Chapter 2

Trends in Human Resources
Management
Nhat Tan Pham, Ph.D.
Text book: Noe, R. A., Hollenbeck, J. R., Gerhart, B., & Wright, P. M.
(2018). Fundamentals of human resource management. NY: McGraw-Hill.
Learning objectives
• Describe trends in the labor force composition and how they affect
human resource management.
• Summarize areas in which human resource management can
support the goal of creating a high-performance work system.
• Define employee empowerment, and explain its role in the modern
organization.
• Identify ways HR professionals can support organizational
strategies for growth, quality, and efficiency.
Nhat Tan Pham, Ph.D. Green your life, green your company, and green our planet
Learning objectives
• Summarize ways in which human resource management can support
organizations expanding internationally.
• Discuss how technological developments are affecting human resource
management.
• Explain how the nature of the employment relationship is changing.
• Discuss how the need for flexibility affects human resource
management.
1. Change in Labor force
Internal Labor Force External Labor Force
• An organization’s workers: Its • Individuals who are actively seeking
employees and people who have employment.
contracts to work at the • The number and kinds of people in
organization. the external labor market
• Internal labor force has been drawn determine the kinds of human
from the external labor market. resources available to an
organization (and their cost).
An aging workforce
An aging workforce
An aging workforce
• HR professionals spend much time on concerns related to
retirement planning, retraining older workers, and motivating
workers whose careers have reached a plateau.
• Organizations struggle to control rising costs of health care and
other benefits.
• Managers will supervise employees much older than themselves.
An aging workforce
• Organizations must find ways to attract, retain, and prepare young
labor force.
• As more of the workforce reaches retirement age, some companies
have asked them if they would be interested in the possibility of
ever returning to work on projects (or part-time works), or set up
mentoring programs between older and younger workers so that
knowledge is not lost but passed on
A diverse workforce (for example: US workforce)
-
• One important source of racial and ethnic diversity is immigration
• Other foreign-born workers in the United States arrived in this
country without meeting the legal requirements for immigration or
asylum.
• The greater diversity of the U.S. labor force challenges employers to
create HRM practices that ensure that they fully utilize the talents,
skills, and values of all employees.
• Employers will have to ensure that employees and HRM systems are
free of bias and value the perspectives and experience that women
and minorities can contribute to organizational goals
Managing cultural diversity involves many different activities:
• creating an organizational culture that values diversity,
• ensuring that HRM systems are bias-free,
• encouraging career development for women and minorities,
• promoting knowledge and acceptance of cultural differences,
• ensuring involvement in education both within and outside the
organization,
• dealing with employees’ resistance to diversity
HRM practices support diversity management
Skill deficiencies in workforce
• The increasing use of computers to do routine tasks has shifted the
kinds of skills needed
• Such qualities as physical strength and mastery of a particular piece
of machinery are no longer important for many jobs
• More employers are looking for mathematical, verbal, and
interpersonal skills.
Skill deficiencies in workforce
Today, ….
• Employees must be able to handle a variety of responsibilities,
interact with customers, and creative thinking.
• A college degree is a basic requirement for many jobs today.
• Not all the skills employers want require a college education. Thus,
companies and communities have set up apprenticeship and
training programs to fix the worker shortage
2. High-Performance Work Systems (HPWS)
HPWS is an organization in which technology, organizational structure,
people, and processes work together seamlessly to give an
organization an advantage in the competitive environment.
Today’s HPWS rely on:
• knowledge workers,
• empowerment of employees to make decisions,
• use of teamwork
Knowledge Workers
• It prefers employees whose main contribution to the organization is
specialized knowledge, such as knowledge of customers, a process,
or a profession.
• Knowledge workers are in a position of power because they own the
knowledge that the company needs in order to produce its products
and services. Also, they must share their knowledge and collaborate
with others in order for their employer to succeed
Employee empowerment
Giving employees responsibility and authority to make decisions regarding all
aspects of product development or customer service.
Ensuring the success of employee empowerment
• HRM practices such as performance management, training, work design, and
compensation are important
• Managers must be trained to link employees to resources within and outside
the organization, such as customers, co-workers, and websites.
• Managers must also encourage employees to interact with staff throughout
the organization, must ensure that employees receive the information
• Employees are fully engaged in their work
Teamwork
• It is the assignment of work to groups of employees with various
skills who interact to assemble a product or provide a service.
• Work teams often assume many activities traditionally reserved for

managers such as (1) selecting new team members, (2) scheduling
work, and (3) coordinating work with customers and other units.
Teamwork
• Work teams also contribute to total quality by performing
inspection and quality-control activities while the product or
service is being completed.
• Virtual teams are so popular now— that rely on communications

technology such as videoconferences, e-mail, and cell phones to
keep in touch and coordinate activities.
3. Focus on Strategy
Business strategy:
Issues affecting HRM
Mergers and Acquisitions
• Often organizations join forces through mergers (two companies
becoming one) and acquisitions (one company buying another).
• Some mergers and acquisitions result in consolidation within an

industry, meaning that two firms in one industry join to hold a
greater share of the industry
HRM should have a significant role in carrying out a merger or acquisition.
Differences between the businesses involved in the deal make conflict
inevitable, therefore,
▪ Training efforts should include development of skills in conflict
resolution.
▪ HR professionals have to sort out differences in the two companies’
practices with regard to compensation, performance appraisal, and
other HR systems.
▪ Settling on a consistent structure to meet the combined organization’s
goals may help bring employees together.
Total quality management (TQM)
TQM-a companywide effort to continually improve the ways people, machines, and
systems accomplish work.
TQM has several core values:
• Methods and processes are designed to meet the needs of internal and external
customers (that is, whomever the process is intended to serve).
• Every employee in the organization receives training in quality.
• Quality is designed into a product or service so that errors are prevented from
occurring, rather than being detected and corrected in an error-prone product or
service. ∙
• The organization promotes cooperation with vendors, suppliers, and customers to
improve quality and hold down costs.
• Managers measure progress with feedback based on data.
Total quality management (TQM)
To promote quality, organizations need:
• An environment that supports innovation, creativity, and risk-taking to
meet customer demands.
• Problem-solving should bring together managers, employees, and
customers.
• Employees should communicate with managers about customer needs.
• A focus on the HRM function itself, such as employee selection, training
and development, and performance management
Control costs
HRM strategy to control costs
Downsizing Reengineering Outsourcing
Downsizing
It is measured by the number of job cuts announced by employers

The main reason employers gave for downsizing was restructuring
their operations to be more profitable
HRM challenges of the downsizing policy
• HRM department must “surgically” reduce the workforce by cutting only
the workers who are less valuable in their performance.
• Achieving this is difficult because the best workers are most able (and
often willing) to find alternative employment and may leave voluntarily
before the organization lays off anyone.
• The surge in unemployment created a climate of fear for many workers.
• Early-retirement programs are humane, but they essentially reduce the
workforce with a “grenade” approach—not distinguishing good from poor
performers but instead eliminating an entire group of employees.
HRM challenges of the downsizing policy
• Another HRM challenge is to boost the morale of employees who remain
after the reduction
• HRM should maintain open communication with remaining employees to
build their trust and commitment, rather than withhold information.
• All employees should be informed why the downsizing is necessary, what
costs are to be cut, how long the downsizing will last, and what strategies
the organization intends to pursue.
• HRM can provide downsized employees with outplacement services to
help them find new jobs, which show that it cares about its employees,
even though it cannot afford to keep all of them on the payroll.
Reengineering
Reengineering is a complete review of the organization’s critical work

processes to make them more efficient and able to deliver higher
quality.
Reengineering involves reviewing all the processes performed by all
the organization’s major functions, including production, sales,
accounting, and human resources.
Reengineering
Reengineering affects HRM in two ways:
• The way the HR department itself accomplishes its goals may
change dramatically.
• The fundamental change throughout the organization requires the
HR department to help design and implement change so that all
employees will be committed to the success of the reengineered
organization.
Outsourcing
Outsourcing is contracting with another organization (vendor, third-party

provider, or consultant) to provide services.
Outsourcing gives the company access to in-depth expertise and is often
more economical as well
Outsourcing
HR functions are being outsourced.
Today’s outsourcing is moving more into areas that automate processes and
support decision making.
Providers of benefits administration help companies set up enrollment and
training via online platforms that employees, especially younger employees,
have come to expect.
Outsourcing HRM has helped the company stay in compliance with labor
laws and provided a source of advice in support of its strategy.
Expanding into Global Markets
Businesses must….
• develop global markets,
• keep up with competition from overseas,
• hire from an international labor pool,
• prepare employees for global assignments
However, this global expansion can pose some challenges for HRM as HR
employees learn about the cultural differences that shape the conduct of
employees in other parts of the world
Global workforce
• Offshoring - moving operations from the country where a company is
headquartered to a country where pay rates (for workers) are lower but
the necessary skills are available. It relies on labor cost
• Reshoring - reestablishing operations back in the country where a
company is headquartered due to quality and flexibility concerns.
• However, challenges may include employees’ lack of familiarity with
technology and corporate practices, as well as political and economic
instability in the areas
Global workforce
Important issues that HR experts can help companies weigh include:
• Whether workers in the offshore locations can provide the same or
better skills,
• How offshoring will affect motivation and recruitment of employees
needed in the host country, especially big countries like the US.
• Whether managers are well prepared to manage and lead offshore
employees
Global workforce
International assignments
Today, international assignments are really important, especially for
multinational companies
This requires HR expertise in selecting employees for international
assignments and preparing them for those assignments.
Employees who take assignments in other countries are called
expatriates
4. Technological change in HRM
Human Resource Information System (HRIS) - A computer system used

to acquire, store, manipulate, analyze, retrieve, and distribute
information related to an organization’s human resources.
Human Resource Information System (HRIS)
Human Resource Information System (HRIS)
• HRIS can support strategic decision making, help the organization avoid
lawsuits, provide data for evaluating programs or policies, and support
day-to-day HR decisions.
• HRIS can help HR professionals think strategically. As strategies are
planned, implemented, and changed, the organization must be constantly
prepared to have the right talent in place at all levels.
• HRIS can support talent management by integrating data on recruiting,
performance management, and training
Electronic Human Resource Management and
Cloud computing
• Electronic Human Resource Management (e-HRM) - The processing and
transmission of digitized HR information, especially using computer
networking and the Internet.
• Cloud Computing - The practice of using a network of remote servers
hosted on the Internet to store, manage, and process data.
Electronic Human Resource Management and
Cloud computing
Sharing of Human Resource Information
• Through using technology, HR employees play a smaller role in maintaining
records, and employees now get information through self-service.
• Self-service - employees have online access to information about HR issues
such as training, benefits, compensation, and contracts; go online to enroll
themselves in programs and services, and provide feedback through online
surveys.
• Today employees routinely look up workplace policies and information
about their benefits online, and they may receive electronic notification
when deposits are made directly to their bank accounts
5. Change in the Employment Relationship
• Psychological Contract - A description of what an employee expects to
contribute in an employment relationship and what the employer will
provide the employee in exchange for those contributions.
• In the traditional view of this psychological contract, organizations
expected their employees to contribute time, effort, skills, abilities, and
loyalty. In return, the organizations would provide job security and
opportunities for promotion
Psychological Contract …
• Today, companies expect employees to take more responsibility for their
own careers, from seeking training to balancing work and family. This
results in less job security for employees.
• Therefore, employees want companies to provide: flexible work schedules,
comfortable working conditions, more control over how they accomplish
work, training and development opportunities, and financial incentives.
• Also, employees want employability because they want their company to
provide training and job experiences to help ensure that they can find
other employment opportunities
Question Discussion
Q1. What do you think about the importance of a Bachelor's degree
in the future labor market, especially in the technology field?
Please access the following link and present your ideas
https://content.techgig.com/google-launches-6-month-certification-
program-to-teach-in-demand-tech-skills/articleshow/77706263.cms
Q2. What are job skills needed for employees during and post covid-
19 pandemic?
Question Discussion
Q3. With “America First” policy, U.S. President Donald Trump is
changing international trade law dramatically. For instance, he
withdrew the United States from the Trans-Pacific Partnership (TPP),
FTA with Mexico and Canada (NAFTA), South Korea (KORUS), as well
as trade war with China. What do you think about changes in the
global workforce towards US companies?
https://english.bdi.eu/article/news/america-first-u-s-trade-policy-
under-president-donald-trump/
Other references
Robert L. Mathis & John H. Jackson 2011, Human Resource Management, South-
Western, 13th edition.
Jiang, K., Lepak, D. P., Hu, J., & Baer, J. C. (2012). How does human resource
management influence organizational outcomes? A meta-analytic investigation of
mediating mechanisms. Academy of management Journal, 55(6), 1264-1294.
Marler, J. H., & Fisher, S. L. (2013). An evidence-based review of e-HRM and strategic
human resource management. Human Resource Management Review, 23(1), 18-36.

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Trends in Human Resources

• Work teams often assume many activities traditionally reserved for

• Virtual teams are so popular now— that rely on communications

• Some mergers and acquisitions result in consolidation within an

HRM strategy to control costs

Downsizing Reengineering Outsourcing

It is measured by the number of job cuts announced by employers

Reengineering is a complete review of the organization’s critical work

Outsourcing is contracting with another organization (vendor, third-party

Human Resource Information System (HRIS) - A computer system used

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