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2002 Southwestern College Publishing. All rights reserved.
2*Internal Assessment of the Organizational WorkforceAuditing Jobs
and SkillsWhat jobs exist now?How many individuals are performing
each job?How essential is each job?What jobs will be needed to
implement future organizational strategies?What are the
characteristics of anticipated jobs?
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2002 Southwestern College Publishing. All rights reserved.
2*Internal Assessment of the Organizational WorkforceOrganizational
Capabilities InventoryHRIS databasessources of information about
employees knowledge, skills, and abilities (KSAs)Components of an
organizational capabilities inventoryWorkforce and individual
demographicsIndividual employee career progressionIndividual job
performance data
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2*Forecasting HR Supply and DemandForecastingThe use of information
from the past and present to identify expected future
conditions.Forecasting MethodsJudgmentalEstimatesasking managers
opinions, top-down or bottom-upRules of thumbusing general
guidelinesDelphi techniqueasking a group of expertsNominal
groupsreaching a group consensus in open discussion
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2*Forecasting HR Supply and DemandForecasting Methods
(contd)MathematicalStatistical regression analysis Simulation
models Productivity ratiosunits produced per employeeStaffing
ratiosestimates of indirect labor needsForecasting
PeriodsShort-termless than one yearIntermediateup to five
yearsLong-rangemore than five years
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Forecasting MethodsFigure 28
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2*Forecasting HR Supply and DemandForecasting the Demand for Human
ResourcesOrganization-wide estimate for total demandUnit breakdown
for specific skill needs by number and type of employeeDevelop
decision rules (fill rates) for positions to be filled internally
and externally.Develop additional decision rules for positions
impacted by the chain effects of internal promotions and
transfers.Forecasting the Supply for Human ResourcesExternal
SupplyInternal Supply
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2*Forecasting HR Supply and DemandForecasting External HR
SupplyFactors affecting externalNet migration for an
areaIndividuals entering and leaving the workforceIndividuals
graduating from schools and collegesChanging workforce composition
and patternsEconomic forecastsTechnological developments and
shiftsActions of competing employersGovernment regulations and
pressuresOther factors affecting the workforce
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2*Forecasting HR Supply and DemandForecasting Internal HR
SupplyEffects of promotions, lateral moves, and
terminationsSuccession analysisReplacement chartsTransition matrix
(Markov matrix)ExitManagerSupervisorLine
WorkerManager.15.85.00.00.Supervisor.10.15.70.05Line
Worker.20.00.15.65
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Estimating Internal Labor Supply for a Given UnitFigure 29
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2002 Southwestern College Publishing. All rights reserved.
2*Managing Human Resource Surplus or ShortageWorkforce Reductions
and the WARN ActIdentifies employer requirements for layoff advance
notice.60-day notice to employees and the local community before a
layoff or facility closing involving more than 50 people.Does not
cover part-time or seasonal workers.Imposes fines for not following
notification procedure.Has hardship clauses for unanticipated
closures or lack of business continuance capabilities.
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2002 Southwestern College Publishing. All rights reserved.
2*Managing Human Resource Surplus or ShortageWorkforce
RealignmentDownsizing, Rightsizing, and Reduction in Force (RIF)
all mean reducing the number of employees in an
organization.CausesEconomicweak product demand, loss of market
share to competitorsStructuraltechnological change, mergers and
acquisitions
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2*Managing Human Resource Surplus or ShortageWorkforce Realignment
(contd)Positive consequencesIncrease competitivenessIncreased
productivityNegative consequencesCannibalization of HR
resourcesLoss of specialized skills and experienceLoss of growth
and innovation skillsManaging survivorsProvide explanations for
actions and the futureInvolve survivors in transition/regrouping
activities
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2002 Southwestern College Publishing. All rights reserved.
2*Managing Human Resource Surplus or ShortageDownsizing
approachesAttrition and hiring freezesNot replacing departing
employees and not hiring new employees/Early retirement
buyoutsOffering incentives that encourage senior employees to leave
the organization early. LayoffsEmployees are placed on unpaid leave
until called back to work when business conditions
improve.Employees are selected for layoff on the basis of their
seniority or performance or a combination of both.
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2002 Southwestern College Publishing. All rights reserved.
2*Managing Human Resource Surplus or ShortageDownsizing approaches
(contd)Outplacement services provided to displaced employees to
give them support and assistance:Personal career counselingResume
preparation and typing servicesInterviewing workshopsReferral
assistanceSeverance payments Continuance of medical benefitsJob
retraining
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2*Dealing with DownsizingInvestigate alternatives to
downsizingInvolve those people necessary for success in the
planning for downsizingDevelop comprehensive communications
plansNurture the survivorsOutplacement pays off
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2002 Southwestern College Publishing. All rights reserved.
2*Assessing HR EffectivenessDiagnostic Measures of HR
EffectivenessHR expense per employeeCompensation as a percent of
expensesHR department expense as a percent of total expensesCost of
hiresTurnover ratesAbsenteeism ratesWorkers compensation per
employee
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Overview of the HR Evaluation ProcessFigure 210
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2002 Southwestern College Publishing. All rights reserved.
2*Assessing HR EffectivenessHR AuditA formal research effort that
evaluates the current state of HR management in an
organizationAudit areas:Legal compliance (e.g., EEO, OSHA, ERISA,
and FMLA)Current job specifications and descriptionsValid
recruiting and selection processFormal wage and salary system
BenefitsEmployee handbookAbsenteeism and turnover controlGrievance
resolution processOrientation program Training and
developmentPerformance management system
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2002 Southwestern College Publishing. All rights reserved.
2*Using HR Research for AssessmentHR ResearchThe analysis of data
from HR records to determine the effectiveness of past and present
HR practices.Primary ResearchResearch method in which data are
gathered first-hand for the specific project being
conducted.Secondary ResearchResearch method using data already
gathered by others and reported in books, articles in professional
journals, or other sources.
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2002 Southwestern College Publishing. All rights reserved. 2*HR
Performance and BenchmarkingBenchmarkingComparing specific measures
of performance against data on those measures in other best
practice organizationsCommon BenchmarksTotal compensation as a
percentage of net income before taxesPercent of management
positions filled internallyDollar sales per employeeBenefits as a
percentage of payroll cost
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2002 Southwestern College Publishing. All rights reserved.
2*Doing the Benchmarking AnalysisReturn on Investment
(ROI)Calculation showing the value of expenditures for HR
activities.A = Operating costs for a new or enhance system for the
time periodB = One-time cost of acquisition and implementationC =
Value of gains from productivity improvements for the time
period
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2002 Southwestern College Publishing. All rights reserved. 2* HR
Business Performance CalculationsFigure 211aSource: Adapted from
Jac Fitz-Enz, Top 10 Calculations for Your HRIS, HR Focus, April
1998, S-3.
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2002 Southwestern College Publishing. All rights reserved. 2* HR
Business Performance CalculationsFigure 211bSource: Adapted from
Jac Fitz-Enz, Top 10 Calculations for Your HRIS, HR Focus, April
1998, S-3.
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2002 Southwestern College Publishing. All rights reserved.
2*Doing the Benchmarking AnalysisEconomic Value Added (EVA)A firms
net operating profit after the cost of capital (minimum rate of
return demanded by the shareholders) is deducted.Cost of capital is
the benchmark for returns for all HR activities.Utility
analysisAnalysis in which economic or other statistical models are
built to identify the costs and benefits associated with specific
HR activities
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2002 Southwestern College Publishing. All rights reserved.
2*Human Resource Information SystemsHuman resource information
systems (HRIS)An integrated system of hardware, software, and
databases designed to provide information used in HR decision
making.Benefits of HRISAdministrative and operational efficiency in
compiling HR dataAvailability of data for effective HR strategic
planningUses of HRISAutomation of payroll and benefit
activitiesEEO/affirmative action tracking
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Uses of an HR Information System (HRIS)Figure 212
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2*Designing and Implementing an HRISHRIS Design IssuesWhat
information available and what is information needed?To what uses
will the information be put?What output format compatibility with
other systems is required?Who will be allowed to access to the
information?When and how often will the information be needed?
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2*Accessing the HRISIntranetAn organizational (internal) network
that operates over the Internet.ExtranetAn Internet-linked network
that allows employees access to information provided by external
entities.Web-based HRIS UsesBulletin boardsData accessEmployee
self-serviceExtended linkage
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