CHAPTER 2: CHALLENGES IN STRATEGIC HUMAN RESOURCE MANAGEMENT

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IBM
IBM Utilized technology not only to improve the delivery of its HR Program to its employees but also significantly to reduce the administrative cost. IBM created HRSC, based in Raleigh, north Carolina. The HRSC Utilizes networking technologies to deliver HR information and service to more than 500,000 active and retired employees in the united states. The centre handles more than 1.5 million calls and process more than 2.5 million transactions annually.
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HRSC Services 20 Separate IBM Business Units Including

Benefits Retirement Planning Compensation Employee suggestion Staffing Job Posting Orientation Performance Management EEO Compliance Employees Separation Leaves of absence

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HRSC
Staffed by 80 Customer Service Representative who act as a generalist in helping Employees with a wide range of HR Related Issues. In addition 80 program specialist handle more complex issues pertaining to particular HR Program. Compensation Tuition reimbursement Short term Foreign Service Assignment etc.

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HRSC
In addition number of functions are fully automated ;for example employees can setup their own flexible benefit program without even talking to another person. These employees and automated person. functions are supported by in-house intranet of inmore than 5000 pages. In establishing the HRSC pages. IBM sought to capitalize on its belief in the importance of combining people, technology, and customer service much as it does with its external customer .
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IBMIBM-STRATEGY
IBM Strategy to improve the employees service and reduce the cost of human resource administration has led to impressive results. Employees seems to value the HRSC ;the centre has the customer satisfaction rate that exceed 90 percent. The centre also allows IBM to reduce the cost of providing HR services by 40 percent during its initial years, and additional cost efficiencies are gained each year as new services are added.
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Major Factors Affecting HRM

Technological Advancement

Demographics and Diversity

Strategic HRM

Globalization

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Exhibit 2-1 2-

Issues for Integrating New Technologies

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Exhibit 2-2 2-

Impact of Technology on Organizations

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Technology Challenges for HRM

Telecommuting Employee surveillance & monitoring e-HR Ethical behavior

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Telecommuting
Dramatic growth in number of Americans working from home
3.4 million in 1990 19.6 million by beginning of 2000 Issues affecting success of telecommuting programs
Clear performance measurement system is key Deciding which employees will be offered participation Equipment expense Some managers uncomfortable having direct reports away from office

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Telecommuting at Merrill lynch

Working from home is supposed to make work easier. No more commuting. No more office politics. Nothing between you and your colleagues except a modem and a view of your backyard.But if working from home is so easy, why do telecommuters find making it work so hard? Back in 1995, Wall Street giant Merrill Lynch posed that question - and devised a one-of-a-kind one-ofprogram to answer it.
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Merrill lynch
"You can't just give people computers, send them home, and call them telecommuters," says Camille Manfredonia, 34, a Merrill Lynch vice president who directs the firm's alternative work arrangements group, based in Somerset, New Jersey. "There are so many issues. What kind of equipment do you need? How will working from home affect your clients, your manager, your cocoworkers? How will it affect your career? How do you manage people effectively from a distance?"
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Merrill lynch
Manfredonia's group has helped hundreds of Merrill Lynch telecommuters wrestle with these issues by insisting that they complete a grueling training program. So far, about 400 people have gone through the program. Hundreds more will complete it by the end of 1998. Even so, Manfredonia says, "We don't want to make telecommuting so easy that anyone can do it."

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Merrill lynch
There's little chance of that. At Merrill Lynch, prospective telecommuters submit a detailed proposal that covers when and how they're going to work at home - and even what their new office will look like. Then they participate in a series of meetings with their manager and with Manfredonia's group. Finally, they spend two weeks in a simulation lab. "The simulation lets people, and their managers, experience the change," Manfredonia says.
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Merrill lynch

But Merrill Lynch isn't just teaching its people how to work from home; it's developing a curriculum that everyone can learn from. Four lessons stand out

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Lesson -1
1. You're out of the office - don't be out of the loop. Informal relationships can be more important than formal assignments. That's why Merrill Lynch requires most of its telecommuters to spend at least one day a week in the office. "Don't expect people to connect with you," says Manfredonia. "You have to stay connected with them. Be sure to go in when there's something special happening, whether it's a key meeting or a colleague's birthday party."
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Lesson -1 contt
But don't just visit the office to swap gossip. Use your time there to help your co-workers counderstand how you spend your time at home. Says Eileen Keyes, 33, business manager for the alternative work group: "You never want to be in a position where your manager says, 'I wonder what Jane is doing - is she really working?'"

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LessonLesson-2
2. If you want freedom, get organized. You've scheduled a 2 p.m. call with a client. At 1:58, you reach for the receiver - and realize that you left your files at the office. Perfectly understandable, says Keyes - but totally inexcusable. You have to learn how to think like a telecommuter," she insists. "You have to plan a day ahead, a week ahead.

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Lesson -2 contt 1
What are you trying to accomplish? What materials will you need? Where are they?" That kind of discipline takes practice. That's why Merrill Lynch has established three simulation labs - in Somerset; Jacksonville, Florida; and New York City. In these labs, telecommuter wannabes work on the same projects - and use the same equipment - that they'll handle outside the office

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LessonLesson-2 contt 2
Which means, of course, they make all the mistakes that they'll eventually learn to avoid. How can you put together a killer client presentation if you don't even have the right office supplies? "The lab helps people get comfortable with the technology," says Manfredonia. "But more importantly, it makes them more comfortable with the realities of working remotely."

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LessonLesson-3
3. To be creative, create new routines. Life in an office involves routines: a morning staff meeting, a standing lunch appointment. People who work from home escape those routines. That's a mixed blessing, argues Keyes. She urges telecommuters to establish new routines - and then to stick with them. One telecommuter at Merrill Lynch wakes up, takes a shower, drives down the road for coffee and a newspaper - and then heads back home to start work.
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LessonLesson-3 contt 1
"People are responsible for doing the same job as they did before," says Keyes. "They're just doing it in a different location." The company requires that telecommuters document their at-home atworking hours and submit weekly progress reports. Some plan their at-home schedules in atpainstaking detail - down to the times of day when they check email. The point is not to prove they're working; it's to create routines that make their work more productive.
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LessonLesson-4
4. You can't work smart in a dumb home office. Who doesn't prefer checking email in their pyjamas? But telecommuting isn't that simple. "Before they go through this program, a lot of people think that all they need is a desk and a chair," says Keyes. "We show them how to do things right." Two years ago, Merrill Lynch sent out inspectors to check each home office; these days, telecommuters take photographs of their office and submit them for approval
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Lesson 4 contt 1
. Furniture must meet strict ergonomic standards. And there's no arguing about technology. The company spends about $7,000 per person to equip telecommuters with a state-of-the-art laptop, state-of-theprinter, and fax machine. It provides a 24-hour 24hotline for technical assistance.All this discipline is paying dividends. Productivity, says Keyes, is definitely up.

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LessonLesson-4 contt 2
There's also been a steep decrease in turnover among the telecommuting population. "These people genuinely love their jobs," she says. "There's a lot less stress. Their satisfaction levels are way up."

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Intrapreneurship
Integration of entrepreneurial skills into a

large corporations strategic vision that nurtures a climate of radical or incremental innovation. Entrepreneurship within an existing business Internal business units within which produce innovative products, services or processes
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 An opportunity for corporate managers to take initiative and try new ideas. An internal corporate venture Nature of Intrapreneurship is allowing an atmosphere of Intrapreneurship Innovation to prosper

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INSIDE INTEL
Intel established an in-house "new business ininitiative" in 1998 to bootstrap new businesses that employees propose, regardless of whether the concepts had anything to do with Intel's core chipchipmaking business. In contrast to a venture capital program that Intel has had in place for a decade, the new business initiative provides financing for businesses that the company's own employees start.

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Intel -1
"The idea for the whole thing came from our employees, who kept telling us they wanted to do entrepreneurial things," said Craig Barrett, president and chief executive officer of Intel. "They saw that we were putting a lot of investments into external companies and said that we should be investing in our own ideas."

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IntelIntel-2
Unlike its efforts in the past, Intel's new business fund, started by executive vice president Gerhard Parker, was earmarked for non-microprocessor nonbusinesses. Gone was the day, said Mr. Barrett, when the company's microprocessors were the "creosote bush," a reference to the desert plant that sucks in all water around it and kills off any nearby saplings.

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IntelIntel-3
Regardless, last year employees pitched more than 400 ideas, and Intel provided funding for about two dozen of them. In contrast, Intel reviewed 5,000 ideas from outside entrepreneurs in the same period and made investments in about 250 of them. One Intel engineer who took the plunge was Paul Scagnetti, who had worked for a couple Scagnetti, of years developing chip-making processes. chipTinkering at home after working 12-hour days 12-

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Intel - 4
, he came up with a concept for a handheld computer aimed at helping people do just one thing: record and plan their fitness and nutrition data. Mr. Scagnetti's idea passed muster with Intel's finance people and he got approval to work on the project with a partner for nine months. Intel then gave him funding to hire 15 people and launch the product, the Vivonic Fitness Planner, in sporting goods stores on the West Coast.

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IntelIntel-5
There were a few hiccups, like trying to recruit from within Intel and running into managers who didn't want their employees to transfer. But the project met expectations and currently Mr. Scagnetti is planning how to expand it, either by spinning off or otherwise growing within Intel

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Employee Surveillance and Monitoring

More than 80% of large employers utilize monitoring technology
Internet usage E-mails Computer files Voice-mail VoiceTelephone usage

Under Electronic Communications Privacy Act (ECPA) employees have only limited privacy rights
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E-HR Opportunity to deliver transactional types of services online

Payroll Employee benefits Scheduling Recruiting Training Career development

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Ethical Behavior
Majority of jobs are considered to be atatwill Movement toward greater protection for employees in regard to offoff-duty behavior Ownership of work Fairness of noncompete clauses
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Sarbanes-Oxley Act Sarbanesof 2002

Eliminates deception in accounting & management practices by increasing government oversight Holds senior executives more directly responsible for violations Protects whistlewhistleblowers
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Workforce Demographic Changes: Graying of Workforce Negative aspects of older workers

Perceived resistance to change by older workers. Increased health-care healthcosts for senior workers Blocking advancement opportunities for younger workers Higher wage & salary costs for senior workers
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Positive aspects of older workers

As productive or more productive than younger workers Have more organizational loyalty than younger workers Possess broader industry knowledge & professional networks
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Workforce Demographic Changes Baby Boomers (19451962) (1945

In excess supply in middle management ranks HR challenge is to manage plateaued workers

Baby Busters (1963mid-1970s) (1963mid Are career bottlenecked by Boomers Who have skills in high demand are doing & will do well

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Workforce Demographic Changes

Generation Xers (late 1970searly 1980s) 1970s
Have life-long exposure to technology & constant change life Seek self-control, independence, personal growth, creativity self Not focused on job security or long-term employment long-

Generation Y: Baby Boom Echo (after 1979)

High comfort level with technology Global & tolerant outlook on life Highly entrepreneurial Shorter attention span Opting for more transient & variable project work
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Workforce Demographic Changes

Sexual orientation
More than 200 Fortune 500 employers offer full benefits for domestic partners Sexual orientation issues can impact bottom line

Disabilities
54 million Americans with disabilities Often not included in diversity initiatives Many supervisors do not understand needs of employees with disabilities Stereotypes

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New Employee/Workplace Dynamics Emphasis on management of professionals

Establishment of separate career tracks
Technical/Professional, Managerial /Administrative

Use of project teams

Less employee loyalty, more loyal to self

Staying with employers for shorter periods; demanding more meaningful work & involvement in organizational decisions

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New Employee/Workplace Dynamics Increased personal & family dynamic effects

More single-parent families, dual-career couples, & singledualdomestic partners

Increased nontraditional work relationships

Part-time, consulting, & temporary employment Partflexibility Outsourcing & entrepreneurial opportunities

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Ethnicity
By 2050
Close to 50% of US population will be nonnon-Caucasian

By 2025
African-Americans will Africanrepresent 14% of population Up from 12% in 1994 Hispanics will represent 17% of population Up from 10% in 1994 Asians & Pacific Islanders will represent 8% of population More than double from 1994
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By 2005
Ethnic minority share of workforce will be 28% Up from 22% in 1990 & 18% in 1980
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Managing Workplace Diversity

Understanding & appreciating diversity
Critical to effectively marketing to ethnic & minority groups Promoted by having diverse workforce at all levels Helps ensure hiring & promotion decisions are unbiased by person differences

Diversity management programs or initiatives

Must be integrated with organizations mission & objectives Help key decision makers identify diversitys benefits to organization Make critical decisions about implementing optimal program/initiative contingent on organization & its people, mission & culture.

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Exhibit 2-6 2-

Individual Dimensions of Diversity

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Strategic Management of Diversity

Determine why diversity is important Articulate how diversity relates to mission & strategic objectives Define diversity & determine how inclusive its efforts will be Make a decision as to whether special efforts should be extended to attract diverse workforce Assess how existing employees, customers, & other constituencies feel about diversity Determine specific types of diversity initiatives that will be undertaken
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Reading 2.1

Five Challenges to Virtual Team Success

Virtual teams:
Groups of people who work interdependently with shared purpose across space, time, & organization boundaries using technology to communicate & collaborate

Types of virtual teams

Global virtual teams Teams assigned to accomplish specific projects Cross-functional teams Cross-

Challenge: Recognize obstacles confronting teams that are both cross-functional & virtual crossCopyright 2005 South-Western. All rights reserved. 148

Reading 2.1

Five Challenges to Virtual Team Success

Building trust within virtual teams Maximizing process gains & minimizing process losses on virtual teams Overcoming feelings of isolation & detachment associated with virtual teamwork Balancing technical & interpersonal skills among virtual team members Assessment & recognition of virtual team performance

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Reading 2.2

Impact of the Sarbanes-Oxley Act Sarbanes New whistleblower protections

No public company may discriminate against employee because of any lawful act Retaliation against employee because of any lawful act done to assist a proceeding relating to alleged violation is prohibited If DOL determines that violation has occurred, employer may be ordered to reinstate employee & provide compensatory damages

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Reading 2.2

Impact of the Sarbanes-Oxley Act Sarbanes The Act dramatically affects officer compensation programs
Executive bonuses subject to forfeiture under Act Personal loans to executives are regulated by Act SEC can remove or temporarily freeze payments to executives & directors Public accounting firms are precluded from auditing company if highly placed executive was employed by auditing firm & participated in companys prior years audit Attorneys have new rules of professional responsibility

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Reading 2.2

Impact of the Sarbanes-Oxley Act Sarbanes The Act requires new employment policies & procedures
Procedures for receiving & handling complaints of corporate fraud have to be established Compensation program bonus policies & stock option plans have to take account of new forfeiture provisions Hiring & recruitment strategies & background checks will have to be revamped to avoid hiring executives whose employment is precluded by the Act Training required to properly implement all Acts mandates

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Reading 2.3

Employee Satisfaction
Potential impact of demographic changes
Aging population increases emphasis on health care benefits, retirement planning, & job security Women are attaining higher proportion of professional qualifications Future skills shortages may cause industrialized countries to compete for skilled immigrant labor

Industrial base shifting to service & health care sectors Wider political & economic trends affecting job satisfaction
Health care costs Job security Pensions

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Reading 2.3

Employee Satisfaction Two groups of issues Those depending on financial position of company
Benefits Wages Job security

Those less costly to implement through changing practices, processes, & culture
Communication with management Work/life balance Employees relationship with immediate supervisor Career development
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