Human Resource Management PDF

Human Resource Management Faculty of Business and Engineering Prof. Dr. Julia Hiemer Agenda „Human Resources Management“ (HRM) 1. HRM: Overview and Environment a. Key Fields of Action and Context of HRM b. Operating in a Global Environment c. HRM – a Strategic Perspective 2. Key Fields...

Human Resource Management Faculty of Business and Engineering Prof. Dr. Julia Hiemer Agenda „Human Resources Management“ (HRM) 1. HRM: Overview and Environment a. Key Fields of Action and Context of HRM b. Operating in a Global Environment c. HRM – a Strategic Perspective 2. Key Fields of Action in HRM a. HR Planning and Job Analysis b. Talent Acquisition c. Organisation of Work d. Learning and Development e. Leadership and Performance Management f. Total Compensation 2 HRM: Overview and Environment Learning Outcomes 1b. Operating in a Global Environment By the end of this chapter you will be able to: 1. Name specifics of International HRM as compared to domestic HRM and name factors that specifically determine HRM in Germany. 2. Explain how the business strategy determines staffing options and name their advantages and disadvantages. 3. Determine cultural differences and apply strategies to become interculturally competent. 4. Analyze ethical issues with the help of ethical theories and understand the ethical dimension of HRM. 5. Explain the benefits and challenges of diversity and describe what HR can do to create more diverse and inclusive organizations.  Specifics of International HRM International Human Resource Management is the process of managing people across international boundaries. à What topics need to be considered in International HRM? (as compared to domestic HRM) Please add during the session Text in e-learning: China goes Shopping in Germany  Specifics of HRM in Germany à Which factors specifically determine HRM in Germany? Please add during the session Text in e-learning: The German Model International Industrial Relations § Different industrial relation systems across national boundaries § Example: Collective Bargaining Agreements (“Tarifverträge”) In USA: negotiations between a local trade union and management In Germany: negotiations between: an employers’ organization - which represents the major companies in a particular industry (e.g. metalworkers’ union) - and the trade union covering employees in that industry § In Germany, those agreements are legally binding for the members of the contracting parties (according to the Collective Bargaining Agreement Act – Tarifvertragsgesetz) § Typical contents of Collective Bargaining Agreements are working conditions (compensation, working hours, holidays, notice periods …) Source: Dowling, P.J.; Festing, M.; Engle, A.D. (2017): International Human Resource Management, 7th ed., Hampshire: Cengage, p. 242ff. Kirchner, J.; Kremp P.R.; Magotsch, M. (2010): Key Aspects of German Employment and Labour Law. Berlin Heidelberg, Springer Verlag. Business Strategy and HR staffing options Headquarter Regional Headquarter Subsidiaries 7  Business Strategy and HR staffing options A Germany-based Multinational Enterprise (MNE) wishes to appoint a new finance Headquarter director for its US subsidiary. Parent Country ) Host Country Nation als (PCN Staffing Options acc. to H. Perlmutter: National Pa r e n t C o u nt r y (HCN) 1) Selecting from finance staff available in the company‘s parent country Subsidiary Host Country = Parent Country National (PCN) Country A T hi rd C o un 2) Recruiting locally (i.e. look for a US finance tr y Na t io director) nal Subsidiary s (T CN = Host Country National (HCN) ) Host Country Country B 3) Choosing to seek a suitable candidate Source: Dowling, P.J.; Festing, M.; Engle, A.D. (2017): International Human Resource Management, 7th ed., Hampshire: Cengage, p. 4 from one of its other subsidiaries = Third Country National (TCN)  Business Strategy and HR staffing (H. Perlmutter) Business Strategy Mindset Staffing Implications Ethnocentric One size fits all. Headquarter practices Parent Country Nationals PCN: Headquarter as strategic are transferred as far as legally Subsidiaries are managed by staff from and cultural center possible. Knowledge in HQ is seen as the headquarter the most useful. Polycentric Foreign markets work differently, Host Country Nationals HCN: Local differentiation locals know best Resources from subsidiaries fill as guiding principle. management positions Geocentric For all relevant processes Looks for the best person A worldwide integrated the right balance between local for a specific job, regardless business. differentiation and global integration is of nationality achieved. Collaborative Approach. Source: Trost, A. (2020): Human Resources Strategies - Balancing Stability and Agility in Times of Digitization. Cham: Springer, p.48. Perlmutter, Howard (1969). "The Tortuous Evolution of Multinational Enterprises". Columbia Journal of World Business (1): 9–18 - adjusted. Dessler, G. (2020): Human Resource Management. 16th ed. Harlow: Person, p. 604 and Mondy, R. W.; Martocchio, J.J. (2016): Human Resource Management. 14th ed. Harlow: Pearson, p. 395f.  HR staffing: Benefits and Challenges (H. Perlmutter) Staffing Implications Benefits Challenges Parent Country Nationals PCN: Subsidiaries are managed by staff from the home country Host Country Nationals HCN: Resources from subsidiaries fill management positions Looks for the best person for a specific job, regardless of nationality Text in e-learning: Brunt Hotels, Part 1: Perlmutter Please add during the session Intercultural Competence Culture: Basic assumptions, values, beliefs, norms, and tendencies in behavioral patterns that are shared among the members of a certain group or community. Intercultural Competence: The ability to interact effectively with people from different cultural backgrounds. Source: Sternard, D. (2020): Effective Management. Developing yourself, others and organizations. London: Red Gobe Press, p. 145ff.  Cultural Dimensions as a framework to compare cultures Edward T. Hall Geert Hofstede Fons Trompenaars Richard D. Lewis (Study from the 1950's) (Study from the 1970's) (Study from the 1980's) (Study from the 1990's) 1 Individualism vs. Collectivism Individualism vs. Collectivism 2 Power Distance Achievement vs. Status High Context vs. 3 Diffuse vs. Specific Low Context 4 Universalism vs. Particularism Deal-focused vs. Relationship-focused Linear-active vs. Multi-active vs. Relation to Time Long-term vs. Short-term orientation Relation to time Reactive Relation to Space Relation towards the Environment Feminine vs. Masculine Uncertainty Avoidance Neutral vs. Emotional Source: Dowling, P.J.; Festing, M.; Engle, A.D. (2017): International Human Resource Management, 7th ed., Hampshire: Cengage, p. 34 Berninghausen, Becht-El Minshawi (2009), p. 55 and Schroll-Machl (2011), p. 26ff. and Erll, Gymnich (2007), p. 44ff. 1 Individualism vs. Collectivism in Business Individualism vs. Collectivism is the degree to which individuals are integrated into groups Individualist Collectivist Focus: own interests Focus: goup interests US “The squeaky wheel gets the grease“ Japan: „The nail that sticks out will be pounded down“ Celebrate the accomplishment of Celebrate group results a person („Employee of the month“) Work relationship is seen as „business“: Work relationship is family-like. § Employment might be terminated for poor § Employer offers protection in exchange for performance. loyalty. § A successful employee might accept § An employee with poor performance might a better pay offer from a competitor. not be dismissed but moved to a different place. 2 High vs. Low Power Distance in Business This shows differences in attitude towards hierarchy and the distribution of power. High Power Distance Low Power Distance § Formal and rigid hierarchies § Equality for all is supported § Manager = Father-figure § Manager = Facilitator The manager is right because he/she is the The manager is right when he/she has the right manager answer § Employees are loyal, respectful followers. They § Employees are rewarded for taking initiative. receive orders and are closely supervised They do not like close supervision. § High degree of formality § Low degree of formality 3 High Context vs. Low Context Cultures High Context / Indirect Low Context / Direct High Context: Low Context: The spoken word is not the primary means of The message is explicit and spelled out. Words are the communication. primary means of communication. Key: nonverbal hints and context. Indirect: Direct: You need to read between the lines. Tendency to infer, People say what they mean and mean what they say. The suggest and imply. Words should not be interpreted truth is more important than other‘s feelings. literally. Implicit messages. What isn‘t said isn‘t communicated. Face is key: Face less important: Maintaining harmony and saving face is the overriding Getting and giving information is the overriding goal of goal of communication: confrontation is avoided. communication. It is OK to criticize or to say ‚no‘ rather Saying ‚no‘ is difficult than run the risk of misunderstanding. 4 Universalism vs. Particularism in Business Universalistic cultures Particularistic cultures Universalist cultures are convinced that Particularist societies are convinced that general rules and obligations are a strong friendship is associated with obligation and source of moral reference. can supersede a certain rule. Rely on extensive and specific contracts Rely on the strength of their personal relationship Rules and regulations prevent conflict Relationships prevent conflict Those who honor their word or Those who accept changes gain respect contractual obligations gain respect Particularism can increase the probability of offering a bribe (Rotondi & Stanca 2015). Source: Rotondi, V.; Stanca, L. (Feb 2015): The Effect of Particularism on Corruption: Theory and Empirical Evidence. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2571205 (Access Date: June 13, 2022) To what extent do cultures undergo changes? There is increasing … 1. international connectedness 2. global economy coordination 3. harmonization of laws and regulations 4. migration Cultures are not confined to given territories. à New challenges for HRM! § How resistant are cultures to change? § There are other “cultures” besides national culture e.g. generation Y are fast, self-organized and absorbed learners with distinct work-life balance preferences. Source: Dowling, P.J.; Festing, M.; Engle, A.D. (2017): International Human Resource Management, 7th ed., Hampshire: Cengage, p. 37f. How can we learn more about other cultures? § Attend formal training programs on “Intercultural Learning” § Read books and ask colleagues who have lived there about the culture § Spend time in a different cultural environment (supported by a mentor) § Attitude of Non-judgmental observation Source: Schroll-Machl, S. (2016): Doing Business with Germans. Their perception, out perception. Götingen: Vandenhoeck and Ruprecht.  Impact of culture on HRM § Be aware of the ethical dimension in international business. § Initiate (cultural) diversity programs to foster understanding of other cultures. § Culture influences HRM Key Fields of Actions. Examples: Talent Acquisition Organisation of Work Training and Leadership Development § Need for geographically § Local employees vs. § Offer intercultural § Advising managers on mobile employees employee transfers at trainings cultural characteristics § High priority given to foreign locations § Events for (e.g. management intercultural competence § Preparation and intercultural teams style, feedback, in personnel selection implementation of motivation) § Hiring of employees at foreign assignments other locations Source: Noe, R. A./Hollenbeck, J.R./Gerhart, B./Wright, P. M. (2015): Human Resource Management. 15th ed. Global Edition: McGraw Hill Eduction, p. 677  Dealing with different ethical standards Dealing with different ethical standards away from home Ethical absolutism Ethical relativism Ethical pluralism The belief that your own values and The belief that ethical standards are not Accepts different moral convictions standards are always the “right” ones necessarily better or worse while at the same time suggesting that a in one culture than in another consensus on basic principles can and should be reached. “When in Rome, one should do e.g. United Nations “When in Rome, one should do what one would do at home, Declaration of Human Rights as the Romans do” regardless of what the Romans do” Source: Sternard, D. (2020): Effective Management. Developing yourself, others and organizations. London: Red Gobe Press, p. 161ff. and Dowling, P.J.; Festing, M.; Engle, A.D. (2017): International Human Resource Management, 7th ed., Hampshire: Cengage, p. 275ff. and Wilcox, T.; Lowry, D. (2017): HRM, Ethics, and CSR, in: Syed, J.; Kramar, R. (2017): Human Resource Management. A global and critical perspective. 2nd ed., London: Palgrave, p. 87ff.  Business Ethics: Key Terms Moral standards: Norms and beliefs that individuals or groups hold about what kind of actions are deemed right or wrong. Ethics: The process of conscious deliberation about what is morally right or wrong. Business ethics is the study of business situations, activities, and decisions where issues of right and wrong are addressed. Ethical theories are the rules and principles that determine right and wrong for any given situation. Descriptive ethical theories: Normative ethical theories: seek to describe how ethics decisions are propose to prescribe the morally actually made in business correct way of acting. Source: Sternard, D. (2020): Effective Management. Developing yourself, others and organizations. London: Red Gobe Press, p. 161ff. and Crane, A.; Matten, D.; Glozer, S.; Spence, L. (2019): Business Ethics. 5th ed. Oxford University Press, p. 8  Ethics and the Law Ethics Law Covered by both Business Ethics start law and ethics when the law ends! Example: Poor Example: safety Which side of standards, Example: the road you child labor Protection against drive on dismissal In Germany, the Act on Corporate Due Diligence Obligations in Supply Chains (= Supply Chain Act) is valid since Jan 1, 2023. § Companies with HQ in Germany are put under the obligation (via a risk management system) to respect human rights, prohibition of child labour health obligations and others. § Applicable to the entire supply chain, including actions of a contractual partner and to the actions of other (indirect) suppliers. § From 2023, for companies with > 3.000 employees in Germany. From 2024, for companies with > 1.000 employees in Germany Source: Supply Chain Act At a Glance; Text of Supply Chain Act (Access Date: Sept. 28, 2022)  Ethics and Corporate Social Responsibility (CSR) Level of Analysis Ethical Actions Individual Individual decisions and actions Level 3 Steps to Ethical Behavior: Moral Awareness Moral Judgement Ethical Behavior Recognizing the existence Deciding what Taking action to do of is right, ideally based on the right thing an ethical dilemma ethical theories Organizational Corporate Social Responsibility (CSR): Level Refers to a corporation‘s responsibilities or obligations toward society. There is some disagreement about what those obligations include. Source: Wilcox, T.; Lowry, D. (2017): HRM, Ethics, and CSR, in: Syed, J.; Kramar, R. (2017): Human Resource Management. A global and critical perspective. 2nd ed., London: Palgrave, p. 91 - adjusted.  Traditional Western Ethical Theories (selection) In general, there is no one right framework to a adopt in all circumstances as each has its usefulness, and each has its limitation. Video Person Action Outcome who decides Virtue Ethics Principle-based Theories Consequentialist Theories Utilitarianism: Relate to a person’s character as Universal and duty-based Maximize the a ‘good person’ principles for everyone overall good Source: Sternard, D. (2020): Effective Management. Developing yourself, others and organizations. London: Red Gobe Press, p. 161ff. and Crane, A.; Matten, D.; Glozer, S.; Spence, L. (2019): Business Ethics. 5th ed. Oxford University Press, p. 85ff - adjusted. Virtue Ethics: Behaving as a “good person” Video Virtue Ethics § Virtues relate to a person’s character and are qualities that help define what being a “good person” entails. § Virtues can be taught and are acquired through practice. § Traditional examples: Honesty, courage, empathy … Relate to a person’s Recent examples: Integrity, Constancy (Alasdair MacIntyre) character as a ‘good § Main proponents: Aristotle (385-323 BC) person’ Try to behave like a “good person” Criticism § Virtues can sometimes contradict each other (e.g. honesty, loyalty) Source: Wilcox, T.; Lowry, D. (2017): HRM, Ethics, and CSR, in: Syed, J.; Kramar, R. (2017): Human Resource Management. A global and critical perspective. 2nd ed., London: Palgrave, p. 96ff.  Principle-based Theories: Basis of Human Rights Principle-based § Attempt to judge actions as right or wrong in themselves, i.e. regardless of the consequences. Video Theories § Assumption that there are some universal, duty-based principles or rules that apply to everyone and should be used to guide our actions = basis of human right arguments Universal and duty- § Main proponent: Immanuel Kant (1724-1804) based principles for Kant’s categorical imperative: everyone "Act only according to that maxim (principle or rule) by which you can at the same time will that it should become a universal law.” Never treat humanity merely as a means, Criticism but always as an end in itself § Leads to an impasse when different equally valid rights collide § Different cultures: different opinions on what should qualify as universal law Source: Wilcox, T.; Lowry, D. (2017): HRM, Ethics, and CSR, in: Syed, J.; Kramar, R. (2017): Human Resource Management. A global and critical perspective. 2nd ed., London: Palgrave, p. 96ff.  Utilitarianism: Maximize the overall good Consequentialist § Is based on the idea that any actions, policies, or decisions Theories should be focused on maximizing “utility” (i.e. benefits over burdens). § Main proponents: Jeremy Bentham (1748-1832) and Utilitarianism: John Stuart Mill (1806-1873) Maximize the overall good "the greatest happiness for the greatest number" Criticism § Certain values, benefits, and costs are difficult to measure § Solutions found could potentially violate the rights of individuals or lead to unfair treatment Source: Sternard, D. (2020): Effective Management. Developing yourself, others and organizations. London: Red Gobe Press, p. 161ff.  HRM and Business Ethics Level of Analysis HR Contribution to Business Ethics Individual Individual HR decisions Instruments and actions. for guiding employees' ethical behavior (examples) Level 3 Steps to Ethical Behavior: Codes of conduct for employees Moral Awareness Moral Judgement Ethical Behavior Recognizing the existenceEthics Deciding what training awareness Taking action to do of an is right, ideally based on the right thing ethical dilemma ethical theories Organizational Corporate Social Responsibility (CSR): Level Adjust HR Refers to a corporation‘s Practices to CSR responsibilities Standards toward society. There or obligations is some disagreement about what those obligations include. Codes of conduct for employees Code of conduct: a policy document that provides rules and boundaries and stipulates acceptable standards of behavior. Examples: General Motors: Winning with Integrity Starbucks: Standards of Business Conduct Inter IKEA Group Code of Conduct Source: Dowling, P.J.; Festing, M.; Engle, A.D. (2017): International Human Resource Management, 7th ed., Hampshire: Cengage, p. 256ff.  Ethics awareness training Train employees how to ensure ethical behavior when moral standards collide Based on code of conduct, Apply Ethical Theories but with room for individual § Be fair and equitable judgments in culturally sensitive § Respect universal human rights. Do situations not treat others as a means to an end (respect human dignity) § Greatest good for greatest number Set a good example in environments with lower ethical standards Apply Ethical Pluralism Have respect for local traditions (recognize that context matters) Source: Sternard, D. (2020): Effective Management. Developing yourself, others and organizations. London: Red Gobe Press, p. 161ff.  Ethics awareness training Learn to ask the right questions: 3 Steps to Ethical Behavior: Moral Awareness Moral Judgement Ethical Behavior Recognizing the existence Deciding what Taking action to do of an is right, ideally based on the right thing ethical dilemma ethical theories What is it that is ethically wrong § What ideally can you do about the What, in practical terms, should about the situation? What has situation? When you apply ethical be done about it, given all the triggered the recognition of the reasoning to the situation, what will constraints and complexities of issue as an ethical one? What has you think is the proper way of the „real“ world? What are the triggered your conscience? action? options for actions … and then act § What do you think the other accordingly. interested persons and parties think about the situation? Source: Wilcox, T.; Lowry, D. (2017): HRM, Ethics, and CSR, in: Syed, J.; Kramar, R. (2017): Human Resource Management. A global and critical perspective. 2nd ed., London: Palgrave, p. 101 - adjusted. Adjust HR Practices to Corporate Social Responsibility (CSR) standards: Element Principle Pay and benefits Just, equal pay Employee health and well-being Stress on preventative actions, zero accidents, support for work-life balance Training and Development Life-long learning, employability of an employee Participation and staff involvement Open and two-way communication (e.g. with employee representatives) Security in employment Long, secure contracts Measurement of policies Job Satisfaction of other surveys Equal employment opportunities Diversity and Inclusion Source: Wilcox, T.; Lowry, D. (2017): HRM, Ethics, and CSR, in: Syed, J.; Kramar, R. (2017): Human Resource Management. A global and critical perspective. 2nd ed., London: Palgrave, p. 101 - adjusted. The role of Diversity in Organizations Diversity: Variation among people in visible and invisible characteristics Source: Sternard, D. (2020): Effective Management. Developing yourself, others and organizations. London: Red Gobe Press, p. 138ff. Visible and Invisible Characteristics Visible Characteristics Age Gender Race Appearance Physical ability... Invisible Characteristics Experience Social class Marital and parental status Sexual orientation... Values Religion Cultural values Lifestyle Attitudes Beliefs... Personality Extraversion Emotional stability Agreeableness Conscientiousness Openness... Source: Sternard, D. (2020): Effective Management. Developing yourself, others and organizations. London: Red Gobe Press, p. 138ff. Diversity as a source of competitive advantage Potential benefits of diversity Higher Connection Source of Attracting and Reputation as decision with customer creativity and retaining a responsible quality groups innovation talent organization Source: Sternard, D. (2020): Effective Management. Developing yourself, others and organizations. London: Red Gobe Press, p. 138ff. Diversity-related challenges Potential challenges of diversity More difficult to create group Higher cohesiveness communication costs (Values, Conflict) Source: Sternard, D. (2020): Effective Management. Developing yourself, others and organizations. London: Red Gobe Press, p. 138ff. - adjusted Diversity management and Inclusion: Definitions Diversity: It is encouraged that a wide range of visible and invisible differences exist within the company - age, gender, nationality, experience, cultural values, personality …(= “the mix”) Inclusion: The act of creating an environment in which differences are valued and no one feels marginalized or excluded. (= “making the mix work”) Diversity management goes beyond legal requirements in the fields of equal employment opportunities and affirmative action. Source: Sternard, D. (2020): Effective Management. Developing yourself, others and organizations. London: Red Gobe Press, p. 138ff.  Fields of action for Diversity Management e.g. seting diversity-related goals or guidelines, diversity Diversity policies and practices training, Above the line bias-free job descriptions Below the line A common understanding Diversity climate that diversity matters Individual thinking and Diversity attitudes feeling about diversity Source: Sternard, D. (2020): Effective Management. Developing yourself, others and organizations. London: Red Gobe Press, p. 138ff. 6 steps towards more Diversity & Inclusion 1. Ensure top management commitment 2. Diagnose and assess the diversity status in the organization 3. Install diversity- and inclusion-promoting roles (diversity manager, council, or task force – usually within HR) 4. Establish diversity-related actions (pls. see next page) 5. Measure and evaluate progress (using diversity-related performance indicators) 6. Integrate diversity thinking in all areas of organizational decision- making and behavior Source: Sternard, D. (2020): Effective Management. Developing yourself, others and organizations. London: Red Gobe Press, p. 138ff.  What types of Diversity are there? Age Gender Cultural Religion Disability Sexual Background Orientation Age-mixed Percentage of Multicultural Considering Percentage of Supporting teams Women (e.g. in teams religion- employees with LGBTQ company leadership dependent severe handicap communities ways of life, and actions to positions) such as food support them To increase diversity: What offers could you make in addressing these aspects? Source: Miebach, B. (2017): Handbuch Human Resource Management. Das Individuum und seine Potentiale für die Organisation. Wiesbaden, Springer Verlag, p. 355  D&I – Actions in HRM (examples) HR Planning Talent Acquisition Organisation of Work Training and Leadership Development § Setting up § Including diversity in § Supporting people § Offering diversity § Linking diversity- recruitment material with special needs training for managers' related § Using objective (e.g. flexible working managers and bonus functions and criteria to reduce bias models, special other members of programs to roles in recruitment meals) the organization diversity- related § Recruitment activities § Establishing § Offering mentoring affiliations with programs for performance specifically targeted minority org’s disadvantaged indicators toward under- represented groups § Introducing groups grievance systems § “Silver Talents”: for dealing with further develop cases of employees in all discrimination or age groups harassment Human Resource Management Faculty of Business and Engineering Prof. Dr. Julia Hiemer Agenda „Human Resources Management“ (HRM) 1. HRM: Overview and Environment a. Key Fields of Action and Context of HRM b. Operating in a Global Environment c. HRM – a Strategic Perspective 2. Key Fields of Action in HRM a. HR Planning and Job Analysis b. Talent Acquisition c. Organisation of Work d. Learning and Development e. Leadership and Performance Management f. Total Compensation 2 HRM: Overview and Environment Learning Outcomes 1c) HRM – a Strategic Perspective By the end of this chapter you will be able to: 1. Recognise recent transforma>ons in the HRM field. 2. Outline a modern HR organiza>on structure. Discuss the role of line managers in HR, advantages and disadvantages of HR outsourcing and IT-soluRons. 3. Demonstrate how Strategic HRM can make a difference by adding value to an organisaRon. 4. Name typical HR metrics, define what is meant by HR Analy>cs and explain its role in organizaRonal decision-making. 5. Reflect on the difference between change management in hierarchical and in agile organizaRons.  From Traditional to Future HRM Previous Next (digital) HR- TransformaRon HR-TransformaRon Strategy Strategy Strategy Personnel People- Officer HR Business Business HR IT Centererd Partner Enablement AdministraRon Administration Admin. Out- Auto- Apps Learning sourcing mation Machines Traditional HR Business Partner Decision Support Fokus: Service Provider Fokus: ‚Partner‘ Enabling employees and HR as a separate Line Managers teams to take personal and isolated function as HR Actors responsiblility Source: Schwab, M.-O.; Jacobs, V. (2018): Auswirkung der Digitalisierung auf die OrganisaFon des HR Bereichs. In: Appel, W.; Wahler M. (Hrsg.) (2019): Die digitale HR-OrganisaFon. Köln: Wolters Kluver, S. 72 – adjusted.. Bauer, T.; Erdogan, B.; Caughlin, D.; Truxillo, D. (2020): Fundamentals of Human Resource Management. People, Data, and AnalyFcs. London: Sage, p. 31. Syed, J.; Kramar, R. (2017): Human Resource Management. A Global and CriFcal PerspecFve, London: Palgrave, p. 28. Trost, A. (2020): Human Resources Strategies. Balancing Stability and Agility in Times of DigiFzaFon. Cham: Springer, p. 11ff. Tradi2onal HRM organisa2on Two op,ons to organize the HR department: Please add during the sessions (2) Based on Customers HR for HR for HR for Source: Noe, R. A.; Hollenbeck J.R.; Gerhart R.; Wright, P. (2021): Human Resource Management, 12th ed., New York, McGraw Hill EducaFon. Holtbrügge, Dirk (2018): Personalmanagement. 7., überarb. und erw. Auflage. Berlin; Heidelberg: Springer Gabler, p. 61f. - adjusted Modern HRM organisa8on: HR Collabora8on Model (David Ulrich: 1997) Business Human Resources HR Business Partner Center of Expertise Line Manager Company wide Near to business Specialists dealing with Consultant of managers complex HR-related issues for one busines function on all HR-related topics. Shared Service Center Company wide Delivery of standardized and regularly Employee demanded services to all employees (e.g. payroll) „Run the Business“ „Key Account Manager“ „Production & Logistics“ „ R&D“ Lead, manage Listen, coach, sell, Collect, requests, track, Define process, and decide plan, drive administer concept, strategy Allocation of tasks – Example: Compensation Line Manager HR Business Partner Center of Expertise § Performance Consulting „Compensation“ Appraisal Planning § Oversight on salary § First point of structure of individual § Determine salary contact in salary department. structure for the conversations with § Consulting on salary company employee Shared Service Center development options for § Determine which individual employee benefits to offer § Consult on performance Administering company-wide issues of individual § Administer payment § Determine on pay-for- emloyee perfomance systems Employee § Provide system for company-wide keeping track of § Interested in a employees’ earnings salary increase and benefits Source: among others Crawshaw, J.; Budhwar, P; Davis, A. (2014): Human Resource Management. Strategic and InternaGonal PerspecGves. London: Sage, p. 15f. – with reference to the Chartered InsGtute of Personnel and Development. Noe, R. A./Hollenbeck, J.R./Gerhart, B./Wright, P. M. (2015): Human Resource Management. 15 th ed. Global EdiGon: McGraw Hill EducGon, p. 714ff. HR Collaboration Model: Benefits + One point of contact in HR for managers. He/she is familiar with department specifics + Specialists for complex HR topics + Very efficient and IT-based service delivery Foundation for strategic HR support Having a closer look into four areas HR tasks Job requirements 1 of Line Managers 2 for HR professionals HR Outsourcing 3 and its advantages and disadvantages IT-solution for HR 4 administration: Cloud-based HR Software, HR Self-Service Portals, Robotic Process Automation (RPA), Chatbots HR Tasks of Line Managers 1 In general: HR iniIates new policies and pracIces, but it is line managers who have the main responsibility for implemenIng them. Human Resources Line Managers Line Manager‘s sole responsibility HR‘s sole responsibility § Setting objectives and evaluating performance § Designing training programs § Identifying training needs § Ensure compliance with labor law § Development conversation with employee § Headcount reporGng § Distribution of tasks § Payroll § Motivate employees Collaboration Line Managers & HR § Etc. § Etc. § Define criteria to evaluate employees § Dealing with performance issues § Conducting Job Interviews § Determining pay raise amounts § Etc. Source: Martocchio, J.J. (2019): Human resource Management. 15th ed. Harlow: Pearson, p. 27. Dessler, G. (2020): Human Resource Management. 16th ed. Harlow: Person, p. 38. Noe, R.A.; Hollenbeck, J.R., Gerhart, B.; Wright, P.M. (2020): Fundamentals of Human Resource Management, 8th ed. New York: McGraw Hill EducaGon, p. 17 10 Job Requirements for HR professionals 2 According the “Society for HRM” (USA) HR professionals should be able to exhibit: § HR Expertise § Business Acumen § Communication and Consultation § Critical Evaluation § Relationship Management § Leadership & Navigation § Ethical Practice § Global & Cultural Effectiveness Source: Dessler, G. (2020): Human Resource Management. 16th ed. Harlow: Person, p. 54f. and Noe, R.A.; Hollenbeck, J.R., Gerhart, B.; Wright, P.M. (2020): Fundamentals of Human Resource Management, 8th ed. New York: McGraw Hill EducaGon, p. 15 HR Outsourcing to improve HRM effecCveness 3 Outsourcing is the practice of having another company provide products or services. Contract with an outside vendor. Offshoring: Outsourcing where jobs leave one country and go to another. Please add during the sessions Examples for typical HR tasks that are outsourced: Outsourcing of HR tasks: Benefits Outsourcing of HR tasks: Risks Source: Noe, R. A./Hollenbeck, J.R./Gerhart, B./Wright, P. M. (2015): Human Resource Management. 15th ed. Global Edition: McGraw Hill Eduction, p. 714ff. IT-solutions for HR administration 4 In general, you can distinguish: Comprehensive Individual solutions: for each task the cloud-based HR soIware vs. most suitable technology is used Example: Criteria for the selecFon are e.g. § Scope of funcGonaliGes § ImplementaGon effort § User friendliness and support § License costs HR Self-Service Portals 4 §Employee Self-Service (ESS) HR portals oProvide an electronic means for employees to access HR services and information oCommon Applications: administration of leave; update personal details; administer training; employee surveys; timesheet entry §Manager Self-Service (MSS) portals oSpecialized ESS portal designed to allow managers to view extensive information about their employees oCommon Applications Complete job requisitions; view applications of prospective applicants; performance appraisals; view and prepare merit increases; view employee’s salary, performance, and training histories §Nonemployee Self-Service oCommon ApplicaIons: Job posIngs and applicaIons Source: Kavanagh, M. and Johnson, R. (2018): Human Resource InformaGon Systems: Basics, ApplicaGons, and Future DirecGons. London: Sage Robotic Process Automation (RPA) for the automation of HR processes 4 RPA is an approach that aims to replace or facilitate human administrative work on computers with robots. Suitable HR processes (examples) Criteria for suitability for RPA § Recruiting (e.g. route description, sending § High volume of processing rejections) § Rule-based processing § Administration of personal data § Low complexity of the process § Reporting (e.g. headcount) § Administrative HR tasks (e.g. sick notes, leave requests, references) Automated processing § Payroll accounting e.g. with uipath § Travel expense accounting § Etc. Source: Gärtner, C. (2020): Smart HRM. Digitale Tools für die Personalarbeit. Wiesbaden: Springer Gabler, p. 37 und p. 200ff. and Franken, R.; Franken, S. (2020): Wissen, Lernen und InnovaGon im digitalen Unternehmen. 2. Aufl. Wiesbaden: Springer, p. 148. Intelligent Process Automa2on (IPA): Use of Chatbots 4 § Dialog between user and chatbot: the user asks, the chatbot answers (content answer, counter question or redirection to a human). § Either written or spoken § Chatbots either retrieve answers based on rules (retrieval) or generate answers (generative models) Source: Gärtner, C. (2020): Smart HRM. Digitale Tools für die Personalarbeit. Wiesbaden: Springer Gabler, p. 41 and p. 145 Develop an integrated HR Strategy People-related Company Strategy HR Strategy challenges Company Vision What needs to be What are consequences for HR CompePPve Advantage considered with regard to key fields of action? Strategic Challenges employees in order to implement the company § HR Planning and Job Analysis In future we will be more strategy? § Talent Acquisition successful than our compe4tors § Organisation of Work because... and Retention § Selection of candidates § Building relevant skills § Training and Development § Compensation choices § Leadership and Perf. Mgmt § Etc. § Total Compensation § Downsizing § Taking into account the internal and external initial situation (megatrends, qualification level, legal situation, etc.) § Collaborating with managers and works council to define HR strategy Strategic HR Management in three areas Work with Line Managers Contribute to the Develop an to support the development of integrated HR Strategy achievement of business strategies their business goals What is our company vision See previous page Example: looking 10 years ahead? Giving advice to Line Example: Managers how to deal with Opening of a new production employees on performance site abroad. Involvement of the issues. HR department, e.g. when choosing a location. Source: Armstrong, M./Taylor S. (2014): Armstrong's Handbook of Human Resource Management PracGce. 13th ed. Kogan Page Ltd., p 15ff. – adjusted. Measuring HR EffecCveness: Selected Indicators Talent Acquisition Training and Retention Workforce / Development Organisation § Own position in § Days of training per § Turnover rate § Average age employer ranking employee § Length of Service § Female/male ratio § Number of § Total cost for § Employee § Women in applications training Commitment leadership positions § Time to fill § Percentage of High- § Reasons for Leaving (%) § Cost per hire Potential employees § Span of Control § Early turnover § Average time on § Sickness Rate (during probation current level (High- § Frequency of period) Potentials) Accidents It is key to decide on few relevant key figures in line with the company strategy and the HR Strategy. HR Analytics to make data-driven people decisions Already existing New HR InformaOon System (HRIS) HR AnalyOcs / People AnalyOcs: A soaware system for data entry, The use of people-related data in analyIcal tracking and informaIon needs processes to address business issues. of the HR funcIon. ApplicaNon examples: Three levels of HR AnalyNcs: § Electronic Payroll § DescripNve: Focuses on understanding what has § Applicant Tracking Systems (ATS) already happened. § Training AdministraPon § PredicNve: Focuses on what is likely to happen in the future based on available data. § Employee Self Service § PrescripNve: Proposal (or automaPon) of § Manager Self Service decisions based on the forecast of future developments. Source: Bauer, T.; Erdogan, B.; Caughlin, D.; Truxillo, D. (2020): Fundamentals of Human Resource Management. People, Data, and Analytics. London: Sage, p. 34. Carbery, R.; Cross, C. (2019): Human Resource Management. London: Red Globe Press, p. 208. Trost, A. (2020): Human Resources Strategies. Balancing Stability and Agility in Times of Digitization. Cham: Springer, p. 315ff.  HR Analytics: Examples Prescriptive Descriptive Predictive Decide on the level of HR Analytics for the following examples: Google found out that its employees hand in their resignation after an average of 3 ½ years. Employees automaIcally receive job posIngs if the system can assume they know candidates with the required skill-set. Employees receive recommendations whom to contact in the company to learn from each other. Forecast the expected sick leave for next week. AutomaIcally terminate employees if they repeatedly fail to meet their performance goals. Please add during the sessions Source: Trost, A. (2020): Human Resources Strategies. Balancing Stability and Agility in Times of Digitization. Cham: Springer, p. 319f. Felder, R. (2019): Planung voraus! in: Personalmagazin Heft 7/2019, S. 48-51. Types of changes in organisations Re- Mergers & Strategy Cultural Re-engineering structuring Acquisition Change Change Changing Changing Changing the Changing Changing organisational processes, the identities of priorities, values, structures and way work is organisations ultimate attitudes and reporting lines done direction and behavior purposes + = Drivers of Change Phases of psychological transmission Elisabeth Kübler-Ross Change Kurve: a recovery model Resistance Source: Kübler-Ross, E. (1969): On death and dying. New York. MacMillan Change Management Change management is defined as a structured approach to transiIoning individuals, teams and organisaIons from a current state to a desired future state. Source: Austin, J. (2015): Leading Effective Change: A Primer for the HR Professional. SHRM Publication The change formula Quality of technical Engagement Transformation solution = Impact of People = Project Management § Project DefiniIon § Creating a Vision Successful and sustainable § Master Plan § Gain support change through Project § Milestones § Manage resistance Management AND Change § Resource PrioriIzaIon § Communicate Management § Results Tracking § Involve § Etc. § Etc. Source: GM Document Stage models of change processes Lewin (1951) Stage 1: Unfreezing Stage II: Changing Stage III: Refreezing 1. Establish sense 2. Form powerful guiding 8. Institutionalize Kotter (1995) of urgency coalition changes in the organizational culture 3. Develop a compelling vision In traditional Change Management 4. Communicate the vision widely changes occur out of a state of stability. After a phase of upheaval, 5. Empower employees to act we are again striving for this stable on the vision state. 6. Generate short-term wins 7. Consolidate gains, create greater change Source: Achua C. F.; Lussier R. N. (2013): Effective Leadership, 5th ed. International Edition. Cengage Learning, p. 392 But: Top Management does not always have the answer The complexity of change Change at a higher level of complexity can be very different: requires an agile setting 3 Organizational changes initiatives are usually only initiated if top management is aware of the consequences Success Plateau Wake-Up Calls Growth Chaos 2 1 Re-Emergence Through Visioning Birth and Learning Old Transition New State State State Death – Mindset Forced to Shift Developmental Change Transitional Change Transformational Change Motivation: Fix a problem Motivation: Improvement Motivation: Survival / breakthrough needed / Focus : Replace old state with Focus : Enhancement of pursue new opportunities something new the old state Focus : Radical shift, content largely uncertain at outset In an agile context: Change happens bottom-up and continuously Hierarchical Context Agile Context Situation: an employee has an idea with strategic relevance The employee (1) talks to the direct The employees themselves initiate, decide manager who will escalate the and drive change (bottom-up). topic to top management (2) who might decide top-down to Grassroots movement: changes that take place slowly, from below implement (3) and increasingly across entire companies. Early failure, simultaneous learning and rapid optimization in an iterative process. Source: Trost, A. (2020): Human Resources Strategies. Balancing Stability and Agility in Times of Digitization. Cham: Springer, p. 339. Are you a Change-Agent? Personality traits that are beneficial for the readiness to change Curiosity Extraversion OpNmism Openness Spontaneity Risk Taking Frustration Tolerance Locus of Control Ambiguity Tolerance Self-Efficacy Source: Freyth, A. (2020): Veränderungsbereitschaft stärken. Wiesbaden: Springer, p. 20 Example: Working out Loud (John Stepper) „Working out Loud“ Circles: a peer support group of 4-5 people across departments who meet for an hour a week for 12 weeks. Objective: Improvement through networking and exchange increasing perceived self-efficacy 5 Principles: Visible Work, Growth Mindset, Generosity, Relationships, Purposeful Discovery Source: Freyth, A. (2019): Persönliche Veränderungskompetenz und Agilität stärken. Wiesbaden: Springer, p. 196. Trost, A. (2020): Human Resources Strategies. Balancing Stability and Agility in Times of Digitization. Cham: Springer, p. 339. Working Out Loud Website https://workingoutloud.com/ (Access Date: August 12, 2022) Hierarchical vs. agile organizations and change Hierarchical Agile organization organization Meaning of „change“ Strategic change Evolution in small steps Drivers for change Senior Management All employees (top-down) (bottom-up) Desired normal condition Stability Change Communication to employees Late communication Early involvement if possible if possible Objectives of change Helping employees (not needed) management through the phase of resistance Source: Trost, A. (2020): Human Resources Strategies. Balancing Stability and Agility in Times of Digitization. Cham: Springer, p. 366. Role of HR in Change Management § HR is a boundary-spanning function. This positions HR professionals to support or drive change initiatives through any organisation. § HR can support and provide a structured framework for (continuous) change: Examples: o Early employee involvement o Improving quality of communication across all levels o Arranging training to teach agile working techniques o Foster organization culture that sees early failure as a chance Human Resource Management Faculty of Business and Engineering Prof. Dr. Julia Hiemer Agenda „Human Resources Management“ (HRM) 1. HRM: Overview and Environment a. Key Fields of Action and Context of HRM b. Operating in a Global Environment c. HRM – a Strategic Perspective 2. Key Fields of Action in HRM a. HR Planning and Job Analysis b. Talent Acquisition c. Organisation of Work d. Learning and Development e. Leadership and Performance Management f. Total Compensation 2  HR Key Fields of Action in HRM: Learning Outcomes 2a) HR Planning and Job Analyses The determination of the target staffing level for the realization of the company's goals. 1. Quantitative: how many positions? 2. Qualitative: which competencies?? By the end of this chapter you will be able: 1. To calculate net staffing requirements according to the staffing plan method. 2. To describe measures by which a company can increase or reduce the number of employees. 3. To define the terms "employee turnover" and "employee retention". 4. To show the essential elements of job descriptions and their purpose. To state the difference between this and role profiles. 5. To explain the meaning of competencies and how they are used in organizations. Quantitative HR Planning Main question of quantitative workforce planning: How many employees are needed to meet the company's goals? Main objective: § Cost effectiveness (lowest possible headcout to achieve company targets) § Secure Performance (prevent insufficient capacity at peak demand) Three methods: § Factor Comparison Methods: Required positions are planned based on experience and guidelines. § Analytical Method: Required positions are determined based on work /time studies § Staffing Plan Method Going forward we will only focus on the Staffing Plan Method Source: Noe, R. A./Hollenbeck, J.R./Gerhart, B./Wright, P. M. (2015): Human Resource Management. 15th ed. Global Edition: McGraw Hill Eduction, p. 201ff. Staffing Plan Method Future Future Net Headcount Stock Staffing Need Headcount Need = Number of HC needed to = Future Staffing Need considering = Current manpower achieve the required the Future Headcount Stok +/- known changes performance of the firm Add. new In this example: HC Need Headcount Need Replace- + or - Future Staffing Need Future ments Current Staffing is higher than Future Head- Expected/ Headcount Stock known changes Need Future count Head- at the time of during planning Stock cycle count Headcount Planning (i.e.: reduction) Stock à Recruitment Known HC data Company Strategy/ Computed Input Dept. concerned by HR Staffing Plan Method Future Future Net Headcount Stock Staffing Need Headcount Need = Number of HC needed to = Future Staffing Need considering = Current manpower achieve the required the Future Headcount Stok +/- known changes performance of the firm + or - Excess In this example: Headcou Excess Headcount Expected/ nt known Future Staffing Need Current changes during Future is lower than Future Head- planning cycle- Head- Headcount Stock count Future (i.e.: addition) count at the time of Stock Staffing Need Stock Headcount Planning à Reductions Known HC data Company Strategy/ Computed Input Dept. concerned by HR Future Headcount Stock: Expected changes Examples: Without influence With influence of employer of employer Please add during the sessions Example Staffing Plan Method Purchasing Department Indirect Direct Supplier Total Material Material Developmt Current Headcount Stock 40 62 28 130 Known/expected changes 0 Return parental leave +2 +2 Retirements -2 -2 Quits/notice -2 -2 Expatriates returning +1 +1 Future Headcount Stock 43 58 28 129 Current Staffing Need 40 65 28 133 Known/expected Changes Outsourcing to Eastern Europe -3 -3 Increase Supplier Development +3 +3 New team: Strategic Purchasing +4 +4 Required Reductions -2 -2 -1 -5 Future Staffing Need 35 67 30 132 Net Headcount Need +8 -9 -2 -3 Excess HC HC Need The HR Planning Process Strategic Planning Human Resources Planning Forecasting Human Comparing Forecasting Human Resource Availability = Resource Requirements = Future Headcount Stock Future headcount Future Staffing Needs stock vs. staffing need Demand = Surplus of Employees Shortage of Employees Supply Actions to reduce staff Recruitment Alternatively: § Outsourcing No Action (please see next page) § Contractors, (quantitative) Selection § Crowdsourcing Source: Mondy, R.W.; Martocchio, J.J. (2016): Human Resource Management. 14th ed., p 107. – adjusted. Noe, R. A./Hollenbeck, J.R./Gerhart, B./Wright, P. M. (2015): Human Resource Management. 15th ed. Global Edition: McGraw Hill Eduction, p. 201ff. - adjusted Actions to reduce the number of employees Actions to reduce the number of employees (consistent with German labor law) non-renewal non-renewal / Hiring Termination Separation Early of fixed-term termination Freeze of contract Agreement Retirement contracts of contractors Case-related Group-related Notice of Notice of termination termination Ordinary or Short-time Short-time Reduncancy Redundancy pending aa change pending change extraordinary work work programme Programmewith with of of contract contract termination social socialplan plan Source: Holtbrügge, Dirk (2018): Personalmanagement. 7., überarb. und erw. Auflage. Berlin; Heidelberg: Springer Gabler, p. 173 – own translation Contingent Workforce: Contractors New forms of work: Crowdsourcing and Crowdworking = Outsourcing of individual tasks via the Internet to a large number of independent providers. Perspective of the employer: „Crowdsourcing“ Perspective of the employee: „Crowdworking“ § The term originated in the mid-2000s and describes a new, Internet-based form of work. Complex services previously created within the company are broken down and offered for processing in individual tasks via the Internet. § The German Metalworkers’ Union and others have announced the establishment of an “Ombuds Office” for the enforcement of a “Crowdsourcing Code of Conduct”. http://faircrowd.work/ § In Germany only 4.2% of companies currently use crowdworking platforms. Source: Stettes, O. (2016): Arbeitswelt der Zukunft: Wie die Digitalisierung den Arbeitsmarkt verändert. Institut der deutschen Wirtschaft Köln https://www.iwkoeln.de/fileadmin/publikationen/2016/306398/Analyse_2016_108_Arbeitswelt_der_Zukunft.pdf (Access Date: August 24, 2021). Trost, A. (2020): Human Resources Strategies. Balancing Stability and Agility in Times of Digitization. Cham: Springer, p. 63.  Employee Turnover Fluctuation describes the process by which employees leave the company. There are several types of fluctuation: Voluntary turnover by employee Special form of "early turnover": within the first 12 months after the start of employment. Termination by employer Fluctuation rate or turnover rate Number of voluntary terminations during a year X 100 Number of employees by mid of the year Source: Carbery, R.; Cross, C. (2019): Human Resource Management. London: Red Globe Press, p. 62 Exit Interviews Exit Interview: an interview performed by HR that seeks information as to what the employee liked at the organization and what should be improved. Example for questions in an Exit Interview § What was the main reason that you decided to leave? § How would you describe your experience in terms of: pay, benefits, working conditions, career opportunities, leadership, co-workers etc. § How would you descibe your relationship with your direct manager? § If a friend approached you and told you he/she was looking for a similar position, how likely would you recommend our company? § Any other comments about the company or you new position? Employee Retention Employee Retention = a strategic approach adopted by organizations to keep productive employees from seeking alternative employment. This can be achieved by: This leads to: Employee Experience Combination of numerous elements that create a positive work Employee Engagement experience for employees (e.g. open communication, feedback, The emotional connection an technological equipment, physical employee feels toward his or her environment, etc.). workplace. Job Analysis: The content perspective Please add during the sessions The typical format of a Job Descrip\on Please add during the sessions Why do we need Job Descriptions? Source: Mathis and Jackson. (2008). Human resource management (12th edition), pp. 186-189 The classic job description no longer fits into an agile age Classical approach Agile approach: A "fluid organizaCon": § Stable company task role profiles with competencies instead of job descripCons. § Is divided into individual tasks