Introduction and Strategic HRM Flashcards
HR value Chain
1 et 2. Human resource-Strategy & Planning
3 et 4. Talent Aquisition : Recruitement (3) and Selection (4)
5 et 6. Engagement& Retention Management : Performance Mangement (5), Compensation, talent management (6)
7. Hr competency
HRM general definition
is the use of individuals to achieve organizational goals. (Martocchio)
Historical moments
Started in 1893
voir page 14
Why is HR relevant ?
Cost :
-optimal management of an important cost factor –> efficiency
Human capital:
-Contributing to the success of the company
Ensue competitiveness in a dynamic environment
Developing and maintaining human capital
–> effectiveness
Perspective HRM: The human being as
- Production factor : From a business perspective, people are seen as production factors and HRM has the task of providing people as production fact
- Performer: People’s performance is at the centre of company efforts and HR has the task of effecting performance and performance promotion.
- Human capital: Human capital refers to sets of collective skills, talent, knowledge, and ability that employees can apply to create value for their employers. HRM has the task of managing this human capital in a value-enhancing way.
The human being from a business perspective:
Production factors:
-Natural ressources
-Real capital (e.g machines)
-work, knowledge –> Human capital
The AMO formula of work performance
P = A x M x 0
Performance: Output, outcome, achievements
Ability: Extent of capability to perform the task based on knowledge, skills, and competencies
Motivation: Extent of drive to perform the task, determined by both external factors (e.g., real/perceived outcomes) and internal factors (e.g., needs, values)
Opportunity: extent of real and perceived restrictions on performance based on factors such as role, resources (time, equipment, funding), policies, and culture
Tasks of the HRM: Personnel management (P = A x M x0)
generally deals with ..
- the maintenance and development of competencies,
- the motivation of the personnel as well as
- work organisation (e.g. job design: job rotation, job enlargement, job enrichment)
=so that the work required can be performed in order to achieve the company’s goals.
HRM’s goal is to manage Human capital in a value-enhancing way for the company by…
-Supporting the organisation to achieve its goals by developing and implementing HR strategies that are integrated with the business strategy.
− Contributing to the development of a high-performance culture.
− Ensuring that the organisation has the talented, trained and motivated people it needs.
− Establishing a positive working relationship between management and staff and create a climate of mutual trust.
− Promoting ethical implementation of human resource management.
An HR strategy describes..
how an organisation wants to achieve its business objectives with its human capital.
the objective of all the HRM practices and
the HR function is…
is to create the “ideal” organisation for a given business. “Ideal” means having:
* just the “right” people with the right attitude
* just the “right” knowledge, skills and capabilities
* just the “right” structure and processes
* just the “right” values and culture
* just the “right” control mechanism
= deployed in just the right way, to meet or exceed both customer’s expectations and competitor’s best efforts. “Right” in this context means build to fit the business strategy.
Humans have beliefs, motives and values and cannot be «bought» : iceberg model
Above the lines:
-Skilles
-Knowledge
Below the lines:
-Values
-Self-Image
-Traits
-Motives
Additional complementary HR functions
HR Controlling: Supports planning and control of the Human Resources with regard to all HR related activities by means of relevant, adequate and differentiated metrics
HR Information Systems: Establishment of an Information Technology platform as personnel data system and to optimize HR related core processes
HR Digitalisation: Management of Business Issues driven by its digitalisation such as profile and function changes, work form changes, etc.
HR Communication: Release of information to existing or potential employees
Employer Branding: Increasing the attractiveness of the employer on the internal and external labour market in
order to improve the chances of attracting and retaining qualified and motivated personnel
Diversity: Refers to the diversity of employees and their all-encompassing inclusion. Often reduced to the „gender question“. Actual topics: equal status, competitive advantage
Labor law: Dealing with legal issues in the context of HRM (e.g. mass dismissals)
HR resource management functions (Martocchio)
-staffing
-Performance management
-employee and labor relations
-Safety and Health
-Human resource development
-compensation
Staffing / talent acquisition
Process of ensuring the organization always has:
* Required number of employees.
* Employees with appropriate skills.
* Employees in the right jobs at the right time.
* Constant job analysis, human resource planning, recruitment, and selection.
-Job analysis: Systematic process of determining skills, duties, and knowledge required for performing jobs in an organizationimpacts virtually every aspect of HRM.
-Human resource planning: Matching internal and external supply of people with anticipated job openings over a specified period of timesets the stage for recruitment and other HR actions.
-Recruitment: Attracting individuals
to apply for jobs:
Must be timely
Applicants need appropriate qualifications Need sufficient number of applicants
-Selection: Choosing individual best suited for a particular position and the organization.
Performance management
-Goal-oriented process to ensure organizational
processes are in place to maximize productivity –> applies to employees, teams, and ultimately, the organization.
-Performance appraisal: Formal system of review and
evaluation
–> for individuals
–> for teams
HR development
This function includes:
* Training: Providing learners with knowledge and skills needed for their present jobsrelatively short-term focus
Development: Offering learning that goes beyond present jobrelatively long-term focus.
* Career planning: Ongoing process
− Individual sets career goals.
− Identifies means to achieve them
Career development: Formal approach used by the organizationensures a pipeline of people with proper qualifications and experiences.
Organization development: Planned and systematic attempt to:
-Make the organization more effective.
-Create a positive behavioral environment.
Compensation & benefits
All rewards that individuals receive as a result of their employment.
* Financial compensation:
- Direct (core compensation): Pay employee receives in
form of wages, salaries, bonuses, or commissions
− Indirect (employee benefits): Benefits employee receives such as paid vacations, sick leave, holidays, medical insurance
Nonfinancial compensation: Satisfaction that employees receive from:
-Job itself
-Psychological and/or physical environment
Safety and health
-Safety: Protecting employees from injuries caused by work-related accidents.
-Health: Employees’ freedom from illness and their general physical and mental well-being.
Employee and labor relations
-Businesses are required by law to recognize a union and bargain with it in good faith if the firm’s employees want union representation.
-Internal labor relations: Movement of employees within the organization; examples:
− Promotions
− Demotions
− Terminations − Resignations.
The design of tasks and functions of Human Resources Management depend on :
–> Organisation of HRM
-The life cycle of a company
− The size of the company
− The organisational form of HRM
− The division of tasks between HRM and line management
− The corporate strategy and HR strategy
− Business environment
− Corporate culture
Organizational forms of HRM
-Function organisational structure: specialisation according to tasks
-Object-related organisational structure: specialisation according to objects (department, divisions, regions, locations, employee group etc)
-Matrix organisation structure: Specialisation according to divisions and regions
–>voir page 49 et 50
Conclusion: Research shows that HR organisation works best if it mirrors the business structure of a company
HR responsibilities - Division of tasks between HRM and line management
HR departement: Defines HR strategies and processes, provides systems, policies, tools
Management broad:Defines the frame of HR strategy and HR politics
Line Manager: Executes HR functions
Who performs HRM tasks?
-Human resource professionals
− Line managers
− HR outsourcing (HRO)
− HR shared service centers (HR SSC)
− Professional employer organization (employee leasing) (PEO)
Human resource professionals
− Historically, the HR professional was responsible for each of the six HR functions.
− Work with managers to help them deal with human resource matters.
− Today, HR departments continue to get smaller
Line managers
- Directly oversee the accomplishment of the organization’s primary goals.
− Involved with human resources by nature of their jobs.
− Now performing some duties typically conducted by HR.
HR outsourcing
− Transfers responsibility to an external provider:
− Discrete services (e.g., health benefits administration)
− Business process outsourcing (BPO) (e.g., the administration of all HR functional areas).
HR shared service centers (SSCs)
− Take routine, transaction-based activities that are dispersed and consolidates them in one location.
− Provide an alternative to HR outsourcing.
Professional employer organization
Company that leases employees to other businesses.
− Advantages:
Economies of scale
Greater job mobility for workers
Job security through leasing company
PEO can handle compliance requirements of programs.
HR as a strategic business partner
“Human resource management must become the business partner of top management - and contribute to value creation”.
HR professionals must understand the company’s business (e.g., sale of medical equipment), -> working as a strategic partner requires deeper and broader understanding of business issues.
HR professionals must use this knowledge to support competitive advantage:
− Recruit and select the most highly qualified individuals.
− Manage performance and compensate based on performance that supports competitive advantage.
− HR development such as training to ensure that employees are as skilled as possible to do their jobs.
Strategic HRM model by Dave Ulrich – 4 aspects of the HR role
- HR function: HR strategy
HR role: Strategic partner
Aligning HR with the company strategy; implementing the strategy - HR function: Service provider
HR role: Administrative expert
Development & optimization of an efficient HR infrastructure and its optimization
3.HR functions: Change management:
HR role: Change agent Enabling and shaping change in the organisation
- HR function: Support
HR role: Employee champion
Ensuring employee commitment; understanding and fulfilling employee concerns
voir page 59
Dynamic HRM environment: Context & stakeholders in HRM
Internal:
-Marketing
-operation
-Finance
-other Functional areas
External:
-legal considerations
-labor market
-society
-political Parties
-Unions
-shareholders
-competition
-customers
-Technology
-Economy
-Unanticaped Events
Impact of the environment on HRM
-Demographic change
-Changing values
-Globalisation
-Digitisation
-Automation
-Individualisation
Strategic HR Management
page 66
Vision
«The vision is a concrete image of the future, near enough to see that it can be realized, but already distant enough to kindle the enthusiasm of the organisation for a new reality»
Mission Statement
-Description of the purpose of the organisation
-Explanation why the organisation exists leading to a contribution to the realization of the vision
-Ultimate statement what the organisation is required to do to achieve the vision
-Establishment of benefits for the various stakeholders of the organisation
Personnel policy is a first driver of the HR core strategy
Fundamental Positioning in the HR area and its integration in the corporate management and -policy
Fundamental Decisions which define the practical actions in the HR area, i.e. the general direction and the principal behavioural norms of human work and of the HRM in the company (eg. working design and time, hiring, education, diversity, rewards, social policies, evaluation)
Design and Cultivation of the Relations between the employees as individuals and group with specific requirements on the one hand and the corporation as an institution and a work environment on the other
Different HR policies drive different HR core strategies
HR strategy depending on Personnel policy
Flexibility focus:
1.Workforce Planning: short term, function oriented, quantitative, minimalistic
2. Talent aquisition:
rather from the outside and outsourced to a great extent
3. Compensation Management: Base salaries under or at market explicit pay for performance (flexible component)
4. talent management; Only functional eduction, no systematic talent management, no succession planning
5. Fluctuation: Average to high
Stability focus:
1.Workforce planning: Middle to longterm, qualitative, comprehensive
2. Talent acquisition: Strong internal recruiting, only partially outsourced
3. Compensation management: Base salaries above or at market long term incentives
4. Talent management: significant and systematic further education, potential succession planning
5. Fluctuation: low to average
HR Strategy depending on Business Strategy:
Quality focus: (example: Michelin)
1.Workforce planning: Longterm, qualitative, competence-oriented
2. Talent acquisition: internal developments, strategic
3. Compensation management: Base salaries at or above the market good benefits, Long term Incentives
4. Talent management: Systematic and significant permanent education, succession planning
5. Fluctuation: low to average
Cost focus (example Macdonald’s)
1.Workforce planning: Shortterm, quantitative, function oriented
2. Talent acquisition: External development, process oriented
3. Compensation management: Base salaries at or below the market, incentives
4. Talent management: Unsystematic, some further education, rudimentary succession planning
5. Fluctuation: Average to high
Framework page 75 et 76
-HR-Flex Value-Strategy (agile and flexible)
Quality & Flexibility Focus
- Recruiting of high competencies
- Performanceoriented compensation
- Limited Talent Management
- Averageattrition
-HR-Investment-Strategy (longterm and value oriented)
Quality & Retention Focus
- Internalrecruitingfocus
- Relevant development efforts - High and consistent salaries - Low attrition
-HR-Low Cost-Strategy (short term and cost oriented)
External recruiting
- No development or further
education
- Compensation at or below
market
- High attrition
-HR-Balance-Strategy (stable and efficient)
Mixed sourcing
- Not much development/
education
- Good salaries at market
- Averageattrition
