Human Resource Management (HRM)

1. Human Resource Management (HRM) What? • the functional area of an organization that is responsible for all aspects of hiring and supporting employees (e.g., providing and administering employee benefits). • all the activities related to the recruitment, hiring, training, promotion, retention, separation, and support of employees. • functions within a company that relate to people. Why? • is the effective use of human resources in order to enhance organisational performance. • the process of evaluating human resource needs, finding people to fill those needs, and getting the best work from each employee by providing the right incentives and job environment, all with the goal of meeting the needs of the firm. • applying human resources within complex systems such that people succeed, performance improves, and human error decreases. (Source: web definitions for HRM)

2. HRM practices • Job analysis and design • Recruitment and selection • Training and development • Performance management and compensation • Labor and employee relations

3. Task / Work process Personnel selection Satisfaction Motivation Personnel development Organization as socio-technical system Performance Performance appraisal / Pay Leadership Team Road map for both HRM courses (Work process design, Leading teams)

4. Task / Work process Satisfaction Motivation Organization as socio-technical system Performance Road map for HRM: Work Process Design

5. HRM: Work process designOverview

6. Organization of course • 3 ETCS points (approx. 75-90 work hours). • Besides the lecture, the prerequisite for credits points and exam participation is the completion of a semester project in groups of 4 students. • Topic of semester project: Analysis and assessment of job and organizational design in a company inclu-ding a written report and feedback to the company. • The exam is written and open book; provisional date: Jan. 13, 2009, 10:15-11:45. Overall grade: 50% project & 50% exam. • Material for the lecture at www.oat.ethz.ch.

7. Semester project • Assessment of job and organizational design in a company based on the instrument KOMPASS • work system analysis (focus on work processes and handling of disturbances in the processes) • job analysis (focus on job design criteria) • Analyses involve 2-3 interviews with managers and employees and .5 - 1 day observation of work tasks and processes • To be carried out in groups of four either in a company of your choice or in a company provided • Please send an e-mail to Jacqueline Hohermuth by Sept. 29 (jhohermuth@ethz.ch) with the names and e-mail addresses of the four people in your group, indicating also if you want us to provide a company and whether you can conduct the analyses in English and/or German

8. Required reading Copies of the texts will be availabe during the lectures on Oct. 21/28 (CHF 10)

9. HRM: Work process designOverview

10. Strategic Management: The basic questions • A clear sense of an organization`s objectives and of how it will achieve these objectives • Facilitate the capability of an organization to create unique value while facing an uncertain environment • Achieving and maintaining a strong competitive advantage. • Application of corporate strategy to decisions regarding all aspects of the organization • With greater empowerment, strategy becomes the concern not just of directors but of employees at all levels of the organization

11. Effects of HRM compared to other strategy decisions • HRM-practices (especially job design and selection/ appraisal/training) better predict company performance than R&D, QM, strategy and technology (West, 2001) • Empowerment better predicts company performance than technology-based management practices (Patterson et al., 2004) • HRM-practices as cause and effect of company performance (Guest et al., 2003)

12. Linkage HRM and company strategy • Administrative (no) linkage • HRM as purely administrative task • One-way linkage • HRM implements strategic goals, but is not involved in strategy formulation • Two-way linkage • HRM executive shows human resource implications of different strategic choices, but does not directly participate in strategic decision making • Integrative linkage • HRM executive is integral member of senior manage-ment team and participates in all phases of strategy formulation and implementation

13. Strategic HRM • "a pattern of planned human resource deployments and activities intended to enable an organization to achieve its goals" (Noe et al., 2005) • Derive human resource needs (skills, beha-viors, culture) from strategy formulation • Strategy implementation by means of HRM practices, which further individuals' capabilities and motivation as well as actual performance

14. HRM practices: Strategic choices • Job analysis and design • simple vs. complex tasks, specific vs. generic job descriptions • Recruitment and selection • external vs. internal recruitment, specific vs. general skills • Training and development • current vs. future skills, train few vs. all employees • Performance management and compensation • internal vs. external equity, input/behavior/output control • Labor and employee relations • GAV vs. individual contracts

15. Contingencies in strategic HRM (Snell & Youndt, 1995; Lepak & Snell, 1999) • Input vs. behavior vs. output control • Input control most effective with high uncertainties • Behavior control only works with low uncertainties • Output control has no effect on performance in any condition • Uniqueness and value of human capital • Traditional, loyalty based employment relationship when knowledge and skills are firm-specific and of high competitive value • Purely economic employment relationship when knowledge and skills are neither firm-specific nor of high competitive value

16. Consequences for job design • Input vs. behavior vs. output control • Input control: Complex jobs with high discretion; emphasis on intrinsic motivation • Behavior control: Simple jobs with low discretion; emphasis on extrinsic motivation • Output control: Clearly prescribed job objectives; emphasis on extrinsic motivation • Uniqueness and value of human capital • Firm specific knowledge/skills: Learning on the job • Competitive value of knowledge/skills: Job crafting, career development

17. Influence of normative assumptions on strategic and operational HRM Assumptions about human nature (Schein, 1988) • Economic man: Employees will do whatever affords them the greatest economic gain • Social man: Social needs are the prime motivator of human behavior, and interpersonal relationships the prime shaper of a sense of identity. • Self-actualizing man: People seek a sense of accomplish-ment in their work and are primarily self-motivated and self-controlled • Complex man: Human needs fall into many categories and vary according to stage of development and total life situation

18. Example Google: HRM for innovation • Highly selective hiring • Generic job descriptions • In-house and on-the-job training • Intrinsic motivation as key driver • "Fringe benefits" as symbol of esteem for employees • High task interdependence and cooperation requirements • Decisions based on expert power