CHAPTER 2:

CHALLENGES IN
STRATEGIC HUMAN
RESOURCE
MANAGEMENT

Copyright © 2005 South-Western. All rights reserved.

 Major
Major Factors
Factors Affecting
Affecting HRM
HRM

Technological Demographics
Advancement and Diversity

Strategic
HRM

Globalization

Copyright © 2005 South-Western. All rights reserved. 1–2

 Exhibit
Exhibit2-1
2-1
Issues
Issues for
for Integrating
Integrating New
New Technologies
Technologies

Copyright © 2005 South-Western. All rights reserved. 1–3

 Exhibit
Exhibit2-2
2-2
Impact
Impact of
of Technology
Technology on
on Organizations
Organizations

Copyright © 2005 South-Western. All rights reserved. 1–4

 Technology
Technology Challenges
Challenges for
for HRM
HRM

•• Telecommuting
Telecommuting
•• Employee
Employee surveillance
surveillance &
& monitoring
monitoring
•• e-HR
e-HR
•• Ethical
Ethical behavior
behavior

Copyright © 2005 South-Western. All rights reserved. 1–5

 Telecommuting
Telecommuting
•• Dramatic
Dramaticgrowth
growthin
in •• Issues
Issuesaffecting
affectingsuccess
successof
of
number
numberofofAmericans
Americans telecommuting
telecommutingprograms
programs
working
workingfrom
fromhome
home –– Clear
Clearperformance
performance
–– 3.4
3.4million
millioninin1990 measurement
1990 measurementsystem
systemisiskey
key
–– 19.6
19.6million
millionby bybeginning
beginningofof –– Deciding
2000 Decidingwhich
whichemployees
employees
2000 will
willbe
beoffered
offeredparticipation
participation
–– Equipment
Equipmentexpense
expense
–– Some
Somemanagers
managers
uncomfortable
uncomfortablehaving
havingdirect
direct
reports
reportsaway
awayfrom
fromoffice
office

Copyright © 2005 South-Western. All rights reserved. 1–6

 Employee
Employee Surveillance
Surveillance and
and Monitoring
Monitoring

•• More
More than
than 80%
80% of
of large
large employers
employers utilize
utilize
monitoring
monitoring technology,
technology, e.g.,
e.g.,
–– Internet
Internetusage
usage
–– E-mails
E-mails
–– Computer
Computerfiles
files
–– Voice-mail
Voice-mail
–– Telephone
Telephoneusage
usage
•• Under
Under Electronic
Electronic Communications
Communications Privacy
Privacy Act
Act
(ECPA),
(ECPA), employees
employees have
have only
only limited
limited privacy
privacy
rights
rights

Copyright © 2005 South-Western. All rights reserved. 1–7

 E-HR
E-HR

•• Opportunity
Opportunity toto deliver
deliver transactional
transactional types
types
of
of services
services online:
online:
–– Payroll
Payroll
–– Employee
Employeebenefits
benefits
–– Scheduling
Scheduling
–– Recruiting
Recruiting
–– Training
Training
–– Career
Careerdevelopment
development

Copyright © 2005 South-Western. All rights reserved. 1–8

 Ethical
Ethical Behavior
Behavior

•• Majority
Majority of
of jobs
jobs are
are •• Sarbanes-Oxley
Sarbanes-Oxley Act Act
considered
considered toto be
be ““at-
at- of
of 2002:
2002:
will
will”” –– Seeks
Seekstotoeliminate
eliminate
•• Movement toward deception
deception ininaccounting
accounting
Movement toward &&management
greater protection for managementpractices
practices
greater protection for by
byincreasing
increasing
employees
employees in in regard
regard toto government
governmentoversight
oversight
off-duty
off-duty behavior
behavior –– Holds
Holdssenior
seniorexecutives
executives
•• Ownership
Ownership of of work
work more
moredirectly
directlyresponsible
responsible
•• Fairness for
forviolations
violations
of
Fairness of
–– Protects
Protects ““whistle-blower
whistle-blower
noncompete clauses
noncompete clauses s” s”
Copyright © 2005 South-Western. All rights reserved. 1–9
 Workforce
Workforce Demographic
Demographic Changes:
Changes:
““Graying
Graying”” of
of Workforce
Workforce
•• Negative
Negative aspects
aspects of
of •• Positive
Positiveaspects
aspects of
of
older
older workers
workers older
older workers
workers
–– Perceived
Perceivedresistance
resistancetoto –– As
Asproductive
productiveorormore
more
change
changeby byolder
olderworkers
workers productive
productivethan
thanyounger
younger
–– Increased
Increasedhealth-care
health-care workers
workers
costs
costsfor
forsenior
seniorworkers
workers –– Have
Havemore
more
–– Blocking organizational
organizationalloyalty
Blockingadvancement
advancement loyalty
opportunities than
thanyounger
youngerworkers
opportunitiesfor
foryounger
younger workers
workers
workers –– Possess
Possessbroader
broader
–– Higher
Higherwage
wageand
andsalary
salary industry
industryknowledge
knowledgeand and
costs
costsfor
forsenior
seniorworkers
workers professional
professionalnetworks
networks

Copyright © 2005 South-Western. All rights reserved. 1–10

 Workforce
Workforce Demographic
Demographic Changes
Changes

•• Baby
Baby Boomers
Boomers (1945
(1945––1962)
1962)
–– Currently
Currentlyininexcess
excesssupply
supplyininmiddle
middlemanagement
management
ranks
ranks
–– HR
HRchallenge
challengeisistotomanage
manage““plateaued
plateaued””workers
workers
•• Baby
Baby Busters
Busters (1963
(1963––mid-1970s)
mid-1970s)
–– Are
Areoften
oftencareer
careerbottlenecked
bottleneckedby
byBoomers
Boomers
–– Many
Manyhave
haveskills
skillsininhigh
highdemand;
demand;are
aredoing
doingand
andwill
will
do
dowell
well

Copyright © 2005 South-Western. All rights reserved. 1–11

 Workforce
Workforce Demographic
Demographic Changes
Changes

•• Generation
Generation ““X
X””ers
ers (late
(late1970s
1970s–early
–early 1980s)
1980s)
–– Have
Havelife-long
life-longexposure
exposuretototechnology
technologyandandconstant
constantchange
change
–– Seek
Seekself-control,
self-control,independence,
independence,personal
personalgrowth,
growth,creativity
creativity
–– Not
Notfocused
focusedon onjob
jobsecurity
securityororlong-term
long-termemployment
employment
•• Generation
Generation ““Y
Y””:: ““Baby
Baby Boom
Boom Echo
Echo”” (after
(after 1979)
1979)
–– High
Highcomfort
comfortlevel
levelwith
withtechnology
technology
–– Global
Globaland
andtolerant
tolerantoutlook
outlookon
onlife
life
–– Highly
Highlyentrepreneurial
entrepreneurial
–– Shorter
Shorterattention
attentionspan
span
–– Opting
Optingfor
formore
moretransient
transientand
andvariable
variableproject
projectwork
work

Copyright © 2005 South-Western. All rights reserved. 1–12

 Workforce
Workforce Demographic
Demographic Changes
Changes

•• Sexual
Sexual orientation
orientation
–– More
Morethan
than200
200Fortune
Fortune500
500employers
employersoffer
offerfull
fullbenefits
benefitsfor
for
domestic
domesticpartners
partners
–– Sexual
Sexualorientation
orientationissues
issuescan
canimpact
impactbottom
bottomline
line
•• Disabilities
Disabilities
–– 54
54million
millionAmericans
Americanswithwithdisabilities
disabilities
–– Often
Oftennot
notincluded
includedinindiversity
diversityinitiatives
initiatives
–– Many
Manysupervisors
supervisorsdo
donotnotunderstand
understandneedsneedsofofemployees
employees
with
withdisabilities
disabilities
–– Stereotypes
Stereotypes

Copyright © 2005 South-Western. All rights reserved. 1–13

 New
New Employee/Workplace
Employee/Workplace Dynamics
Dynamics

•• Emphasis
Emphasis on
on management
management of
of professionals
professionals
–– Establishment
Establishmentofofseparate
separatecareer
careertracks
tracks
•• Technical/Professional,
Technical/Professional,Managerial
Managerial/Administrative
/Administrative
–– Use
Useofofproject
projectteams
teams
•• Less
Less employee
employee loyalty,
loyalty, more
more loyal
loyal to
to self
self
–– Staying
Stayingwith
withemployers
employersfor
forshorter
shorterperiods;
periods;
demanding
demandingmore
moremeaningful
meaningfulwork
workand
andinvolvement
involvement
ininorganizational
organizationaldecisions
decisions

Copyright © 2005 South-Western. All rights reserved. 1–14

 New
New Employee/Workplace
Employee/Workplace Dynamics
Dynamics

•• Increased
Increased personal
personal and
and family
family dynamic
dynamic
effects
effects
–– More
Moresingle-parent
single-parentfamilies,
families,dual-career
dual-careercouples,
couples,&&
domestic
domesticpartners
partners
•• Increased
Increased nontraditional
nontraditional work
work relationships
relationships
–– Part-time,
Part-time,consulting,
consulting,and
andtemporary
temporaryemployment
employment
flexibility
flexibility
–– Outsourcing
Outsourcingandandentrepreneurial
entrepreneurialopportunities
opportunities

Copyright © 2005 South-Western. All rights reserved. 1–15

 Ethnicity
Ethnicity

•• In
In 2005:
2005: •• By
By 2025:
2025:
–– Ethnic
Ethnicminority
minority –– African-Americans
African-Americanswill
will
share
shareofof workforce
workforce represent
represent14%
14%ofofpopulation
population
roughly
roughly28%
28% •• Up
Upfrom
from12%
12%inin1994
1994
•• Up
Upfrom
from22%
22%inin –– Hispanics
Hispanicswill
willrepresent
represent17%
17%
1990
1990and
and18%
18%inin ofof population
1980 population
1980 •• Up
Upfrom
from10%
10%inin1994
1994
•• By
By 2050:
2050: –– Asians
Asians&&Pacific
PacificIslanders
Islanders
–– Close
Closetoto50%
50%ofofUS
US will
willrepresent
represent8%
8%ofof
population
populationwill
willbe
be population
population
non-Caucasian
non-Caucasian •• More
Morethan
thandouble
doublefrom
from
1994
1994

Copyright © 2005 South-Western. All rights reserved. 1–16

 Managing
Managing Workplace
Workplace Diversity
Diversity
•• Understanding
Understandingand
and •• Diversity
Diversitymanagement
management
appreciating
appreciatingdiversity
diversity programs
programsor
orinitiatives
initiatives
–– Critical
Criticaltotoeffectively
effectively –– Must
Mustbebeintegrated
integratedwithwith
marketing
marketingtotoethnic
ethnicand
and organization
organization’s’smission
missionand and
minority
minoritygroups
groups objectives
objectives
–– Promoted
Promotedby byhaving
having diverse
diverse –– Help
Helpkey
keydecision
decisionmakers
makers
workforce
workforceatatallalllevels
levels identify
identifydiversity
diversity’s’sbenefits
benefitstoto
–– Helps
Helpsensure
ensurehiring
hiringand
and organization
organization
promotion
promotiondecisions
decisionsare –– Make
are Makecritical
criticaldecisions
decisionsabout
about
unbiased
unbiasedby bypersonal
personal implementing
implementingoptimal
optimal
differences
differences program/initiative
program/initiativecontingent
contingent
on
onorganization
organizationand andits
its
people,
people,mission
missionand andculture.
culture.

Copyright © 2005 South-Western. All rights reserved. 1–17

 Exhibit
Exhibit2-6
2-6
Individual
Individual Dimensions
Dimensions of
of Diversity
Diversity

Copyright © 2005 South-Western. All rights reserved. 1–18

 Strategic
Strategic Management
Management of
of Diversity
Diversity
•• Determine
Determinewhywhydiversity
diversityisisimportant
important
•• Articulate
Articulatehow
howdiversity
diversityrelates
relatestotomission
missionand
andstrategic
strategic
objectives
objectives
•• Define
Definediversity
diversityand
anddetermine
determinehow howinclusive
inclusiveits
itsefforts
efforts
will
willbe
be
•• Make
Makeaadecision
decisionas
asto
towhether
whetherspecial
specialefforts
effortsshould
shouldbe be
extended
extendedtotoattract
attractdiverse
diverseworkforce
workforce
•• Assess
Assesshow
howexisting
existingemployees,
employees,customers,
customers,andandother
other
constituencies
constituenciesfeel
feelabout
aboutdiversity
diversity
•• Determine
Determinespecific
specifictypes
typesofofdiversity
diversityinitiatives
initiativesthat
thatwill
will
be
beundertaken
undertaken

Copyright © 2005 South-Western. All rights reserved. 1–19

 Reading
Reading2.1
2.1(Kirkman
(Kirkmanet
etal.)
al.)
Five
Five Challenges
Challenges to
to Virtual
Virtual Team
Team Success
Success
•• Virtual
Virtual teams:
teams:
–– Groups
Groupsofofpeople
peoplewho
whowork
workinterdependently
interdependentlywith
withshared
shared
purpose
purposeacross
acrossspace,
space,time,
time,and
andorganization
organizationboundaries,
boundaries,
using
usingtechnology
technologytotocommunicate
communicateandandcollaborate
collaborate
•• Types
Types of
of virtual
virtual teams
teams
–– Global
Globalvirtual
virtualteams
teams
–– Teams
Teamsassigned
assignedtotoaccomplish
accomplishspecific
specificprojects
projects
–– Cross-functional
Cross-functionalteams
teams
•• Challenge:
Challenge: Recognize
Recognize obstacles
obstacles confronting
confronting teams
teams
that
that are
are both
both cross-functional
cross-functional and
and virtual
virtual

Copyright © 2005 South-Western. All rights reserved. 1–20

 Reading
Reading2.1
2.1
Five
Five Challenges
Challenges to
to Virtual
Virtual Team
Team Success
Success
•• Building
Building trust
trust within
within virtual
virtual teams
teams
•• Maximizing
Maximizing process
process gains
gains and
and minimizing
minimizing
process
process losses
losses on
on virtual
virtual teams
teams
•• Overcoming
Overcoming feelings
feelings ofof isolation
isolation and
and detachment
detachment
associated
associated with
with virtual
virtual teamwork
teamwork
•• Balancing
Balancing technical
technical and
and interpersonal
interpersonal skills
skills
among
among virtual
virtual team
team members
members
•• Assessment
Assessment andand recognition
recognition of of virtual
virtual team
team
performance
performance
Copyright © 2005 South-Western. All rights reserved. 1–21
 Reading
Reading2.2
2.2(Starkman)
(Starkman)
Impact
Impact of
of the
the Sarbanes-Oxley
Sarbanes-Oxley Act
Act
•• New
New whistleblower
whistleblower protections
protections
–– No
Nopublic
publiccompany
companymay maydiscriminate
discriminateagainst
againstan an
employee
employeebecause anylawful
becauseofofany lawfulact
act
–– Retaliation
Retaliationagainst
againstemployee
employeebecause
becauseofofanyanylawful
lawful
act
actdone
donetotoassist
assistaaproceeding
proceedingrelating
relatingtotoalleged
alleged
violation
violationisisprohibited
prohibited
–– IfIfDOL
DOLdetermines
determinesthat thatviolation
violationhas
hasoccurred,
occurred,
employer
employermay maybe beordered
orderedtotoreinstate
reinstateemployee
employeeand and
provide
providecompensatory
compensatorydamages
damages

Copyright © 2005 South-Western. All rights reserved. 1–22

 Reading
Reading2.2
2.2
Impact
Impact of
of the
the Sarbanes-Oxley
Sarbanes-Oxley Act
Act
•• The
The Act
Act dramatically
dramatically affects
affects officer
officer compensation
compensation
programs
programs
–– Executive
Executivebonuses
bonusessubject
subjecttotoforfeiture
forfeitureunder
underAct
Act
–– Personal
Personalloans
loanstotoexecutives
executivesare areregulated
regulatedbybyAct
Act
–– SEC
SECcancanremove
removeorortemporarily
temporarilyfreeze
freezepayments
paymentstoto
executives
executivesandanddirectors
directors
–– Public
Publicaccounting
accountingfirms
firmsare
areprecluded
precludedfrom
fromauditing
auditing
company
companyififhighly
highlyplaced
placedexecutive
executivewas wasemployed
employedby by
auditing
auditingfirm
firmand
andparticipated
participatedinincompany
company’s’sprior
prioryear
year’s’saudit
audit
–– Attorneys
Attorneyshave
havenew
newrules
rulesofofprofessional
professionalresponsibility
responsibility

Copyright © 2005 South-Western. All rights reserved. 1–23

 Reading
Reading2.2
2.2
Impact
Impact of
of the
the Sarbanes-Oxley
Sarbanes-Oxley Act
Act
•• The
The Act
Act requires
requires new
new employment
employment policies
policiesand
and
procedures
procedures
–– Procedures
Proceduresfor forreceiving
receivingandandhandling
handlingcomplaints
complaintsofof
corporate
corporatefraud
fraudhave
havetotobe
beestablished
established
–– Compensation
Compensationprogram
programbonus
bonuspolicies
policiesand
andstock
stockoption
option
plans
planshave
havetototake
takeaccount
accountofofnewnewforfeiture
forfeitureprovisions
provisions
–– Hiring
Hiringand
andrecruitment
recruitmentstrategies
strategiesandandbackground
backgroundcheckscheckswill
will
have
havetotobe
berevamped
revampedtotoavoid
avoidhiring
hiringexecutives
executiveswhose
whose
employment
employmentisisprecluded
precludedby bythe
theAct
Act
–– Training
Trainingrequired
requiredtotoproperly
properlyimplement
implementall allofofthe
theAct
Act’s’s
mandates
mandates

Copyright © 2005 South-Western. All rights reserved. 1–24

 Reading
Reading2.3
2.3(J.
(J.Schramm)
Schramm)
Employee
Employee Satisfaction
Satisfaction
•• Potential
Potentialimpact
impactof
of •• Industrial
Industrialbase
baseshifting
shiftingto
to
demographic
demographicchanges
changes service
serviceand
andhealth
healthcare
care
–– Aging
Agingpopulation
populationincreases
increases sectors
sectors
emphasis
emphasison onhealth
healthcare
care •• Wider
benefits, Widerpolitical
politicaland
and
benefits,retirement
retirementplanning,
planning, economic
and
andjob
jobsecurity
security economictrends
trendsaffecting
affecting
–– Women job
jobsatisfaction
satisfaction
Womenare areattaining
attaininghigher
higher
proportion –– Health
Healthcare
carecosts
proportionofofprofessional
professional costs
qualifications
qualifications –– Job
Jobsecurity
security
–– Future
Futureskills
skillsshortages
shortagesmay may –– Pensions
Pensions
cause
causeindustrialized
industrializedcountries
countries
totocompete
competefor forskilled
skilled
immigrant
immigrantlabor
labor

Copyright © 2005 South-Western. All rights reserved. 1–25

 Reading
Reading2.3
2.3
Employee
Employee Satisfaction
Satisfaction
•• Two
Two groups
groups of
of issues:
issues:
–– Those
Thosedepending
dependingon
onfinancial
financialposition
positionofofcompany
company
•• Benefits
Benefits
•• Wages
Wages
•• Job
Jobsecurity
security
–– Those
Thoseless
lesscostly
costlytotoimplement
implementthrough
throughchanging
changing
practices,
practices,processes,
processes,and andculture
culture
•• Communication
Communicationwith withmanagement
management
•• Work/life
Work/lifebalance
balance
•• Employee
Employee’’ssrelationship
relationshipwith
withimmediate
immediatesupervisor
supervisor
•• Career
Careerdevelopment
development
Copyright © 2005 South-Western. All rights reserved. 1–26