LECTURE 02

Challenges in
Strategic Human
Resource
Management
1. MAJOR FACTORS AFFECTING HRM

Technological Demographics
Advancement and Diversity

Strategic
HRM

Globalization
2. IMPACT OF TECHNOLOGY
3. TECHNOLOGY CHALLENGES FOR HRM
 4. TELECOMMUTING
Telecommuting is also called telework, teleworking, working
from home, mobile work, remote work, and flexible
workplace, is a work arrangement in which employees do
not commute or travel (e.g. by bus or car) to a central place of
work, such as an office building, warehouse, or store.
 READING 2.1: TELECOMMUTING
Benefits Obstacles
• Reduced work commuting
time
• Employee retention
• Increased geographic
recruiting flexibility
• Reduced costs of doing
business (reduced office
space)
• Significant productivity
gains
• Difficulty in measuring
performance
• Determining eligible jobs
• Individual employee
characteristics
• Assumption of home office
expenses/liabilities
• Managerial resistance to
telecommuting
• Increased networking cost
 5. WORKFORCE DIVERSITY
 Workforce diversity is the bringing together of a variety of
people to one workplace.
 This workplace would be comprised of people with a wide
range of experiences, backgrounds and characteristics.
 Those key characteristics that make workforce diversity
include: race, ethnicity, gender, religion, age, ability etc.
 Why is this important to your business? Companies that
embrace workforce diversity are growing and can become
more competitive, but with that workforce diversity also brings
its own issues and challenges.
 6. WORKFORCE DEMOGRAPHIC
CHANGES
 Demographic changes in society and the composition of the
workforce are also creating a number of challenges for
management of human resources.
 Recognizing and promoting diversity is seen as a critical for
organizational success.
 Some employers appreciating diversity whereas others simply
maintaining it for ensuring compliance.
 7. GENERATIONAL DIVERSITY
 Advances in health care are allowing us to live longer, remain
healthier and remain in the workplace longer.
 Census data shows that 13% of the US population is age 65.
and this is expected that it will go 20%.
As baby boomers continue to live longer and
remain healthy, 80% of this group plan to continue
working in the organization.
 Such working retirements suggests a very different types of
employment relationship and a very different kind of
lifestyle.
 8. WORKFORCE DEMOGRAPHIC
CHANGES
The “Graying” of the Workforce
Negative Aspects of Older Workers
• Perceived resistance to change by older workers.
• Increased health-care costs for senior workers
• Blocking advancement opportunities for younger workers
• Higher wage and salary costs for senior workers
Positive Aspects of Older Workers
• As productive or more productive than younger workers
• Have more organizational loyalty than younger workers
• Possess broader industry knowledge and professional
networks
 9. WHY IS WORKFORCE DIVERSITY
IMPORTANT TO YOUR BUSINESS?
 Increasing workforce diversity has a number of benefits
including: creativity, innovation, positive reputation and
more!
 Having different perspectives at your business can increase
your creativity and allow people to positively collaborate with
one another.
 This collaboration could bring additional innovation and the
ability for your business to stay ahead in these changing times!
And of course, celebrating diversity within a business
can encourage a positive public reputation and
create more devote brand fans. So why not
consider workforce diversity?
 10. DISADVANTAGES
 With the many positives come some disadvantages including:
 communication barriers,
 resistance to change and
 negative attitudes.
 It may be difficult to bring together employees of different
cultures and communication styles.
 Meetings and discussions could be sidelined while dealing
with what should be a simple issue- communication.
 our business may come across employees that are
resistant to change or harbor negative feelings towards
diversity.
 11. WORKFORCE DEMOGRAPHIC
CHANGES
Baby Boomers (1945–1962)
• In excess supply in middle management ranks
• HR challenge is to manage “plateaued” workers
Baby Busters (1963–mid-1970s)
• Are career bottlenecked by the Boomers
• Who have skills in high demand are doing and will do well
Generation “X”ers (late 1970s–early 1980s)
• Have life-long exposure to technology and constant change
• Seek self-control, independence, personal growth, creativity
• Are not focused on job security or long-term employment.
 12. NEW EMPLOYEE/WORKPLACE
DYNAMICS
Emphasis on the Management of Professionals
• Establishment of separate career tracks
• Technical/Professional, Managerial /Administrative
• Use of project teams
Less Employee Loyalty, More Loyal to Self
• Staying with employers for shorter periods; demanding more
meaningful work and involvement in organizational decisions
Increased Personal and Family Dynamic Effects
• More single-parent families, dual-career couples, and domestic
partners
Increased Nontraditional Work Relationships
• Part-time, consulting, and temporary employment flexibility
• Outsourcing and entrepreneurial opportunities
 13. MANAGING WORKPLACE
DIVERSITY
Understanding and Appreciating Diversity
• Is critical to effectively marketing to ethnic and minority groups
• Is promoted by having a diverse workforce at all organization
levels
• Helps ensure that hiring and promotion decisions are unbiased
by person differences
Diversity Management Programs/Initiatives
• Must be integrated with organization’s mission and objectives
• Help key decision makers identify diversity’s benefits to the
organization
• Make critical decisions about implementing the optimal
program/initiative contingent on the organization and its
people, mission and culture.
 14. READING 2.2: WORKPLACE
DIVERSITY
Issues Affecting Diversity Policy making
• Why diversity is internally and externally important to the
organization?
• How is diversity related to the current and future mission and
strategic objectives of the organization?
• How is diversity to be defined in its inclusion and exclusion of
the extent, composition, and recognition of “differences”?
• Should the organization make special efforts to attract a
diverse workforce? and for what purposes?
• How do existing employees and constituents feel about
diversity?
• What specific types of diversity initiatives will be
undertaken? and to meet what objectives?
 CASE 1
Changes, Changes
Jennifer, the owner and manager of a company with ten employees, has hired you to take over the HRM
function so she can focus on other areas of her business. During your first two weeks, you find out that the
company has been greatly affected by the up economy and is expected to experience overall revenue growth
by 10 percent over the next three years, with some quarters seeing growth as high as 30 percent. However,
five of the ten workers are expected to retire within three years. These workers have been with the
organization since the beginning and provide a unique historical perspective of the company. The other five
workers are of diverse ages.
In addition to these changes, Jennifer believes they may be able to save costs by allowing employees to
telecommute one to two days per week. She has some concerns about productivity if she allows employees
to work from home. Despite these concerns, Jennifer has even considered closing down the physical office
and making her company a virtual organization, but she wonders how such a major change will affect the
ability to communicate and worker motivation.
Jennifer shares with you her thoughts about the costs of health care on the organization. She has considered
cutting benefits entirely and having her employees work for her on a contract basis, instead of being full-time
employees. She isn’t sure if this would be a good choice.
Jennifer schedules a meeting with you to discuss some of her thoughts. To prepare for the meeting, you
perform research so you can impress your new boss with recommendations on the challenges presented.
Point out which changes are occurring in the business that affect HRM.
What are some considerations the company and HR should be aware of when making changes related to
this case study?
What would the initial steps be to start planning for these changes?
What would your role be in implementing these changes? What would Jennifer’s role be?
CASE 2
Managing Diversity for Success: The Case of IBM
When you are a company that operates in over 170 countries with a workforce of over 398,000 employees, understanding and
managing diversity effectively is not optional—it is a key business priority. A company that employs individuals and sells products
worldwide needs to understand the diverse groups of people that make up the world.
Starting from its early history in the United States, IBM Corporation (NYSE: IBM) has been a pioneer in valuing and appreciating
its diverse workforce. In 1935, almost 30 years before the Equal Pay Act guaranteed pay equality between the sexes, then IBM
president Thomas Watson promised women equal pay for equal work. In 1943, the company had its first female vice president.
Again, 30 years before the Family and Medical Leave Act (FMLA) granted women unpaid leave for the birth of a child, IBM
offered the same benefit to female employees, extending it to one year in the 1960s and to three years in 1988. In fact, the
company ranks in the top 100 on Working Mother magazine’s “100 Best Companies” list and has been on the list every year
since its inception in 1986. It was awarded the honor of number 1 for multicultural working women by the same magazine in
2009.
IBM has always been a leader in diversity management. Yet, the way diversity was managed was primarily to ignore differences
and provide equal employment opportunities. This changed when Louis Gerstner became CEO in 1993.
Gerstner was surprised at the low level of diversity in the senior ranks of the company. For all the effort being made to promote
diversity, the company still had what he perceived a masculine culture.
In 1995, he created eight diversity task forces around demographic groups such as women and men, as well as Asians, African
Americans, LGBT (lesbian, gay, bisexual, and transgender) individuals, Hispanics, Native Americans, and employees with
disabilities. These task forces consisted of senior-level, well-respected executives and higher-level managers, and members
were charged with gaining an understanding of how to make each constituency feel more welcome and at home at IBM. Each
task force conducted a series of meetings and surveyed thousands of employees to arrive at the key factors concerning each
particular group. For example, the presence of a male-dominated culture, lack of networking opportunities, and work-life
management challenges topped the list of concerns for women. Asian employees were most concerned about stereotyping, lack
of networking, and limited employment development plans. African American employee concerns included retention, lack of
networking, and limited training opportunities. Armed with a list of priorities, the company launched a number of key programs
and initiatives to address these issues. As an example, employees looking for a mentor could use the company’s Web site to
locate one willing to provide guidance and advice. What is probably most unique about this approach is that the company acted
on each concern whether it was based on reality or perception. They realized that some women were concerned that they would
have to give up leading a balanced life if they wanted to be promoted to higher management, whereas 70% of the women in
higher levels actually had children, indicating that perceptual barriers can also act as a barrier to employee aspirations. IBM
management chose to deal with this particular issue by communicating better with employees as well as through enhancing their
networking program.
CASE 2 CONTINUED
The company excels in its recruiting efforts to increase the diversity of its pool of
candidates. One of the biggest hurdles facing diversity at IBM is the limited minority
representation in fields such as computer sciences and engineering. For example,
only 4% of students graduating with a degree in computer sciences are Hispanic. To
tackle this issue, IBM partners with colleges to increase recruitment of Hispanics to
these programs. In a program named EXITE (Exploring Interest in Technology and
Engineering), they bring middle school female students together for a weeklong
program where they learn math and science in a fun atmosphere from IBM’s female
engineers. To date, over 3,000 girls have gone through this program.
What was the result of all these programs? IBM tracks results through global surveys
around the world and identifies which programs have been successful and which
issues no longer are viewed as problems. These programs were instrumental in more
than tripling the number of female executives worldwide as well as doubling the
number of minority executives. The number of LBGT executives increased sevenfold,
and executives with disabilities tripled. With growing emerging markets and women
and minorities representing a $1.3 trillion market, IBM’s culture of respecting and
appreciating diversity is likely to be a source of competitive advantage.
CASE 2 QUESTIONS
DISCUSSION QUESTIONS
IBM has been championed for its early implementation of equality among its
workforce. At the time, many of these policies seemed radical. To IBM’s
credit, the movement toward equality worked out exceptionally well for them.
Have you experienced policy changes that might seem radical? Have these
policies worked out? What policies do you feel are still lacking in the
workforce?
If you or your spouse is currently employed, how difficult would it be to take
time off for having a child?
Some individuals feel that so much focus is put on making the workplace
better for underrepresented groups that the majority of the workforce
becomes neglected. Do you feel this was the case at IBM? Why or why not?
How can a company ensure that no employee is neglected, regardless of
demographic group?
What types of competitive advantages could IBM have gained from having
such a diverse workforce?