Presentation on theme: "The Investment Perspective In Human

Resource Management" Presentation transcript:

1 The Investment Perspective In Human Resource Management

2 Investment Perspective in HR
When employees are viewed as variable costs, there is little recognition of the firms
contributions to their training and the costs of recruiting and training replacements.Human
capital is not often included in the determination of an organizations business capitalHUMAN
CAPITAL: 1) highly skilled, 2) knowledgeable, 3) stable labor force

3 HR INVESTMENT considerations
MANAGEMENT VALUESValues and philosophies of senior management are communicated
through HR policies and practicesHow employees are treated is a reflection of their values and
communicates whether organization view employees from an investment perspective.Those
adopting an investment perspective seek to enhance the value of their human capital, pr at the
very least, prevent their depreciation

4 HR INVESTMENT considerations
RISKS AND RETURN ON INVESTMENT IN HRInvestment in HR is more risky since
employer does not own the resource unlike machines or technologyIN order for investments in
HR to be attractive, the returns must be great enough to overcome risks.Investment in HR may
be long-term and benefits may not be direct (I.e., loyalty, organizational commitment, etc)

5 HR INVESTMENT considerations
ECONOMIC RATIONALE FOR INVESTMENT IN TRAININGSpecific vs. general training in
human capital theory (Gary Becker, Nobel Laureate - Economics)Specific training - skills that
are specific to the organizationGeneral training - skills that are transferable to other employees
and other organizations.Employers are generally reluctant to lay-off employees they have
invested in specific traininghowever, the distinction between general and specific training is
misleading. Few skills are non-transferable.

6 HR INVESTMENT considerations
UTILITY THEORYAttempts to determine the economic value of human resource programs,
activities and procedures.To what extent can the results of HR programs be quantified?ROI
considerations particularly in training

7 HR INVESTMENT considerations
OUOTSOURCING AS AN ALTERNATIVE TO INVESTMENT IN HRInvestments in HR
should support organizational strategy (vertical alignment)Strategic outsourcing is advocated
whereworld-class capabilities and a strategic advantage can not be developedoutsourcing is
clearly cheaperdependency on suppliers can be avoidedMany HR functions have been
outsourced: executive search, executive compensation, etc.
8 Mergers and Acquisitions
What are the negative implications of mergers and acquisitions to the investment perspective in
HR?Identify at least three ways in which the investment perspective in HR can still be upheld
even during mergers and acquisitions.

9 INVESTMENT IN TRAINING & DEVT

Investments in employabilityjob security from being employable not from being employedsocial
security vs. job securityIncreased investment and time spent in trainingapprenticeship
trainingmandatory training time

10 INVESTMENT IN TRAINING & DEVT

On-the-job Trainingcross trainiself-instruction (CBT)personal career and development
plansInvestments in Management DevelopmentJob rotation programscross-functional
assignmentsexecutive development programsmentoring and coaching programs

11 INVESTMENT IN TRAINING & DEVT

Prevention of skill obsolescencerapid changes in technologyexpectancy theory vs. human capital
theoryemployees expectation of their ability to acquire new skills and the perceived reward
instrumentality of such skills explain employees motivation for skill acquisitionMany models in
preventing skill obsolescence - HP, Intel, IBM, Motorola; the emergence of corporate
universities.

12 INVESTMENT IN TRAINING & DEVT

Reductions in career plateauingoccurs when employees have occupied a job for some period,
have mastered all aspects of the job, and have few prospects for promotioncreates resentment
and a sense of futilitynatural consequence of lck of organizational growth or changecan be
reduced by constant inventory of potentials vs performance

13 Potential PCSTARSWH DWPerformance

14 INVESTMENT PRACTICES FOR RETENTION

Organizational Cultures emphasizing Interpersonal Relationship Values Focusing on Technical
EmployeesEffective Selection ProceduresEquitable compensation and benefitsJob enrichment
and satisfactionPractices providing for work-life balanceCreating confidence in the
organizations futureFocusing on Technical EmployeesLiberal HR Policies (e.g.
Transfer)Effective management of diversityPrevention of sexual harassment

15 INVESTMENT PRACTICES FOR RETENTION

Organizational Cultures emphasizing Interpersonal Relationship Valuesrespect for peopleteam
orientationfearless culturepositive relationships with superiorsabsence of conflictparticipation
in decision makinginformal culturesinformation sharingorganizational support for
employeesImproved Retention: median was 14 mos longer

16 INVESTMENT PRACTICES FOR RETENTION

Effective Selection ProceduresPerson-job fitOrganization-person fitCareful selectionValid
testsImproved interviewing techniquesRealistic job previewsImproved Retention
17 INVESTMENT PRACTICES FOR RETENTION
Equitable compensation and benefitsFair performance appraisalequitable ratios of inputs to
outputsexclusion of politics in compensation decisionscommunication of compensation
structures and proceduresperformance-based compensationpay incentivesbenefits that are valued

18 INVESTMENT PRACTICES FOR RETENTION

Job enrichment and satisfactionBuilding increased responsibilityAutonomyKnowledge of
resultsmeaningful workEnhanced job latitudeJob satisfactionWhen high performing employees
feel undervalued, they tend to have higher turnover rates

19 INVESTMENT PRACTICES FOR RETENTION

Practices providing for work-life balanceAlternative work schedulesChild-care servicesfamily
leaveTelecommutingFlextimeUnreasonable workloads found to be associated with turnover

20 INVESTMENT PRACTICES FOR RETENTION

Creating confidence in the organizations futuresetting clear directions for the future and
building confidence in the vision of the future improve retentionFocusing on Technical
EmployeesLiberal HR Policies (e.g. Transfer)Effective management of diversityPrevention of
sexual harassment

21 INVESTMENT PRACTICES FOR RETENTION

Organizational Cultures emphasizing Interpersonal Relationship Values Focusing on Technical
EmployeesEffective Selection ProceduresEquitable compensation and benefitsJob enrichment
and satisfactionPractices providing for work-life balanceCreating confidence in the
organizations futureFocusing on Technical EmployeesLiberal HR Policies (e.g.
Transfer)Effective management of diversityPrevention of sexual harassment

22 INVESTMENTS IN JOB-SECURE WORKPLACES

Recognition of the costs of downsizing and layoffsoften, it is more cost-effective not to
downsizeoften not practical because of LIFO practiceAvoiding business-cycle-based
layoffsoffering employment guaranteesloaning out employees during downturnscost sharing
practices

23 INVESTMENTS IN JOB-SECURE WORKPLACES

Offering alternatives to layoffsdirect HR Planning toward employment stabilityplacing emphasis
on training and retraininglean staffing even during prosperitymaintaining stability with buffers
(OT, PT)Correcting poor performance and terminating with warrantedSelecting new employees
for long-termUsing probationary periods effectivelyHiring non-specialists when
possibleTraining for skills needed for next stage of product cycle life

24 NONTRADITIONAL INVESTMENT in HR APPROACHES

Investment in disabled employeesInvestments in employee healthCountercyclical hiring
 Download ppt "The Investment Perspective In Human Resource Management"

Ppt on domestic tourism in india Ppt on cadbury dairy milk Ppt on adobe photoshop
tools Ppt on human chromosomes disorders Ppt on animal kingdom class 9 Ppt on multivariate
statistical analysis Ppt on catenation of carbon Ppt on e waste management
in india Ppt on introduction to object-oriented programming for
dummies Ppt on railway track engineering
Similar presentations