human capital management - mba crash course module 2

8/14/2019 HUMAN CAPITAL MANAGEMENT - MBA CRASH COURSE MODULE 2

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MBAMaster of Business AdministrationCrash Course

An association of institutional, professionals, and OFWsRiyadh, Kingdom of Saudi Arabia

The National Organization of Certified Public AccountantsRiyadh Chapter, Kingdom of Saudi Arabia

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MODULE 2

HUMAN CAPITALMANAGEMENT

TALENT REALITIESTALENT REALITIES

Business success is more people dependent

Marketplace for TALENT is increasingly becomingglobal

Expectations and desires about employment

relationship is more complex

Employees are more sophisticated now

Loyal to themselves and on the move

TALENT is a scarce source


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ORGANIZATIONAL CHALLENGESORGANIZATIONAL CHALLENGES

De-motivated staff

Lack of Job Fit

Decreased productivity

Increased pressures to produce

High levels of stress

Ineffective training plans and programs (costs, ROI!)

Etc

NORMALLY CANDIDATES ARE:

Hiredfor

qualifications

Hiredfor

qualifications

But,Fired forBehavior

But,Fired forBehavior


FIRING as a result of WRONG HIRINGHas major negative impact

FIRING as a result of WRONG HIRINGHas major negative impact

CORPORATE CULTURECORPORATE CULTURE

FINANCIALLYFINANCIALLY

OPERATIONALLYOPERATIONALLY



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WHY PEOPLE FAIL?WHY PEOPLE FAIL?

INCOMPATIBILITYINCOMPATIBILITY

With COMPANY CULTURE

With JOB

With PEOPLE

DO ORGANIZATIONS HAVEHUMAN CAPITAL STRATEGY

IN PLACE

DO ORGANIZATIONS HAVEHUMAN CAPITAL STRATEGY

IN PLACE

HUMAN CAPITALHUMAN CAPITAL

The ability of people to innovate to createnew products and new services, and to

improve business process.

INTELLECTUAL CAPITAL

(knowledge, skills, and talent)

RELATIONAL CAPITAL

(connections and relationships

with customers, peers, vendors,

and external associates)+

ORGANIZATIONS GOALS

ACHIEVEMENT OF=


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CUL

TURE

LEADERSHIP M

OTIVA

TION

TEAM

WORK

HUMAN CAPITALHUMAN CAPITAL

RECRUITMENT

DEVELOPMENT

RETENTION

EMPLOYEELIFE CYCLE

HUMAN CHARACTERISTICSHUMAN CHARACTERISTICS

As organisms not mechanisms(Idiosyncratic)

Bio-Logic not Machine-Logic

UNDERSTANDING

BETTER

MANAGEMENT OF

PEOPLE

BELONGINGConnectionIntimacy

ESTEEMAchievement

CompetenceApproval

Recognition

HUMAN ATTENTION-CRITICAL CURRENCYHUMAN ATTENTION-CRITICAL CURRENCY

4 TOP PRIORITIES

SURVIVAL AND

REPRODUCTIONFood, Shelter,

Sex,Protection,

Offspring

SAFETY

Shelter,

Trusted FriendFamily

MASLOWS HEIRARCHY OF NEEDSDavenport and Beck,2001

FOCUS

UnderstandingDynamics

=

EffectiveManagement


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EFFECTIVE MANAGEMENTEFFECTIVE MANAGEMENT

DR. RINSES LIKERT

EMPLOYEES SEEN AS PEOPLE

OWN NEEDS, DESIRES AND VALUES

MOTIVATION TO WORK- MODERN PRINCIPLES vs REWARDS & THREATS

TIGHTLY KNIT AND HIGHLY EFFECTIVE WORKFORCE- COMMITTED TO ACHIEVING GOALS

SUPPORTIVE RELATIONSHIP WITHIN GROUP- MUTUAL RESPECT

NEW PSYCHOLOGICAL CONTRACTNEW PSYCHOLOGICAL CONTRACT

safe/hygienic work conditions

job security

challenging and satisfying jobs

equitable policies & procedures;

participation in decisions

implement best practice

Devt & career progression;

respect

Understanding & consideration

ORGANIZATIONINDIVIDUAL EXPECTATION

accept organizations ideology

to work diligently

not to abuse goodwill shown bymanagement

uphold the image of the

organization

show loyalty

not to betray positions of trust

standards of dress andappearance

IMPORTANCE OF CULTURE

INPEOPLE MANAGEMENT

IMPORTANCE OF CULTURE

INPEOPLE MANAGEMENT


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VALUES

Mission

Business Objectives

Strategies

UNDERSTANDING CULTUREUNDERSTANDING CULTURE

BELIEFS

PARADIGM

(Cultural Web)

THREE LAYERS


CULTURAL WEB

PARADIGM

SYMBOLS

Looking Busy

Untidy work area Prestigious offce POWER

STRUCTURES Leadership Power Distribution

ORGANIZATION

STRUCTURES

Mechanistic Organic

Formal/InformalCONTROL

SYSTEMS

Procedures

Rewards Punishment

RITUAL/ROUTINES

Meetings Communications Parties

STORIES

Fun place to work Salary Levels Working hard


DIMENSIONS OF CULTURE - (Hofstede)

POWER DISTANCE ManagementStyle Willingness of subordinates todisagree

UNCERTAINTY AVOIDANCEExtent of threat in unusual situations

INDIVIDUALISM Individualisticor collectivism

MASCULINITY Masculinecharacteristics


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CULTURAL VARIANCE & WORKPLACE BEHAVIOR(Dutch Writer Fons Trompenaars)

RELATIONSHIP & RULESEmployees Flexibility to situations

INDIVIDUALS/COLLECTIVISM Individualist/Family

EMOTIONAL SOCIETIESDisplay of emotions in workplace

DIFFUSE CULTURE Take time tobuild relationship


CULTURAL VARIANCE & WORKPLACE BEHAVIOR

(Trompenaars)

ACIEVEMENT BASEDAccomplishments

TIME ELEMENT Presentperformance for future success.

ENVIRONMENTAL

DIFFERENCES Impact ofenvironment to attitude


EMPOWERMENTEMPOWERMENT


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Energizing people to

achieve furtherprogress and success.

Power is a route topower.

Major support forbusiness turnaround

EMPOWERMENT - CHALLENGESEMPOWERMENT - CHALLENGES

Habit

Fear of Anarchy

Personal Insecurity

Lack of Skills

Pragmatismempowerment does not solve everything


ROLES OF MANAGERSROLES OF MANAGERS

Counselor/Coach -understand and manage situation

Vision ArticulatorEncourage participation of employees

Goal DefinerDefine goals and give feedback-Agree target, let team

decide how to meet them

Challenge Creator

Talent DeveloperDevelop employees talents-provide opportunities

Resource ObtainerAvailability of resources


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ROLES OF MANAGERSROLES OF MANAGERS

Leader- Controlling Leader

select the right productselect the right employees

define processes, procedures, standards

set objectives and guidelines.

- Enabling Leaderencourage cross-trainingappraise performance continuously

promote communication

build and nurture the team

encourage employees

coordinate direction

procure resources

represent the team when needed

LEADERSHIPLEADERSHIP


LEADERSHIPcentral to exercise of

management

MANAGER VS LEADER

How ThingsGet Done

What ThingsMeant to People

Do the RightThing

Do ThingsRight


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In a study of nineteeninsurance companies, the

climate created by the CEOamong their direct reports

predicted the businessperformance of the entire

organization: In75%of cases,climate alone accurately

sorted companies into highversus low profits and

growth.


If climate drives businessresults, what drives climate?

Roughly50 to 70percent of howemployees perceive their

organizations climate can betraced to the actions of one

person: the leader. More thananyone else, the boss creates the

conditions that determine

peoples ability to work well.

MANAGEMENT VS. LEADERSHIPMANAGEMENT VS. LEADERSHIP

FIVE DIMENSIONS(By Kotter)

1.DIRECTION

2.ALIGNMENT

3.RELATIONSHIP

4.PERSONAL QUALITIES

5.OUTCOMES


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DIRECTION

MANAGEMENT LEADERSHIP

Planning & Budgeting

Keeping an eye onbottom line

Creating vision andstrategy

Keeping an eye on thehorizon


ALIGNMENT


Organizing and staffing

Directing andcontrolling

Creating boundaries

Creating shared cultureand vision

Helping others to grow

Reducing boundaries


RELATIONSHIPS


Focus on objects/products

Selling goods andservices

Acting as a boss

Focus on inspiringpeople

Motivating followers

Based on personalpower

Acting as coach,facilitator


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PERSONAL QUALITIES


Emotional distance

Expert mind

Talking

Conformity

Insight intoorganization

Emotional connection

Open mind

Listening

Non-conformity

Insight into self


OUTCOMES


Maintain Stability Create Change oftenradical

LEADERSHIP APPROACHESLEADERSHIP APPROACHES

TRAIT APPROACH

BEHAVIORAL

CHARISMATIC

TRANSFORMATIONAL


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TRAIT APPROACH

ARELEADERS

BORN OR MADE?


TRAIT APPROACH

Broad Range of Characteristics

Intelligence

Height

Health

Socio-Economic Status

Initiative & Enthusiasm


TRAIT APPROACH

Effective Leaders

Supervisory Skills

Occupational achievement

Intelligence

Decisiveness

Self Assurance

Initiative


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BEHAVIORAL

Behavior(learned phenomenon)

and nottraits (inherent attributes)

that determines theeffectiveness of a leader.


BEHAVIORAL

Rensis Likert (University of Michigan)

Exploitative/Authoritative

Benevolent/

Authoritative

Consultative Participative

Groups

CONTINUUM

TASK


LEADERSHIP GRID TASK VS. PEOPLE

IMPOVERISHEDMANAGEMENT

(1,1)

LOW

HIGH

HIGH

PEOPLE

COUNTRY CLUBSTYLE

(9,1)

MIDDLE OF THEROAD STYLE

(5,5)

TEAM STYLE

(9,9)

PRODUCER OR PERISH(Authority-Obedience)

(9,1)


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CHARISMATIC

CHARISMA Gift of Favor

THREE (3) PERSPECTIVES

LEADER CENTERED

FOLLOWER CENTERED

INTERDEPENDENCY


TRANSFORMATIONAL

Ability to change attitude/perception ofmembers; create vision that inspires people

COMPETENCIES AND STRATEGIES

Capacity to encourage/motivate others

Capacity to accept challenges & take risks

Self awareness and self knowledge

Personal persistence and commitment

Willingness and motivation to go on

learning

Ability to learn and profit from failuresand mistakes

LEADERSHIP CONTINUUMLEADERSHIP CONTINUUM

Tannenbaum and Schmidts Leadership Continuum(How to choose Leadership Pattern, Harvard Business Review)

Manager

makes

decision

andannounces

it

CONTINUUMBoss Centered

LeadershipSubordinate Centered

Leadership

Manager

presents theproblem

and seeksideas

Staff actsfreely in set

limits

Manager sellsdecision

Manager

presentsideas and

invitesquestions

Manager

presentspotentialsolution

Managerdefines limits

and asksgroup to

decide


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In challenging waters, theleader must be the rock

that provides stability,the shield that offers safe

harbor, and the compassthat points the way.

MOTIVATIONMOTIVATION


Persuading people to do whatneeds to be done and achieve

pre-set goals/objectives.


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RESEARCHES/STUDIES

MASLOWS HEIRARCHY OF NEEDS

Assumption that one people have satisfied acertain level of need, they will want to move to thelevel above .

CHALLENGES- Every individual has different needs.- Need to know the person in the hierarchy.- Multiple needs satisfied at the same time.


RESEARCHES/STUDIES

DOUGLAS MCGREGOR X & Y THEORYAssumption that one people have satisfied acertain level of need, they will want to move to thelevel above .

Theory X- People need to be controlled and threatened.- Human prefers to be directed.- People need more than financial reward.

Theory Y- Mental/physical effort = play/rest- Control/punishment not only ways to work

- Job Satisfaction = Commitment- Imagination/creativity solve work problems.


RESEARCHES/STUDIESFREDERICK HERZBERGS TWO FACTORTHEORY

Hygiene Organization & Work Environment- Organization - Interpersonal relations

- Policies - Salary- Supervision - Status- Working Condition - Job Security

Job Motivators- Achievement- Recognition- Growth/Advancement- Interest in the Job


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RESEARCHES/STUDIES

HAWTHORNE EXPERIMENT ELTON MAYO

Work is a group activity.

Recognition, security, sense of belonging areimportant in employee morale and productivity.

Complaint sign of disturbance of status/position

Attitude & Effectiveness affected by internal andexternal environment.

Informal groups with great impact to individualworker.

Group collaboration must be planned &developed


RESEARCHES/STUDIES

EMPLOYEE IMMATURITY/MATURITYTHEORY CHRIS ARGYRIS

Bureaucratic/Pyramidal SystemPoor, shallow and mistrustful relationship.

Humanistic/Democratic RelationshipTrusting, authentic relationships will developamong people - result in increasedinterpersonal competence, inter-groupcooperation, flexibility, and the like andshould result in increases in organizationaleffectiveness


RESEARCHES/STUDIES

MANAGEMENT SYSTEM AND STYLESRENSIS LIKERT

Exploitive-Authoritative System

Threats High level mgt responsibilities.

Benevolent Authoritative SystemMaster Servant Trust Reward System

Consultative SystemLeadership by superiorsPartial Trust in subordinatesReward system


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RESEARCHES/STUDIES

MANAGEMENT SYSTEM AND STYLESRENSIS LIKERT

Participative Group SystemLeadership by superiorsComplete Trust in subordinatesReward system - Economic


RESEARCHES/STUDIES

ACHIEVEMENT MOTIVATIONDAVID MCLELLAND

Intense need to achieve distinct amongother needs.

TEAMWORKTEAMWORK


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TEAMWORKTEAMWORK

PEOPLE WORKING

TOGETHER TO ACHIEVEA COMMON GOAL

TEAMWORKTEAMWORK

Balanced roles.

Clear objectives and agreed goals

Openness and confrontation.

Support and trust.

Cooperation and conflict.

Sound procedures.

Appropriate leadership.

Regular review

Individual development.

Sound inter-group relations.Good communications.

BUILDING BLOCKS TO EFFECTIVE

TEAMWORK

WHAT IT TAKES TO

ATTRACT, RETAIN, AND ENGAGE

EMPLOYEES

WHAT IT TAKES TO

ATTRACT, RETAIN, AND ENGAGE

EMPLOYEES


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ATTRACTIONRecruiting the Right People

Competitive base pay

Challenging work

Career Advancement Opportunities

Salary increases linked to individualperformance

Learning & development opportunities

Organizations reputation as good employer

Caliber of co-workers

Organizations financial health.

RETENTIONKeeping the Best People

ENGAGEMENTSecuring Discretionary

Effort

TOP GLOBAL DRIVERSTOP GLOBAL DRIVERS




Effort

Satisfaction on organizations decision

Manager understands what motivatespeople


Low-or-no stress work environment

Opportunities to learn and develop newskills

Fair compensation

Effective communication of careeropportunities.





Effort

Opportunities to learn & develop new skills

Skill & capabilities improvement


Input into decision making in the department

Organizations focus on customer satisfaction

Fair & consistent salary criteria

Good collaboration across units

Appropriate decision making authority to do thejob well.

Senior managements action to ensure long-term success

Senior managements interest in employee wellbeing.



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RECRUI TMENTMANAGEMENT

RECRUI TMENTMANAGEMENT

COMMON RECRUITMENT CHALLENGESCOMMON RECRUITMENT CHALLENGES

Typical Selection Process

KNOWLEDGE

SKILLS EXPERIENCE

WHAT EMPLOYERS SEE

INTERESTS

MOTIVATION

TRAITS

VALUES

WHAT EMPLOYERS GET

BAD-GOOD JOB\ORG. FIT!

IS THERE A BAD-GOOD PERSON?

NO


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THE CHALLENGE

Your Pool Of

PotentialCandidates

The

Target

Job

Role & Responsibilities

Competencies

Personality(Behavioral Traits)

Interest

Thinking Capacity

Cultural & Value Fit

Leadership andManagement Style Fit

Marriage

Good Fit

Growth-Productivity

Bad Fit

Termination-Law Suits

Study:Retaining Talent, Retention andSuccession In the Corporate Workforce

85% of Executives reported the single greatestchallenge in workforce management is creatingor maintaining their companies ability tocompete for top talent.


Chances are good that up to

66% of your companys hiring

decisions will prove to bemistakes in the first twelve

months.

PETER DRUCKER

Revered as father of Modern DayManagement

PETER DRUCKER

Revered as father of Modern DayManagement



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30-40 percent of all applicants misrepresentthemselves on their resumes

10-15 percent of all applicants haveunfavorable records

52 percent of resumes have discrepancies

A Recent StudyA Recent Study


63% of all hiring decisions are made

during the first 4.3 minutes of an

interview.

Society of Human Resource Management Study, reported inUSA Today


1 st Quarter

TIME

EXPEC

TATIONS

2nd Quarter

3rd Quarter



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COSTPER

HIRE?

TIM

ET

OFILL

POSITIO

N?

COSTO

F

MIS-HIR

E?

COSTOF

TRAINING?

COSTOF

DISENGAGED

EMPLOYEES?

WHIC

HEMPLO

YEE

CONTRIBUTE

NEG

ATIVELY?

MANPOWER COSTMANPOWER COST

GOAL:IMPROVED

PERFORMANCE

ENGAGEMENTENGAGEMENT

The degree to which employees

connect with their work and feelcommitted to their organization

and its goals.

CHARACTERISTICS OF HIGHLYENGAGED EMPLOYEES

CHARACTERISTICS OF HIGHLYENGAGED EMPLOYEES

Feel excited and enthused

Less aware of the passage of time

Devote discretionary effort to the activity

Identify with task describe themselves withothers in the context of task.

Think about questions or challenges posed bythe activity during spare moments.

Resist distractions and find it easier to stayfocused.

Invite others into the activity


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EMPLOYEE ENGAGEMENT WORLDWIDE2006 STUDY

EMPLOYEE ENGAGEMENT WORLDWIDE2006 STUDY

Belgium

Brazil Canada

China

France

Germany

India

Ireland

Italy

Japan Mexico

Netherlands

South Korea

Spain

United Kingdom

United States

EMPLOYEE ENGAGEMENT WORLDWIDEEMPLOYEE ENGAGEMENT WORLDWIDE

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Global*

Highly Engaged

14%

Moderately Engaged

62%

Disengaged

24%

Mexico 40% 51% 9%

Brazil 31% 62% 7%

U.S. 21% 63% 16%

Belgium 18% 67% 15%

Canada 17% 66% 17%

Germany 15% 70% 15%

Ireland 15% 70% 15%

U.K 12% 65% 23%

Spain 11% 64% 25%

S. Korea 9% 71% 20%

France 9% 68% 23%

Netherlands 8% 73% 19%

China 8% 67% 25%

Italy 7% 64% 29%

India 7% 37% 56%Japan 2 57% 41%

Source: Towers Perrin Global Workforce Study

5%Plans

to Retire

2%Made Plans

to Leave3%

ActivelyLooking

RETENTION & TURNOVER PATTERNSRETENTION & TURNOVER PATTERNS


HIGHLY ENGAGED EMPLOYEESHIGHLY ENGAGED EMPLOYEES

59%Intends to Stay

31%Open to Offers


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6%Plans To Retire

4%Made PlansTo Leave

8%ActivelyLooking


MODERATELY ENGAGED EMPLOYEESMODERATELY ENGAGED EMPLOYEES

35%

Intends to Stay

47%Open to Offers


7%Plans To Retire

9%Made PlansTo Leave

24%Intends to Stay


DISENGAGED EMPLOYEESDISENGAGED EMPLOYEES

21%ActivelyLooking

39%Open to Offers


SUMMARYSUMMARY

19%Actively

Disengaged

26%Engaged

55%Unengaged

WHOS WORKING IN YOUR ORGANIZATION?

75% PAYROLL LOSS


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THE NEW WORKFORCE

DemographicGroup

Year Born Traits and Values Learning St yles

Traditionalists1928-1945

(62+ Yrs Old)

Hierarchical, loyal toinstitutions, and

motivated by financialrewards and security

Traditional, instructor-led,reading, homework

teach-me

1946-1965(42-61 Yrs Old)

Idealistic, competitiveand striving to achieve

Traditional, group effort,expert-driven, self-driven, lead me toinformation

Baby Boomers

Generation X1966-1981

(26-41 Yrs Old)Self Reliant, willing tochange rules, and tribaland community oriented

Team Driven,collaborative,wisdom ofcrowds, peer-to-peer connect me to people

1982-2000(7-25 Yrs Old)

Confident, impatient,socially conscious,family-centric andtechnology-savvy.

Give context andmeaning, make it fun,search and explore,entertain me connectme to everything

Generation Y(Millennials)

YOUR CHALLENGEYOUR CHALLENGE

To ensure that every people

decisionwhether hiring,

promotion, or development is

aimed at achieving

superior performance.

WHY DO PEOPLE PERFORM ATA SUPERIOR LEVEL?

WHY DO PEOPLE PERFORM ATA SUPERIOR LEVEL?


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ACHIEVING JOB MATCHACHIEVING JOB MATCH

Skill MatchEducationTraining

ExperienceSkills

Checking the Past

Company MatchValues

DemeanorAppearanceIntegrity

Reviewing the Present

?

What predicts future

superior performance?

THE MISSING THIRD IS..THE MISSING THIRD IS..

Skill MatchEducationTraining

ExperienceSkills

Checking the Past

Company MatchValues

DemeanorAppearanceIntegrity

Reviewing the Present

Job MatchThinking Style

Behavioral TraitsInterests

in predictingsuperior performance

Sources Prof. Mike Smith, University of Manchester.John E. Hunter and Ronda F. Hunter. Validity and Utility of Alternative Predictors of JobPerformance. Psychological Bulletin.

Robert O. Tett, Douglas N. Jackson and Michelle Rothstem . Personality Measures andPredictors of Job performance. A Meta -Analytical Review. Personnel Psychology. Winter. p103 Michigan State Universitys Schooolof Business

Job Matching75%

Assessment Tool

Interest Testing66%

Abilities Testing 54%

Personality Testing 38%

Reference Checking 26%

Interview 14%

0 10 20 30 40 50 60 70 80

PERSONALITY MEASURES ANDPREDICTORS OF JOB PERFORMANCE

PERSONALITY MEASURES ANDPREDICTORS OF JOB PERFORMANCE


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THINGS TO PONDERTHINGS TO PONDER

WHICH KIND OF MANAGER AND LEADER ARE YOU?

OLD? NEW?

Thinks of self as a

manager 0r boss

Thinks of self as a

sponsor, team leader, orinternal consultant

Follows the chain of

commandDeals with anyonenecessary to get the jobdone.

Makes most decisionalone

Invites others to join indecision making

THINGS TO PONDERTHINGS TO PONDER

WHICH KIND OF MANAGER AND LEADER ARE YOU?

OLD? NEW?

Hoards information Shares information

Tries to master one majordiscipline, such asmarketing or finance

Tries to master a broadarray of managerialdisciplines

Demands long hours Demands results

CASE STUDYCASE STUDY


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