Chapter 2 Flashcards
(93 cards)
1
Q
HRM can be viewed as an umbrella term that encompasses what three philosophies?
A
> Overarching HR philosophies that specify the values that inform an organization’s policies and practices
> Formal HR policies that direct and partially constrain the development of specific practices, such as to increase workforce diversity
> Specific HR practices, such as recruitment, selection, and appraisal
2
Q
What is strategic HRM?
A
> Strategic HRM is the management of HR philosophies, policies, and practices to enable the achievement of the organizational strategy.
3
Q
What do HR philosophies, practices, and policies form?
A
> form a system that attracts, develops, motivates, and trains employees who ensure the survival and effective functioning of the organization and its members
4
Q
two recent surveys identified what two components in alignment with the org strategy as top priority?
A
> Two recent surveys identified building critical skills and competencies of the workforce that align with the organizational strategy as the top priority
5
Q
Indeed, one survey found that senior HR leaders are being fired for what? When are they empowered and successful?
A
> failing to develop an HR strategy.
> those companies that empowered their HR leaders with the title of Chief Human Resources Officer (CHRO) reported a 30-percent higher total shareholder return
6
Q
What do studies have to say about HR influence?
A
> Canadian organizations believe that HR is more influential now than five years ago; the recognition of HR importance is especially higher among CEOs and senior managers (about three-quarters believe so) than other managers (about half)
7
Q
What do HR practitioners not value?
A
> HR practitioners themselves do not seem to value theory.
8
Q
How is HR seen?
A
> HR is seen as theoretical and problem-driven
9
Q
What was HRM formerly? How were the contributions measured?
A
> Human resource management, formerly called “personnel management,” started as an administrative function and has traditionally been associated with costs in organizations.
> Its contributions were often measured by the number of disputes resolved, applicants recruited, total hours spent on training, etc.
> it was minimized due to the administrative tasks that could be contracted out
10
Q
What are “high performance” HR practices? What are those practices are also considered?
A
> selective hiring, extensive training, and competitive pay, are considered “best practices, because they were often found in the most successful organizations
11
Q
Accumulated research showed consistent evidence that the implementation of high-performance HR systems significantly predicted what?
A
> various organizational performance indicators, ranging from reduced employee turnover to improved quality and organizational performance
12
Q
The term Human Resources was adopted, why?
A
reflecting the recognition of personnel as valuable “resources” that create competitive advantage, an idea that can be traced back to the resource-based view.
13
Q
What is the resource-based view?
A
> the less a resource can be imitated, the more durable the source of competitive advantage
14
Q
What are the four components that create sustained competitive advantage in the resource-based view?
A
1) Firstly, employees who have superior performance because of their skills, commitment, or flexibility are valuable.
2) Secondly, human resources can be difficult for competitors to imitate.
3) best human resources are rare
4) the value is hard to substitute
15
Q
According to Porter, how many years does it take to duplicate a competitive edge in human resources?
A
> 7 years
16
Q
Why are dynamic capabilities important?
A
Dynamic capabilities allow businesses to be the first to discover new opportunities, to act faster than others to seize opportunities, and to quickly create the internal processes needed to realize these opportunities
17
Q
What is the contingency perspective of HRM?
A
> Although high-performance HR practices in general contribute to high performance, they may be more cost-effective for businesses that pursue a differentiation strategy than for those implementing a low-cost strategy.
18
Q
Classical economists describe three types of resources or inputs used in the production of goods and services - what are they?
A
> land, capital, and labour
19
Q
What is labour / human capital?
A
> refers to the collective sum of the attributes, experience, knowledge, and commitment that employees choose to invest in their work.
> his intangible asset comprises the knowledge, education, vocational qualifications, professional certifications, work-related experience, and competence of an organization’s employees
> requires investment
20
Q
Employees are of value to the organization to the extent that:
A
> that they work toward accomplishing organizational objectives.
21
Q
What are investments in human capital?
A
> Costs incurred in training, motivating, compensating, and monitoring employees can be viewed as investments in human capital
22
Q
What is the formula human capital’s value added can be estimated by what formula:
A
[ Total revenue - (operating expenses - total compensation) ] / total compensation costs
23
Q
What was the median human capital ROI for canadian orgs in 2010?
A
> median human capital return on investment for Canadian organizations was two dollars and twenty-six cents in 2010
24
Q
It is estimated that human capital and non-financial value drivers explain up to what percent of “intangible” value.
A
85%
25
The advantages of an organization with effective HR practices may come not only from having better resources but also from what?
> But also from making better use of these resources by achieving higher productivity per worker and matching the capabilities of employees with the strategy
> To simplify, having a stock of human capital is similar to having a team of talented players. Knowing how to leverage their talents is like having skills in managing and coaching this team. Similarly, without the right HR systems, employees are less effective
26
The behavioural perspective suggests that :
> suggests that different strategies require not only different human capital, but also different behaviours of employees.
27
An effective HR system first accurately identifies what?
> identifies the behaviours needed to implement a strategy.
28
Under the behavioural model, what is HR's role?
> HR’s role is to tactfully challenge and refocus baseless ideas of human behaviour
29
What does the behavioural model suggest about HR practice?
> Behavioural perspective suggests that these HR practices should be further linked to a particular behavioural objective.
30
Therefore, what is the behavioural perspective?
> The behavioural perspective is particularly important as the HR department is asked to define and develop the behaviours necessary to achieve organizational capabilities of innovation, speed, and accountability
31
What are the components of the Workforce Planning Continuum from least planning to most planning?
> ad hoc planning: no workforce planning and hiring as needed
> Head count planning: head count analysis, basic labour costing
> workforce forecasting analytics: Historical or lagging performance indicators and descriptive workforce analysis
> Strategic Workforce Planning: Workforce segmentation and workforce planning to support projected business needs
> Human Capital Planning: enterprise level workforce planning and workforce risk management and mitigation planning
32
The Conference Board of Canada reports that executives have identified HR planning as what?
> as the most important long-term HR priority for Canadian organizations
33
There are at least two reasons strategic HR planning is so important: describe them:
1) Employees help an organization achieve success because they are strategic resources.
2) The planning process itself results in improved goal attainment.
34
How are employees a strategic resource?
> The value of employees as a resource must be placed within a strategic framework.
> In other words, a strategy itself can become obsolete, making current employee skills obsolete.
> when there is a vacancy, HR managers might not look for replacements for current skills, but rather consider what skills will enable the organization to implement its strategy a few years from now.
> Therefore Employees might be asked to exhibit different behaviours, depending on strategic goals, and these behaviours will be motivated by different HRM practices and therefore HR matches employees to are managed and matched to the organizational strategy.
35
The goals of HRM strategies are to:
> are to shape employee behaviour so that it is consistent with the direction the organization identifies in its strategic plans.
36
What are practical barriers to HR planning?
> Leaders lack planning and business acumen
> Multiple planning horizons
> Organizational silos
> Moving targets – business goals are not clear
> Union restrictions, and barriers to internal employee mobility
> No budget, or not enough budget
> No data available
> Not enough time, too busy, competing priorities, “daily bombs,” and “fighting fires”
37
What are perception and attitude barriers to HR planning?
> Seen as important, but not urgent
> Lack of holistic approach
> It is hard to measure success
> Seen as too daunting to change
> Resistance to change: "We always got by in the past"
> Considered to lack credibility
38
strategy formulation is important to what?
> the attainment of organizational goals in order to align all HR functional strategies with overall strategy and to focus employees on the important missions and goals of the organization.
39
Strategic HRM has to do what?
> facilitate the formulation and implementation of corporate and business-level strategies
40
The basic premise is that every HR policy and practice must do what?
> directly support the organization’s strategy and objectives
41
Aligning HR strategy with business strategy can be done in one of the following ways:
1) Start with organizational strategy and then create HR strategy.
2) Start with HR competencies and then craft corporate strategies based on these competencies.
3) Apply a combination of both in a form of reciprocal relationship.
42
A traditional perspective of HR planning views HRM programs as what?
> views HRM programs as flowing from corporate strategy. In other words, personnel needs are based on corporate plans.
43
What brands use the Low-Cost-Provider Strategy?
> McDonalds & Timex
44
What does the Low-Cost provider strategy do?
> Buyers are price-sensitive, and businesses appeal to this price consciousness by providing products or services at prices lower than those of competitors
> Costs are an important element of this strategy, so labour costs are carefully controlled
45
Implications on the employee from the Low-Cost provider strategy?
> To keep wages low, jobs have to be of limited scope so that the company can hire people with minimal skills at low wages.
> he job requires highly repetitive and predictable behaviours. T
> Doing more with fewer employees is the goal of most organizations with a low-cost-provider strategy.
> eliminating as many of the support or managerial layers as possible. The impact of cutting costs in this way is that employees may have to do more with less
46
What are six HR functions that will facilitate the personnel work at a low-cost-provider organization?
1) HR Planning
2) Selection
3) Compensation
4) Training
5) Performance Evals
6) Labour relations
47
HR planning in the low-cost strategy involves:
> At the entry level, succession planning is minimal, ensuring only the feeder line to the next level.
> Outside labour markets are monitored to ensure that entry-level people are in adequate supply.
> The availability and use of fringe workers—those who are retired, temporarily unemployed, students, and so on—is part of the planning strategy, particularly if the employment market is offering better opportunities to the normal supply of low-skilled workers.
> At the executive level, succession management assumes the same importance as in other organizations.
48
Selection in the low-cost strategy:
> Recruitment is primarily at the entry, or lowest, level and is from the surrounding external labour market.
> Recruitment is by word of mouth, and application forms are available on-site, thus saving the costs of recruiting in online applications.
> Most other positions are staffed internally through promotions.
> Thus, career paths are narrow.
49
Compensation in the low-cost strategy:
> lower wages and fringe benefits.
> carefully monitor what their competitors are paying in the local labour market
> deploys a lag strategy and attempt to pay wages slightly below industry norms
50
How costs are reduced in the low-cost strategy?
> to outsource production to sites with lower labour costs or outsourcing has also meant moving the work from highly unionized plants, where workers make 20 dollars or more per hour, to non-unionized, smaller sites, where workers are paid slightly more than the minimum wage.
> using part-time workers that recieve 0 fringe benefits
> Pay for performance, such as incentive compensation that is linked to productivity, rewards individual effort. Group rewards are based on explicit, results-oriented criteria and the meeting of short-term performance goals.
> incentives like cash bonuses can also be used
51
How is training conducted in the low-cost strategy?
> training is minimal, as few skills are required.
> Any training is based on increasing efficiency in the current job, or specialization for the current position.
> training is fast and inexpensive
> There is little to no investment in the long-term development of the employee, nor in the acquisition of skills for jobs other than the current one.
> relies on outside reporters
> little need for training due to the repetitive nature
52
Performance evaluations in the low-cost strategy?
- Short-term results, with explicit and standardized criteria, are used to evaluate an employee’s performance.
- The feedback is immediate and specific. Individuals are held accountable only for their own behaviour or results, not for those of the team or the company.
- Only the supervisor provides input for the performance evaluation.
- Forms are kept to a minimum, and rating is done against check marks.
- Feedback, if based on a performance review, tends to be one-way, with little opportunity for the employee to debate the results or receive developmental feedback.
- Results are used for consideration for promotion.
53
Labour relations in the low-cost strategy?
> Low-cost providers try to prevent the formation of a union because they believe that unions drive up wages.
> furthermore, employees quit often, and many low-cost providers absorb turnover rates of 300 percent annually as a cost of doing business.
> High turnover has the primary advantage of keeping compensation levels low.
54
Firms providing features that appeal to a particular market segment are said to compete on what kind of strategy? How do they compete on this strategy?
> compete on a differentiation strategy
> A firm competing on the basis of a differentiation strategy will offer something unique and valuable to its customers.
55
What is the primary focus on the differentiation strategy?
> The primary focus is on the new and different.
> Observation, experience, and market research will establish what buyers consider important, what has value, and what buyers will pay for these features.
> Then the firm can offer a product or service that commands a premium price, increase unit sales within this niche, and gain buyer loyalty among those who value these features.
56
A firm can differentiate itself from its competitors in many ways - list 7?
> Having quality products
> Offering superior customer service
> Having a more convenient location
> Using proprietary technology
> Offering valuable features
> Demonstrating unique styling
> Having a brand-name reputation
(these different features can be anything - i.e. services, engineering design, etc.)
57
How are competitive advantages treated under the differentiation model?
> these competitive advantages are combined, such as by linking quality products with proprietary technology and superior customer service, thus providing the buyer with more value for money.
58
What is the key to differentiation model?
> The key in this strategy is to provide the differentiation that is perceived to be of value to customers while keeping costs down.
> i.e. a slice of lemon in a glass of ice water delivered to the table is an obvious way to differentiate the restaurant, but at low cost.
59
The starting point for aligning HR programming with a differentiation strategy is what?
> The starting point for aligning HR programming with a differentiation strategy is the employee.
60
Organizations competing on a differentiation strategy require what kind of behaviours from their employees?
> requires from their employees creative behaviour, a long-term focus, interdependent activity, and some risk taking, as well as an ability to work in an ambiguous and unpredictable environment.
> Their employees’ skills need to be broad, and employees must be highly involved with the firm.
> Organizations encourage employees to make suggestions, through both informal and formal suggestion systems, for new and improved ways of doing their job.
61
How does HR planning occur in the differentiation model?
> HR planning is taken very seriously
> Succession management is critical, as employees have to possess many attributes to move ahead in the organization
> a strong emphasis on developing skills for the future is part of the promotion policy.
> investments in career moves, training, and developmental experiences are substantial.
> Long-term job security and reciprocal loyalty are the norm.
62
What is selection like under the differentiation model?
> Companies with a differentiation strategy need employees who have a broad range of skills and the ability to learn from others.
> Employees are selected for their abilities to think creatively, be flexible in work attitudes, and be able to work in teams.
> usually involves team interviews and behaviourally-based evidence of innovative performance
> Employees are normally recruited through reputation (word of mouth) or through graduate schools. Some testing for creative ability may be used.
63
What is compensation under the differentiation model?
> compensation is carefully designed in firms that have a differentiation strategy.
> Pay rates may be slightly below average market rates, but there are substantial opportunities to increase those base levels through incentive pay
> Pay for performance is a large part of the compensation package and will be dependent on individual, group, and corporate results.
> These results are a combination of process and financial criteria and are set in advance, usually on a yearly basis. Individuals may receive salary, bonus, or stock option incentives.
> Internal equity is of greater concern than equity with the external market.
> Egalitarian pay structures are associated with greater product quality; non-monetary rewards play a larger role in HR strategy in these types of firms.
64
What is training like under the differentiation model?
> have a strong training team
> The focus of training is on both skills and attitudes. Process skills, such as decision making, the ability to work in teams, and creative thinking, are emphasized as much as skills needed for the current job.
> the training itself is seen as an opportunity to generate new ideas and procedures.
> Indeed, customers and cross-functional teams might be included in the training program.
> The value of working in another division or another country is recognized and encouraged.
> Employees receive promotions or other job opportunities based, partially, on their willingness to undertake training and their track record in learning.
65
What is performance evaluation in the differentiation model?
> performance appraisal is based not on short-term results but instead on the long-term implications of behaviour.
> Processes that are deemed to lead to better results in the long term are rewarded.
> Thus, companies encourage and appraise attitudes such as empowerment, diversity sensitivity, and teamwork in an effort to build future bottom-line outcomes.
> Working beyond the job is encouraged, not punished. Failure is tolerated, although management tries to distinguish between bad luck and bad judgment.
> Evaluation tends to be based on a mixture of individual and group (and sometimes corporate) criteria.
> 360 evaluations are the norm
> Organizations in the service sector are more likely to include customers as sources of input for performance appraisal.
66
What are labour relations in the differentiation model?
> Any structure or process that reduces the capacity to be innovative and flexible is difficult to tolerate.
> Traditional unions, with rigid collective agreements, are encouraged to work collectively toward a new union–management relationship.
> This relationship is characterized by shared information such as open books, shared decision-making about best approaches, and shared responsibility for solving problems as they arise.
67
A competing view states what about implementing strategy?
> A competing view states that an organization cannot implement a strategy if it does not have the necessary human resources.
68
What are small businesses good at?
> Small businesses seem to be better at this second approach. The owners of very small businesses are nimble and quickly recognize that if an employee has a certain capability, it can be exploited to develop new products or services.
69
This “skills determine strategy” outlook relies too heavily on what?
> relies too heavily on employee capabilities and not enough on environmental analysis; nor is consideration given to changing HR practices in training or compensation to facilitate this change in strategy.
70
When an org chooses a business strategy what are they doing?
> in organization develops its employees and then capitalizes on their skills; the employees then learn new skills, and so it continues.
71
How does HR strategy affect business strategy and so forth? What is this concept?
> In many ways, HR strategy generates the business strategy, and business strategy determines HR strategy.
> This concept of reciprocal interdependence is widely accepted in the HR strategy literature
72
An emerging view is that HR should build its strategies by doing what?
> by starting with the issues facing the business.
73
What is concurrent strategy?
> Strategy development is conducted at the same time that HRM issues are considered.
74
What's an example of the concurrent strategy?
> An example of this occurred when an organization was experiencing a rapid downward spiral in business. The traditional HR response would have been to prepare for downsizing the workforce. Instead, the HR manager created a unit to successfully lobby the government to support two major contracts, using the employees’ unique competencies
75
What is an HRBP?
> An HR business partner (HRBP) is a member of the HR team who is assigned to represent human resources in specific business units, working directly with the leadership of the units in a consulting and coaching role.
> HRBPs act as brokers between the business unit and other HR functions—such as core HR, centres of expertise, and shared service centres—to tailor the design and implementation of HR programs and services to best serve the operational needs of the business unit.
> At the same time, HRBPs coach business unit leaders on how to get the most value out of their teams while aligning to programmatic and cultural norms.
> The HRBP role is designed to be HR’s one-stop shop or single point of contact in the business unit, ensuring an effective two-way flow of information and services between HR and the business.
76
What is the matrix HR/shared services model:
> proposed by Ulrich and Grochowski (2012, 136–142), this model encompasses four distinct HR roles:
1) Corporate HR: oversees the organization’s overall HR function
2) Centres of expertise (COEs): HR specialists create and manage corporate HR programs (e.g., learning and development, leadership, wellness)
3) Shared service centres: carry out the routine, standardized HR transactions (e.g., payroll, relocation)
4) HR Business Partner (HRBP): embedded HR in the person of the HRBP, who works directly with line managers to ensure that HR programs and processes are aligned with, and contribute to, the business strategy of individual business units
77
Traditionally, HR has been organized into what kind of units? How about currently?
> functional units (training, compensation, and so on).
> However, there are some more innovative practices, where the unit is organized according to the services provided.
78
Firms with more than one business strategy are likely to have more than one approach to what?
> are likely to have more than one approach to HR strategy.
79
Recently, researchers have suggested that HR strategy can be further differentiated based on jobs/positions within divisions. What are two considerations that apply to this?
(1) when a position is directly responsible for creating the strategic capabilities of the business and
(2) when different job holders may vary substantially in their job performance, then the position is considered a strategic position
80
From a human capital perspective, even within the same positions, some individuals may deserve differential HR strategy than others for two reasons - what are they?
(1) valuable to the business strategy and (2) unique (hard to replace)
81
Human capital has been found to be significantly related to what, particularly when what occurs?
> Human capital has been found to be significantly related to organizational performance, particularly when the human capital is unique to the organization
82
The Conference Board of Canada (2017, 65) found that employers are segmenting workers by the following categories:
1) Hot skills: skills that are in short supply and high demand in the labour market
2) Mission critical skills: capabilities needed within an occupation (leadership skills)
3) Mission critical roles: highly skilled, highly trained individuals who drive organizational value
4) Key job family positions: workers who are well trained on core organizational processes, but are more easily replaced
5) Contingent labour: temporary, demand-based, and project-based workers
83
The purpose of HR strategy is what?
> The purpose of HR strategy is to capitalize on the distinctive competencies of the organization and add value through the effective use of human resources
84
Effective HRM strategies include:
> external and internal fit, and a focus on results. Agility is becoming increasingly important in a turbulent environment.
85
What is fit?
> Fit is an important consideration when designing HR programs. We will examine two important types of fit: external fit and internal fit.
86
What is external fit?
> HR programs must align with or fit the overall strategy of the organization.
> Fit with other functional strategies is as important as fit with business strategies
87
What is the best fit approach to strategic HR management?
> HR senior management must be included in strategy discussions to be sure this happens. This is sometimes called the “best fit” approach to strategic HR, where HR strategies match organizational strategies.
88
What are the two types of internal fit?
> We refer to two types of internal fit: a fit with other functional areas, such as marketing, and a fit among all HR programs.
89
HR programs must also be what overall? (in relation to other programs?)
> HR programs must also be consistent with each other.
90
The “best practices” approach, in which bundles of HR practices are internally consistent, suggests what
> suggests that there is a direct relationship between an internally consistent bundle of HR practices and firm performance
91
What values does an aglie org have?
An agile organization has a set of values and methodology that emphasize a continuous process of experimentation, feedback, and improvement to maximize customer value.
92
Is HR static?
> HR is not static (Devine and McMackin 2021).
< Fit may be the opposite and may undermine flexibility.
< Somehow there needs to be a tight fit between business and HR strategies, but there is also a need to be fluid to adapt to changing circumstances.
< Think of this as evolutionary HR; sensing and responding to changes so that HR practices align with changing organizational needs and circumstance
93
Before any HR program is introduced, the following chain (Describe each link) needs to be developed:
1) HR program:
2) Employee Human Capital and behaviours
3) Organizational strategy
4) Organizational outcomes
