1–1

CHAPTER 2

TRENDS AFFECTINGHUMAN RESOURCE MANAGEMENT

Societal Factors Affecting HRMSocietal Factors Affecting HRMSocietal Factors Affecting HRMSocietal Factors Affecting HRM

StrategicStrategicHRMHRM

SustainabilitySustainabilityDemographicsDemographicsand Diversityand Diversity

EthicsEthics

DiversityDiversityDiversityDiversity

Demographic changes in society have greatly impacted the Demographic changes in society have greatly impacted the composition of the workforce. composition of the workforce.

numerous laws protect diverse groups in our society from numerous laws protect diverse groups in our society from discrimination in employment Most organizations have discrimination in employment Most organizations have developed some kind of diversity management program in developed some kind of diversity management program in response to one of both of these factors.response to one of both of these factors.

Diversity initiatives can be designed to ensure legal compliance Diversity initiatives can be designed to ensure legal compliance or to truly promote and encourage respect for others and or to truly promote and encourage respect for others and differences. differences.

There is a marked difference between these motivations, as There is a marked difference between these motivations, as illustrated in Exhibit 2.1.illustrated in Exhibit 2.1.

Diversity is a strategic business issue for an overwhelming Diversity is a strategic business issue for an overwhelming majority of organizations/employers.majority of organizations/employers.

Demographic changes in society have greatly impacted the Demographic changes in society have greatly impacted the composition of the workforce. composition of the workforce.

numerous laws protect diverse groups in our society from numerous laws protect diverse groups in our society from discrimination in employment Most organizations have discrimination in employment Most organizations have developed some kind of diversity management program in developed some kind of diversity management program in response to one of both of these factors.response to one of both of these factors.

Diversity initiatives can be designed to ensure legal compliance Diversity initiatives can be designed to ensure legal compliance or to truly promote and encourage respect for others and or to truly promote and encourage respect for others and differences. differences.

There is a marked difference between these motivations, as There is a marked difference between these motivations, as illustrated in Exhibit 2.1.illustrated in Exhibit 2.1.

Diversity is a strategic business issue for an overwhelming Diversity is a strategic business issue for an overwhelming majority of organizations/employers.majority of organizations/employers.

Exhibit 2.1Exhibit 2.1Differences Between Legal Compliance and Managing Differences Between Legal Compliance and Managing

DiversityDiversity

Exhibit 2.1Exhibit 2.1Differences Between Legal Compliance and Managing Differences Between Legal Compliance and Managing

DiversityDiversity

Generational DiversityGenerational DiversityGenerational DiversityGenerational Diversity

Generational diversity is becoming increasingly Generational diversity is becoming increasingly prevalent as individuals live and remain in the prevalent as individuals live and remain in the workplace longer than in previous years. workplace longer than in previous years. Different generations need to be able to work Different generations need to be able to work alongside each other in contemporary alongside each other in contemporary organizations. Exhibit 2.2 illustrates some of the organizations. Exhibit 2.2 illustrates some of the characteristics of different generations found in characteristics of different generations found in the workplace.the workplace.

Generational diversity is becoming increasingly Generational diversity is becoming increasingly prevalent as individuals live and remain in the prevalent as individuals live and remain in the workplace longer than in previous years. workplace longer than in previous years. Different generations need to be able to work Different generations need to be able to work alongside each other in contemporary alongside each other in contemporary organizations. Exhibit 2.2 illustrates some of the organizations. Exhibit 2.2 illustrates some of the characteristics of different generations found in characteristics of different generations found in the workplace.the workplace.

Workforce Demographic Changes: Workforce Demographic Changes: “Graying” of Workforce“Graying” of Workforce

Workforce Demographic Changes: Workforce Demographic Changes: “Graying” of Workforce“Graying” of Workforce

• Negative aspects of Negative aspects of older workersolder workers

– Perceived resistance to Perceived resistance to change by older workers.change by older workers.

– Increased health-care Increased health-care costs for senior workerscosts for senior workers

– Blocking advancement Blocking advancement opportunities for younger opportunities for younger workersworkers

– Higher wage & salary Higher wage & salary costs for senior workerscosts for senior workers

• Negative aspects of Negative aspects of older workersolder workers

– Perceived resistance to Perceived resistance to change by older workers.change by older workers.

– Increased health-care Increased health-care costs for senior workerscosts for senior workers

– Blocking advancement Blocking advancement opportunities for younger opportunities for younger workersworkers

– Higher wage & salary Higher wage & salary costs for senior workerscosts for senior workers

• Positive aspects of Positive aspects of older workersolder workers

– As productive or more As productive or more productive than younger productive than younger workersworkers

– Have more Have more organizational loyalty organizational loyalty than younger workersthan younger workers

– Possess broader Possess broader industry knowledge & industry knowledge & professional networksprofessional networks

• Positive aspects of Positive aspects of older workersolder workers

– As productive or more As productive or more productive than younger productive than younger workersworkers

– Have more Have more organizational loyalty organizational loyalty than younger workersthan younger workers

– Possess broader Possess broader industry knowledge & industry knowledge & professional networksprofessional networks

Workforce Demographic ChangesWorkforce Demographic ChangesWorkforce Demographic ChangesWorkforce Demographic Changes

• Sexual orientationSexual orientation– Increasing laws and company policies which prohibit Increasing laws and company policies which prohibit

discrimination based on sexual orientation have been discrimination based on sexual orientation have been implementedimplemented

• DisabilitiesDisabilities– 54 million Americans with disabilities54 million Americans with disabilities– Often not included in diversity initiativesOften not included in diversity initiatives– Many supervisors do not understand needs of employees Many supervisors do not understand needs of employees

with disabilitieswith disabilities– Intel and PepsiCo have both developed innovative Intel and PepsiCo have both developed innovative

approaches for managing diversity in the workplaceapproaches for managing diversity in the workplace

• Sexual orientationSexual orientation– Increasing laws and company policies which prohibit Increasing laws and company policies which prohibit

discrimination based on sexual orientation have been discrimination based on sexual orientation have been implementedimplemented

• DisabilitiesDisabilities– 54 million Americans with disabilities54 million Americans with disabilities– Often not included in diversity initiativesOften not included in diversity initiatives– Many supervisors do not understand needs of employees Many supervisors do not understand needs of employees

with disabilitieswith disabilities– Intel and PepsiCo have both developed innovative Intel and PepsiCo have both developed innovative

approaches for managing diversity in the workplaceapproaches for managing diversity in the workplace

New Employee/Workplace DynamicsNew Employee/Workplace DynamicsNew Employee/Workplace DynamicsNew Employee/Workplace Dynamics

• Emphasis on management of professionalsEmphasis on management of professionals– Establishment of separate career tracksEstablishment of separate career tracks

• Technical/Professional, Managerial /AdministrativeTechnical/Professional, Managerial /Administrative– Use of project teamsUse of project teams

• Less employee loyalty, more loyal to selfLess employee loyalty, more loyal to self– Staying with employers for shorter periods; demanding more Staying with employers for shorter periods; demanding more

meaningful work & involvement in organizational decisionsmeaningful work & involvement in organizational decisions• The development and support of affinity groups is one way in The development and support of affinity groups is one way in

which organizations manage and encourage diversity. Both which organizations manage and encourage diversity. Both Frito-Lay and PepsiCo have successfully embraced this strategy Frito-Lay and PepsiCo have successfully embraced this strategy with successful business results. with successful business results.

•

• Emphasis on management of professionalsEmphasis on management of professionals– Establishment of separate career tracksEstablishment of separate career tracks

• Technical/Professional, Managerial /AdministrativeTechnical/Professional, Managerial /Administrative– Use of project teamsUse of project teams

• Less employee loyalty, more loyal to selfLess employee loyalty, more loyal to self– Staying with employers for shorter periods; demanding more Staying with employers for shorter periods; demanding more

meaningful work & involvement in organizational decisionsmeaningful work & involvement in organizational decisions• The development and support of affinity groups is one way in The development and support of affinity groups is one way in

which organizations manage and encourage diversity. Both which organizations manage and encourage diversity. Both Frito-Lay and PepsiCo have successfully embraced this strategy Frito-Lay and PepsiCo have successfully embraced this strategy with successful business results. with successful business results.

•

Managing Workplace DiversityManaging Workplace DiversityManaging Workplace DiversityManaging Workplace Diversity

• Understanding & Understanding & appreciating diversityappreciating diversity

– Critical to effectively Critical to effectively marketing to ethnic & minority marketing to ethnic & minority groupsgroups

– Promoted by having diverse Promoted by having diverse workforce at all levelsworkforce at all levels

– Helps ensure hiring & Helps ensure hiring & promotion decisions are promotion decisions are unbiased by person unbiased by person differencesdifferences

• Understanding & Understanding & appreciating diversityappreciating diversity

– Critical to effectively Critical to effectively marketing to ethnic & minority marketing to ethnic & minority groupsgroups

– Promoted by having diverse Promoted by having diverse workforce at all levelsworkforce at all levels

– Helps ensure hiring & Helps ensure hiring & promotion decisions are promotion decisions are unbiased by person unbiased by person differencesdifferences

• Diversity management Diversity management programs or initiativesprograms or initiatives

– Must be integrated with Must be integrated with organization’s mission & organization’s mission & objectivesobjectives

– Help key decision makers Help key decision makers identify diversity’s benefits to identify diversity’s benefits to organizationorganization

– Make critical decisions about Make critical decisions about implementing optimal implementing optimal program/initiative contingent program/initiative contingent on organization & its people, on organization & its people, mission & culture.mission & culture.

• Diversity management Diversity management programs or initiativesprograms or initiatives

– Must be integrated with Must be integrated with organization’s mission & organization’s mission & objectivesobjectives

– Help key decision makers Help key decision makers identify diversity’s benefits to identify diversity’s benefits to organizationorganization

– Make critical decisions about Make critical decisions about implementing optimal implementing optimal program/initiative contingent program/initiative contingent on organization & its people, on organization & its people, mission & culture.mission & culture.

Exhibit 2.3Exhibit 2.3

Individual Dimensions of DiversityIndividual Dimensions of DiversityExhibit 2.3Exhibit 2.3

Individual Dimensions of DiversityIndividual Dimensions of Diversity

Ethical Behavior Ethical Behavior Ethical Behavior Ethical Behavior

• Many employers are now considering ethics and Many employers are now considering ethics and ethical behavior in light of major bankruptcies, ethical behavior in light of major bankruptcies, scandals and business meltdowns. However, scandals and business meltdowns. However, ethics are subject to personal values and ethics are subject to personal values and convictions. Financial report and disclosureconvictions. Financial report and disclosure

• Common ethical concerns for HR includeCommon ethical concerns for HR include– off-duty behavior terminationoff-duty behavior termination– ownership of work intellectual properly protectionownership of work intellectual properly protection– non-compete clauses working with competitorsnon-compete clauses working with competitors

• Many employers are now considering ethics and Many employers are now considering ethics and ethical behavior in light of major bankruptcies, ethical behavior in light of major bankruptcies, scandals and business meltdowns. However, scandals and business meltdowns. However, ethics are subject to personal values and ethics are subject to personal values and convictions. Financial report and disclosureconvictions. Financial report and disclosure

• Common ethical concerns for HR includeCommon ethical concerns for HR include– off-duty behavior terminationoff-duty behavior termination– ownership of work intellectual properly protectionownership of work intellectual properly protection– non-compete clauses working with competitorsnon-compete clauses working with competitors

Sarbanes-Oxley Act of 2002Sarbanes-Oxley Act of 2002Sarbanes-Oxley Act of 2002Sarbanes-Oxley Act of 2002

The Sarbanes-Oxley Act of 2002 provides sweeping The Sarbanes-Oxley Act of 2002 provides sweeping measures to control deception in accounting and measures to control deception in accounting and management practices by increasing government management practices by increasing government oversight of financial reporting, holding senior oversight of financial reporting, holding senior executives more responsible that previously and executives more responsible that previously and protecting whistle blowersprotecting whistle blowers

The Sarbanes-Oxley Act of 2002 provides sweeping The Sarbanes-Oxley Act of 2002 provides sweeping measures to control deception in accounting and measures to control deception in accounting and management practices by increasing government management practices by increasing government oversight of financial reporting, holding senior oversight of financial reporting, holding senior executives more responsible that previously and executives more responsible that previously and protecting whistle blowersprotecting whistle blowers

Codes of EthicsCodes of EthicsCodes of EthicsCodes of Ethics

Many organizations and some industries have developed Many organizations and some industries have developed their own code of ethics. The Society of Human their own code of ethics. The Society of Human Resource Management (SHRM) has developed such a Resource Management (SHRM) has developed such a code for HR professionals. This code presents core code for HR professionals. This code presents core principles, intent and guidelines in a number of areas, principles, intent and guidelines in a number of areas, including: Professional Responsibility; Professional including: Professional Responsibility; Professional Development; Ethical Leadership; Fairness and Justice; Development; Ethical Leadership; Fairness and Justice; Conflicts of Interest; and Use of Information. Conflicts of Interest; and Use of Information.

Exhibit 2.6 provides some guides for developing a code of Exhibit 2.6 provides some guides for developing a code of ethics or code of conduct.ethics or code of conduct.

Many organizations and some industries have developed Many organizations and some industries have developed their own code of ethics. The Society of Human their own code of ethics. The Society of Human Resource Management (SHRM) has developed such a Resource Management (SHRM) has developed such a code for HR professionals. This code presents core code for HR professionals. This code presents core principles, intent and guidelines in a number of areas, principles, intent and guidelines in a number of areas, including: Professional Responsibility; Professional including: Professional Responsibility; Professional Development; Ethical Leadership; Fairness and Justice; Development; Ethical Leadership; Fairness and Justice; Conflicts of Interest; and Use of Information. Conflicts of Interest; and Use of Information.

Exhibit 2.6 provides some guides for developing a code of Exhibit 2.6 provides some guides for developing a code of ethics or code of conduct.ethics or code of conduct.

SustainabilitySustainabilitySustainabilitySustainability

Sustainability (and social responsibility in general) take a Sustainability (and social responsibility in general) take a more macro approach to managing an organization’s more macro approach to managing an organization’s relationship with its external environment. relationship with its external environment.

Organizations are being increasingly expected to Organizations are being increasingly expected to consider the effects of their operations, decision and consider the effects of their operations, decision and business on the social and natural environment. business on the social and natural environment.

General Electric has developed a model program related General Electric has developed a model program related to sustainability and Gap, Inc. has set standards for to sustainability and Gap, Inc. has set standards for offshoring of its manufacturing operations. offshoring of its manufacturing operations.

Sustainability (and social responsibility in general) take a Sustainability (and social responsibility in general) take a more macro approach to managing an organization’s more macro approach to managing an organization’s relationship with its external environment. relationship with its external environment.

Organizations are being increasingly expected to Organizations are being increasingly expected to consider the effects of their operations, decision and consider the effects of their operations, decision and business on the social and natural environment. business on the social and natural environment.

General Electric has developed a model program related General Electric has developed a model program related to sustainability and Gap, Inc. has set standards for to sustainability and Gap, Inc. has set standards for offshoring of its manufacturing operations. offshoring of its manufacturing operations.