The Dynamic of HRM Environment

Chapter 2

• Dynamics of Human resource management environment.

• Identify environmental factors that affect Human resource management .

• Review internal environmental factors• Who performs HRM tasks• Define diversity and identify the diverse

workforce that management now confronts.

Overview

• Utilization of individuals to achieve organizational objective

• All managers at every level must concern themselves with human resource management

• Five functions

Human Resource Management

Staffing

HRMFunction

Employee& Labor

Relations

Safety &Health

Compensation& Benefits

Human Resource

Development

Human Resource ManagementHRM Function

Case – Lone Star Manufacturing

Wayne Simmons, vice president of HR for Lone Star Manufacturing, returned to his office from weekly executive staff meeting, he was disturbed. Lone Star, a producer of high – quality telecommunication equipment, is HQ in Texas, and has manufacturing plant throughout Texas, Louisiana and Oklahoma. Wayne had just heard a rumor that an overseas firm has developed a new manufacturing process that had the potential to cut costs substantially.Should this report prove true, customers might switch to cheaper product. The three plants that produce similar products would then be in serious trouble.

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If the new technology was superior, he also knew Lone Star might have to cut back production severely or even close some plants. These plants are located in areas that are already experiencing high unemployment because of the depressed price of crude oil.Plant closing would have a devastating effect on the economies of their respective communities. A few workers could be transferred to other locations, but most would have to be laid off. Thus, Wayne is now keenly aware of ways in which the EXTERNAL ENVIRONBMENT can have an impact on the operations of Lone Star Manufacturing

Lone Star Manufacturing (Cont..)

Environmental Factors Affecting HR Management

• Many Interrelated Factors Affect HRM–Internal Environment–External Environment

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EXTERNAL ENVIRONMENT INTERNAL ENVIRONMENT

StaffingEmployee & Labor

Relations

Safety& Health

Compensation& Benefits

Human Resource

Development

HR ManagementFunctions

The Environment of HRM

The external environment component

Labor Force Legal Considerations Society Unions Shareholders

Competition Customers Technology Economy

The factors that affect a firm’s human resources from outside the organization's boundaries

Environmental Factors Labor Force

• A pool of individuals external to the firms from which the organization obtains its workers.

• The capacities of the firm’s employees determine to a larger extent how well the organization can perform its mission.

• As new employees are hired from outside the firm, the labor force is considered an external environmental factors.

Environmental Factors Legal consideration

• Relates to federal, state and local legislation, and many court decisions.

• Compliance with Law• EEO (Equal Employment opportunity) – to

employ disabilities.• OSHA (Occupational Safety and Health Act) –

to provide safe and conductive work place.• Employee Privacy & Job Security

Environmental Factors Society

• Society may also exert pressure on HRM. The public is no longer to accept, without question, the actions of the business.

• Individuals and special interest groups have found that they effect changes through their voices, votes, and other actions.

• The attitudes and beliefs of the general public can affect the firm’s behavior, because those attitudes and beliefs often directly affect profitability.

Environmental Factors Unions

• A group of employees who have joined together for the purpose of dealing collectively with their employer.

• Unions are treated as an environmental factor because, essentially, they become a third party when dealing with the company.

• In a unionized organization, the union rather than the individual employee negotiates an agreement with management.

Environmental Factors Shareholders

• The owners of the corporations. • As shareholders, have invested money in the

firms, they may at times challenge program consider by management to be beneficial to their organization.

• They are Stockholders who frequently hold lawsuits against managers and directors, claiming they failed to look out for stockholders interest.

Environmental Factors Competition

• Firms may face intense competitions in both their products and services and labor market.

• Firms must maintain a supply of competent employees if it is to succeed, grow, and prosper.

• A firm’s major task is to ensure that it obtains and retains a sufficient number of employees in various career fields to allow the firms to compete effectively.

Environmental Factors Customer

• The people who actually use a firm’s goods and services are also part of external environment.

• Customers constantly demand high quality products and after purchase services.

• Sales are often lost or gained because of variance in product quality and follow – up service.

Environmental Factors Technology

• Technology change cause career changes.

• One of the most challenging aspect of HRM will be training and developing employees to keep with rapidly advancing technology.

• In the case we studied earlier, Wayne Simmons is well aware of the impact of technology on the workforce, realizing that technologies disadvantage will possibly result in plant closure

Environmental Factors Economy

• The economy of the nation, on the whole and its various segments, is a major environmental factor affecting HRM.

• When the economy is booming, recruiting qualified worker is more difficult.

• On the other hand, when a downtown is experiencing, more applicants are typically available.

The Internal Environment

• Mission• Policies• Corporate Culture• Management Style

of Upper Managers

• Employees• Informal

Organization• Labor-

Management Agreement

Mission• It illustrates what the company is, what the company does

and where the company is headed.

Policies• A written statement that reflects the employer’s standards

and obligations relating to various employees activities and employment – related matters.

Corporate Culture• The beliefs, values and practice adopted by an organization

that directly influence employees conducts and behaviors

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The Internal Environment (Cont..)

Labor Management Agreement• A binding agreement governing wages, benefits,

representation rights and other working conditions between a labor union and management.

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The Internal Environment (Cont..)

• The Human Resource Manager• Shared Service Centers• Outsourcing Firms• Line Managers

Who performs human resource management

tasks

Human Resource Manager

• Acts in advisory or staff capacity• Serves an increasing number of employees• Shares responsibility with line managers and

HR professionals• Coordinate HR activities to achieve

organization goal

HR Manager – Example

Bill Brown, the production supervisor for Ajax Manufacturing, has just learned that one of his machine operators has resigned

He immediately calls Sandra Williams, the HR Manager, and says, “ Sandra, I just has a class A Machine operator quit down here. Can you find some qualified people for me to interview?”

“Sure Bill”, Sandra Replies. “I’ll send two or three down to you with in the week, and you can select the one that best fits your needs.”

HR Manager – ExampleIn this instance, both Bill and Sandra are concerned with achieving organizational goals, but from different perspective.

HOW?What are their Responsibility?Sandra, as a HR Manager, identifies applicants who meet the criteria specified by Bill. Where as Bill primary responsibility is productions.

As a HR Manager, Sandra must constantly deal with many problem related to HR that Bill and other managers Face

A central place where routine, transaction – based activities that are dispersed throughout the organization are consolidated.

For eg., a company with 20 strategic business unit could consolidate routine HR tasks and performs them in one location

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Shared Service Centers (SSCS)

Shared Service Centers (SSCS) Performing HR

Tasks

HR Managers Assume a

More Strategic Role Improves Quality

Fewer HR Personnel Needed

Outsourcing Firms

• Transfer responsibility to an external provider

• Contracting with another organization (vendor, third party provider or consultant) to provide service

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Reduces: • Cost• Transaction Time

Improves Quality

Outsourcing

• Involved with Human Resources • Used more to deliver HR services• Reduces size of HR department

Line Manager Performing HR Tasks

MANAGING THE DIVERSE WORKFORCE

The issue of diversity is one reality of being globally competitive.Today, Levis Strauss has taken the moral high ground in terms of being socially responsible by developing a diverse workforce.Earlier in 1908, Levis placed an advertisement brochure that had “none but white women and girls are employed”But now the firm appears to be exceptional in this areas and is currently recognized as “one of the most ethnically and culturally diverse companies in the US, if not the world”

• Single parent and working mother

• Women in business• Dual career families• Workers of color• Older worker

• Person with disabilities

• Immigrants• Yong persons with

limited education / skills

• Education level of employees

Managing the diverse workforce

• Number is growing• Many marriages end in

divorce• Widows and widower who

have children• Need alternative childcare

arrangement• Childcare service and

workplace flexibility needed

• 11.9% of corporate officers• Number in entry- and mid-

level managerial positions has risen

• More than 9 million women-owned businesses

• Increasing number of nontraditional households

• Organizations must address work/family issues

Single Parent and working Mother

Women In Business

• Represent 53% of marriages

• Both spouses have jobs and family responsibilities

• Challenges and opportunities

• Flexibility in their workplaces and careers.

• Often experience stereotypes

• Often encounter misunderstandings and expectations

• Role conflict• Role overload• Socialize within their

particular culture

Dual Career families

Workers of color

• Population is growing• Long-term labor

shortage is developing• Early retirement is

about to reverse itself• Needs and interests

may change• May require retraining

• One million legal immigrants per year

• Newer immigrants require time to adapt

• Managers must work to understand the different cultures and languages

Older Worker Immigrants

• Several thousands of young, unskilled workers are hired

• Poor work habits• Tardy or absent• Can do many jobs well• Jobs can be de-skilled

• Bipolar country with regard to education

• Half of new jobs need some education beyond high school

• Those with limited education will be left out of empowerment effort

Young Persons with Limited Education

or Skills

Educational Level of

Employees

Structure Question

1. Identify the HRM Function?2. What are the challenges of HRM3. Identify the external environment?4. Who perform HRM activities?5. Identify the diverse workforce that management

now confronts

Class Room Activity