Expert answer:Challenges Facing HR Executives The Society for Hu
Expert answer:Challenges Facing HR ExecutivesThe Society for Human Resource Management (SHRM), which is the primary professional organization for HR professionals and an organization we recommend students interested in the field join recently asked members to identify the top issues that they think HR executives will face in the next 10 years. (Stewart 558). Of the 9 issues identified in the textbook…Select any 3 of the issues you might feel are more important than the others and briefly explain your reasoning. Be specific.NOTE: In your response, do not cut and paste definitions or meanings of the issues from your book or Online because that is not what the discussion topic requires. Adhere strictly to the discussion topic’s requirement.NOTE 2: Minimum 250 words APA format. This is a discussion post not a paper!
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Part 1
Seeing People as a
Strategic Resource
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Ned Dishman/NBAE/Getty Images
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Chapter 1 • Creating Value Through Human
Resources
Chapter 2 • Making Human Resource Management
Strategic
Chapter 3 • Ensuring Equal Employment
Opportunity and Safety
Copyright © 2014 John Wiley & Sons, Inc.
Chapter 1
A MANAGER’S PERSPECTIVE
M iguel
disconnects his phone and breathes
a sigh of relief .
t he
job offer is everything
he hoped it would be .
he is
pretty certain
he will accept the auditor position in a
couple of days , but he wants to do a little
More research first .
t wo
years ago Miguel
took his first accounting class and instantly
knew what he wanted to do for a career .
loves the structure and logic of
p utting
he
accounting .
all the nuMbers in the right place
and Making sure they add up gives hiM a
sense of accoMplishMent .
n ow
he just needs
to be sure that he is joining the right firM .
As Miguel reflects back on his day of interviews
with the firm, he recalls a number of insightful
conversations. One thing that impresses him is the
firm’s strong reputation for excellence. In the last
few years, he has seen many of his friends lose
their jobs. Seeing their pain has steered Miguel
toward business organizations that he feels are
unlikely to have financial difficulties. He knows
that profitability is one key to success. But why
is the firm that is offering him a position so
PhotoInc/iStockphoto
Creating Value Through
Human Resources
profitable? Of course,
much of it has to do
with the firm’s excellent
operating procedures.
From everything he has learned, the firm is simply
superior at meeting customer needs. According to
some of the managers who interviewed him, being
profitable helps the firm invest more money to
improve working conditions. The firm also has a
strong reputation for helping people in the community, which is very important to Miguel.
Something that really attracts Miguel to the
company is how they treated him during the job
interviews. Sarah, a human resource staff member,
told Miguel that he has already progressed farther than 90 percent of job applicants. Sarah also
described how the company focuses on finding and
keeping only the best employees. This makes Miguel
feel good and leads him to believe he will have
competent coworkers. The firm seems to have good
human resource practices. It offers numerous training opportunities and pays above-market wages.
Insurance benefits are much better than most
Copyright © 2014 John Wiley & Sons, Inc.
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THE BIG PICTURE Human Resource Management Practices Help Successful
Organizations Meet the Needs of Employees, Customers, Owners, and Society.
competitors’. According to Sarah, the firm also
emphasizes internal promotions, making it likely
that Miguel will have an opportunity to become a
manager.
The firm also seems to have a strategic plan for
dealing with important changes that are likely to
occur both in the marketplace and among future
employees. Cutting-edge technology allows the
firm to keep up with constantly changing accounting rules and procedures. Now that he has received
an offer, Miguel plans to discuss things with his
parents and a friend who works for the firm. Unless
something changes his mind, he plans to take the
offer and is convinced that he has the potential for
a great career with the firm.
WHAT DO YO U T HINK?
?
Suppose you are listening to a conversation between Miguel
and his parents. His parents make the following statements
as they and Miguel discuss his decision about the job offer.
Which of the statements do you think are true?
T oR F Companies with good human resource
practices have more satisfied workers.
T oR F Companies with happy employees are
more profitable.
T oR F Companies lose money when they try to be
good social and environmental citizens.
T oR F Having a successful career in the future
workplace will require young employees to
work effectively with older people.
T oR F Human resource specialists can provide
critical information and support that helps
make life better for employees.
3
Copyright © 2014 John Wiley & Sons, Inc.
LEARNING oBJECTIVES
After reading this chapter you should be able to:
L EA R N I N G o BJE CTIV E
1
Explain how human resource management, from the organizational life-cycle and
stakeholder perspectives, can facilitate organizational success.
L EA R N I N G o BJE CTIV E
2
List the core functions of human resource management.
L EA R N I N G o BJE CTIV E
3
Explain what human resource professionals do to help create successful organizations.
L EA R N I N G o BJE CTIV E
4
Identify important labor trends that are affecting organizations and their human
resource practices.
L EA R N I N G o BJE CTIV E
5
Explain how effective human resource management requires a combination of
strategic and functional perspectives.
How Can Human Resource Management Make an
Organization Effective?
Human resource management
The field of study and practice
that focuses on people in
organizations.
4
Human resource management focuses on people in organizations. Of course,
people are a major component of any organization, so it follows that organizations with more productive employees tend to be more successful. Employee
productivity increases when organizations hire and motivate employees
effectively. In addition, good human resource practices create more satisfied
employees, who in turn work harder to satisfy customers.1
One prosperous organization that traces much of its success to effective
management of people is Trader Joe’s. The chain now includes over 365
stores in more than 30 different states, but it began in the 1960s as three
convenience stores seeking to survive the introduction of 7-Eleven. Seeing
the difficulty of competing head-to-head with 7-Eleven, the founder—Joe
Coulombe—decided to change Trader Joe’s to a specialty store selling unique
products. Trader Joe’s has since become well known for providing foods and
beverages that cannot be found in other stores. Products, which usually carry
the store’s own label, include gourmet and specialty foods such as soy icecream cookies, black rice, and stuffed salmon.2
Keeping prices low is one key to success for Trader Joe’s. However, customers describe their shopping experience as something more than a simple
hunt for bargains. Trader Joe’s works hard to attract educated customers who
develop a loyal relationship with the company. Many of these customers say
they have fun shopping at Trader Joe’s. They look forward to searching store
aisles and finding interesting products. They also enjoy their interactions with
helpful store employees dressed in casual Hawaiian shirts. The real key to success for Trader Joe’s, then, seems to be finding and keeping great employees.3
What does Trader Joe’s do to develop and maintain a productive workforce? Flexible job design certainly plays a role. Employees have a great deal
of autonomy in determining how the store can best serve customers. Every
employee is encouraged to sample products and make recommendations.
Employees are free to tell customers when they don’t like something. Workers
at Trader Joe’s are not limited to performing certain tasks but help out wherever they are needed. Managers, for example, often sweep floors and stock
shelves.4
Chapter 1 • Creating Value Through Human Resources
Copyright © 2014 John Wiley & Sons, Inc.
How Can Human Resource Management Make an Organization Effective? 5
Of course, not everyone would fit equally well into the job environment at Trader Joe’s. Employee selection focuses on hiring people with
personalities that fit the productive and creative culture. Trader Joe’s
looks for employees who are upbeat, outgoing, and motivated by challenge. Employees also need a good sense of humor and a strong customer
orientation.
Convincing people to take jobs with Trader Joe’s does not seem to be difficult. The store has a reputation as a desirable place to work, and a large
number of people apply whenever job openings are advertised.5 One reason
people like to work at Trader Joe’s is the company’s compensation practices.
Employees are paid substantially more than they could make doing similar
jobs in other companies. Full-time crew members begin at salaries around
$50,000. They receive health insurance and participate in an excellent retirement savings program, including a plan that contributes over 15 percent of
gross income to a tax-deferred retirement account. Excellent pay not only
helps get people interested in working at Trader Joe’s but also helps ensure
that employees will stay with the company. Managers are almost always promoted from within the company, and few employees leave to work elsewhere.6
Both employees and customers see Trader Joe’s as a successful company. It
is a profitable company, with annual sales exceeding $8 billion. More important, Trader Joe’s generates twice as many dollars in sales per square foot of
store space as competitors such as Whole Foods. This profitability has helped
the company expand the number of stores without taking on debt. Profits
grew tenfold over a 10-year period.7
The success of Trader Joe’s clearly illustrates how a company can thrive in
difficult and changing times. Rather than giving up to a formidable competitor, Joe Coulombe identified an unmet need and created an organization to
fill that need. Human resource practices at Trader Joe’s help attract and motivate employees who provide great customer service. Doing things differently
from the competition, and doing them better, has created a culture where
people like to go to work. Happy employees make shoppers happy.
Building Strength
Through HR
Trader Joe’s is a privately owned chain of
about 365 specialty grocery and wine stores.
Human resource management at Trader
Joe’s builds competitive strength by
AFP/Getty Images
Trader Joe’s
• Designing work to give people
autonomy to complete tasks in creative ways.
• Identifying and hiring people who have fun, outgoing personalities.
• Providing high pay and excellent benefits to attract the best workers.
• Matching human resource practices with a competitive strategy of
providing unique products.
Copyright © 2014 John Wiley & Sons, Inc.
6
Chapter 1 • Creating Value Through Human Resources
L E ARN I N G oB JEC TIV E
1
How Is Organizational Success Determined?
As you begin studying human resource management, it is important to think
about what you want to gain from your efforts. How can understanding human
resource management better prepare you for success in your upcoming
career? The most basic answer is that human resource skills will help you hire,
manage, and motivate employees more effectively. Clearly, human resource
skills are useful not only to human resource professionals but also to everyone
who has responsibility for leading and managing others. Furthermore, even
if you don’t plan to work either as a human resource specialist or as a manager, learning the concepts of human resource management will help you to
understand why the places where you work do much of what they do.
The goal of human resource management is, of course, to make organizations more effective. Thus, a starting point for learning about the field of
human resource management is to explore the concept of organizational success. We know that some organizations are more successful than others. Can
differences in human resource management explain why?
Most observers agree that Trader Joe’s is a successful organization. This is
supported by top rankings from publications such as Consumer Reports. But
what exactly does it mean to say an organization is successful? Does it mean
the organization makes a lot of money? Does it mean the organization makes
the world a better place? Perhaps success is meeting the demands of different stakeholders, such as Trader Joe’s recent agreement with a farmworker
organization concerning employee fair treatment as part of tomato-growing
practices.8 Maybe success simply means the organization has been around
for a long time. Because organizational success has many faces, each of these
perspectives is partly true. Different viewpoints capture different meanings of
success. Here, we briefly examine the meaning of organizational success from
two perspectives—the life-cycle model and the stakeholder perspective—and
consider how human resource management plays a role in making organizations effective from each viewpoint.
SUCCESS IN LIFE-CYCLE STAGES
organizational life cycle
Stages through which an
organization moves after
its founding.
Think about success for you as an individual. Being successful now doesn’t
guarantee you will be successful in 10 years. Having just enough money to buy
pizza and books may equal success when you are 20, for example, but probably
isn’t enough when you are 40. Similarly, the life-cycle approach to organizational success suggests that measures of effectiveness change as an organization grows. Twenty-five years ago, Trader Joe’s was successful simply because
it didn’t close when 7-Eleven entered the market. Success today depends on
expansion into a national chain.
At the heart of this model of success is the organizational life cycle, a series
of stages through which an organization moves during its lifetime. Stages of
growth begin when the organization is founded and end when it ceases to
exist. Since goals and objectives change as the organization moves from stage
to stage, the nature and meaning of success also change. Here, we examine
four common stages in the organizational life cycle: the entrepreneurial stage,
the communal stage, the formalization stage, and the elaboration stage.9 As
Copyright © 2014 John Wiley & Sons, Inc.
How Is Organizational Success Determined?
Table 1.1
7
Human Resources Across the Organizational Life Cycle
Stage
Goal
Human Resource Contribution
Entrepreneurial
Survival and growth
Need to hire and maintain employees; emphasis on creating plans for measuring performance and deciding pay
Communal
Develop identity and
overcome conflict
Need to develop clear communication channels; emphasis
on building strong loyalty among employees
Formalization
Efficient production
Need to create formalized practices for hiring, training,
and compensating; emphasis on continual improvement
of employee skills and motivation
Elaboration
Adaptation and
renewal
Need to alter practices to meet changing demands;
emphasis on new ways of organizing work tasks
you will see, human resource management plays an important role in every
stage. Table 1.1 summarizes key differences across the stages.
Entrepreneurial Stage
An organization enters the entrepreneurial stage when it is first created. This
stage is a lot like infancy for human beings. The main goal is survival and
growth. Organizations in the entrepreneurial stage need to develop an identity and obtain resources. Success during this stage is often measured simply in terms of staying alive. Organizations that survive are successful. The
early history of the Internet company Yahoo! is a good example. Yahoo! wasn’t
profitable in the beginning, but it showed innovation and growth when many
competitors were going out of business.
Effective human resource management is very important for the survival
and growth of newly formed organizations. Organizations must find and hire
a sufficient number of high-quality employees. They must also develop basic
plans for measuring performance and paying people.
A typical organization employs one human resource specialist for every
100 employees.10 This means that organizations in the entrepreneurial stage
of development are typically too small to have a full-time, dedicated human
resource staff. As a result, it is likely that owners and managers of firms with
relatively few employees perform many human resource duties themselves or
hire outside consultants to do this work.
Given the importance of human resources for entrepreneurial organizations,
it is not surprising that firms with better-developed plans and methods of obtaining and paying employees are more likely to survive. For instance, one study
found that new organizations lacking clear human resource and pay plans have
just a 34 percent chance of surviving the first five years. Firms with good human
resource plans, in contrast, have a 92 percent chance of survival.11 Organizations
with better plans for hiring and motivating workers are thus more likely to survive—
and survival is a key indicator of success during the entrepreneurial stage.
Communal Stage
Organizations that survive the entrepreneurial stage enter the communal
stage, which is marked by expansion, innovation, and cooperation. This stage
is much like the teenage years for human beings. The main objective is to gain
a unique identity and overcome internal conflict. Learning who you are and
improving your skills are the essence of life during these years. Similarly, organizations in the communal stage focus on developing and improving processes
Copyright © 2014 John Wiley & Sons, Inc.
Entrepreneurial stage
First stage in the organizational
life cycle; focuses on survival.
Communal stage
Second stage in the
organizational life cycle;
focuses on expansion and
innovation.
8
Chapter 1 • Creating Value Through Human Resources
for effectively producing goods and services. Members of the organization
begin to feel a sense of commitment. Survival is still important, but organizational success is measured increasingly by the extent to which employees
feel a sense of cohesion or belonging. It is important for employees to build
strong feelings of attachment to coworkers and to the mission of the organization. Such attachment is an important part of success at Trader Joe’s, where
employees feel connected. The company’s managers listen to employees,
which encourages employees to communicate effectively with customers.12
Organizations with effective human resource management practices in the
communal stage continue to hire good employees and provide training. They
also communicate well with employees. Employees, aware of these activities,
develop a feeling that the organization is committed to taking care of them.
Such feelings increase job satisfaction and feelings of empowerment, so that
organizations with better human resource practices have happier employees
who are more committed to making the organization successful and helping
others.13 Employees are also less likely to leave organizations with good human
resource practices. The accompanying “How Do We Know?” feature describes a
study that demonstrates how effective human resource practices in call centers
increase the likelihood of retaining workers, which in turn increases profitability.
How Do We Know?
d oes e ffecTive H uman r esource m anagemenT
i ncrease o rganizaTional s uccess ?
Have you phoned a company’s call center in the
past to ask a question or complain about a product
or service? Perhaps a call center representative has
phoned you to try to sell you something. Many companies have call centers, and some centers employ
thousands of people. As you can probably imagine, working in a call center is not always fun, and
employees frequently quit shortly after being hired.
An important question therefore is whether
good human resource practices can improve work
in call centers. Rosemary Batt conducted a study to
learn about the effect of human resource practices
on organizational performance in call centers. She
asked call center managers about the skill level
of employees, the amount of freedom employees
had to choose how to do their work, and human
resource incentives. She also measured employee
quit rates and sales growth.
The study found higher sales growth in call centers with better human resource practi …
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