shrm session 1
TRANSCRIPT
S.Mishra/SHRM/23.9.08
• Employees are human assets that increase in value to the organization and the marketplace when investments of appropriate policies and programs are applied.
• Effective organizations recognize that their employees do have value, much as same as the organization’s physical and capital assets have value.
• Employees are a valuable source of sustainable competitive advantage.
• Employees are human assets that increase in value to the organization and the marketplace when investments of appropriate policies and programs are applied.
• Effective organizations recognize that their employees do have value, much as same as the organization’s physical and capital assets have value.
• Employees are a valuable source of sustainable competitive advantage.
S.Mishra/SHRM/23.9.08
S.Mishra/SHRM/23.9.08
Sources of Employee Value
• Technical Knowledge– Markets, Processes, Customers,
Environment
• Ability to Learn and Grow– Openness to new ideas– Acquisition of knowledge and skills
• Decision Making Capabilities• Motivation• Commitment• Teamwork
– Interpersonal skills, Leadership ability
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Valuation of Human Assets
• Implications for Individuals and Organizations– Determination of compensation
• Internal and external equity for employees in return for their contributions to the organization.
• Organization placement of resources and returns on employee development are aligned and well-matched.
– Advancement opportunities• Developing current employees creates
motivation and permits promotion from within. – Development of retention strategies
• Effective means of retaining valuable employees allows for the recapture of the invested costs of their development.
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Investment Orientation
S.Mishra/SHRM/23.9.08
The Investment-Oriented Organization
• Organizational Characteristics– Sees people as central to its mission/strategy.
– Has a mission statement and strategic objectives that espouse the value of human assets in achieving goals.
– Has a management philosophy that encourages the development and retention of human assets and does not treat or regard human assets in the same ways as physical assets.
S.Mishra/SHRM/23.9.08
Investment Orientation Factors
• Senior Management Values and Actions– An organization’s willingness to invest in its
human resources is determined by the “investment orientation” of its managers.
• Attitude Toward Risk– Investment in human resources is inherently
riskier due to lack of absolute “ownership” of the asset.
• Nature of Skills Needed by Employees– The more likely that skills developed by
employees are marketable outside the firm, the more risky the firm’s investment in the development of those skills.
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Investment Orientation Factors
• Utilitarian (“Bottom Line”) Mentality– An attempt is made to quantify employee
worth to the organization through a cost-benefit analysis.
– The “soft” benefits of HR programs and polices are difficult to objectively quantify because they affect many different organizational areas and have differential effects on individual employees.
• Availability of Outsourcing– If cost-effective outsourcing is available,
investments will be made only in HR activities producing the highest returns and largest sustainable competitive advantages.
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Types of Investment Considerations
• Investments in Training and Development
• Investment Practices for Improved retention
• Investments in Job Secure Workforces
• Non-Traditional Investment Approaches
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Investments in Training & Development
• Investments in Employability-Job Security vs. Career Security-Provision of growth opportunities, learning
environment, training & re-training-GE & “Neutron Jack”!!!Having a workforce that is characterized by its
employability is perhaps a pre-requisite for the survival of organizations
-”It is the employer’s responsibility to get the maximum benefit out of an employee prior to terminating them” (Bruce Ellig, the former VP of Human Resources for Pfizer)
S.Mishra/SHRM/23.9.08
Investments in Training & Development• Current Practices in Training & Development-Apprenticeship Programs-Training & the Corning experience-Boeing, Ford, GE, IBM, Motorola etc. make
substantive Investments in training & development-Dana Corporation invested $10million to gain a
competitive advantage vis-à-vis its competitors• On the Job training
– Method by which employees are given hands-on experience with instructions from their supervisor or other trainer.
• Drawbacks– The lack of a well-structured training
environment– Poor training skills of managers– The absence of well-defined job performance
criteria
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On-the-Job Training
• Overcoming OJT training problems
1. Develop realistic goals and/or measures for each OJT area.
2. Plan a specific training schedule for each trainee, including set periods for evaluation and feedback.
3. Help managers establish a non threatening atmosphere conducive to learning.
4. Conduct periodic evaluations, after training is completed, to prevent regression.
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The PROPER Way to Do On-the-Job Training
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Investments in Training & Development
• Investments in Management Development-Participative decision making & leaner organizations-Job rotation & Cross Functional Assignments-Advantages of Job rotation include development of
generalists, avoidance of over dependency on one supervisor, the challenge of new assignments, avoidance of dead-end career paths etc.
-Disadvantages include the institutionalization of the short term perspective, “rotated out” concept, under-developed peer relationships, reduced loyalty to the organization etc.
-High level executives & senior managers to executive programs at leading universities
-Shorter in-house programs for junior members-Management development is given low priority in most org. &
is considered as an avoidable cost
S.Mishra/SHRM/23.9.08
Investments in Training & Development
• Prevention of Skill Obsolescence-Technological change-Provision of challenge, Job enrichment, periodic reassignments,
encourage of knowledge acquisition activities to stay abreast with developments & its linkages with performance appraisal
-HP’s experience with removal of obsolescence
• Reductions in Career Plateaus-Career Plateaus occur when employees have stayed in a
particular job for a long time, mastered all aspects of the job & are now awaiting promotions
-Lack of proper skills for promotion & lack of proper development programs may cause plateaus to occur
-Job rotation & dual career paths-Managerial recognition in the absence of promotions
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Dual-Career Ladder for EngineersDual-Career Ladder for Engineers
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Investment Practices for Improved Retention
• Organizational Cultures emphasizing Interpersonal Relationship values
• Effective Selection procedures-Realistic Job previews (RJPs)-Use of the Bio data
• Compensation & Benefits-Equity in terms of the ratio of inputs to outcomes-Equitable & Fair compensation-ESOPs of Merck & Cisco Systems-Retention bonuses (The oil industry pays a retention
bonus of 15 to 50% of the annual salary spread over three years to employees who ”stick around”
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Investment Practices for Improved Retention
• Job Enrichment & Satisfaction
• Practices providing work life balance-Flexi-time & Telecommuting-Deloitte & Touche , Plante & Moran (child care on
Saturday during the tax season)
• Organization Direction Creating confidence in the future
• Retention of Technical Employees
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Investments in Job secure workforces
• Recognition of the costs of downsizing & layoffs
Costs related to ”bumping” less senior employees-Reduced productivity during learning periods-costs of training employees assigned to other jobs-Wage supplements for reassignment to jobs having lower
compensationCosts related to the termination of employees-Separation payments, Higher rates for Unemployment
compensation, Depletion of the firm’s resources in training employees
Administrative Costs
Intangible costs
S.Mishra/SHRM/23.9.08
Investments in Job secure workforces
• Avoiding Business Cycle Lay offs-The advisability of laying off workers during
economic downturns has been questioned by some companies
-Loaning of workers to Daimler Benz for one year -Sony & Akio Morita Employment Guarantees of HP, Hallmark, Nucor
Corporation etc.
• Alternatives to layoffs-Shutting down the inflow of personnel-Pay cuts-Flexible employment arrangements (Walt Disney
World)-Reduction of costs during downturns
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Investments in Job secure workforces
• Employment Guarantees-Employment Guarantees are oral agreements to
move heaven and earth to avoid layoffs-Understaffing (IBM & Motorola)-Flexibility in Job assignment-Work SharingBenefits of having a secure workforce
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Non Traditional Investment approaches
• Investments in Disabled employees-Adjustment of physical space & provision of
employees to help disabled employees remain productive
-AT&T, Sears, IBM are sharing with other companies the knowledge that they have acquired in accommodating disabled workers
-Chicago bank & the Pennsylvania Power & light Company
• Investments in Employee health -Non smoking zone-Fitness centers-Close monitoring of self esteem of employees to
prevent burnout-Sunbeam Oster Housewares
• Counter Cyclical Hiring