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Strategic HRM and

Emerging Trends
HRM in the 21
st
Century
HRM activities must be:
1. Responsive to a highly competitive
marketplace and global business structures;
2. Closely linked to business strategic plans;
3. Jointly conceived and implemented by line and
HR managers; and
4. Focused on quality, customer service,
productivity, employee involvement, teamwork,
and workforce flexibility.
Characteristics of High
Performance Work Systems
Large number of 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)
performance appraisal and
feedback.
Linkage of merit increases to
formal appraisal processes.
Above market compensation for
key positions.
High percentage of the 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 teams.
Low percentage of employees
covered by union contract.
High percentage of jobs filled from
within.

Goal: Developing a Human Resources Scorecard!
Highly effective HR function:
Are conceptualized in a business capacity,
focusing on the strategy and core
competencies of the organization.
Able to show how it can make a difference
to the companys bottom line.
Use research to make recommendations
for cost improvement and more efficient
operations.
Key to Competitive Advantage:
Building and sustaining core
competencies within the organization
and maintaining flexibility in order to
react quickly to the changing global
marketplace and the advances in
technology.
Research Finding HRM Practice
Recruitment
Quantitative analysis of recruitment sources using yield ratios
can facilitate efficiencies in recruitment.

Less than 10% calculate yield ratios.
Less than 25% know how.
Staffing
Realistic job previews can reduce turnover.
Weighted application blanks reduce turnover.
Structured, behavioral, or situational interviews are more valid.
Use actuarial model of prediction with multiple measures.
Graphology is invalid and should not be used

Less than 20% use RJPs in high turnover jobs.
Less than 30% know what an WAB is; < 1% use WABs.
45% use structured interviews.
Less than 5% use actuarial model.
Use is on the increase in the U.S.

Performance Appraisal
Do not use traits on rating forms.
Train raters for accuracy, observation bias, etc.
Make appraisal process important element of managers job.

More than 70% still use traits.
Less than 30% train raters.
Less than 35% evaluate managers on performance appraisal.
Compensation
Merit-based systems should not be tied into bas salary.
Gainsharing is an effective PFP system

More than 75% tie merit pay into base pay.
Less than 5% use it where they could
Discrepancies Between Research and Practice
Major Trends Impacting HRM
Trend 1: The Increased Globalization of the
Economy
Trend 2: Technological Changes, Challenges
and Opportunities
Trend 3: The Need to be Flexible in Response to
Changing Business Environments
Trend 4: Increase in Litigation Related to HRM
Trend 5: Changing Characteristics of the
Workforce.
Increased Globalization
Development of a worldwide
labor market for U.S. firms:
Easy to move work around
when it can be digitized.
Decrease the cost of labor.
HRM becomes more
complicated.
More union activities.
Corporate downsizing linked
to new technology.
Barriers to entry have been
reduced, increasing
international competition from
firms and individuals alike.
U.S. export jobs up 20% in
last 10 years.
U.S. firms are expanding in
new countries and new
markets.
Reduced work forces by more
than 10% in last decade:
HRM specialists in
organizational restructuring.
Conduct vocational counseling
for displaced employees.
Assist in developing new
staffing plans.
Help in legal defense against
allegations of discrimination
related to downsizing.
Technological Changes
Optimal combination of
people, software, and
equipment.
User testing programs
assess computer
interface.
Use of intranet sites to
convey personnel
information.
Maximize profit margins
and sustained customer
value.
Electronic tracking of HR
activities such as T/O and
performance reviews.
Impact of Internet on
HRM activities:
Computer search of
potential applicant pool.
Standardized resumes in
data base.
Announcements and
responses through e-mail.
Increased focus on security
of personnel information
and intellectual property.
Increased speed of
communication across the
organization.
Video computer conducts
testing and interviewing.
Need to be Flexible
Focus on core competencies leads to
outsourcing of other activities:
Use of temporary or leased workers;
Use of independent contractors; and
Place personnel with new technology.
Consulting is now a thriving business for
HRM:
Outsource HR activities.
Increase in Litigation
Federal lawsuits have increased over 125%
since 1991.
Expected increase in age discrimination
lawsuits.
State laws regarding mergers and acquisitions,
AIDS victims and homosexuals, family leave
benefits, and video displays.
Health and safety regulations, employee
pensions and other compensation programs,
plant closures, mergers and acquisitions, and
EEO laws and guidelines.
Changing Characteristics
Nearly 90% of workforce growth from 1995 to
2000 were women, immigrants, African-
Americans, Hispanic or Asian origin.
Older workers are less likely to retire at 65.
Increasing number of disabled workers.
Increase in number of people experiencing
sandwich generation issues.
More programs on diversity, flexible work
schedules, better training programs, childcare
arrangements, and career development
strategies.

Importance of Measuring HRM
Performance
Enhance productivity, product and service quality, and
customer satisfaction.
Link HR programs to cost savings, financial
performance, and productivity.
Link employee behavior and attitudes to revenues and
profits.
Link leading and lagging indicators to organizational
goals.
Measures should be derived from organizational
strategy.
Feedback is essential for development and refinement.
Relative weights should be linked to strategic goals
Develop a workforce scorecard.
Steps in Developing a Workforce
Scorecard
1. Identify critical and carefully defined
outcome measures related to strategic
objectives.
2. Translate measures into specific actions
and accountabilities.
3. Develop and communicate detailed
descriptions of what is expected.
Determine how (or if) improvements can
be achieved.
Steps (Continued)
4. Identify high and low performing
employees. Establish a differentiated
incentive systems.
5. Develop supporting HR management
and measurement systems of selection,
formal appraisal, promotion,
development, and termination practices.
6. Specify the roles of leadership, the
workforce, and HR in strategy execution.
Challenges in Developing a
Workforce Scorecard
Perspective challenge Does management
fully understand how workforce behaviors affect
strategy execution?
Metrics challenge Has the organization
identified and collected the right measures of
success?
Education Challenge Does management
have access to the data and motivation to use
the data in decision making?
Challenges in HRM Measurement
View the workforce in terms of contribution
rather than cost;
Use measurement as a tool for
differentiating contribution to strategic
impact; and
Hold line and HR management
responsible for getting the workforce to
execute strategy.
HRs Role in Sustaining
Competitive Advantage
HR systems must be in place that not only
maximize organizational capability, but
also exploit any other potential sources of
uniqueness.
Organizational capability is matching
customer and strategic needs through
work structure and design.
Organizational capability derives from
HRM practices.