MGT 563 OPERATIONS STRATEGIES

1. MGT 563OPERATIONS STRATEGIES Dr. Aneel SALMAN Department of Management Sciences COMSATS Institute of Information Technology, Islamabad

2. Recap Lecture 26 • Inventory Management • Inventory Models • Independent versus Dependent Demand • Holding, Ordering, and Setup Costs • Inventory Models For Independent Demand • Basic Economic Order Quantity (EOQ) Model • Minimizing Costs • Reorder Points • Production Order Quantity Model • Quantity Discount Models

3. HR Branding • Firm’s corporate image or culture • Embodies values and standards that guide peoples’ behavior • People know what company stands for, people it hires, fit between jobs and people, and results it recognizes and rewards • Important in getting highest quality applicants to join firm

4. Human Resource Management • Utilization of individuals to achieve organizational objectives • All managers at every level must concern themselves with human resource management • Five functions

5. Human Resource Management Functions 1 Staffing Human Resource Management Human Resource Development Employee and Labor Relations Compensation Safety and Health

6. Staffing • Job Analysis • Human Resource Planning • Recruitment • Selection

7. Staffing (Cont.) • Staffing - Process through which organization ensures it always has proper number of employees with appropriate skills in right jobs at right time to achieve organizational objectives • Job analysis - Systematic process of determining skills, duties, and knowledge required for performing jobs in organization

8. Staffing (Cont.) • Human resource planning - Systematic process of matching the internal and external supply of people with job openings anticipated in the organization over a specified period of time . • Recruitment - Process of attracting individuals on a timely basis, in sufficient numbers, and with appropriate qualifications, to apply for jobs with an organization

9. Staffing (Cont.) • Selection - Process of choosing from a group of applicants the individual best suited for a particular position and the organization

10. Human Resource Development • Training • Development • Career Planning • Career Development • Organizational Development • Performance Management • Performance Appraisal

11. Human Resource Development (Cont.) • Training - Designed to provide learners with knowledge and skills needed for their present jobs • Development - Involves learning that goes beyond today's job; it has more long-term focus • Career planning - Ongoing process whereby individual sets career goals and identifies means to achieve them

12. Human Resource Development (Cont.) • Career development - Formal approach used by organization to ensure that people with proper qualifications and experiences are available when needed • Organization development - Planned process of improving organization by developing its structures, systems, and processes to improve effectiveness and achieving desired goals

13. Human Resource Development (Cont.) • Performance management - Goal-oriented process directed toward ensuring organizational processes are in place to maximize productivity of employees, teams, and ultimately, the organization • Performance appraisal - Formal system of review and evaluation of individual or team task performance

14. Compensation Compensation- All rewards that individuals receive as a result of their employment

15. Compensation • Direct Financial Compensation -Pay that person receives in form of wages, salaries, bonuses, and commissions. • Indirect Financial Compensation (Benefits) -All financial rewards not included in direct compensation such as paid vacations, sick leave, holidays, and medical insurance. • Nonfinancial Compensation - Satisfaction that person receives from job itself or from psychological and/or physical environment in which person works.

16. Safety and Health Employees who work in safe environment and enjoy good health are more likely to be productive and yield long-term benefits to organization.

17. Safety and Health • Safety - Involves protecting employees from injuries caused by work-related accidents • Health - Refers to employees' freedom from illness and their general physical and mental well being

18. Employee and Labor Relations • Private-sector union membership has fallen from 39 percent in 1958 to 7.8 percent in 2005. • Business is required by law to recognize a union and bargain with it in good faith if the firm’s employees want the union to represent them • Human resource activity is often referred to as industrial relations • Most firms today would rather have a union-free environment

19. Human Resource Research • Human resource research is not separate function. • It pervadesall HR functional areas.

20. Interrelationships of HRM Functions • All HRM functions are interrelated • Each function affects other areas

21. Dynamic Human Resource Management Environment

22. Environment of Human Resource Management EXTERNAL ENVIRONMENT INTERNAL ENVIRONMENT Unions Society Technology 1 Marketing Operations Legal Considerations Staffing Human Resource Management Human Resource Development Unanticipated Events Employee and Labor Relations Compensation Finance Other Functional Areas Economy Safety and Health Shareholders Competition Labor Market Customers

23. Labor Market • Potential employees located within geographic area from which employees are recruited • Always changing

24. Legal Considerations • Federal, state and local legislation • Court decisions • Presidential executive orders

25. Society • No longer content to accept, without question, the actions of business • Ethics - Discipline dealing with what is good and bad, or right and wrong, or with moral duty and obligation • Social responsibility - Implied, enforced or felt obligation of managers to serve or protect interests of groups other than themselves

26. Unions • Group of employees who have joined together for purpose of dealing collectively with their employer • Become a third party when dealing with the company

27. Shareholders • Owners of corporation • Because they have invested money in firm, they may at times challenge programs considered by management to be beneficial to organization

28. Competition • Firms may face intense competition in both their product or service and labor markets • Must maintain a supply of competent employees • Bidding war often results

29. Customers • People who actually use firm’s goods and services • Management has task of ensuring its employment practices do not antagonize members of market it serves • Workforce should be capable of providing top-quality goods and services

30. Technology • The world has never before seen technological changes occur as rapidly as they are today. • Created new roles for HR professionals • Additional pressures on them to keep abreast of technology

31. Economy • In general, when economy is booming, it is often more difficult to recruit qualified workers. • When a downturn is experienced, more applicants are typically available.

32. Unanticipated Events • Occurrences in the external environment that could not be foreseen • Every disaster, whether manmade or by nature, requires a tremendous amount of adjustment with regard to human resource management

33. Cyberwork • Possibility of never-ending workday • BlackBerrys, cell phones, text messaging, and e-mail create endless possibilities for communication • Some workers believe their employer wants them available 24/7

34. HR’s Changing Role: Questions That Are Being Asked • Can some HR tasks be performed more efficiently by line managers or outside vendors? • Can some HR tasks be centralized or eliminated altogether? • Can technology perform tasks that were previously done by HR personnel? • Many HR departments continue to get smaller

35. HR’s Changing Role:Who Performs Human Resource Management Tasks? • Human Resource Managers • HR Outsourcing • HR Shared Service Centers • Professional Employer Organization (Employee Leasing) • Line Managers

36. Human Resource Manager • Acts in advisory or staff capacity • Works with other managers to help them deal with human resource matters • Today HR departments continue to get smaller because others are accomplishing certain functions

37. HR Outsourcing • Transfers responsibility to an external provider • Market for HR outsourcing is growing dramatically

38. Ways HR Outsourcing is Done • Discrete services • Multi-process services • Total HR outsourcing

39. Discrete Services • One element of business process or single set of high-volume repetitive functions is outsourced to a third-party • Large majority of companies outsource transactional HR activities, such as 401(k) administration

40. Multi-process Services • Complete outsourcing of one or more human resource processes • Example: Procter & Gamble outsourced entire training operations

41. Total HR Outsourcing • Transfer majority of HR services to third party • Example: Whirlpool Corporation signed 10-year deal to outsource HR business processes for 68,000 employees to Convergys Corporation

42. HR Shared Service Centers (SSCS) Takes routine, transaction-based activities that are dispersed and consolidates them in one location

43. Professional Employer Organization (Employee Leasing) Company that leases employees to other businesses.

44. Professional Employer Organization (Cont.) • Company releases its employees who are then hired by PEO • PEO pays the employees • PEO is the employees’ legal employer and has the rights to hire, fire, discipline, and reassign an employee • Charges a fee of from 1 to 4 percent of the customer’s gross wages

45. Line Managers Performing HR Tasks • Involved with human resources by nature of their jobs • Line managers are now performing some duties typically done by HR

46. HR as a Strategic Partner • HR executives must understand complex organizational design • Sharp deviation from what has traditionally been an administrative type role for HR

47. Strategic Activities CEOs Want from HR • Make workforce strategies integral to company strategies and goals • Leverage HR’s role in major change initiatives • Earn the right to a seat at the corporate table • Understand finance and profits • Help line managers achieve their goals

48. Human Capital Metrics Measures of HR performance

49. Examples of HR Metrics • Time to fill open positions • HR headcount ratios • Administrative cost per employee • Turnover cost • Training return on investment • Cost per employee for HR administration ranges from $1,200 - $1,600

50. HR Scorecard • Report card of effectiveness of specific person • Metrics that will best suit each company depends on variety of factors