Chapter 02 – Trends in Human Resource Management
HR Oops!
Less Helpful than a Search Engine!
Access to information is essential in the information age. According to a Hay Group survey, HR
professionals are not responding quickly enough to line manager’s questions and concerns. In
one survey, 29% of line managers rated Google above the HR department for providing
pertinent information. From the HR perspective, almost half are spending time simply
responding to line manger inquiries. HR needs to determine how they can set up line managers
with the information they need so that HR can be more strategic.
Discussion Questions with Possible Responses
1. Suggest one way that HR managers might improve their helpfulness to managers.
2. Suggest one way that line managers can improve communication with HR managers so
they get the support they need.
A. Mergers and Acquisitions
1. Organizations join forces through mergers-two companies becoming one-and
acquisitions-one Company buying another.
2. HRM should have a significant role in carrying out a merger or acquisition.
Differences between the businesses involved in the deal make conflict inevitable.
Therefore, training efforts should include development of skills in conflict
resolution.
3. HR professionals have to sort out differences in the two companies’ practices with
regards to compensation, performance appraisal, and other HR systems.
A. High Quality Standards
1. To compete in today’s economy, companies need to provide high-quality
products and services.
2. Total quality management (TQM) refers to a company-wide effort to
continuously improve the ways people, machines, and systems accomplish
work.
3. TQM has several core values:
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Chapter 02 – Trends in Human Resource Management
a. Methods and processes are designed to meet the needs of internal and
external customers.
b. Every employee in the organization receives training in quality.
c. Quality is designed into a product or service so that errors are prevented
from occurring rather than being detected and corrected.
d. The organization promotes cooperation with vendors, suppliers, and
customers to improve quality and hold down costs.
e. Managers measure progress with feedback based on data.
4. The TQM approach provides guidelines for all the organization’s activities,
including human resource management. To promote quality, organizations need
an environment that supports innovations, creativity, and risk taking to meet
customer demands.
C. Downsizing
1. Figure 2.5, Number of Employees Laid Off During the Past Decade, identifies
the number of layoffs that have occurred despite the ongoing war for talent.
2. The surge in unemployment created a climate of fear for many workers.
3. An important challenge for employers was how to maintain a reputation as an
employer of choice and how to keep employees engaged in their work and
focused on the organization’s goals.
4. Downsizing presents a number of challenges and opportunities for HRM:
a. Reduction of the workforce by cutting only the workers who are less valuable
in their performance.
b. Boost the morale of employees who remain after the reduction.
5. HR professionals should maintain open communication with remaining employees
to build their trust and commitment, rather than withholding information.
6. All employees should be informed why the downsizing is necessary, what costs
are to be cut, how long the downsizing will last, and what strategies the
organization intends to pursue.
7. HRM can provide downsized employees with outplacement services to help them
find new jobs.
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Chapter 02 – Trends in Human Resource Management
D. Reengineering
1. Rapidly changing customer needs and technology have caused many
organizations to rethink the way they get work done.
2. Reengineering is a complete review of the organization’s critical work processes
to make them more efficient and able to deliver higher quality.
3. Reengineering affects human resource management in two ways:
a. First, the way the HR department itself accomplishes its goals may change
dramatically.
b. Second, the fundamental change throughout the organization requires the HR
department to help design and implement change so that all employees will be
committed to the success of the reengineered organization.
E. Outsourcing
1. Manu organizations are increasingly outsourcing business activities.
Outsourcing refers to the practice of having another company-a vendor, third-
party provider, or consultant-provide services.
2. Not only do HR departments help with a transition to outsourcing, but also many
HR functions are being outsourced. A recent study suggests 8 out of 10
companies outsource at least one human resource activity.
3. Goodyear Tire and Rubber Company improved its recruiting and hiring practices
by outsourcing these activities to a specialist.
Best Practice
Outsourcing Enriches the Bottom Line for Land O’Lakes
Land O’Lakes successfully reduced cost by outsourcing some HR activities. Pam
Grove, the Senior Director of Benefits and HR Operations, determined that managing
the health and pension plans internally didn’t align with the strategic objectives of the
organization. She outsourced both of the HR activities and achieved her goal of
reducing costs while maintaining employee satisfaction of their benefits.
Discussion Questions and Possible Responses
1. When does outsourcing make strategic sense for an organization such as Land
O’Lakes?
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Chapter 02 – Trends in Human Resource Management
2. How does Grove ensure that a cost-conscious practice such as outsourcing is well
received by the employees?
F. Expanding into Global Markets
1. In order to meet challenges, U.S. companies must develop global markets, keep
up with competition from overseas, hire from an international labor pool, and
prepare employees for global assignments.
G. The Global Workforce: For today’s and tomorrow’s employers, talent comes
from a global workforce.
1. Organizations with international operations hire at least some of their employees
in the foreign countries where they operate. In fact, regardless of where their
customers are located, more and more organizations are looking overseas to hire
talented people willing to work for less pay than the U.S. labor market requires.
2. The efforts to hire workers in other countries are common enough that they have
spurred the creation of a popular name for the practice name of the practice:
offshoring. This is the moving of operations from the country where a company
is headquartered to a country where pay rates are lower but the necessary skills
are available.
3. Hiring in developing nations such as India, Mexico, and Brazil gives employers
access to people with potential to be eager to work yet who will accept lower
wages than elsewhere in the world.
4. Important issues that HR experts can help companies weigh include whether
workers in the offshore locations can provide the same or better skills, how
offshoring will affect motivation and recruitment of employees needed in the
United States, and whether managers are well prepared to manage and lead
offshore employees.
5. For an organization to operate in other countries, its HR practices must take into
consideration differences in culture and business practices. Starbuck’s Coffee is
an example of an organization that manages these differences effectively.
6. Figure 2.6, Where Immigrants to the United States Came from in 2012,
shows the distribution of immigration by continent of origin.
H. International Assignments: Employees who take assignments in other
countries are called expatriates.
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Chapter 02 – Trends in Human Resource Management
1. U.S. companies must better prepare employees to work in other countries as the
failure rate for U.S. expatriates is greater than that for European and Japanese
expatriates.
V. Technological Change in HRM
1. Advances in computer-related technology have had a major impact on the use of
information for managing human resources.
2. A human resource information system (HRIS) is a computer system used to acquire,
store, manipulate, analyze, retrieve, and distribute information related to an
organization’s human resources.
3. An HRIS can support strategic decision making, help the organization avoid lawsuits,
provide data for evaluating programs and policies, and support day-to-day HR decisions.
4. Table 2.2, New Technologies Influencing HRM, describes some of the new technologies
that may be included in an organization’s HRIS.
A. Electronic Human Resource Management
1. The development of e-business has included ways to move HRM activities onto
the Internet such as:
2. The processing and transmission of digitalized HR information is called electronic
human resource management (e-HRM).
3. E-HRM has the potential to change all traditional HRM functions. Table 2.3,
HRM Applications for Social Networking, identifies some major
implications of e-HRM. Some of these applications include:
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Chapter 02 – Trends in Human Resource Management
d. Sites where users can post links to articles, webinars, training programs,
and other information.
e. Instant messaging and other communication tolls to use with mentors
and coaches.
f. Site where the HR department posts job openings and responds to
candidate’s questions.
4. Privacy is an important e-HRM issue. A great deal of HR information is
confidential and not suitable for posting on a website for everyone to see.
5. One solution is to setup e-HRM on an intranet, which is a network that uses
Internet tools but limits access to authorized users in the organization.
B. Sharing of Human Resource Information: Information technology is changing the
way HR departments handle record keeping and information sharing.
1. Employees can now get information through self-service. This means employees
have online access to information about HR issues, can go online to enroll in
programs and services, and can provide feedback through online surveys.
2. Today, employees routinely look up workplace policies and information about their
benefits online and they may receive electronic notification when deposits are
made directly to their bank accounts.
3. A growing number of companies are combining employee self-service with
management self-service such as the ability to go online to authorize pay
increases, approve expenses, and transfer employees to new positions. More
sophisticated systems extend management applications to decision making in
areas such as compensation and performance management.
4. To further support management decisions, a company may create an HR
dashboard, or a display of how the company is performing on specific HR metrics.
HR How To
Providing HR Services on Mobile Devices
Software vendors are busy creating HR apps to help HR become more efficient and relevant to
the workforce and applicants. Most employees and applicants don’t just want Internet access to
company information and jobs, they want mobile access. The vignette gives guidelines for
developing HR mobile apps.
Discussion Questions and Possible Responses
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Chapter 02 – Trends in Human Resource Management
1. How could offering a mobile version of its careers website support an organization’s
strategy?
2. What could be an advantage of using a software vendor for mobile HR apps, instead of
having your organization’s employees create the apps?
VIII. Change in the Employment Relationship
1. Technology and the other trends we have described in this chapter require managers
at all levels to make rapid changes in response to new opportunities, competitive
challenges, and customer demands.
2. These changes are most likely to succeed in flexible, forward-thinking organizations.
3. Employees who will thrive in such organizations need to be flexible and open to
change as well.
A. A Psychological Contract
1. A psychological contract is a description of what an employee expects to
contribute in an employment relationship and what the employer will provide the
employee in exchange for those contributions.
2. This contract is not formally put into words. It describes unspoken expectations
that are widely held by employers and employees.
3. The psychological contract has changed over the years. To stay competitive,
4. New organizational expectations result in less job security for employees, who
5. In exchange for top performance and working longer hours without job security,
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Chapter 02 – Trends in Human Resource Management
6. Employees can enjoy variety, develop skills and build an interesting career
Did You Know?
Half of U.S. Employees Interested in Changing Jobs
More than half of US workers would welcome an offer letter for a new job. Jobvite found
that 71% are actively looking for a new job.
Discussion Question and Possible Response
1. What challenges and opportunities do employers face in a climate where half of an
organization’s employees feel ready to leave?
B. Flexibility
1. The new psychological contract results from the HRM challenge of building a
2. Flexibility in HRM includes flexible staffing levels and flexible work schedules.
3. Flexible Staffing Levels: A flexible workforce is one the organization can
quickly reshape and resize to meet its changing needs.
4. Alternative work arrangements are methods of staffing other than the
traditional hiring of full-time employees. There are a variety of methods
including the following:
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Chapter 02 – Trends in Human Resource Management
5. Recent research suggests that the use of contingent workers has been growing
6. Most workers in alternative employment relationships are choosing these
7. Flexible Work Schedules: The globalization of the world economy and the
8. Many organizations are taking steps to provide more flexible work schedules,
9. Employers are using flexible schedules to recruit and retain employees and to
10. Flexible work schedules and flexible job assignments also provide organizations
with a way to increase satisfaction and productivity.
ROADMAP: CASE STUDY
Thinking Ethically
How Should Employers Protect Their Data on Employees’ Devices?
Companies are finding it increasingly difficult to manage their intellectual property now that
employees have Smartphone and tablets many times which are not owned by the company.
Discussion Questions and Possible Responses:
1. Imagine you work in the human resources department of a company considering a
policy to protect its data on employees’ mobile devices. In advising on this policy, what
rights should be considered?
2. What advice would you give or actions would you take to ensure that the policy is
administered fairly and equitably?
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Chapter 02 – Trends in Human Resource Management
ROADMAP: Key Terms
Internal Labor Force
External Labor Market
High-Performance Work Systems
Knowledge Workers
Employee Empowerment
Teamwork
Total Quality Management
Reengineering
Outsourcing
Offshoring
Expatriates
Human Resource Information System (HRIS)
Electronic Human Resource Management (e-HRM)
Self-Service
Psychological Contract
Alternative Work Arrangements
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