Unit 1 Discussion

Should Title VII of the Civil Rights Act be amended to include sexual orientation? Justify your position.

Requirements:

250 words

2 references and one can be the reading material.

APA format

Human Resource Management An Experiential Approach Sixth Edition W I H. JOHN BERNARDIN L Stewart Distinguished Professor, S Florida Atlantic University O JOYCE E. A. RUSSELL N Ralph J. Tyser Distinguished Teaching Fellow, , The University of Maryland J A M I E 5 0 5 1 B U ber29163_fm_i-xvi.indd i 23/02/12 3:25 PM Chapter 1 Strategic Human Resource Management in a Changing Environment Copyright © 2013 The McGraw-Hill Companies. All rights reserved. W I L OBJECTIVES S After reading this chapter, you should be able to O 1. Describe the field N of human resource management (HRM) and its potential for creating and adding value within contemporary organizations. , 2. Describe discrepancies between actual HRM practices and recommendations for HRM practice based on scholarly research. 3. Describe the majorJactivities of HRM. 4. Explain important A trends relevant to HRM, including the increasing globalization of the Meconomy, changing technology, the role of regulations and lawsuits, the changing demographics of the workforce, and the I growing body of research linking particular HRM practices to corporate E performance. 5. Emphasize the importance of measurement for effective and strategic HRM. 6. Understand what is5 meant by competitive advantage, and what the four mechanisms are for offering and maintaining uniqueness. 0 5 1 OVERVIEW B Paul Sassi, the fluidity of President Obama’s signature is a sign According to graphologist of high intelligence, while U its illegibility shows he is protecting his privacy. “He doesn’t want you to know him too well.” Another handwriting expert concluded: “The large letters in Obama’s signature show that he is ambitious, self-confident, and views himself as a leader. . . . The fluid letter forms reveal that he can form a coalition, be diplomatic, and get along with both sides of the aisle.” She added: “He’s the type of guy who could tell you to go to hell and you’d enjoy the trip.”1 In her assessment of Mitt Romney, graphologist Sheila Kurtz concluded that he is inclined to think quickly but impulsively, to dream big, but don’t even think about telling him what to do. Kurtz describes President Obama as “unclogged with preconceptions and prejudices,” with an ability to consider new ideas and probe beneath the surface of issues. She also claims his handwriting also reveals that he is unlikely to act on “raw or coerced impulse.”2 When one of your authors shared these assessments with undergraduate human resources classes, about 20 percent of students thought the evaluations were “dead on accurate,” another 30 percent described the profiles as “mostly accurate,” about 25 percent 3 ber29163_ch01_001-032.indd 3 14/02/12 3:40 AM 1 / Human Resource Management and the Environment Major HRM responsibilities Sound measurement is critical to effective HR thought they were “completely inaccurate,” and about 25 percent had no opinion at all on the accuracy of the profiles. Within the last group, however, about half of the students expressed skepticism about assessing someone’s personality, intelligence, motivation, or anything else important using the person’s handwriting. It is this group of students who are “dead-on accurate.” Research clearly shows that handwriting is not a valid means of assessing anything important (except your handwriting!). The assessment of politicians is not the only application you will find of such invalid assessment methods. Inc. magazine, one of the most popular magazines for U.S. small businesses, ran a story extolling the benefits of using graphology to hire managers.3 The article reported that the use of graphology was on the increase and that the method was very effective for selecting managers and salespersons. Sound research in human resource management (HRM) has determined that companies would do just about as well picking names out of a hat to make personnel decisions.4 Skilled HRM specialists help organizations with all activities related to staffing and maintaining an effective workforce. Major HRM responsibilities include work design and job analysis, training and development, recruiting, compensation, team building, performance management W and appraisal, and worker health and safety issues as well as identifying and developing valid I methods for selecting staff. Research by academics who study L and teach HRM is devoted to identifying the most effective and efficient methods for meeting these HRM responsibilities. A key theme of SHRM programs, policies, and practices are those this book is that the most effective that are developed based on HRM O research results. Another theme of this book is that contemporary HRM practice often ignores the sound research about policy, practice, or Ngood decisions. Instead, organizations are apt to adopt people that is available to help make an HRM practice merely because ,competitors are using it (this was a main theme of the Inc. article about graphology). One of your authors once had a conversation with a business owner who had hired his 145-person sales staff based on graphology reports (at $75 per report) and the answer to a J single question posed in an interview. When questioned about the validity of these methods, the business owner described A one terrible salesman he had hired out of desperation in a tight labor market despite a graphologist’s report that said the “small writing with little M slant indicated he may be too introverted for sales work.” This one example had stuck in I his mind as “proof” of graphology’s effectiveness. He lamented, “If only I had listened E a bundle training the guy!” Those of us who teach to the handwriting expert. I wasted statistics refer to this type of “research” as a “man who” statistic in which a person enlists a single case to support or refute a theory. For example, when you discuss the overwhelm5 causes cancer, someone might offer the counterarguing evidence showing that smoking ment that “yea, but my aunt smoked 0 three packs a day and lived to be 90.” An article in the Washington Post reported that the Pilot Pen Company’s CEO Ronald Shaw was a big 5 it for all hiring decisions because the graphologist’s believer in graphology and would use profile based on his own handwriting 1 showed that he was “sincere and intelligent and had a lot of integrity.”5 While (apparently) flattery will get you somewhere (or at least a good Bget you accurate or valid assessments of the personal consulting gig), graphology will not characteristics related to job performance U (even the job of president). Needless to say, this is not the way to do research on a procedure. There are good ways to do research and good ways to assess the effects of programs, procedures, and activities of HRM. Sound measurement, followed by data-driven decision making, are keys to effective management. Remember the old adage: if it’s not measured, it’s not managed. Management needs to collect and validate information. This information can be a major asset and in many cases, “the raw material of new products and services, smarter decisions, competitive advantage for companies, and greater growth and productivity.”6 A 2011 study led by MIT professor Erik Brynjolfsson showed that companies that adopted “data-driven decision making” for major managerial decisions achieved productivity that was 5 to 6 percent higher than what could be explained by other factors, including how much the companies invested in technology. Data-driven decision making was defined not only by collecting sound data on critical variables, but also whether the results of the data collection were then used to make crucial decisions. The major distinction made in the study was determining whether 4 ber29163_ch01_001-032.indd 4 14/02/12 3:40 AM 1 / Strategic Human Resource Management in a Changing Environment The Balanced Scorecard The Workforce Scorecard Copyright © 2013 The McGraw-Hill Companies. All rights reserved. Lagging and leading indicators The vision of HRM for the 21st century managerial decisions were based mainly on “data and analysis” versus the more traditional “experience and intuition.”7 Graphology has been the subject of sound, data-based research to determine whether diagnostics that derive from a person’s handwriting actually predicts whether a person is going to be a competent manager and great salesperson (it doesn’t). As we discuss in detail in Chapter 6, there are many methods that do an excellent job predicting performance. Data-driven (and effective) HRM means decision makers (HR specialists and line managers) are aware of these valid methods and then use them to make decisions. Many HRM systems and activities are not subjected to systematic measurement and analysis. In fact, many organizations do not assess either the short- or long-term consequences of their HRM programs or activities. Another key theme of the book is that measurement and data-driven decision making are key components to organizational effectiveness and competitive advantage. Good measurement and data-driven decisions, allied with business strategies, will help organizations identify and improve all of their HRM activities and resultant decisions. Stanford University professor Jeffrey Pfeffer considers measurement to be one of the keys W to competitive advantage. His book Competitive Advantage Through People cites measurement I as one of the 16 HRM practices that contribute the most to competitive advantage.8 Pfeffer’s views were echoed and L expanded in the popular text The Balanced Scorecard by Harvard professor Robert Kaplan and consultant David Norton.9 Kaplan and Norton stress that “if companies are to survive andSprosper in information age competition, they must use measurement and management systems O derived from their strategies and capabilities” (p. 21). Their “balanced scorecard” emphasizes much more management attention to “leading indicators” of N “lagging” financial performance measures. The “balance” reflects performance that predict the the need to measure short, and long-term objectives, financial and nonfinancial measures, lagging and leading indicators, and internal and external performance perspectives. In their book The Workforce Scorecard, Professors Mark Huselid, Brian Becker, and Dick Beatty extend research J on the “balanced scorecard” to a comprehensive management and measurement system designed to maximize workforce potential.10 These authors show A performance measures such as return on equity, stock price, that the traditional financial and return on investment, Mthe “lagging indicators,” can be predicted by the way companies conduct their HR. HR practices are the “leading indicators” that predict subsequent finanI cial performance measures.11 Unfortunately, research indicates that only a small percentage of HRM programs orEactivities are subjected to critical, data-driven analysis. The good news, however, is that the percentage is at least going up. Measurement and data-driven decision making are essential for American organizations in the 21st century! 5 vision of HRM for the 21st century. HRM activities must be One study defined the (1) responsive to a highly 0 competitive marketplace and global business structures, (2) closely linked to business strategic plans, (3) jointly conceived and implemented by line and HR managers, and 5 (4) focused on quality, customer service, productivity, employee involvement, teamwork,1and workforce flexibility.12 In general, research shows that the realization of this vision translates into greater organizational effectiveness. B body of research, the status of HRM is improving relative to Perhaps because of this other potential sources ofU competitive advantage for an organization. Professor Pfeffer notes that “traditional sources of success (e.g., speed to market, financial, technological) can still provide competitive leverage, but to a lesser degree now than in the past, leaving organizational culture and capabilities, derived from how people are managed, as comparatively more vital.”13 Research clearly indicates that certain HR practices can increase employees’ knowledge, skills, and abilities through more valid staffing and selection decisions, serve to empower employees to leverage these superior characteristics for the benefit of the organization, and to increase the motivation of these employees to do so. The results of these practices are greater job satisfaction and organizational commitment, lower levels of voluntary turnover among key personnel, and higher productivity.14 You are likely to manage people at some point in your career. Research shows that the extent to which you as a manager make data-driven, evidence-based HR decisions will be a key to your effectiveness as a manager.15 We believe that the knowledge and experiences we provide here will prepare you to be an effective manager. We emphasize that the 5 ber29163_ch01_001-032.indd 5 14/02/12 3:40 AM 1 / Human Resource Management and the Environment Keep mission in mind most effective HRM programs, policies, and practices are those that derive from strong research and data-driven decisions that are carefully aligned with the organization’s strategic mission and objectives. All HRM activities should be evaluated in this context, using “leading indicator” performance measures. WHAT IS HUMAN RESOURCE MANAGEMENT? Line managers and HRM HRM and Corporate Performance The human resources of an organization consist of all people who perform its activities. In a sense, all decisions that affect the workforce concern the organization’s HRM function. Human resource management concerns the personnel policies and managerial practices and systems that influence the workforce. Regardless of the size—or existence—of a formal HRM or personnel department (many small businesses do not have a formal HRM department), the activities involved in HRM are pervasive throughout the organization. Line managers, for example, will W spend more than 50 percent of their time involved in human resource activities such as hiring, evaluating, motivating, disciplining, and schedulI ing employees. L The effectiveness with which line management performs HRM functions with the tools, data, and processes provided by S HRM specialists is the key to competitive advantage through HRM. This principle generalizes from very small businesses to the very largest O global enterprises. Dr. James Spina, former head of executive development at the Tribune N Company, really put things in perspective about the role of HRM. He said, “The HRM focus should always be maintaining, and, ideally, expanding the customer base while maintaining and, ideally, maximizing profit. HRM has a whole lot to do with this focus regardless of the size of the business, or the products or services you are trying to sell.” Those individuals classified within J an HRM functional unit provide important products and services for the organization. These products and services may include the provision Aor processes that facilitate organizational restructurof, or recommendation for, systems ing, job design, personnel planning, Mrecruitment, hiring, evaluating, training, developing, promoting, compensating, and terminating personnel. A major goal of this book is to I that will improve the student’s future involveprovide information and experiences ment and effectiveness in HRM activities. E A good way to think of an HR department is to view the department as a business within the company. The HR business has three product lines: (1) administrative services and transactions, which are made up 5 of areas such as staffing and compensation; (2) business partner services, which assist in implementing business plans and meeting objectives; 0 and (3) strategic partner, which contributes to the firm’s strategy based on human capital considerations and developing HR5practices to foster competitive advantage.16 The most common and traditional product line for HR is the first one: administrative services. How1 ever, the most effective (but less common) HR departments contribute significantly to the B other two lines as well. While HR is capable of creatingU and sustaining competitive advantage, some would argue that HR, as it is practiced, is often more a weakness than a strength. One survey found that only 40 percent of employees thought their companies were doing a good job retaining high-quality workers, and only 41 percent thought performance evaluations were fair. A mere 58 percent of respondents reported their job training as favorable. A majority said they had few opportunities for advancement and they had little idea about how to advance in the first place. Only about half of those surveyed below the managerial level believed their companies took a genuine interest in their well-being.17 A growing body of research shows that progressive HRM practices can have a significant effect on corporate performance. Studies now document the relationship between specific HR practices and critical outcome measures such as corporate financial performance, productivity, product and service quality, and cost control.18 Many of the methods characterizing 6 ber29163_ch01_001-032.indd 6 14/02/12 3:40 AM 1 / Strategic Human Resource Management in a Changing Environment Figure 1-1 Characteristics of High-Performance Work Practices (HPWP) ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ Large number of highly qualified applicants for each strategic position. The use of validated selection and promotion models/procedures. Extensive training and development of new employees. The use of formal performance appraisal and management. The use of multisource (360 degree) performance appraisal and feedback. Linkage of merit increases to formal appraisal processes. Above-market compensation for key positions. High percentage of entire workforce included in incentive systems. High differential in pay between high and low performers. High percentage of workforce working in self-managed, project-based work teams. Low percentage of employees covered by union contract. High percentage of managerial jobs filled from within. Source: Reprinted by permission of Harvard Business School Press. From The HR Scorecard, by B. Becker and M. Ulrich. Boston, MA, 2001. Copyright © 2001 by the Harvard Business School Publishing Corporation’ all rights reserved. High-performance work systems Copyright © 2013 The McGraw-Hill Companies. All rights reserved. Validation Focus on core competencies W I these so-called high-performance work systems or practices (HPWP) have been researched and developed by the HRM academic community. Figure 1-1 presents a summary of this L research. HPWP are particularS HR practices or characteristics designed to enhance employees’ competencies and productivity O so that employees can be a reliable source of competitive advantage. They have been called “coherent practices that enhance the skills of the workN making, and motivation to put forth discretionary effort.” force, participation in decision Research shows that “firm , competitiveness can be enhanced by high-performance work systems.” A summary of this research found that one standard deviation of improved assessment on an HPWP measurement tool increased sales per employee in excess of $15,000, an 8 percent gain J in labor productivity.19 A more recent review concluded that “research in applied psychology and strategic human resource management clearly indiA capital can yield positive individual- as well as organizationcates that investing in human level performance outcomes.” M 20 Recall the critical remarks earlier about graphology, or handwriting analysis.