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Human Resource Management (HRM)

What? the functional area of an organization that is responsible for all aspects of hiring and supporting employees (e.g., providing and administering employee benefits). all the activities related to the recruitment, hiring, training, promotion, retention, separation, and support of employees. functions within a company that relate to people. Why? is the effective use of human resources in order to enhance organisational performance. the process of evaluating human resource needs, finding people to fill those needs, and getting the best work from each employee by providing the right incentives and job environment, all with the goal of meeting the needs of the firm. applying human resources within complex systems such that people succeed, performance improves, and human error decreases.
(Source: web definitions for HRM) HRM: Work Process Design G. Grote ETHZ, Fall08

HRM practices
Job analysis and design Recruitment and selection Training and development Performance management and compensation Labor and employee relations

HRM: Work Process Design G. Grote ETHZ, Fall08

Road map for both HRM courses (Work process design, Leading teams)
Personnel selection
Satisfaction Motivation

Personnel development

Task / Work process


Performance

Performance appraisal / Pay

HRM: Work Process Design G. Grote ETHZ, Fall08

Road map for HRM: Work Process Design

Satisfaction

Motivation

Task / Work process


Performance

HRM: Work Process Design G. Grote ETHZ, Fall08

HRM: Work process design Overview


23.9. 30.9. 7.10. 14.10. 21.10. 28.10. 4.11. 11.11. 18.11. 25.11. 2.12. 9.12. 16.12. Introduction The role of HRM in strategic management Tutorial Work process analysis - System level Tutorial Work process analysis - Individual job level Management of uncertainty as basis for work process design Job design Effects of job design: Stress/health, motivation, competence development Coordination of work: Collaborative planning Methods for analyzing work processes Work process design embedded in organizational change Integration of "fit task to human" and "fit human to task" Disucsssion of student projects Exam preparation
HRM: Work Process Design G. Grote ETHZ, Fall08

Organization of course
3 ETCS points (approx. 75-90 work hours). Besides the lecture, the prerequisite for credits points and exam participation is the completion of a semester project in groups of 4 students. Topic of semester project: Analysis and assessment of job and organizational design in a company including a written report and feedback to the company. The exam is written and open book; provisional date: Jan. 13, 2009, 10:15-11:45. Overall grade: 50% project & 50% exam. Material for the lecture at www.oat.ethz.ch.
HRM: Work Process Design G. Grote ETHZ, Fall08

Semester project
Assessment of job and organizational design in a company based on the instrument KOMPASS work system analysis (focus on work processes and handling of disturbances in the processes) job analysis (focus on job design criteria) Analyses involve 2-3 interviews with managers and employees and .5 - 1 day observation of work tasks and processes To be carried out in groups of four either in a company of your choice or in a company provided Please send an e-mail to Jacqueline Hohermuth by Sept. 29 (jhohermuth@ethz.ch) with the names and e-mail addresses of the four people in your group, indicating also if you want us to provide a company and whether you can conduct the analyses in English and/or German

HRM: Work Process Design G. Grote ETHZ, Fall08

Required reading
Noe, R.A. et al. (2005). Human Resource Management: Gaining a competitive advantage. Chapter 2 Strategic Human Resource Management (pp.56-91). New York: McGraw-Hill. (Sept. 30/Dec. 2) Schein, E. (1988). Organizational psychology (3rd ed.) (pp. 50-72 and 93-101). Englewood Cliffs, NJ: Prentice-Hall. (Sept. 30) Grote, G. (2004) Uncertainty management at the core of system design. Annual Reviews in Control, 28, 267-274. (Oct. 21) Parker, S.K. & Wall, T.D. (2001). Work design: Learning from the past and mapping a new terrain. In Anderson, N., Ones, D.S., Sinangil, H.K. & Visweswaran, C. (Eds.). Handbook of Industrial, Work and Organizational Psychology, Vol. 1 (pp. 90-109). London: Sage. (Oct. 28/Nov. 4) Foster, J.J. (2000). Motivation in the workplace. In N. Chmiel (Ed.), Introduction to work and organizational psychology - A European perspective (pp. 302-326). Oxford: Blackwell. (Nov. 4) Le Blanc, P., de Jong, J. & Schaufeli, W. (2000). Job stress and health. In N. Chmiel (Ed.), Introduction to work and organizational psychology - A European perspective (pp. 148-177). Oxford: Blackwell. (Nov. 4) Windischer, A. et al. (in press). Characteristics and organizational constraints of collaborative planning: Cognition, Technology & Work. (Nov. 11) Lees, C.D. & Cordery, J.L. (2000). Job analysis and design. In N. Chmiel (Ed.), Introduction to work and organizational psychology - A European perspective (pp. 45-68). Oxford: Blackwell. (Nov. 18) Senior, B. (2000). Organizational change and development. In N. Chmiel (Ed.), Introduction to work and organizational psychology - A European perspective (pp. 347-383). Oxford: Blackwell. (Nov. 25)

Copies of the texts will be availabe during the lectures on Oct. 21/28 (CHF 10)
HRM: Work Process Design G. Grote ETHZ, Fall08

HRM: Work process design Overview


23.9. 30.9. 7.10. 14.10. 21.10. 28.10. 4.11. 11.11. 18.11. 25.11. 2.12. 9.12. 16.12. Introduction The role of HRM in strategic management Tutorial Work process analysis - System level Tutorial Work process analysis - Individual job level Management of uncertainty as basis for work process design Job design Effects of job design: Stress/health, motivation, competence development Coordination of work: Collaborative planning Methods for analyzing work processes Work process design embedded in organizational change Integration of "fit task to human" and "fit human to task" Disucsssion of student projects Exam preparation
HRM: Work Process Design G. Grote ETHZ, Fall08

Strategic Management: The basic questions


A clear sense of an organization`s objectives and of how it will achieve these objectives Facilitate the capability of an organization to create unique value while facing an uncertain environment Achieving and maintaining a strong competitive advantage. Application of corporate strategy to decisions regarding all aspects of the organization With greater empowerment, strategy becomes the concern not just of directors but of employees at all levels of the organization HRM: Work Process Design G. Grote ETHZ, Fall08

Effects of HRM compared to other strategy decisions


HRM-practices (especially job design and selection/ appraisal/training) better predict company performance than R&D, QM, strategy and technology (West, 2001) Empowerment better predicts company performance than technology-based management practices (Patterson et al., 2004) HRM-practices as cause and effect of company performance (Guest et al., 2003)
HRM: Work Process Design G. Grote ETHZ, Fall08

Linkage HRM and company strategy


Administrative (no) linkage
HRM as purely administrative task

One-way linkage
HRM implements strategic goals, but is not involved in strategy formulation

Two-way linkage
HRM executive shows human resource implications of different strategic choices, but does not directly participate in strategic decision making

Integrative linkage
HRM executive is integral member of senior management team and participates in all phases of strategy formulation and implementation
HRM: Work Process Design G. Grote ETHZ, Fall08

Strategic HRM
"a pattern of planned human resource deployments and activities intended to enable an organization to achieve its goals"
(Noe et al., 2005)

Derive human resource needs (skills, behaviors, culture) from strategy formulation Strategy implementation by means of HRM practices, which further individuals' capabilities and motivation as well as actual performance
HRM: Work Process Design G. Grote ETHZ, Fall08

HRM practices: Strategic choices


Job analysis and design
simple vs. complex tasks, specific vs. generic job descriptions

Recruitment and selection


external vs. internal recruitment, specific vs. general skills

Training and development


current vs. future skills, train few vs. all employees

Performance management and compensation


internal vs. external equity, input/behavior/output control

Labor and employee relations


GAV vs. individual contracts
HRM: Work Process Design G. Grote ETHZ, Fall08

Contingencies in strategic HRM


(Snell & Youndt, 1995; Lepak & Snell, 1999)

Input vs. behavior vs. output control


Input control most effective with high uncertainties Behavior control only works with low uncertainties Output control has no effect on performance in any condition

Uniqueness and value of human capital


Traditional, loyalty based employment relationship when knowledge and skills are firm-specific and of high competitive value Purely economic employment relationship when knowledge and skills are neither firm-specific nor of high competitive value HRM: Work Process Design G. Grote ETHZ, Fall08

Consequences for job design


Input vs. behavior vs. output control
Input control: Complex jobs with high discretion; emphasis on intrinsic motivation Behavior control: Simple jobs with low discretion; emphasis on extrinsic motivation Output control: Clearly prescribed job objectives; emphasis on extrinsic motivation

Uniqueness and value of human capital


Firm specific knowledge/skills: Learning on the job Competitive value of knowledge/skills: Job crafting, career development
HRM: Work Process Design G. Grote ETHZ, Fall08

Influence of normative assumptions on strategic and operational HRM


Assumptions about human nature (Schein, 1988) Economic man: Employees will do whatever affords them the greatest economic gain Social man: Social needs are the prime motivator of human behavior, and interpersonal relationships the prime shaper of a sense of identity. Self-actualizing man: People seek a sense of accomplishment in their work and are primarily self-motivated and selfcontrolled Complex man: Human needs fall into many categories and vary according to stage of development and total life situation
HRM: Work Process Design G. Grote ETHZ, Fall08

Example Google: HRM for innovation


Highly selective hiring Generic job descriptions In-house and on-the-job training Intrinsic motivation as key driver "Fringe benefits" as symbol of esteem for employees High task interdependence and cooperation requirements Decisions based on expert power
HRM: Work Process Design G. Grote ETHZ, Fall08