[lecture 2] strategic hr management - sangyub ryu hr strategies public human resourcespsa management...

Public Human Resource Management !

Week 2 Strategic HR Management

International University of Japan Instructor: Sangyub Ryu

Public Human Resource Management International University of JapanSangyub Ryu

Introduction: HR Strategies

SPSAPublic Human Resource Management International University of JapanSangyub Ryu

To have the right people in the right place at the right time

The Nature of Strategy and HR Management

International University of JapanSangyub Ryu

Strategic HR Management : the use of employees to gain or keep a competitive advantage

Public Human Resource Management

Practice of HR Strategies in Business Sectors - Neglects of top management on HR as its strategic contributions - Less emphasis on a HR strategy - Weak or no links between HR and overall strategic planning

How much does your organization treat HR strategies seriously? !

What is your organization’s top priorities as HR strategies?



Operationalizing HR Strategy 1) Understand the business - Knowing the mission, programs, financials and so on 2) Focus on key business goals - Programs that have the greatest reliance to the political objectives should get priority !3) Know what to measure - Metrics are a vital part of assessing success; operationalize the measure of goals and outcomes !4) Prepare for the future - Predictable and/or unpredictable future




HR as a Core Competency


HR as an Organizational Contributor


HR as an Organizational Contributor to 1) Organizational Productivity 2) Customer service and Quality 3) Financial Performance




HR and Organizational Productivity - Productivity: measure of the quantity and quality of work done, considering the cost of the resources used !- Measure of HR productivity - Dividing their average levels of output by the average cost of workers


How can you measure productivity in public organizations?



Improving Organizational Productivity through HR




HR and Customer Service and Quantity - The quality of service as an outcome of interaction between individual employees and their customers !Katz et al. (1975) found that people are favorable for individual bureaucrats or agencies that treated them, but are less favorable for public agencies in general.


How can you measure service quality in public organizations?



HR and Financial Performance - Effectiveness vs. Efficiency - Greater outcomes with little amount of finical expenditure for HR !


How can you measure financial performance in public organizations?

Human Resource Planning


HR Planning - Process of analyzing and identifying the need for and availability of human resources so that the organization can meet its objectives !- The focus is on the right number of human resources with the right capabilities at the right times, and in the right places


Human Resource Planning


HR Planning Process


Scanning the External Environment


- Government Influence ex) laws and regulations, executive orders !- Economic Conditions ex) labor market, economic growth !- Geographical and Competition Concerns ex) location, competition with the organizations !- Workforce Composition ex) diverse workforces (age, gender, outsource)


Assessing the Internal Workforce


- Jobs and Skills Audit ex) Analyze current jobs and skills and compare them with jobs and skills needed !

- Database KSA of Employees for HR Planning !

- Using a Skills Database - Demographics - Career progression - Performance data - Expertise


Forecasting HR Supply and Demand


Forecasting Methods and Periods - Methods - From a manager’s perceptual judgement to a rigorous computer simulation - Combination of the two needed !- Period - Short-range ( less than 1 year) - Intermediate-range (between 1 and 3 years) - Long-range (more than 3 years) !- Forecasting the Demand for Human Resources - Analyze job opening/closure in the future - Consider chain effects - Prepare for each unit’s demand !


Forecasting HR Supply and Demand


Forecasting the Supply of Human Resources - Internal supply - Promotion, lateral move, transfer !- External supply Migration

New labor market entrants Output from schools and colleges Workforce composition changes Economic outlook Technological changes Competing employers’ actions Government regulations and pressures


Succession Planning - Process of identifying a long-term plan for the orderly replacement of key employees

Workforce Realignment


Managing a Human Resource Surplus - Workforce Reductions and the Law - Employment at will - Workforce Downsizing - Focusing on reduction of underperforming employees/units - Early retirement, attrition, layoff - Worked well for some organizations / performance improvement not guaranteed - Overburdening and demoralizing surviving employees - Attrition and Hiring Freezes - Voluntary Separation Programs - Early retirement buyouts - make additional payments to employees - more humane way to reduce staff than terminating - Layoffs


Workforce Realignment


Managing a Shortage of Employee - Use Overtime - Add Contingent Workers - Bring Back Recent Retirees - Outsourcing - Reduce Turnover


Measuring Effectiveness Using HR Metrics


Developing and Using HR Metrics Specific measures tied to HR performance indicators

Costs Quantity Quality Timeliness

Examples Cost of Turnover Average Time Taken to Fill a Job Opening Employee Satisfaction Scores Ratio of Payroll Expenses to Revenues


Measuring Effectiveness Using HR Metrics


Measures of Strategic HR Effectiveness - Return on Investment (ROI): Value of expenditures for HR activities

= (the potential/actual benefits) / (all potential/actual costs) !

- Economic Value Added (EVA): Net operating profit of a firm after the cost of capital is deducted !- Balanced Scorecard - Incorporating non-financial performance measures to financial performance measure - Financial - Internal business process - Customer - Learning and growth


Organization/Individual Relations and Retention


Introduction - How to retain talented employees? !—> Enhance work motivation(job satisfaction, commitment, etc.)


Organization/Individual Relationships


The Psychological Contract - Unwritten expectation between employees and employers - Fragile: balancing both parties’ expectation


Employers Expectation Employees ExpectationContinuous skill improvement and increased productivity Reasonable time with the organization Extra effort when needed

Competitive compensation and benefits Flexibility to balance work and home life Career development opportunities Ethical and legal behavior of upper management

Organization/Individual Relationships


Generational Differences - Difference expectation of individuals in different generation - Managing employees by understanding their generation gap !• Matures (Born before 1945) • Baby boomers (Born 1945 - 1965) —> Concerning about job security and experience • Generation X (Born 1966 - 1980) —> Heterogeneous generation: acknowledging and embracing social diversity, less likely to idolize leaders and pursue long-term institutionalized change through economic, media, or consumer action • Generation Y (Born 1981 - 1990) —> “Why” generation: expects quick rewards, adapt fast, questions about top managers’ decision


Job Satisfaction

Definition: !Job satisfaction concerns how an individual feels about his or her job and various aspects of it (Gruneberg, 1979), usually in the sense of how favorable—how positive or negative—those feelings are.

International University of JapanSangyub RyuPublic Human Resource Management

Job Satisfaction

• In general, I like working here. • In the next year I intend to look for another job outside this organization. • I definitely dislike my work [reversed scoring]. • My job is pretty uninteresting [reversed scoring]. • I feel happier in my work than most other people. • I find real enjoyment in my work. • Most days I am enthusiastic about my work. • Supervision: “Do you have the feeling you would be better off working under different supervision?” • Company identification: “From my experience, I feel this organization probably treats its employees _____.” [five possible responses, from “poorly” to “extremely well”]

Measures:


• Impact on Performance - No consistent findings: positive impact / no impact - Reciprocal relationship? !!

!

Good performance Rewards Satisfaction Good performance

Consequence:

• Positive Impact on Absenteeism and Turnover


Job Satisfaction

Determinants:

• Person - Individual differences: level of aspiration, comparison to alternatives, acclimation, education, position, age, tenure, gender, cultural background etc.

• Job - Job characteristics and job design

• Extrinsic Factors - Pay, promotion, job security, supervision, participation in plans and decisions, organizational structure and climate etc.


Job Satisfaction

• Definition - Loyalty and commitment to the organization in which one works !• What Does Organization Mean to You? - An institution worthy of service (Identification commitment) - A location of friends (Affiliation commitment) - A source of security and other benefit (Exchange commitment) !• Professionals and Organizational Commitment - Loyalty external to the organization - Professional association (e.g., doctor’s or engineer’s) !• Measure - Whether the respondent sees the organization’s problems as his or her own - Whether he or she feels a sense of pride in working for the organization,

Loyalty and Organizational Commitment


Individual Employee Performance


Individual Performance Factor 1) Individual Ability to do the work 2) Effort expended 3) Organizational support


Performance = Ability x Effort x Support

Retention of Human Resource


Myths about Retention • Money is the main reason why people leave • Hiring has nothing to do with retention • If you train people, you are only training them for another employer • If solid performers want to leave, the company cannot hold them !Why People Stay or Leave


Drivers of Retention


Characteristics of the Employer ■ Organizational Culture and Values ▪The shared values and beliefs of a workforce, such as consistent and thoughtful

practices !

■ Management and Retention ▪Challenges seen by the leaders as threats or opportunities ▪Visionary quality of the leaders !

■ Job Security ▪Personal security/anxiety about their job ▪How other good people are treated and retained




Job Design and Work ■ Person—Job Fit ▪Job characteristics matches with a person’s characteristics


▪Significance of the selection process



Job Design and Work ■ Time Flexibility ▪Needs for elder care and child care ▪Flexible working hours needed ▪Not all jobs are applicable ▪Formal policies are needed !

■ Work Flexibility ▪Work-life balancing program include: ▪ Different work arrangements ▪ Leave for children’s school functions ▪ Compressed workweek ▪ Job sharing ▪ On-site child/adult care ▪ Telecommuting/teleworking ▪ Employee assistance program ▪ On-site health services ▪Wellness programs ▪ Fitness facility




Career Opportunities ■ Opportunities for Personal Growth as a Top Reason for Job Selection and Retention

■ Training/Development and Mentoring ▪In-house train ▪Tuition aid programs ▪Orientation ▪Mentoring !

■ Career Planning/Advancement ▪People who have been promoted are less likely to leave

▪ A two-way process between a employer (manager) and an employee to plan/develop an employee’s career within the organization




Rewards ■ Competitive Pay and Benefits ▪Exotic benefits using operating expenditure include

▪ Dry cleaning pickup and drop-off ▪ Car maintenance services in company parking lots ▪ Coffee and latte kiosks ▪ ATM machines in break rooms

■ Performance and Compensation ▪Efforts >>Performance>>Compensation ▪Careful approach to pay-for-performance in the public sector

■ Recognition ▪Tangible ▪ Employee of the month

▪Intangible (Psychological recognition) ▪ Feedback acknowledging extra effort and performance




Employee Relationship ■ Reasonableness of HR Policies ■ Fair and Non-discriminatory Treatment

■ Fairness of Disciplinary Actions ■ Fairness of Work Assignment and Opportunities

■ Management Support ■ Co-worker Relations


Employee Absenteeism


Absenteeism ■ Any failure to report for work as scheduled or to stay at work when scheduled ■ High absenteeism is costly and gives burdens to co-workers


Employee Absenteeism


!Types of Absenteeism ■ Voluntary absenteeism (illness; death in the family; etc.) ■ Involuntary absenteeism (bad work attitude; etc)


Employee Turnover


!Turnover The process in which employees leave an organization and have to be replace


Employee Turnover


Types of Employee Turnover ■ Involuntary Turnover ▪Terminations due to poor performance or rule violations

■ Voluntary Turnover ▪Employees leave by choice

■ Functional Turnover ▪Lower-performing or disruptive employees leave

■ Dysfunctional Turnover ▪Key individuals and high performers leave at critical times

■ Uncontrollable Turnover ▪Employees leave for reasons outside the control of the employer

■ Controllable Turnover ▪Employees leave for reasons that can be influenced by the employer


HR Metrics: Measuring Absenteeism and Turnover


Measuring Absenteeism ■ U.S. Department of Labor ▪Number of person-days lost divided by (average number of employees ×

number of workdays) ■ Incidence Rate

■ The number of absences per 100 employees per day ■ Inactivity Rate

■ The percentage of time lost to absenteeism ■ Severity Rate

■ The average time lost per absent employee during a specified period of time


HR Metrics: Measuring Absenteeism and Turnover


Measuring Turnover ▪Number of employee separations during the month divided by total number of

employees at midmonth !Determining Turnover Cost

▪Separation costs ▪ HR staff and supervisor’s time and salaries to prevent separation, exit interview

time, unemployment expenses, legal fees for separations challenged, etc ▪Replacement costs ▪Recruiting and advertising expenses, search fees, HR interviewer and staff time

and salaries, etc. ▪Training costs ▪Paid orientation time, training staff time and salaries, cost of training materials

etc. ▪Hidden Costs ▪Lost productivity; decreased customer service; unexpected

employee turnover; missed project deadlines; etc.Public Human Resource Management

Managing Retention


Managing Retention


Retention Measurement and Assessment ▪Exit Interview: ▪An interview in which individuals are asked to give their reasons for leaving he

organization ▪Employee Survey: ▪A survey that focuses on employees’ feelings and beliefs about their jobs and the

organization ▪Conducting Exit Interview ▪See page 99 !

Retention Management and Intervention ▪After the assessment, develop and implement retention management strategies !

Retention Evaluation and Follow-upPublic Human Resource Management

[lecture 2] strategic hr management - sangyub ryu hr strategies public human resourcespsa management...

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