CHAPTER1ANINVESTMENTPERSPECTIVEOFHUMANRESOURCEMANAGEMENTPowerPointPresentationbyCharlieCookCopyright©2002South-Western.AllrightsreservedCopyright©2002South-Western.Allrightsreserved.1–2TheStrategicViewofHumanResources•Employeesarehumanassetsthatincreaseinvaluetotheorganizationandthemarketplacewheninvestmentsofappropriatepoliciesandprogramsareapplied.•Effectiveorganizationsrecognizethattheiremployeesdohavevalue,muchassameastheorganization’sphysicalandcapitalassetshavevalue.•Employeesareavaluablesourceofsustainablecompetitiveadvantage.Copyright©2002South-Western.Allrightsreserved.1–3Copyright©2002South-Western.Allrightsreserved.1–4SourcesofEmployeeValue•TechnicalKnowledge–Markets,Processes,Customers,Environment•AbilitytoLearnandGrow–Opennesstonewideas–Acquisitionofknowledgeandskills•DecisionMakingCapabilities•Motivation•Commitment•Teamwork–Interpersonalskills,LeadershipabilityCopyright©2002South-Western.Allrightsreserved.1–5ValuationofHumanAssets•ImplicationsforIndividualsandOrganizations–Determinationofcompensation•Internalandexternalequityforemployeesinreturnfortheircontributionstotheorganization.•Organizationplacementofresourcesandreturnsonemployeedevelopmentarealignedandwell-matched.–Advancementopportunities•Developingcurrentemployeescreatesmotivationandpermitspromotionfromwithin.–Developmentofretentionstrategies•Effectivemeansofretainingvaluableemployeesallowsfortherecaptureoftheinvestedcostsoftheirdevelopment.Copyright©2002South-Western.Allrightsreserved.1–6InvestmentOrientationCopyright©2002South-Western.Allrightsreserved.1–7TheInvestment-OrientedOrganization•OrganizationalCharacteristics–Seespeopleascentraltoitsmission/strategy.–Hasamissionstatementandstrategicobjectivesthatespousethevalueofhumanassetsinachievinggoals.–Hasamanagementphilosophythatencouragesthedevelopmentandretentionofhumanassetsanddoesnottreatorregardhumanassetsinthesamewaysasphysicalassets.Copyright©2002South-Western.Allrightsreserved.1–8InvestmentOrientationFactors•SeniorManagementValuesandActions–Anorganization’swillingnesstoinvestinitshumanresourcesisdeterminedbythe“investmentorientation”ofitsmanagers.•AttitudeTowardRisk–Investmentinhumanresourcesisinherentlyriskierduetolackofabsolute“ownership”oftheasset.•NatureofSkillsNeededbyEmployees–Themorelikelythatskillsdevelopedbyemployeesaremarketableoutsidethefirm,themoreriskythefirm’sinvestmentinthedevelopmentofthoseskills.Copyright©2002South-Western.Allrightsreserved.1–9InvestmentOrientationFactors•Utilitarian(“BottomLine”)Mentality–Anattemptismadetoquantifyemployeeworthtotheorganizationthroughacost-benefitanalysis.–The“soft”benefitsofHRprogramsandpolicesaredifficulttoobjectivelyquantifybecausetheyaffectmanydifferentorganizationalareasandhavedifferentialeffectsonindividualemployees.•AvailabilityofOutsourcing–Ifcost-effectiveoutsourcingisavailable,investmentswillbemadeonlyinHRactivitiesproducingthehighestreturnsandlargestsustainablecompetitiveadvantages.Copyright©2002South-Western.Allrightsreserved.1–10Reading1.1:TheSWAValueCycleValueatSouthwestAirlinesis:1.Createdthroughsatisfactionofemployeeneeds.2.Convertedtocustomerandshareholdervalueviaorganizationalcapabilities(thedesignofspecificoperatingprocesses).3.CapturedbySWAascompetitiveadvantagethroughlowercostsandsuperiorservice(productivity)inrelationtoitscompetitors.Copyright©2002South-Western.Allrightsreserved.1–11Reading1.2:EffectiveHRMPractices•EmploymentSecurity•SelectivityinRecruiting•HighWages•Incentivepay•EmployeeOwnership•InformationSharing•Participation&Ownership•Self-ManagedTeams•Training&Development•Cross-Utilization&Cross-Training•SymbolicEgalitarianism•WageCompression•PromotionFromWithin•TakingtheLongView•MeasurementofPractice•OverallPhilosophyCHAPTER2TRENDSAFFECTINGHUMANRESOURCEMANAGEMENTPowerPointPresentationbyCharlieCookCopyright©2002South-Western.AllrightsreservedCopyright©2002South-Western.Allrightsreserved.1–13MajorFactorsAffectingHRMStrategicHRMTechnologicalAdvancementDemographicsandDiversityGlobalizationCopyright©2002South-Western.Allrightsreserved.1–14TechnologyandHRMCopyright©2002South-Western.Allrightsreserved.1–15TechnologyChallengesforHRMCopyright©2002South-Western.Allrightsreserved.1–16WorkforceDemographicChanges•The“Graying”oftheWorkforce•NegativeAspectsofOlderWorkers–Perceivedresistancetochangebyolderworkers.–Increasedhealth-carecostsforseniorworkers–Blockingadvancementopportunitiesforyoungerworkers–Higherwageandsalarycostsforseniorworkers•PositiveAspectsofOlderWorkers–Asproductiveormoreproductivethanyoungerworkers–Havemoreorganizationalloyaltythanyoungerworkers–PossessbroaderindustryknowledgeandprofessionalnetworksCopyright©2002South-Western.Allrightsreserved.1–17WorkforceDemographicChanges•BabyBoomers(1945–1962)–Inexcesssupplyinmiddlemanagementranks–HRchallengeistomanage“plateaued”workers•BabyBusters(1963–mid-1970s)–ArecareerbottleneckedbytheBoomers–Whohaveskillsinhighdemandaredoingandwilldowell•Generation“X”ers(late1970s–early1980s)–Havelife-longexposuretotechnologyandconstantchange–Seekself-control,indep