Chapter 2

TRENDS IN HUMAN
RESOURCE
MANAGEMENT

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 What Do I Need to Know? 1

L O 2-1 Describe trends in the labor force composition and

how they affect human resource management.
L O 2-2 Summarize areas in which human resource
management can support the goal of creating a high-
performance work system.
L O 2-3 Define employee empowerment, and explain its role in
the modern organization.
L O 2-4 Identify ways HR professionals can support
organizational strategies for growth, quality, and
efficiency.

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 What Do I Need to Know? 2

L O 2-5 Summarize ways in which human resource

management can support organizations expanding
internationally.
L O 2-6 Discuss how technological developments are affecting
human resource management.
L O 2-7 Explain how the nature of the employment
relationship is changing.
L O 2-8 Discuss how the need for flexibility affects human
resource management.

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 Change in the Labor Force 1
Internal Labor Force
• An organization’s workers
includes its employees and
people who have contracts
to work at the organization
• Internal labor force has been
drawn from the external
labor market
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External Labor Market
• Individuals who are actively
seeking employment
• Number and kinds of people
in external labor market
determine kinds of human
resources available to an
organization
 Change in the Labor Force 2

An Aging Workforce
• Workers aged 55 and older fastest growing group in force
• HRM considerations:
• Planning retirement
• Retraining older workers
• Motivating workers whose careers have plateaued
• Controlling the rising cost of health care and other benefits

• Today’s workforce often brings together three to four

generations

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 What age do you expect to work until?
POLLING QUESTION

A. 55
B. 60
C. 65
D. 70
E. 75
F. Never retiring

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 Change in the Labor Force 3

©Hero Images/Getty Images

As more and more of the workforce reaches retirement age, some companies
have set up mentoring programs between older and younger workers so that
knowledge is not lost but passed on.

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 Figure 2.1 Age Distribution of U.S. Labor Force,
2016 and 2026

Jump to long description in appendix..

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Source: Bureau of Labor Statistics, “Employment Projections, Table
 Change in the Labor Force 4

A Diverse Workforce
• Growing diverse in race, ethnicity, and gender
• Immigration important source of growing diversity
• HRM considerations regarding immigration:
• Supply of and demand for labor
• Need to comply with laws

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 Figure 2.2 Projected Racial/Ethnic Makeup of
the U.S. Workforce, 2026

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Source: Bureau of Labor Statistics, Employment Projections, Table 3.1,
 Change in the Labor Force 5

A Diverse Workforce continued

• HRM considerations regarding diversity:
• Use talents, skills, and values of all employees
• Staffing selection should not use biased tests
• Employees’ nonwork needs should be met with flexible schedules
• Educate employees on cultural differences and stereotypes
• Encourage career development for women and minorities

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 Figure 2.3 HRM Practices That Support
Diversity Management

Jump to long description in appendix.

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Source: Based on M. Loden and J. B. Rosener, Workforce America!
 Change in the Labor Force 6
Skill Deficiencies of the Workforce

Desired skills today: Many employers willing to

• Mathematical accept candidates without an
education; they offer training
• Verbal
to correct any skills gaps
• Interpersonal
• Computer/technology
Physical strength and mastery of
machinery no longer as important

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 High-Performance Work Systems 1

Organizations that have the best fit between:

• Social system (people and how they interact)
• Technical system (equipment and processes)
Trends in high-performance work systems
• Reliance on knowledge workers
• Empowerment of employees to make decisions
• Use of teamwork

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 Table 2.1 Top 10 Occupations for Job Growth
Most New Jobs Fastest Rate of Growth
Personal care aides Solar voltaic installers
Combined food preparation and serving Wind turbine service technicians
workers
Registered nurses Home health aides
Home health aides Personal care aids
Software developers, applications Physician assistants
Janitors and cleaners Nurse practitioners
General and operations managers Statisticians
Laborers and freight, stock, material movers Physical therapist assistants
Medical assistants Software developers, applications
Waiters and waitresses Mathematicians

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 High-Performance Work Systems 2

Knowledge Workers
• Main contribution to company is specialized knowledge
such as in customers, process, or a profession
• Have a position of power
• Employers need the knowledge they possess
• Competitive: most jobs with fast rates of growth are filled by
knowledge workers
• Some argue that all workers are knowledge workers

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 High-Performance Work Systems 3

Employee Empowerment
• Employees allowed to make more decisions; they share in
resulting losses and rewards
• Leads to more innovation and sharing of ideas
• HRM practices such as performance management, work
design, and compensation should be considered
• Employee engagement leads to higher productivity, better
customer service, and lower turnover

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 High-Performance Work Systems 4
Teamwork
• Groups of employees with
various skills work together to
assemble a product or provide
a service
• Virtual teams possible through
technology

©Pixtal/AGE Fotostock
• Can motivate employees;
makes work more interesting
• More companies using One way companies can increase
employee responsibility and control
teamwork due to its proven
is to assign work to teams.
benefits
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 Sharon is a very smart and conscientious
POLLING QUESTION
worker. However, she feels that her ideas are
disregarded and she has not had autonomy in
completing her work. This situation is probably
caused by a lack of _____.
A. teamwork
B. knowledge management
C. employee empowerment
D. job security

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 Focus on Strategy 1

HRM must support company’s strategy

• Align policies and practices with company goals
• Support company decisions through quality improvement
programs, mergers and acquisitions, and restructuring

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 Figure 2.4 Business Strategy: Issues Affecting HRM

Jump to long description in appendix.

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 Focus on Strategy 2

Mergers and Acquisitions

• Mergers: two companies become one
• Acquisitions: one company buys another
• In both, HR must be involved in resolving inevitable
conflicts between companies’ practices

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 Focus on Strategy 3

Total Quality Management (TQM)

• Many companies use TQM: high-quality standards are
necessary to remain competitive
• Provides guidelines for all the organization’s activities
• Quality improvement can focus on HRM functions
• Applying data to improve business functions

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 Focus on Strategy 4

TQM Core Values

1. Methods and processes are designed to meet the needs
of internal and external customers
2. Every employee receives training in quality
3. Quality is designed into product or service to prevent
errors from occurring
4. Organization promotes cooperation with vendors,
suppliers, and customers to improve quality and hold
down costs
5. Managers measure progress with feedback based on data

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 Focus on Strategy 5

Cost Control
• Some organizations have a low-cost, low-price strategy
• These organizations rely on HR to identify ways to limit
costs of maintaining a qualified, motivated workforce
• HR must lower costs without compromising quality
• HRM can downsize, reengineer, outsource to control costs

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 Focus on Strategy 6

Cost Control: Downsizing

• HRM challenged to “surgically” reduce workforce
• Most valuable employees should be kept, but they are often
willing and able to find other employment before layoffs
• HRM must boost morale of remaining workers
• Open communication necessary to build trust: notify employees of
reason for downsizing and strategies moving forward

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 Figure 2.5 Number of Job Cuts Announced by
Employers during the Past Decade

Jump to long description in appendix.

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Source: Challenger, Gray & Christmas, “Lowest Job Cut Total Since
 Focus on Strategy 7

Cost Control: Reengineering

• Complete review of organization’s work processes to make
them more efficient and able to deliver higher quality
• Effects on HRM:
• How HR accomplishes goals may change dramatically
• HR must design and implement change so that all employees will
be committed to the reengineered organization’s success

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 Focus on Strategy 8

Cost Control: Outsourcing

• Having another organization (vendors, third-party
providers, consultants) provide services
• Gives company access to in-depth expertise
• Often more economical
• HR helps with the transition to outsourcing; many HR
functions are also outsourced

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 Focus on Strategy 9
Expanding Into Global Markets

The Global Workforce International Assignments

Offshoring
• Moving operations to a country
where pay rates are lower and
necessary skills are available
Reshoring
• Reestablishing operations back in
country of headquarters due to
quality and flexibility concerns
Expatriates
• Employees who take assignments
in other countries
• HR must select expatriates
carefully and help prepare them
to work internationally

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 Figure 2.6 Where Immigrants to the United States
Came from in 2016

Even hiring at home may

involve selection of
employees from other
countries.

Jump to long description in appendix.

Source: Ryan Baugh, “U.S. Lawful Permanent Residents: 2016,” Annual Flow Report (Department
©McGraw-Hill Education. of Homeland Security, Office of Immigration Statistics, December 2017), http://www.dhs.gov.
 Technological Change in HRM 1

Human Resource Information System (HRIS)

• Computer system that automates HR processes
• Improves accuracy and efficiency; helps avoid lawsuits
• Supports strategic and day-to-day decision making
• Provides data for evaluating programs or policies

• Cloud computing expands use of HRIS

• Organization can set up an intranet to protect info

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 Technological Change in HRM 2

People Analytics
• The use of computers to analyze large amounts of data and
offer information to guide decisions
• Artificial Intelligence (AI) can improve HR decisions
• Job analysis
• Recruiting and selection
• Performance management
• Employee relations

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 Technological Change in HRM 3
Sharing of Human Resource Information
• Employees can now access HR info through self-service
• Using self-service has privacy and efficiency benefits

Access to an HRIS from mobile devices is

helpful for employees who work outside the
office because they can receive and share
information online easily. The benefits of
©Comstock/PunchStock

products such as smartphones are

enormous, but is it possible to be too
accessible?

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 Table 2.2 Automating HR Tasks 1
Application Example
Employee selection Developers are working on software that can analyze
videos of interviews to provide data about candidates’
behavior associated with particular characteristics.
Workforce planning Software can analyze hourly pay to identify and
predict situations in which companies are paying for
overtime, pointing to opportunities for better
workforce management to reduce this expense.

Sources: Erica Volini, Pascal Ocean, Michael Stephan, and Brett Walsh, “Digital HR: Platforms, People, and Work,”
Rewriting the Rules for the Digital Age (Deloitte, 2017), pp. 87–94; Mary E. Shacklett, “What Is HCM Software, and
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What Are the HR Software Benefits?” TechTarget, February 2018, http:// searchhrsoftware. techtarget.
 Table 2.2 Automating HR Tasks 2
Application Example
Compensation A payroll system maintains information about salaries,
bonuses, and other pay and automatically computes
taxes and benefits costs to be withheld. It keeps pay
records up-to-date and shares information with banks
receiving direct deposits
Orientation of new New hires at Royal Bank of Canada use a
employees “preboarding” system to get information about the
job, their team, and the company culture.
Training Training modules are available online for employees to
download as they identify relevant skills they want to
learn. A training system may also include information
about career paths and the necessary skills for each.

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 Change in the Employment Relationship 1

A Psychological Contract
• Unspoken expectations of both employee and employer
• Employees expected to take responsibility in careers
• Employers expected to provide perks in exchange

Declining Union Membership

• Has been declining since 1980s; consistent with idea of
individual workers taking responsibility for own careers

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 Change in the Employment Relationship 2

Flexibility
• Flexible staffing levels
• Allows an organization to quickly meet changing needs
• Alternative work arrangements: independent contractors, on-call
workers, temporary workers, contract workers
• Flexible work schedules
• Helps protect employees’ free time and to more productively use
employees’ work time

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 Appendix of Image Long
Descriptions

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 Appendix to Figure 2.1 Age Distribution of U.S.
Labor Force, 2016 and 2026
Age Distribution in 2016:
16 to 24 years old: 13 percent
25 to 54 years old: 64 percent
55 years and older: 23 percent
Projected Age Distribution in 2026:
16 to 24 years old: 12 percent
25 to 54 years old: 63 percent
55 years and older: 25 percent

Return to original slide

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 Appendix to Figure 2.3 HRM Practices That
Support Diversity Management
Communication: Communicate with employees from a variety of
backgrounds.
Development: Provide career development for employees with
different backgrounds and abilities.
Performance appraisal: Provide feedback based on objective
outcomes.
Employee Relations: Create a work environment that is
comfortable for all and fosters creativity.

Return to original slide

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 Appendix to Figure 2.4 Business Strategy:
Issues Affecting HRM
1. Mergers and Acquisitions
2. Reengineering
3. International Expansion
4. Downsizing
5. Outsourcing
6. Total Quality Management

Return to original slide

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 Appendix to Figure 2.5 Number of Job Cuts
Announced by Employers during the Past Decade
All numbers are approximate.
2007 800,000
2008 1,200,000
2009 1,250,000
2010 500,000
2011 600,000
2012 500,000
2013 450,000
2014 400,000
2015 600,000
2016 550,000
2017 450,000

Return to original slide

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 Appendix to Figure 2.6 Where Immigrants to
the United States Came from in 2016
Asia: 39 percent
North America: 31 percent
Central and South America: 11 percent
Africa: 10 percent
Europe: 8 percent
Other: 1 percent

Return to original slide

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