OS 352 1/15/08

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OS 352 1/15/08

• I. Strategic behavior of organizations
• A. HRM trends.
• B. Theories of strategy
• C. Application jetBlue Airways.

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Trends in Human Resource Management

• Change in the labor force (i.e., people who are
  willing and able to work)
• High performance work systems
• Focus on strategy
• Technological change in HRM
• Change in the employment relationship

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Change in the U.S. Labor Force

• Areas of skill deficiencies mathematical,
  verbal, interpersonal skills.
• The workforce is aging. Between 2002-2012, the
  fastest growing age groups are ees ages 55 and
  older.
• The workforce is growing more diverse.
• The 2012 workforce is expected to be 66 white,
  15 Hispanic (any race), 12 black, and 7 Asian
  and other minorities.
• At present, women comprise 47 of the workforce.
• At present, 61 of mothers with a child under the
  age of 3 are working.

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Minorities are the fastest growing segment of the
U.S. workforce
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Working Mothers
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High Performance Work Systems

• Require
• Knowledge workers ees whose main contribution to
  the firm is specialized knowledge.
• Ee empowerment giving ees responsibility and
  authority to make decisions.
• Teamwork assignment of work to groups of ees
  with various skills who interact to assemble a
  product or provide a service.

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Change in the Employment Relationship

• New psychological contract
• Traditional ee contributes time, effort, skills,
  abilities, and loyalty firm provides job
  security and opportunities for promotion.
• New ee contributes top performance, current
  skills, and longer hours firm provides flexible
  schedules, more ee control over how accomplish
  work, training and development, and financial
  incentives.

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The Behavior of Organizations Two Perspectives

• 1) Firm behavior is a function of environmental
  pressures (sociology)
• 2) Firm behavior is a function of the goals and
  actions of the firm (economics, business
  strategy).

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Strategy

• Plan for meeting broad goals such as
  profitability, quality, and market share.

• 3 Levels
• Firm / organization
• Business unit
• Function / department

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Three HRM Strategy Theories

• Contingency perspective
• Best practices
• Resource-based

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Contingency Perspective

• Organizations will be most successful when
  strategies fit environments.
• Organizations will be most successful when HR
  strategies fit organizational strategies.
• Firms should tailor HR activities.

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Diagram of the Contingency Perspective
Organizational Strategies
Environment
Consistency
Fit
Fit
Improved Firm Performance
HR Strategies
Consistency
Consistency
Fit
Fit
Organizational Characteristics
Organizational Capabilities
Consistency
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How to Interpret the Diagram

• Contingency Perspective says that firms that
  match their HR activities / strategies to the 4
  boxes (organizational strategies, environment,
  organizational characteristics, organizational
  capabilities) will be more successful than those
  that do not.

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Examples

• Organizational Strategies
• JetBlue Airlines
• Wegmans Food Markets customer service, high
  quality goods, variety of products
• Business Environment
• JetBlue Airlines
• Wegmans Food Markets competition from low cost
  providers, poor economy, good reputation

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Examples

• Organizational Characteristics
• JetBlue Airlines
• Wegmans Food Markets growing/expanding, retail
  food industry, privately-held
• Organizational Capabilities
• JetBlue Airlines
• Wegmans Food Markets excellent reputation as
  employer and as grocery store, ability to attract
  and retain high quality workers

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If you fully understand the contingency
perspective

• You should be able to give examples of the four
  boxes.
• You should be able to think of HR activities that
  would fit or match the four boxes. For
  example, Wegmans strategy of providing a
  excellent customer service should lead it to
  select new employees based upon their degree of
  interest in solving customer problems.

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Best Practices Approach

• Some practices work better than others (e.g.,
  variable pay bonuses for managers).
• Some practices are more progressive than others
  (e.g., paid family leave).
• Firms should imitate HRM leaders.

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Resource-Based Approach

• Invent unique practices or combinations of
  practices.
• Or imitate successful practices in other
  companies and tailor to your firm and integrate
  it with your firms systems.

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How to Assess A Firms Human Resource Strategy

• The combination of HR practices used by a firm.
• Company statements regarding mission, values,
  strategies, and references to its workers.

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Terms You Should Know

• Psychological contract
• Knowledge workers
• Ee empowerment
• Strategy

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You Should be Able To

• Know basic statistics about the changing
  demographics of the U.S. workforce.
• Identify and discuss key environmental trends
  affecting HR.
• Explain in depth and using examples the
  contingency theory of strategy.
• Explain and compare the three theories of
  strategy.