Course Check-up

• HRM today plus JP article (Seven Practices)

Case Presentations

• Present the Case – Gentleman’s Threes

• Class work on the Case – – Step 1 – Core Elements (short summary of main factors in the

case)– Step 2 – Critical Issue (one sentence)– Step 3 – Relevant Theories that will help you to answer the

problem– Step 4 – Options (3) – possible solutions– Step 5 – Supported Argument for the “Best” one

Gentleman’s Three

• Must “cut” $20M from budget• Staff layoffs• Performance review system seems to be a

problem. (1) Above average (2) All 3s• What to do?

– VP HR Nils Ekdahl– CFO Anita Fierst– Michael Milanese (previous VP HR)

Seven Practices of Successful OrganizationsJeffrey Pfeffer

• Employee Security• Selective Hiring• Self-managed teams• Comparatively high

compensation• Extensive training• Reduced status distinctions• Extensive sharing of information

Employment Security

• Employment Security Policy– more careful / leaner

hiring

• Avoid “Dumbsizing”– buying high selling low

(IT industry)

– doing their job (Bank - loans officers)

• Fire when necessary

Selective Hiring

• High number of applicants• Screen for cultural fit and

attitude• What are important skills• Several rounds to scrutinize• Involve senior people• Assess the results and

performance

Self-Managed Teams

• Research = they work!• Why?

– peer-control

– pooled ideas

– decrease administrative overhead

High CompensationContingent on Performance

• Relationship between money paid and attracting right workforce

• Can take other forms than just a pay-cheque (i.e. employee ownership or profit sharing)

Training

• Affords flexible production

• Competitive Advantage

• NA / Japan differences reflects differences in “time horizon” for holding on to employees

Reduce Status Differences

• Make all organizational members feel important

• How - symbolically– “associates”

• How - figuratively– parking

– dining hall

– offices

– freeze salaries

Share Information

• ‘Open Book’ management• Shows organizational

members that they are trusted• People must know what is

happening to make changes• (but fears that information

will leak out to competitors is troublesome)

Summary 7 Practices

• Difficult to do them in a staged approach - jump in!

• Some will take longer to work (training)

Chapter 10 - HRM

The role of HRM• Recruitment – employment decisions• Retention – working conditions,

compensation• Rouse – motivate employees, intrinsic

rewards• Redevelop – employee training and

development

Toward a New HRM Model

Recent Developments

• Profit / Customer focus – companies became more focused on generating shareholder value, and they looked to HR departments to take more long-term, profit oriented perspective; HR is a source of competitive advantage

• New Technology – new technology allowed outsourcing of many activities and handling many administrative aspects of HR electronically; firms focus more on “core competencies”

Recent Developments

• Diversity – HR were asked to reconcile the social demand that employment practices be open and inclusive with respect to diverse cultures and lifestyles and the need for high-performing, employees

• Globalization – Global trade and global capital mobility increased dramatically in the last two decades of the 20th century

Recent Developments

• Deregulation – has resulted in declining unionization and wages in industries

Lessons Learned

• Profit calls the tune – profit is the invisible hand that guides and shapes all aspects of company’s HR practices

• Strategic – the more that labour issues have the potential for impacting the bottom line, the more that top management will start to look at HR from a strategic perspective

Lessons Learned

• Contingency – HR practices that work well for one company or in one situation may be an embarrassing failure in another (don’t just follow the leader) – it depends on your organization’s strategy (low cost producer vs. differentiator)

• Alignment - management must adopt a holistic, systems view of HR and mix and match HR practices so they interact with each other to maximize overall performance

• Human Resources are people – every person wants to be treated with respect and fairness

Strategic Typology of HRM

Staff planningBenefit planningRetirement planningCompliance

PayrollBenefit Admin.Retirement Admin.Employee recordsRelocation Admin.

Performance enhancementEmployee relationsLabour negotiationsEmployee developmentManagerial developmentRecruitment

Employee assistance programsRecruitment Information

Processing

Strategic value

Type of HR activityTransactionalRelationship

Low

High

ImportantTo Execs

Important toEmployees

Core Elements of The New Model

• Flexible job design– Teamwork

– Quality circles

– Job rotation

• Worker training and development• Pay-for-performance compensation• Employment (in)security• Employee involvement in decision making

Two Work Systems

HRM Practices Command & Control High Performance

Internal career opportunities

Hiring mainly from outside the firm

Very little use of internal career ladders

Hiring mainly from within the firm

Extensive use of well defined career ladders

Training No formal training provided Extensive formal training provided

Result-oriented appraisals Performance measured by quantifiable output

Performance measured by behavior-oriented measures

Incentives Mainly extrinsic Extrinsic and intrinsic

Employment security

Little High Benefits to outpaced employees

Formal dismissal policies

Participation in decision making

Little High

Job descriptions Jobs are clearly/tightly defined Jobs are broadly defined

Next Day

Chapter 12: Individual BehaviourRead and Prepare Case on Webpage•One pager: Answer following the 5 steps

– Step 1 – Core Elements (short summary of main factors in the case)

– Step 2 – Critical Issue (one sentence)– Step 3 – Relevant Theories that will help you to answer

the problem– Step 4 – Options (3) – possible solutions– Step 5 – Supported Argument for the “Best” one