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PART I Introduction

CHAPTER 1 Meeting Present and Emerging Strategic Human Resource Challenges

CHALLENGES

After reading this chapter, you should be able to deal more effectively with the following challenges:

1 Understand the major challenges affecting HR.
2 Develop competence in planning and implementing strategic HR policies.
3 Develop competence in selecting HR strategies to increase firm performance.
4 Become aware of HR best practices.
5 Understand the need to establish a close partnership between the HR department and managers.
6 Recognize career opportunities in various human resources management subfields.

Whether in a recession or during boom times, companies compete for talent. Those that are capable of attracting, retaining, and motivating good employees are more likely to achieve and sustain a competitive advantage. Let’s take three examples:

Source: epa european pressphoto agency/Alamy.

▪ Giant Alcatel-Lucent employs about 72,000 employees worldwide, and it plans to cut approximately 10,000 jobs during 2014 through 2016 to stem years of losses. While this move might be beneficial for the bottom line in the short term, many of its employees (even those who might not get the ax) are being syphoned away by competitors such as Ericsson, Huawei, and Nokia. This loss of talent might accelerate Alcatel-Lucent’s decline in the future.1
▪ Not long ago, Google Inc. was considered the ideal place to work and it was repeatedly chosen by Fortune in its annual pick of the best companies to work for. Google used to receive more than 1,000 applicants for every five jobs available, and very few employees left the company once they were hired. Yet the situation seems to be changing, making it much tougher for Google to attract and retain top talent despite the company’s name recognition and prestige. Google Inc. is now fighting off many growing Internet firms that are poaching its staff. During the years 2011–2015, Facebook, Zynga, and Twitter have increased their staffing by approximately 90 percent, and many of those employees are migrating from Google. To help attract new recruits and preempt defections, all of Google’s employees (about 23,000) were given a 10 percent raise, at an estimated cost of $400 million.
▪ In recent years, Motorola has lost thousands of engineers, researchers, and designers to competitors such as Apple; Samsung; Research in Motion (RIM, the maker of the Blackberry); Nokia; Dell; and Sony Erickson. A group of software experts recently laid off by Motorola marketed themselves to Yahoo as a team, and all were quickly hired.2 Ironically, RIM now is also on the brink of disaster because the market for the Blackberry has dwindled and the company has been unable to muster the engineering talent required to diversify its product offering. Nokia also finds itself in a similar situation—its inability to innovate in the cell phone market has made it a victim of Apple’s success in introducing a new stream of devices every year.

The Managerial Perspective

This book is about the people who work in an organization and their relationship with that organization. Different terms are used to describe these people: employees, associates (at Walmart, for instance), personnel, and human resources. None of these terms is better than the others, and they often are used interchangeably. The term we have chosen for the title of this text, and which we will use throughout, is human resources (HR) .* This term has gained widespread acceptance over the last decade because it expresses the belief that workers are a valuable—and sometimes irreplaceable—resource. Effective human resource management (HRM) is a major component of any manager’s job.

A human resource strategy refers to a firm’s deliberate use of human resources to help it gain or maintain an edge against its competitors in the marketplace.3 It is the grand plan or general approach that an organization adopts to ensure that it effectively uses its people to accomplish its mission. A human resource tactic is a particular policy or program that helps to advance a firm’s strategic goal. Strategy precedes and is more important than tactics.

In this chapter, we focus on the general framework within which specific HR activities and programs fit. With the help of the company’s human resources department, managers implement the chosen HR strategies.4 In subsequent chapters, we move from the general to the specific and examine in detail the spectrum of HR strategies (for example, those regarding work design, staffing, performance appraisal, career planning, and compensation).5

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Table of Contents for PART I Introduction

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Table of Contents for
PART I Introduction