Managing Human Resources in North America

Current Issues and Perspectives

Steve Werner, Steve Werner

• Publisher: Routledge
• Year: 2012
• ISBN:
  9781136713729
• Edition: 1
• Topic: Betriebswirtschaft
• Subtopic: Business allgemein

This unique text covers the key issues in North American human resources today. Providing an overview of new and emerging issues in North American Human Resource Management (HRM), the chapters are divided into three parts. The first part examines how changes in the business environment have affected HRM; the second part looks at topics that have escalated in importance over the last few years; and the third analyzes topics that have recently emerged as concerns.

Each chapter is authored by a leading figure in the field and features case vignettes to provide practical illustrations of the points in hand. The chapters also conclude with guidelines to help HR professionals deal with the issues raised.

A Companion Website featuring online lecturer and student resources is available for this text and can be visited at www.routledge.com/textbooks/0415396867.

Managing Human Resources in North America is a core text for current issues in HRM courses in North America and a supplementary text for students studying international HRM in other countries. It will be invaluable reading for all those studying HRM in North America or currently working in the field.

1

Introduction to managing HR in North America

STEVE WERNER

Human resource management (HRM) matters. A large and growing number of studies has shown that human resource management dramatically affects the firm. Numerous HRM practices have been shown to affect different plant and business performance measures including financial performance, turnover, and productivity (Huselid and Becker, 2000). HRM effectiveness has been shown to be positively related to corporate performance indicators including market value, cash flow, and productivity (Huselid et al., 1997) as well as perceived firm performance (Delaney and Huselid, 1996). An effective HRM department will help firms attract and hire the right people, train them properly, pay them fairly, evaluate their performance accurately, motivate them, and it will achieve this within the current legal constraints and appropriate ethical boundaries. However, the business environment is constantly changing, raising many challenges for HRM. This book looks at those challenges, how they can affect the firm and human resources (HR), and how HRM can address them.

The structure of the book

The book is structured as follows. The topics are organized into three parts. The first part is “Major changes in environmental factors and HRM.” In this part, the chapters look at how changes in the business environment have affected HRM. The second part is “Areas of increased importance.” In this part, the chapters explore HRM topics that have increased in importance over the last several years. The third part is “Emerging trends and new issues.” In this part, the chapters analyze topics that have recently emerged as concerns to HRM. Each chapter concludes with guidelines to help HR professionals deal with the current issue. The book concludes with a summary chapter that looks at the major environmental changes and points out some common themes across the chapters.

The topics

Here is a brief overview of each chapter in Part I, “Major changes in environmental factors and HRM.”

Chapter 2, by Ibraiz Tarique and Randall S. Schuler, is titled “Staffing and developing the multinational workforce.” This chapter looks at the recent research on expatriates, locals, and third country nationals. It also covers new issues in staffing and developing employees in multinational enterprises.

Chapter 3, by Bradford S. Bell and Steve W.J. Kozlowski, is titled “Advances in technology-based training.” This chapter looks at how environmental factors have influenced training. The chapter also looks at the benefits, costs, and challenges of training technology, and how training content, technological capabilities, and trainee characteristics affect the effectiveness of technology-based training.

Chapter 4, by Teri J. Elkins, is titled “New HR challenges in the dynamic environment of legal compliance.” This chapter looks at current trends in personnel law. Specifically, the chapter looks at new laws and new court rulings and how they affect the HR function. Topics include sexual harassment, age discrimination, alternative dispute resolution, and corporate reform.

Chapter 5, by Pamela L. Perrewé, is titled “The changing family and HRM.” The chapter looks at the changing demographics of the workforce and how they affect employers and HRM. Topics include dual-career families, the changing shape of families, the aging workforce, and diversity and how organizations are responding to these changes.

Here is a brief overview of each chapter in Part II, “Areas of increased importance.”

Chapter 6, by K. Michele Kacmar, is titled “Ethics and HRM.” This chapter provides a brief overview of ethics and how current trends have raised ethical concerns. It looks at how HR can be used to instill ethics in the workplace and the costs and benefits of such programs.

Chapter 7, by Lois E. Tetrick and Michael T. Ford, is titled “Health, safety and HRM.” This chapter looks at some current issues involving health, safety, employees, and the HR department. Issues covered include the Americans with Disabilities Act, the Family and Medical Leave Act, rising health care insurance costs, and general workforce trends. The chapter looks at how organizations can address these issues with safety management, employee assistance programs, health promotion, and work–life balance initiatives.

Chapter 8, by Jason D. Shaw, is titled “Competitive advantage through HRM.” This chapter looks at how firms can strategically respond to environmental changes. Topics include commitment-enhancing practices, leveraging HR practices strategically, HRM investment, and enhancing the flexibility and agility of the HRM system.

Chapter 9, by Hannah L. Jackson and Deniz S. Ones, is titled “Counterproductive leader behavior.” This chapter looks at the current issue of counterproductive leader behaviors. Topics include recent research on counterproductive behaviors, antecedents and rationalizations of counterproductive behaviors, how environmental factors and individual differences are related to counterproductive behaviors, and how HR can deal with them.

Here is a brief overview of each chapter in Part III, “Emerging trends and new issues.”

Chapter 10, by Brian S. Klaas, is titled “Outsourcing and HRM.” This chapter looks at the current trends in outsourcing HRM and other functions. It provides an overview of the trend, and introduces factors that may be responsible. The chapter discusses how firms can improve outcomes when outsourcing and what factors can influence the outsourcing arrangement.

Chapter 11, by Joseph J. Martocchio, is titled “The costs of employee benefits.” This chapter looks at the trend of rising costs of employee benefits, why it has come about, and what HR departments are doing about it. The chapter focuses on health care and looks at the implications as well as the costs and benefits of different solutions.

Chapter 12, by Marianna Makri and Luis R. Gomez-Mejia, is titled “Executive compensation: something old, something new.” This chapter looks at new issues in executive compensation. Topics covered include CEO overpayment, the role of risk in CEO contracts, shareholder activism, the Sarbanes–Oxley Act, Securities and Exchange Commission (SEC) disclosure rules, and CEO pay in high-technology firms and family firms.

Chapter 13, by Gerald R. Ferris, Wayne A. Hochwarter and Timothy A. Matherly, is titled “HRM after 9/11 and Katrina.” This chapter looks at how 9/11 and Katrina have changed HR. The chapter looks at how firms can prepare for catastrophes, including the role of HR before and after the disaster.

The book ends with my “Concluding thoughts” chapter that looks at some common themes across the chapters using the organizing framework as a reference point.

The organizing framework

To help organize the chapters, each author used a similar framework (see Figure 1.1). The framework begins by looking at the changes in the internal and external environmental factors that have led to the current issues. These environmental changes lead to HR and firm responses. These responses will result in outcomes that can affect the company and all its stakeholders, including the HR department, management, other employees, company owners, and even society as a whole. The model also includes moderating factors, which can change the effects of the responses. Finally, the model includes guidelines that should help firms increase the probabilities of positive outcomes and reduce the possibilities of negative outcomes to stakeholders.

Figure 1.1 The organizing framework

Changes in the environment

The business environment is comprised of the general environment, the task environment, and the firm's internal environment (Anthony et al., 2006). Each of these environmental components shapes what the firm can and should do.

The general environment

The general environment is comprised of factors in broader society that affect a firm and its industry indirectly, usually through the task environment. The factors include the demographic segment, the economic segment, the political/legal segment, the sociocultural segment, the technological segment, and the global segment (Hitt et al., 2007). The demographic segment is defined by the characteristics of the people who are external stakeholders in the firm. It includes the size and geographic distribution of the relevant population and their age structure, income distribution, and ethnic mix. The relevant population can represent a firm's pool of possible employees (labor market), consumers, and surrounding community. Thus, changes in the demographic segment can affect a firm on many levels.

The economic segment is comprised of the economic and financial condition of the firm's environment. It includes relevant inflation, interest, unemployment, and savings (business and personal) rates. It also includes other economic indicators such as gross domestic product (GDP), change in GDP, and level of trade and budget deficits. These economic variables can affect a firm's labor market, sales potential, material costs, labor costs, suppliers, market value, and cost of capital. Thus, changes in the economic segment can also affect a firm on many levels.

The political/legal segment is comprised of the laws and dominating political climate that impact the firm. It includes all laws affecting the firm, such as tax laws, antitrust laws, employment laws, training laws, consumer protection laws, and environmental regulations. The political segment also includes aspects affected by the current political climate such as deregulation philosophies, educational philosophies, and political agendas, which can all affect the regulatory environment. Clearly, this segment affects all aspects of the firm from the rights of employees to how the firm can dispose of its waste.

The socio-cultural segment is defined by the values held by the firm's external stakeholders. It includes the attitudes and cultural values of society. Examples include attitudes about the quality of work life, work and career preferences, product and service preferences, and environmental concerns. The values may affect aspects of the demographic segment such as workforce diversity.

The technological segment is defined by the technology available to the firm. It includes available product technologies, communication technologies, applications of knowledge, data management technologies, and applicable software. The technologies can affect everything the firm does from manufacturing to training employees.

The global segment is comprised of the non-domestic factors that could impact the firm and its industry. It includes world political events, global product markets, global material availability, global labor markets, and the values and culture of other countries. These may overlap some of the other segments.

Task environment

The task environment is comprised of factors that directly affect the firm and its industry. The factors are likely to be influenced by the general environment. The task environment includes the labor market, the product market, competitors, and other stakeholders (Anthony et al., 2006). The labor market is the labor pool from which the firm can choose its employees. The product market is the nature of the firm's customers and clients. Competitors are other firms against which the firm is competing. Other stakeholders include the government, special interest groups, and the immediate community.

Internal environment

One way to look at a firm's internal environment is to consider its resources (Barney, 1991; Dess et al., 2006). The firm's resources can be categorized as tangible or intangible. The tangible resources include financial resources, organizational resources, physical resources, and technological resources, while the intangibles include human resources, innovation resources, and reputational resources. Financial resources are the firm's current financial position and its capability to change that position. This would include its current cash holdings, borrowing capacity, and ability to generate funds. The organizational resources are the current management structures of the firm and its capabilities to change them. These resources include the policies and procedures, the organizational structure, and the current management systems in place. The physical resources are the actual materials, land, and buildings that a firm owns or has access to. The technological resources are the processes the firm uses to make its product and manage the company.

Of the intangible resources, human resources are the employees and managers of the firm. They are resources based on their knowledge, trust, capabilities, skills, experience, and flexibility. The innovation resources are the firm's current abilities to innovate. They include the capacity of the employees to innovate and create, and their technical and scientific skills, as well as the firm's innovation culture. The reputational resources are the firm's reputation with different stakeholders. These intangible resources can be at the firm, brand, or product level as perceived by customers, suppliers, and society as a whole. These intangible resources may be influenced by the general or task environment. They are important because they can determine not only how the organization responds to environmental changes, but also the outcomes of those responses.

Responses

Changes in the general environment usually will lead to changes in the task environment. These task environmental changes can lead to HR and firm responses. ...