[lecture 2] strategic hr management - sangyub ryu hr strategies public human resourcespsa management...
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Public Human Resource Management !
Week 2 Strategic HR Management
International University of Japan Instructor: Sangyub Ryu
Public Human Resource Management International University of JapanSangyub Ryu
Introduction: HR Strategies
SPSAPublic Human Resource Management International University of JapanSangyub Ryu
To have the right people in the right place at the right time
The Nature of Strategy and HR Management
International University of JapanSangyub Ryu
Strategic HR Management : the use of employees to gain or keep a competitive advantage
Public Human Resource Management
Practice of HR Strategies in Business Sectors - Neglects of top management on HR as its strategic contributions - Less emphasis on a HR strategy - Weak or no links between HR and overall strategic planning
How much does your organization treat HR strategies seriously? !
What is your organization’s top priorities as HR strategies?
The Nature of Strategy and HR Management
International University of JapanSangyub Ryu
Operationalizing HR Strategy 1) Understand the business - Knowing the mission, programs, financials and so on 2) Focus on key business goals - Programs that have the greatest reliance to the political objectives should get priority !3) Know what to measure - Metrics are a vital part of assessing success; operationalize the measure of goals and outcomes !4) Prepare for the future - Predictable and/or unpredictable future
Public Human Resource Management
The Nature of Strategy and HR Management
International University of JapanSangyub Ryu
HR as a Core Competency
Public Human Resource Management
HR as an Organizational Contributor
International University of JapanSangyub Ryu
HR as an Organizational Contributor to 1) Organizational Productivity 2) Customer service and Quality 3) Financial Performance
Public Human Resource Management
HR as an Organizational Contributor
International University of JapanSangyub Ryu
HR and Organizational Productivity - Productivity: measure of the quantity and quality of work done, considering the cost of the resources used !- Measure of HR productivity - Dividing their average levels of output by the average cost of workers
Public Human Resource Management
How can you measure productivity in public organizations?
HR as an Organizational Contributor
International University of JapanSangyub Ryu
Improving Organizational Productivity through HR
Public Human Resource Management
HR as an Organizational Contributor
International University of JapanSangyub Ryu
HR and Customer Service and Quantity - The quality of service as an outcome of interaction between individual employees and their customers !Katz et al. (1975) found that people are favorable for individual bureaucrats or agencies that treated them, but are less favorable for public agencies in general.
Public Human Resource Management
How can you measure service quality in public organizations?
HR as an Organizational Contributor
International University of JapanSangyub Ryu
HR and Financial Performance - Effectiveness vs. Efficiency - Greater outcomes with little amount of finical expenditure for HR !
Public Human Resource Management
How can you measure financial performance in public organizations?
Human Resource Planning
International University of JapanSangyub Ryu
HR Planning - Process of analyzing and identifying the need for and availability of human resources so that the organization can meet its objectives !- The focus is on the right number of human resources with the right capabilities at the right times, and in the right places
Public Human Resource Management
Human Resource Planning
International University of JapanSangyub Ryu
HR Planning Process
Public Human Resource Management
Scanning the External Environment
International University of JapanSangyub Ryu
- Government Influence ex) laws and regulations, executive orders !- Economic Conditions ex) labor market, economic growth !- Geographical and Competition Concerns ex) location, competition with the organizations !- Workforce Composition ex) diverse workforces (age, gender, outsource)
Public Human Resource Management
Assessing the Internal Workforce
International University of JapanSangyub Ryu
- Jobs and Skills Audit ex) Analyze current jobs and skills and compare them with jobs and skills needed !
- Database KSA of Employees for HR Planning !
- Using a Skills Database - Demographics - Career progression - Performance data - Expertise
Public Human Resource Management
Forecasting HR Supply and Demand
International University of JapanSangyub Ryu
Forecasting Methods and Periods - Methods - From a manager’s perceptual judgement to a rigorous computer simulation - Combination of the two needed !- Period - Short-range ( less than 1 year) - Intermediate-range (between 1 and 3 years) - Long-range (more than 3 years) !- Forecasting the Demand for Human Resources - Analyze job opening/closure in the future - Consider chain effects - Prepare for each unit’s demand !
Public Human Resource Management
Forecasting HR Supply and Demand
International University of JapanSangyub Ryu
Forecasting the Supply of Human Resources - Internal supply - Promotion, lateral move, transfer !- External supply Migration
New labor market entrants Output from schools and colleges Workforce composition changes Economic outlook Technological changes Competing employers’ actions Government regulations and pressures
Public Human Resource Management
Succession Planning - Process of identifying a long-term plan for the orderly replacement of key employees
Workforce Realignment
International University of JapanSangyub Ryu
Managing a Human Resource Surplus - Workforce Reductions and the Law - Employment at will - Workforce Downsizing - Focusing on reduction of underperforming employees/units - Early retirement, attrition, layoff - Worked well for some organizations / performance improvement not guaranteed - Overburdening and demoralizing surviving employees - Attrition and Hiring Freezes - Voluntary Separation Programs - Early retirement buyouts - make additional payments to employees - more humane way to reduce staff than terminating - Layoffs
Public Human Resource Management
Workforce Realignment
International University of JapanSangyub Ryu
Managing a Shortage of Employee - Use Overtime - Add Contingent Workers - Bring Back Recent Retirees - Outsourcing - Reduce Turnover
Public Human Resource Management
Measuring Effectiveness Using HR Metrics
International University of JapanSangyub Ryu
Developing and Using HR Metrics Specific measures tied to HR performance indicators
Costs Quantity Quality Timeliness
Examples Cost of Turnover Average Time Taken to Fill a Job Opening Employee Satisfaction Scores Ratio of Payroll Expenses to Revenues
Public Human Resource Management
Measuring Effectiveness Using HR Metrics
International University of JapanSangyub Ryu
Measures of Strategic HR Effectiveness - Return on Investment (ROI): Value of expenditures for HR activities
= (the potential/actual benefits) / (all potential/actual costs) !
- Economic Value Added (EVA): Net operating profit of a firm after the cost of capital is deducted !- Balanced Scorecard - Incorporating non-financial performance measures to financial performance measure - Financial - Internal business process - Customer - Learning and growth
Public Human Resource Management
Organization/Individual Relations and Retention
International University of JapanSangyub Ryu
Introduction - How to retain talented employees? !—> Enhance work motivation(job satisfaction, commitment, etc.)
Public Human Resource Management
Organization/Individual Relationships
International University of JapanSangyub Ryu
The Psychological Contract - Unwritten expectation between employees and employers - Fragile: balancing both parties’ expectation
Public Human Resource Management
Employers Expectation Employees ExpectationContinuous skill improvement and increased productivity Reasonable time with the organization Extra effort when needed
Competitive compensation and benefits Flexibility to balance work and home life Career development opportunities Ethical and legal behavior of upper management
Organization/Individual Relationships
International University of JapanSangyub Ryu
Generational Differences - Difference expectation of individuals in different generation - Managing employees by understanding their generation gap !• Matures (Born before 1945) • Baby boomers (Born 1945 - 1965) —> Concerning about job security and experience • Generation X (Born 1966 - 1980) —> Heterogeneous generation: acknowledging and embracing social diversity, less likely to idolize leaders and pursue long-term institutionalized change through economic, media, or consumer action • Generation Y (Born 1981 - 1990) —> “Why” generation: expects quick rewards, adapt fast, questions about top managers’ decision
Public Human Resource Management
Job Satisfaction
Definition: !Job satisfaction concerns how an individual feels about his or her job and various aspects of it (Gruneberg, 1979), usually in the sense of how favorable—how positive or negative—those feelings are.
International University of JapanSangyub RyuPublic Human Resource Management
Job Satisfaction
• In general, I like working here. • In the next year I intend to look for another job outside this organization. • I definitely dislike my work [reversed scoring]. • My job is pretty uninteresting [reversed scoring]. • I feel happier in my work than most other people. • I find real enjoyment in my work. • Most days I am enthusiastic about my work. • Supervision: “Do you have the feeling you would be better off working under different supervision?” • Company identification: “From my experience, I feel this organization probably treats its employees _____.” [five possible responses, from “poorly” to “extremely well”]
Measures:
International University of JapanSangyub RyuPublic Human Resource Management
• Impact on Performance - No consistent findings: positive impact / no impact - Reciprocal relationship? !!
!
Good performance Rewards Satisfaction Good performance
Consequence:
• Positive Impact on Absenteeism and Turnover
International University of JapanSangyub RyuPublic Human Resource Management
Job Satisfaction
Determinants:
• Person - Individual differences: level of aspiration, comparison to alternatives, acclimation, education, position, age, tenure, gender, cultural background etc.
• Job - Job characteristics and job design
• Extrinsic Factors - Pay, promotion, job security, supervision, participation in plans and decisions, organizational structure and climate etc.
International University of JapanSangyub RyuPublic Human Resource Management
Job Satisfaction
• Definition - Loyalty and commitment to the organization in which one works !• What Does Organization Mean to You? - An institution worthy of service (Identification commitment) - A location of friends (Affiliation commitment) - A source of security and other benefit (Exchange commitment) !• Professionals and Organizational Commitment - Loyalty external to the organization - Professional association (e.g., doctor’s or engineer’s) !• Measure - Whether the respondent sees the organization’s problems as his or her own - Whether he or she feels a sense of pride in working for the organization,
Loyalty and Organizational Commitment
International University of JapanSangyub RyuPublic Human Resource Management
Individual Employee Performance
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Individual Performance Factor 1) Individual Ability to do the work 2) Effort expended 3) Organizational support
Public Human Resource Management
Performance = Ability x Effort x Support
Retention of Human Resource
International University of JapanSangyub Ryu
Myths about Retention • Money is the main reason why people leave • Hiring has nothing to do with retention • If you train people, you are only training them for another employer • If solid performers want to leave, the company cannot hold them !Why People Stay or Leave
Public Human Resource Management
Drivers of Retention
International University of JapanSangyub Ryu
Characteristics of the Employer ■ Organizational Culture and Values ▪The shared values and beliefs of a workforce, such as consistent and thoughtful
practices !
■ Management and Retention ▪Challenges seen by the leaders as threats or opportunities ▪Visionary quality of the leaders !
■ Job Security ▪Personal security/anxiety about their job ▪How other good people are treated and retained
Public Human Resource Management
Drivers of Retention
International University of JapanSangyub Ryu
Job Design and Work ■ Person—Job Fit ▪Job characteristics matches with a person’s characteristics
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▪Significance of the selection process
Drivers of Retention
International University of JapanSangyub Ryu
Job Design and Work ■ Time Flexibility ▪Needs for elder care and child care ▪Flexible working hours needed ▪Not all jobs are applicable ▪Formal policies are needed !
■ Work Flexibility ▪Work-life balancing program include: ▪ Different work arrangements ▪ Leave for children’s school functions ▪ Compressed workweek ▪ Job sharing ▪ On-site child/adult care ▪ Telecommuting/teleworking ▪ Employee assistance program ▪ On-site health services ▪Wellness programs ▪ Fitness facility
Public Human Resource Management
Drivers of Retention
International University of JapanSangyub Ryu
Career Opportunities ■ Opportunities for Personal Growth as a Top Reason for Job Selection and Retention
■ Training/Development and Mentoring ▪In-house train ▪Tuition aid programs ▪Orientation ▪Mentoring !
■ Career Planning/Advancement ▪People who have been promoted are less likely to leave
▪ A two-way process between a employer (manager) and an employee to plan/develop an employee’s career within the organization
Public Human Resource Management
Drivers of Retention
International University of JapanSangyub Ryu
Rewards ■ Competitive Pay and Benefits ▪Exotic benefits using operating expenditure include
▪ Dry cleaning pickup and drop-off ▪ Car maintenance services in company parking lots ▪ Coffee and latte kiosks ▪ ATM machines in break rooms
■ Performance and Compensation ▪Efforts >>Performance>>Compensation ▪Careful approach to pay-for-performance in the public sector
■ Recognition ▪Tangible ▪ Employee of the month
▪Intangible (Psychological recognition) ▪ Feedback acknowledging extra effort and performance
Public Human Resource Management
Drivers of Retention
International University of JapanSangyub Ryu
Employee Relationship ■ Reasonableness of HR Policies ■ Fair and Non-discriminatory Treatment
■ Fairness of Disciplinary Actions ■ Fairness of Work Assignment and Opportunities
■ Management Support ■ Co-worker Relations
Public Human Resource Management
Employee Absenteeism
International University of JapanSangyub Ryu
Absenteeism ■ Any failure to report for work as scheduled or to stay at work when scheduled ■ High absenteeism is costly and gives burdens to co-workers
Public Human Resource Management
Employee Absenteeism
International University of JapanSangyub Ryu
!Types of Absenteeism ■ Voluntary absenteeism (illness; death in the family; etc.) ■ Involuntary absenteeism (bad work attitude; etc)
Public Human Resource Management
Employee Turnover
International University of JapanSangyub Ryu
!Turnover The process in which employees leave an organization and have to be replace
Public Human Resource Management
Employee Turnover
International University of JapanSangyub Ryu
Types of Employee Turnover ■ Involuntary Turnover ▪Terminations due to poor performance or rule violations
■ Voluntary Turnover ▪Employees leave by choice
■ Functional Turnover ▪Lower-performing or disruptive employees leave
■ Dysfunctional Turnover ▪Key individuals and high performers leave at critical times
■ Uncontrollable Turnover ▪Employees leave for reasons outside the control of the employer
■ Controllable Turnover ▪Employees leave for reasons that can be influenced by the employer
Public Human Resource Management
HR Metrics: Measuring Absenteeism and Turnover
International University of JapanSangyub Ryu
Measuring Absenteeism ■ U.S. Department of Labor ▪Number of person-days lost divided by (average number of employees ×
number of workdays) ■ Incidence Rate
■ The number of absences per 100 employees per day ■ Inactivity Rate
■ The percentage of time lost to absenteeism ■ Severity Rate
■ The average time lost per absent employee during a specified period of time
Public Human Resource Management
HR Metrics: Measuring Absenteeism and Turnover
International University of JapanSangyub Ryu
Measuring Turnover ▪Number of employee separations during the month divided by total number of
employees at midmonth !Determining Turnover Cost
▪Separation costs ▪ HR staff and supervisor’s time and salaries to prevent separation, exit interview
time, unemployment expenses, legal fees for separations challenged, etc ▪Replacement costs ▪Recruiting and advertising expenses, search fees, HR interviewer and staff time
and salaries, etc. ▪Training costs ▪Paid orientation time, training staff time and salaries, cost of training materials
etc. ▪Hidden Costs ▪Lost productivity; decreased customer service; unexpected
employee turnover; missed project deadlines; etc.Public Human Resource Management
Managing Retention
International University of JapanSangyub RyuPublic Human Resource Management
Managing Retention
International University of JapanSangyub Ryu
Retention Measurement and Assessment ▪Exit Interview: ▪An interview in which individuals are asked to give their reasons for leaving he
organization ▪Employee Survey: ▪A survey that focuses on employees’ feelings and beliefs about their jobs and the
organization ▪Conducting Exit Interview ▪See page 99 !
Retention Management and Intervention ▪After the assessment, develop and implement retention management strategies !
Retention Evaluation and Follow-upPublic Human Resource Management