Strategic Human Resource Management
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MGTS3603:
Strategic Human Resource Management
Human Resource Management:
Groups
If you did not attend seminar 1, please make sure you have a thorough reading of
• ECP
• Week 1 seminar notes
• relevant blackboard materials.
Familiarize with assessments
3
• Week 2 seminar: HRM goals and tensions in HRM
• Week 3 workshop presentation: HRM goals and tensions in HRM (slides submitted at the latest by
10am on the seminar day) Check this ☺
• Topic evaluation worksheet #1 (submit in Week 3, by 5pm on the day following seminar)
How it flows
4
Goal:
To establish fundamental definitions associated with HRM, examine what managers are trying to achieve
in HRM, and understand why HRM is challenging
Content:
• How do we define human resources and HRM?
• What are the goals of HRM?
• What strategic tensions and problems do these goals imply?
Seminar Outline
Part 1: Define HR and HRM
6
Human resources are the characteristics that are intrinsic to human beings:
• Most obviously: our knowledge, skills and energies
• Underpinning these: our physical and emotional health, intellectual capabilities, personalities and
motivations
Defining Human Resources & HRM
Defining Human Resources & HRM
• Who owns human resources?
• What can employers do with human resources?
Question – Who owns HR?
Question – Who owns HR?
HRM is an inevitable process in organisations:
• Managers need access to human capital and build social capital to create organisational
performances
• HRM involves policies and practices for organising work and managing people, including both
individual and collective dimensions
• HRM involves line managers and (in larger organisations) HR specialists
Defining HRM
Defining HRM
Part 2: Strategic goals in HRM
(workshop presentation group #1)
10
1.Cost-effective Labour
2.Organizational flexibility
3.Human resource advantage
4.Social legitimacy
5.Management power
What are the goals of HRM?
What are the goals of HRM?
1. Cost-effective labour
• Why? Labour cost matters a lot (e.g, restaurants: one third of sales revenue)
• Some astute choices in HRM are needed to make a business economically
viable, which means it is making a level of profit that investors and lenders
consider acceptable
HRM goal - Cost-effective labour
HRM goal - Cost-effective labour
Why Australian car manufacturing died?
• Holden, Toyota and Ford have closed or will close their factories in OZ
• Australia is surrounded by developing countries with much cheaper labour costs.
• The minimum wage in Thailand equates to less than $2 an hour. Car assembly line workers
are paid more generously — about $6 an hour, or close to $12,500 a year.
• But it’s nowhere near the average Australian car manufacturing worker wage of $69,000.
HRM goal- Cost-effective labour
Example:
HRM goal- Cost-effective labour Example:
http://www.heraldsun.com.au/technology/why-australian-car-manufacturing-died-and-what-it-means-for-our-motoring-future/news-story/0428dc235d1b44639459959f5a3bbf9b
1. Cost-Effective Labour
• Discuss: Is cost-effective labour equal to cost minimization?
• Cost-effective labour = The value of labour output in relation to the cost of labour input
• This means the approach managers take in HRM needs to be cost-effective: the firm needs people
who are both effective and affordable
HRM goal- Cost-Effective Labour
HRM goal- Cost-Effective Labour
Recall: CHRM decision-making framework
Recall: CHRM decision-making framework 15
2. Organisational flexibility
• Nothing lasts forever. Some element of flexibility is important in an organisation’s HRM if it is to cope
with change
• Change is a inevitable and so an element of flexibility is an issue for managers.
HRM goal- Organisational flexibility
HRM goal- Organisational flexibility
2. Organisational Flexibility
Think and Discuss:
• Does anyone work as casual?
• Why does your org hire you as casual instead of full-time employees?
HRM goal- Organisational flexibility
HRM goal- Organisational Flexibility
Seasonal work in hospitality or retailing
• Organisation like hotels might need to hire casual or contractors to adapt and remain flexible to peaks
and troughs in seasonal periods.
HRM goal- Organisational flexibility
Example
HRM goal- Organisational Flexibility
Example
2. Organisational Flexibility
= short-run responsiveness + long-run agility
What are they and which one is harder to achieve?
HRM goal- Organisational flexibility
HRM goal- Organisational flexibility
Short-run responsiveness: e.g.
o offer overtime and bring in temporary or seasonal staff (numerical)
o pay employees a mix of wages and profit-related bonuses (financial)
o hire workers who are cross trained or multi skilled (functional)
HRM goal- Organisational flexibility
HRM goal- Organisational Flexibility 20
Long-run agility: whether a firm can show the ability to survive in an environment that can change
radically.
oDoes the firm have the capacity to create, or at least cope, with, long-run changes in
products, costs and technologies?
oCan it adapt to change as fast as, or faster, than rivals?
HRM goal- Organisational flexibility
HRM goal- Organisational Flexibility 21
HRM goal- Organisational Flexibility
Example
HRM goal- Organisational Flexibility
Example
Film camera
Think and discuss:
When companies in lower-cost countries find ways of making products at the same quality and delivery
benchmarks but do so at much lower prices, how should established firms operating in high-cost countries
respond?
Offshore? Short-run responsiveness
Innovation? Long-term agility
HRM goal- Organisational Flexibility
HRM goal- Organisational Flexibility
• In 2002 Dyson moved its production from the U.K. to Malaysia, costing 800 jobs in the U.K.
However it delivered lower unit costs and ensured proximity to suppliers of key parts, thus
improving the firm’s location in its supply chain.
• This has created an HR strategy in managing a dual workforce across two continents,
making Dyson a more agile firm, enabling them to be more focused on research and
development to maintain being a competitive market leader.
HRM goal- Organisational Flexibility
Example
HRM goal- Organisational Flexibility
Example
‘Zero-hours’ contracts
• Employers do not guarantee the workers any set number of regular working, but employees have an obligation to
accept the employment assignments offered.
For example: In the UK there is a growth toward zero hour contracts post GFC.
Benefits for employers?
• It provides a high level of flexibility for employers by transferring the risk of fluctuations in the level of work
demand onto the employee.
Ethical issues are raised around the use of this style of contact. Eg.
• Can employers penalize workers if they turn down shifts?
• Can employers restrict employees from undertaking work with another employer?
• Should employers give warning that there is no work?
• How can employees survive on such contracts??
HRM goal- Organisational Flexibility
Example
HRM goal- Organisational Flexibility
Example
3. Human Resource Advantage
• Firms that survive are engaged in an ongoing process of trying to build and defend
competitive advantages
• Some of these are temporary and some are more sustained ( more details in W4)
• human capital advantage vs. social capital advantage
- have star employees--- HCA
- star employees provide mentoring and support ---- SCA
HRM goal- Human Resource Advantage
HRM goal- Human Resource Advantage
3. Human Resource Advantage
Think and discuss:
Who performs better, work alone or work collaboratively?
Example: Studies using sociometric data indicate engineering, research, and consulting, individuals with
larger “internal collaboration networks” outperform those who operate and work independently.