HR Metrics & Balanced Scorecard Concepts

• There will be 2 or 3 short answer questions worth 5 points each on exam 1.
• There will be 32 or 25 multiple choice/true/false questions worth 1 point each.
• The exam will be out of 40 points, and short answers are questions from the study guide.

Human Resource Management Functions

• Employing, training, compensating, policy development, and strategy development to retain people are key functions.

Staffing

• The entire hiring process, from posting a job to negotiating a salary package, is involved in staffing.
• There are four main staffing process steps.
• Develop a staffing plan, and policies to encourage multiculturalism.
• Recruitment is a key component, involving finding people for positions.
• During the selection phase, people are interviewed and selected for hire.

Development of workplace policies

• The job of HRM is to develop the verbiage surrounding policies; HR should involve all other departments.
• Examples of policies include;
  • Discipline process policy
  • Vacation time policy
  • Dress code
  • Ethics policy

Awareness of External Factors

• HR needs to consider outside forces that may affect the organization.
• External factors are things that the company has no direct control over.
• Examples of external factors:
  • Globalization and offshoring
  • Changes to employment law
  • Diversity of the workforce
  • Layoffs and downsizing
  • Technology used
• Flexible schedules and work from home are external factors that affect HR as well.
• HR must stay aware, and develop policies to meet company and individual needs.
• Managers stay aware by attending conferences and reading articles online.

Skills needed for HRM

• Organization and multitasking, alongside people skills, and communication are needed for HRM.
• The ability to manage people's pay, benefits, and careers is a task, and HR may have to deal with one employee one minute, then a new issue the next
• Being able to manage a variety of personalities and conflict, coach, and communicate well is vital.
• Understanding specific job areas, thinking strategically, planning, and looking at trends that can affect people, alongside good ethics, are important in HR.
• HR deals with pay and salaries and needs to comply with ethical standards.

Personnel Mistakes

• Ignoring employee feedback, picking the wrong people, providing a lack of training, and experiencing high turnover are personnel mistakes to avoid.

Key HR Challenges for today's managers

• Environment: Globalization and workforce diversity, combined with the rise of the internet, technology, natural disasters, legislation, evolving work and family roles, and skill shortages.
• Organization: Includes competitive position, decentralization, downsizing, organizational restructuring, and self-managed work teams.
  • Self-Managed Work Teams: Do not report to anyone; all decisions are made by the group, responsible, and accountable.
• Small Businesses: Employees may prefer to work with startups because they want to learn more.
• Organizational Culture: Most countries want a unified culture
• Technology: Doesn't always work in all situations
• Outsourcing and Cyberloafing are challenges in today's business environment.
  • Outsourcing: Asking a third party to do some of the work.
  • Cyberloafing: Using work computer for personal things.
• Individual: Matching people and organizations to promote employee retention is critical.
• Ethical dilemmas and social responsibility, productivity, empowerment, and brain drain are vital.
  • Brain Drain: People from third world countries moving to first world countries for opportunities
  • Developing countries are impacted more and developed countries are helped when it comes to brain drain
• Job Insecurity: A person can be terminated without any reason.

Measuring HR's Contribution

• HR Metrics measures HR success.
  • Absence rate
  • Cost per hire
  • Health care costs per employee
  • HR Expense Factor and Training investment factor
  • Turnover costs and rate
    • How many people leave the company
  • Workers compensation cost per employee

HRM Practices

• Ways to increase employee's KSA;
  • Training
  • Selection,
  • Compensation
• How to Motivate
  • Internal Promotion
  • Incentive system
• How to Empower
  • Grievance Procedure
    • Employee can highlight issues
  • Flex Time
    • Employees decide when to arrive but work set hours
  • Employment Security
  • Participation Programme

HR Managers and Business Strategies

• Downsizing: Planned elimination of jobs
• Outsourcing: Hiring someone outside the company
• Offshoring: Shifting work to locations abroad (global sourcing)
• Employee leasing: Arrangement who supplies workers on a project-specific or temporary basis
• Human Capital: Managing the size of the workforce.
• Nearshoring: Process of moving jobs closer to one's home country.
• Offshoring: Shifting work to locations abroad (global sourcing)
• Furloughing: A temporary layoff, an involuntary leave, or some other modification of normal working hours without pay for a specified duration
• Strategic Advice and Counsel, Recruiting, policy formulation, and implementation, along with employee advocacy, are responsibilities of HR managers.
• Competencies HR managers require: Business Mastery, HR Mastery, and Personal Credibility

Managing an International Subsidiary

• Expatriate: A citizen of one country living and working in another country
• Ethnocentric: Top management and other key positions are filled by people from the home country; an example is Japan corporations- Honda, bringing executives in from their home countries
• Polycentric: International subsidiaries are managed and staffed by personnel from the host country
• Geocentric: Nationality is deliberately downplayed; the firm actively searches worldwide/regionally for the best people to fill key positions (US corporations)

Personnel vs. HRM focus

• Personnel Focus: Administering of policies and stand-alone programs, with the personnel department responsible for managing people, creates a cost within an organization.
• HRM Focus: Help achieve strategic goals, HRM training programs integrated with company value; line managers share responsibility in all areas of management and contribute to the profit objectives of the organization.

HRM Model

• The Strategic partner ensures alignment of the HR function with the needs of the organization.
• The Change agent has the skill to anticipate and respond to change within the HR function, but as a company as a whole.
• An Administrative expert and functional expert: the ability to understand and implement policies, procedures, and processes that relate to the HR strategic plan.
• The Human capital developer means to develop talent that is projected to be needed in the future, just as the Employee advocate works for employees currently within the organization standing by employees.
• Strategic Human Resource Management: The linking of HRM practices with strategic goals and objectives in order to improve business performance and develop organizational cultures to foster innovation and flexibility.
• HR systems formulate HR policies and activities that produce the employee competencies and behaviors the company needs to achieve its strategic aims.

Writing the HRM plan

• It has six aspects to it:
  • Determine human resource needs, which includes expected growth or decline.
  • Determine recruiting strategy, which includes the necessity to write down a strategy addressing how you will recruit the right people at the right time.
  • Select employees, with a selection process consisting of the interviewing and hiring process
  • Develop training, based on the strategic plan, with new software that everyone must learn
  • Determine compensation, including pay scale, healthcare, bonuses, and other perks.
  • Standards of performance should be developed as well.
• Strategic Planning: Procedures for making decisions about the organization's long-term goals and strategies.
• Human Resource Planning: The process of anticipating / making provision for the movement (flow) of people into, within, and out of the organization.
• The process of deciding what positions the firm will have to fill and how to fill them.
• Mission, Vision, Values, the step 1 of the plan.
  • Mission: The basic purpose of the organization and its scope of operations (ex: Google allows you to find all relevant data).
  • Vision: Statement about where the company is going in the future (ex: Google making self-driving cars).
  • Core Values: The strong and enduring beliefs and principles that the company uses as a foundation for its decisions.

External analysis

• Step 2 of the plan is an environmental scan
• Environmental Scanning: The systemic monitoring of the major external forces influencing the organization.
• Scanning includes economic, industry, technological, governmental, social, and demographic factors.
  • Economic factors impact all other countries, in addition to regional and global conditions.
  • Industry trends include new processes/services/innovations and AI.
  • Technological changes include robotics and office automation.
  • Governmental issues include legal and administrative rulings.
  • Social concerns consist of childcare and educational priorities.
  • Demographic data includes labor market trends/literacy/immigration and population demographics.
• Porter's five force framework:
  • New entrants
  • Suppliers
  • Customers

Internal Analysis

• Is step 3, focusing on culture, composition, and capabilities
• Culture
  • Clan - family knit culture, people support each other (ex: Starbucks).
  • Market - encourages competition among employees and focus on results (ex: investment banking companies).
  • Adhocracy - encourages innovation and risk-taking (ex: Google, 3M).
  • Hierarchical - authority holds a lot of importance, structures and processes (ex: utility companies)
• Composition: Strategic knowledge workers posses specialized skills for company strategy.
• Capabilities: Processes help the organization to differentiate.

Forecasting- Demand and supply

• Forecasting demand for labor, forecasting the supply of labor, balancing supply and demand considerations, forecasting, and employment planning are things to be mindful of.
• Employment or personnel planning
  • Succession planning: Deciding how to fill important executive job positions
  • Succession forecasts: Overall personnel needs, supply of inside/outside candidates
• Techniques of HPR: Formulating using a SWOT analysis to compare strengths, weaknesses, opportunities, and threats for strategy formulation purposes.
• Capitalizing internal strengths, counteracting threats, and alleviating internal weaknesses are key as well.

Corporate strategy

• Corporate Strategy: Consists of low cost and differentiation.
• A low-cost strategy focuses on an attractive price to customers and efficient production.
• Differentiation involves providing something unique to customers.
• HR strategy here should focus on innovation and development.
• Focus: Strategy should focus on combining what's done for low cost and differentiation

Implementing a firm's strategy

• Step 5 involved reconciling supply and demand.
• This requires balancing supply and demand while forecasting business activities and locating applicants.
• It also involves organizational downsizing, outsourcing, offshoring and headcount reduction, making layoff decisions:
  • Seniority or performance?
  • Labor agreements
• Step six should involve:
  • Benchmarking: Comparing its processes and practices with other companies
  • Assessing the workforce, HR function, and strategic alignment are key.
• Strategy Mapping and the Balanced Scorecard (BSC) can be used in the process as well.
• A Balanced Scorecard (BSC) measures strategic goals and operational objectives, including:
  • Financial metrics
  • Customer metrics
  • Internal processes
  • Employee factors

Employee turnover rates

• Computing Turnover Rates:
• Labor suggests
  • (Number of separations during the month/Total number of employees at mid month) x 100
  • Another method is one reflecting unavoidable vs avoidable separation.

Federal Laws

• Employee Absenteeism Rates are equal to; Number of worker – days lost through job absence during period divided by the Average number of employees X number of workdays multiplied by 100.

• Equal employment opportunity: Treatment of individuals in all aspects of employment in a fair and unbiased manner

• EEOC: Federal agency that enforces nation's fair employment laws.

• Diversity is The differences between people; Race, Gender, Sexual orientation, Religion, Background, Social economic status

• Multiculturism: Goes deeper than diversity by focusing on respect, inclusiveness, understanding.

• Major Federal laws include;

  • Protected classes: Minority race/Women/Older people/Disabilities
  • Equal Pay Act: Makes it illegal to discriminate against people in terms of pay

• The Civil Rights Act: Employees who can prove they were intentionally discriminated against can seek monetary damages.

• Bona fide occupational qualification: Permits discrimination when employer hiring preferences are reasonable

• Business necessity, covers people 40 years or older in the Age Discrimination in Employment Act.

• Pregnancy Act of 1978: Pregnancy is treated as any other disability and cannot be discriminated against

• 4/5 rule: Calculate/divide percentages and it should be 4/5.

• Adverse Impact: Rejection of protected class when compared with non-protected.

• Restricted policy: Employer selection procedure excludes members of a protected class

• Disparate impact: Protected class members receive unequal treatment or are evaluated by different standards for discriminatory purposes

Filing a Charge of Employment Discrimination

• Job analysis is the procedure for determining the duties and skill requirements of a job and the kind of person who should be hired for it.
• Job description: List of tasks, duties, and responsibilities of a job.
• Job specification: The skills and abilities the person must have to perform the job.
• Sources of job analysis include information sources such as:
  • Employee interviews, questionnaires, observation, participant diary or logs, and data from the position analysis questionnaire system
  • Task Inventory Analysis, Critical Incident Technique, and Functional Job Analysis also provide key HR insight

Managing and Designing Jobs

• Job enlargement is assigning workers additional same level activities, thus increasing the number of activities they perform.
• Job rotation is moving a trainee from department to department to broaden his or her experience
• Systematically moving workers from one job to another enhances work team performance.
• Job enrichment is redesigning jobs to increase the job of responsibility
• Job crafting whereby employees mold their tasks to fit their individual strengths.
• Flexible work schedules include flex time and compressed work week
• Job Sharing by way of two part-time employees.
• Telecommuting via computers, networks, and technology.

What are the key HR Challenges for today's managers?

• Complying with laws and regulations
• Balancing remote and hybrid work
• Matching people to jobs
• Diversity in the workplace
• Employee engagement and productivity

Discuss the concept of downsizing and some of the hidden costs associated with it:

• It refers to a deliberate reduction in a company's workforce to cut costs, improve efficiency, or respond to economic challenges due to financial, automation, market shifts, or restructuring.
• Downsides;
  • Increased workloads for those who remain, potentially leading to burnout.
  • Employees may spend more time worrying about job security.
  • Layoffs can create fear and uncertainty, leading to lower morale.
  • Companies may develop a reputation as unstable employers.

Explain the major activities for which the HR manager is responsible

• Human resource planning and performance management.
• Benefits and developing policies.
• Conflict resolution and recruiting.
• Selection and compensating employees.
• Employee engagement and job analysis training.
• Some of the key competencies needed by Human Resource Managers to become full business partners: Business Mastery, HR Mastery, and Personal Credibility
• Ways to increase KSA: Training, selection, and compensation.
• Criteria for achieving sustained competitive advantage: People must decrease cost/increase value, have rare and difficult to imitate qualities.
• The three key elements of the HR Forecasting model are; Labor Demand, Labor Supply, Balancing supply and demand consideration.

What is the Balanced Scorecard?

• Strategic performance management that aligns vision and strategy via financial, customer, internal, and employee analyses.

What HR practices the firm should use when they follow Low-cost strategy/differentiation strategy? What is a BFOQ?

• Low-cost strategy: should focus on efficient production, job specific training
• DIFFERENTIATION strategy: should focus on emphasizing innovation and flexibility
• BFOQ- permits discrimination when legitimate

Compare Job Analyses

• The role of job analysis is job specifications of skill, and activities involved in working
  • PAQ: standard, assesses processes/components
  • CIT: gather employee stories & evaluate outcomes
• The 4A's - all align with and support business goals.
• HR measures and manages performance across four key perspectives, which consist of HR's impact on financial perspective, customer perspective, internal process perspective and learning and growth perspective.

Explore benchmarking, human capital vs. HR metrics, and the Balanced Scorecard's role in strategic alignment. Learn about the BSC's perspectives and turnover rate calculations, including avoidable separations. Understand the relationship between HRM practices and the BSC.