HRMT20023 Contemporary Studies in Human Resource Management

1. HRMT20023Contemporary Studies in Human Resource Management T2, 2014 Course Coordinator Dr Sujatha Sridharan s.sridharan@cqu.edu.au

2. Module-3 Chapters 2 & 7 Competition & Choice and Competing for people

3. Chapter 2: Competition and Choice

4. Objectives: • Explain how competitive intensity has increased and shows signs of increasing. • Demonstrate how globalisation serves to increase competition. • Explain the role played by technological developments. • Show the influence of developments in governments' trade and industrial policies. • Explore the impact of 'financialisation' on organisations and its causes. • Set out the impact on HRM activity.

5. Competitive intensity: • Difficult to measure but two approaches common: • Combining proxy measures • Anecdotal evidence. • Proxy measures include: - ‘industry membership’ churn - incidence of financial instability - levels of overseas competition - number of start-ups and their growth rates - levels of ‘discounting’.

6. Cause 1: Globalisation • long-term trend • acceleration since 1990 due to development of RIC countries • international rather than national markets • huge impact on manufacturing, but increasingly in the service sector too.

7. Cause 2: Technology • Developments in communications and transport make international trade quicker. • Developments in communications increase our knowledge of alternatives. • Developments in advertising media. • Aiding productivity improvements (labour-saving machines). • The potential of biotechnologies and nanotechnology.

8. Cause 3: Government action • Policies aimed at increasing competition and choice. • Move from ‘mixed economy’ model (1940–1980 in UK) to a belief that fair competition between companies is the best means of satisfying customers, raising productivity and quality, and growing the economy. • Widespread privatisation, and ‘market disciplines’ introduced into remaining public sector services. • Evolving international consensus on such a strategy, and resulting relaxation of foreign exchange controls, and cross-national standardisation.

9. Arguments against: • Economic argument: Allowing choice leads to volatility in product markets, this leads to insecurity for employees and caution on the part of consumers – which has a deflationary impact. • Paternalism argument: People are not qualified to make the choices now available to them, and will often only consider short-term gratification.

10. Consumerism cycle: Increased competition Exercise of choice: Less loyalty More choice

11. Financialisation: • increasing pressure to reduce costs • increasing pressure to secure investment • globalisation of money marks – making the world financial system largely ‘unregulatable’ • threat of ‘loss of confidence’ – in a corporation, or even a national government • rise of system of ‘shareholder capitalism’, which includes a tendency for mergers and acquisitions.

12. Impact of increasing competition on HR: • Increased pressure to meet organisation objectives effectively. • This needs to be achieved more efficiently. • Requirement for HR to prove its worth in financial terms. • Volatility of the business environment – necessitates environmental awareness. • Focus on organisational agility – necessitates the management of structural and cultural change. • Increased pressure to operate internationally – necessitated international HRM.

13. Summary: • Increasing competitive intensity is the most significant contemporary trend in the business environment. • Can be explained with reference to globalisation, technological developments and government agendas. • The result is a business environment which is more volatile and less predictable.

14. Chapter 7: Competing for People

15. Objectives: • Explain why high wages are not always central for effective recruitment and retention. • Introduce the concept of ‘total reward’. • Assess the advantages and disadvantages of a flexible benefits system. • Introduce the concept of ‘employer branding’. • Consider labour market segmentation.

16. Reward: • ‘Leading the market’ approach sees pay as the key issue in staff recruitment and retention. • ‘Following the market’ is possible however, where resources are constrained, when there are other benefits, such as: • job security • flexible working arrangements • other benefits (holidays, car parking, pensions) • career development and training • work that is satisfying or worthwhile • a pleasant and friendly working environment.

17. Total reward: • 'A concept which recognises the importance of considering all aspects of reward as an integrated and coherent whole’. • Incorporates: • base pay • contingent pay (PRP) • benefits and non-financial rewards • intrinsic rewards from the employment environment and job itself.

18. Types of reward: Four categories based on two distinctions: • Transactional versus Relational • Individual versus Communal

19. Hay model: The ‘Engaged Performance Model’ is the most comprehensive published to date, and focuses substantially on five sets of potential ‘relational rewards’: • Inspiration and values (inc. leadership, company reputation, recognition). • Future growth and opportunity (inc. L&D and career prospects). • Quality of work. • Enabling environment. • Work–life balance. Such things are harder for competitors to imitate than pay.

20. Flexible benefits: • individuals can tailor their own package to their needs • vary in degree of flexibility • vary in operation – some being very technologically sophisticated • more popular in the USA followed by Australia and UK at present.

21. Employer branding: • Tools borrowed from consumer marketing. • Communicating a certain message about the organisation as an employer. • Brand message must be genuine. • Employers should gain perceptions of existing staff to shape the message. • Focus on the positive and the unique. Frameworks are often based on organisation personality or employee value propositions (what’s important to the workforce).

22. Communicating the message: • often starts with clarification of core value • development of slogans, statements and even visual imagery • these are repeated again and again • can be used to introduce the company, but also to target faulty perceptions.

23. Labour market segmentation: • Idea that HR managers should analyse data on their workforce to identify distinct groups that may have specific needs and aspirations. • Tesco identified 5 alternate ‘employee identities’ among its staff based on attitudes towards work. • Traditional approach is to consider differentiating for different generations of employees.

24. Conjoint analysis: • Technique used to assess the strengths and weaknesses of each group in terms of contribution to overall organisation performance. • Allows reward strategies, etc. to be tailored more to the needs of the most valuable group(s). • Involves extensive ‘market research’ – staff attitude surveys. • Aim is to enable HR managers to make a cost–benefit analysis of different types of HR intervention.

25. Summary: • It is possible for organisations to recruit and retain good performers without leading the market in terms of pay. • Following the market is only viable if the wider employment experience is attractive. • Growing popularity of ‘total reward’ including relational as well as transactional elements. • Flexible benefits systems allow employers to offer packages tailored to each individual employee. • Employer branding involves using marketing principles in the communication with existing and would-be employees. • Labour market segmentation has potential in the field of recruitment and retention.