VIEW Strategic Human Resource Management Taken from: Strategic Human Resource Management, Second Edition by Charles R Greer Copyright © 2001, 1995 by Prentice-Hall, Inc A Pearson Education Company Upper Saddle River, New Jersey 07458 Compilation Copyright © 2003 by Pearson Custom Publishing All rights reserved This copyright covers material written expressly for this volume by the editor/s as well as the compilation itself It does not cover the individual selections herein that first appeared elsewhere ii Permission to reprint these has been obtained by Pearson Custom Publishing for this edition only Further reproduction by any means, electronic or mechanical, including photocopying and recording, or by any information storage or retrieval system, must be arranged with the individual copyright holders noted This special edition published in cooperation with Pearson Custom Publishing Printed in the United States of America 10 Please visit our web site at www.pearsoncustom.com ISBN 0–536–72690–6 BA 996748 PEARSON CUSTOM PUBLISHING 75 Arlington Street, Suite 300 Boston, MA 02116 A Pearson Education Company iii iv Table of Contents SECTION ONE An Investment Perspective and Human Resources HUMAN RESOURCE INVESTMENT CONSIDERATIONS INVESTMENTS IN TRAINING AND DEVELOPMENT 14 INVESTMENT PRACTICES FOR IMPROVED RETENTION 32 INVESTMENTS IN JOB-SECURE WORKFORCES 42 ETHICAL IMPLICATIONS OF EMPLOYMENT PRACTICES 56 NONTRADITIONAL INVESTMENT APPROACHES 58 SUMMARY 67 NOTES 74 STRATEGIC HUMAN RESOURCE MANAGEMENT Table of Contents SECTION TWO 93 The Human Resource Environment 94 TECHNOLOGY AND ORGANIZATIONAL STRUCTURE 96 WORKER VALUES AND ATTITUDINAL TRENDS 109 MANAGEMENT TRENDS 116 DEMOGRAPHIC TRENDS 143 TRENDS IN THE UTILIZATION OF HUMAN RESOURCES 153 INTERNATIONAL DEVELOPMENTS 163 SUMMARY 169 NOTES 178 Strategy Formulation 202 IMPORTANCE OF HUMAN RESOURCES TO STRATEGY 203 THEORETICAL FOUNDATIONS 206 INTERNATIONAL STRATEGY 219 HUMAN RESOURCE CONTRIBUTIONS TO STRATEGY 232 STRATEGY-DRIVEN ROLE BEHAVIORS AND PRACTICES 237 STRATEGIC HUMAN RESOURCE ACTIVITY TYPOLOGY 239 CLASSIFYING HUMAN RESOURCE TYPES 245 NETWORK ORGANIZATIONS AND STRATEGY 252 vi STRATEGIC HUMAN RESOURCE MANAGEMENT Table of Contents ORGANIZATIONAL LEARNING 254 INTEGRATION OF STRATEGY AND HUMAN RESOURCE PLANNING 257 THE HUMAN RESOURCE MANAGER AND STRATEGIC PLANNING 268 SUMMARY 272 NOTES 281 vii STRATEGIC HUMAN RESOURCE MANAGEMENT Table of Contents SECTION THREE 299 Human Resource Planning 300 THE STRATEGIC ROLE OF HUMAN RESOURCE PLANNING 301 OVERVIEW OF HUMAN RESOURCE PLANNING 307 MANAGERIAL ISSUES IN PLANNING 314 SELECTING FORECASTING TECHNIQUES 319 FORECASTING THE SUPPLY OF HUMAN RESOURCES 326 FORECASTING THE DEMAND FOR HUMAN RESOURCES 348 SUMMARY 363 NOTES 370 viii STRATEGIC HUMAN RESOURCE MANAGEMENT Table of Contents SECTION FOUR 384 Strategy Implementation: Workforce Utilization and Employment Practices 385 EFFICIENT UTILIZATION OF HUMAN RESOURCES 386 DEALING WITH EMPLOYEE SHORTAGES 397 SELECTION OF EMPLOYEES 406 DEALING WITH EMPLOYEE SURPLUSES 416 SPECIAL IMPLEMENTATION CHALLENGES 440 SUMMARY 446 NOTES 451 Strategy Implementation: Reward and Development Systems 452 STRATEGICALLY ORIENTED PERFORMANCE MEASUREMENT SYSTEMS 467 STRATEGICALLY ORIENTED COMPENSATION SYSTEMS 480 EMPLOYEE DEVELOPMENT 499 SUMMARY 525 NOTES 535 ix STRATEGIC HUMAN RESOURCE MANAGEMENT Table of Contents SECTION FIVE 548 The Performance Impact of Human Resource Practices 549 INDIVIDUAL HIGH-PERFORMANCE PRACTICES 551 LIMITATIONS OF INDIVIDUAL PRACTICES 607 EVOLUTION OF PRACTICES 608 SYSTEMS OF HIGH-PERFORMANCE HUMAN RESOURCE PRACTICES 609 INDIVIDUAL BEST PRACTICES VS SYSTEMS OF PRACTICES 614 UNIVERSAL PRACTICES VS CONTINGENCY PERSPECTIVES 616 EMPIRICAL EVIDENCE: THE CASE FOR UNIVERSAL BEST PRACTICES 618 EMPIRICAL EVIDENCE: THE CASE FOR THE CONTINGENCY VIEW 622 SORTING THROUGH THE EVIDENCE 627 SUMMARY 631 NOTES 639 x STRATEGIC HUMAN RESOURCE MANAGEMENT Section Six NOTES Tsui, Anne S., and Luis R Gomez-Mejia “Evaluating Human Resource Effectiveness,” in Lee Dyer (Ed.), Human Resource Management: Evolving Roles and Responsibilities Washington, DC: Bureau of National Affairs, Inc., 1988, pp 187–227; Ulrich, Dave “Assessing Human Resource Effectiveness: Stakeholder, Utility, and Relationship Approaches,” Human Resource Planning 12, no (1989): 301–15; Gomez-Mejia, Luis R “Dimensions and Correlates of the Personnel Audit as an Organizational Assessment Tool,” Personnel Psychology 38, no (1985): 293–308 Ulrich “Assessing Human Resource Effectiveness: Stakeholder, Utility, and Relationship Approaches.” Page 720 STRATEGIC HUMAN RESOURCE MANAGEMENT Section Six Steers, Richard M “Problems in the Measurement of Organizational Effectiveness,” Administrative Science Quarterly 20, no (1975): 546–58; Mott, Paul E The Characteristics of Effective Organizations New York: Harper and Row, 1972; Hitt, Michael A., and R Dennis Middlemist “A Methodology to Develop the Criteria and Criteria Weightings for Assessing Subunit Effectiveness in Organizations,” Academy of Management Journal 22, no (1979): 356–74; Hitt, Michael A., R Dennis Middlemist, and Charles R Greer “Sunset Legislation and the Measurement of Effectiveness,” Public Personnel Management 6, no (1977): 188–93 Tsui and Gomez-Mejia “Evaluating Human Resource Effectiveness”; Tsui, Anne S “Personnel Department Effectiveness: A Tripartite Approach,” Industrial Relations 23, no (1984): 184–97 Tsui and Gomez-Mejia “Evaluating Human Resource Effectiveness”; Tsui “Personnel Department Effectiveness: A Tripartite Approach.” Page 721 STRATEGIC HUMAN RESOURCE MANAGEMENT Section Six Jarrell, Donald W Human Resource Planning: A Business Planning Approach Upper Saddle River, NJ: Prentice Hall, 1993; Peterson, Donald J., and Robert L Malone “The Personnel Effectiveness Grid (PEG): A New Tool for Estimating Personnel Department Effectiveness,” Human Resource Management 14, no (1975): 10–21 Rogers, Edward W., and Patrick M Wright “Measuring Organizational Performance in Strategic Human Resource Management: Looking Beyond the Lamppost,” Working Paper #98-24, Center for Advances Human Resource Studies, Cornell University, 1998 Portwood, James D “Process Management vs Problem Solving: Choosing an Appropriate Perspective for Evaluating Human Resource Systems,” in Richard J Niehaus and Karl F Price (Eds.), Creating the Competitive Edge through Human Resource Allocations New York: Plenum Press, 1988, pp 181–91 Tsui and Gomez-Mejia “Evaluating Human Resource Effectiveness”; Tsui “Personnel Department Effectiveness: A Tripartite Approach.” 10 Tsui, Anne S “Defining the Activities and Effectiveness of the Human Resource Department: A Multiple Constituency Approach,” Human Resource Management 26, no (1987): 35–69 Page 722 STRATEGIC HUMAN RESOURCE MANAGEMENT Section Six 11 Ibid 12 “New Ethics—or No Ethics?”, Fortune (March 20, 2000): 82 13 Losey, Michael R “The Future Human Resource Professional: Competency Buttressed by Advocacy and Ethics,” in Dave Ulrich, Michael R Losey, and Gerry Lake (Eds.), Tomorrow’s HR Management: 48 Thought Leaders Call for Change New York: John Wiley and Sons, 1997, pp 297–98 14 Tsui and Gomez-Mejia “Evaluating Human Resource Effectiveness”; Peterson and Malone “The Personnel Effectiveness Grid (PEG): A New Tool for Estimating Personnel Department Effectiveness”; Phillips, Jack J., and Anson Seers “Twelve Ways to Evaluate HR Management,” Personnel Administrator 34, no (April 1989): 54–58 15 Ulrich “Assessing Human Resource Effectiveness: Stakeholder, Utility, and Relationship Approaches.” Page 723 STRATEGIC HUMAN RESOURCE MANAGEMENT Section Six 16 Tsui and Gomez-Mejia “Evaluating Human Resource Effectiveness”; Phillips and Seers “Twelve Ways to Evaluate HR Management: The Best Methods to Measure HR’s Effectiveness”; Steffy, Brian D., and Steven D Maurer “Conceptualizing and Measuring the Economic Effectiveness of Human Resource Activities,” Academy of Management Review 13, no (1988): 271–86; Ulrich “Assessing Human Resource Effectiveness: Stakeholder, Utility, and Relationship Approaches.” 17 Hitt and Middlemist “A Methodology to Develop the Criteria and Criteria Weightings for Assessing Subunit Effectiveness in Organizations”; Phillips and Seers “Twelve Ways to Evaluate HR Management: The Best Methods to Measure HR’s Effectiveness.” 18 Tsui and Gomez-Mejia “Evaluating Human Resource Effectiveness”; Schmitt, Neal W., and Richard J Klimoski Research Methods in Human Resources Management Cincinnati: South-Western Publishing Co., 1991 19 Kaplan, Robert S., and David P Norton The Balanced Scorecard: Translating Strategy into Action Boston: Harvard Business School Press, 1996 20 Ibid 21 Ibid., p 132 Page 724 STRATEGIC HUMAN RESOURCE MANAGEMENT Section Six 22 Ulrich, Dave, Wayne Brockbank, and Arthur Yeung “Beyond Belief: A Benchmark for Human Resources,” Human Resources Management 28, no (1989): 311– 35 23 Jorgensen, Les “How to Steal the Best Ideas Around,” Fortune (October 19, 1992): 102–06 24 Ulrich, Brockbank, and Yeung “Beyond Belief: A Benchmark for Human Resources.” 25 Ibid 26 Ibid., p 312 27 Bamberger, Peter, Samuel Bacharach, and Lee Dyer “Human Resources Management and Organizational Effectiveness: High Technology Entrepreneurial Startup Firms in Israel,” Human Resource Management 28, no (1989): 349–66 28 Ibid 29 Ibid 30 Ibid., pp 362–63 Page 725 STRATEGIC HUMAN RESOURCE MANAGEMENT Section Six 31 Tsui and Gomez-Mejia “Evaluating Human Resource Effectiveness”; Phillips and Seers “Twelve Ways to Evaluate HR Management”; Petersen and Malone “The Personnel Effectiveness Grid (PEG): A New Tool for Estimating Personnel Department Effectiveness”; Cascio, Wayne F “Responding to the Demand for Accountability: A Critical Analysis of Three Utility Models,” Organizational Behavior and Human Performance 25, no (1980): 32–45; Tannenbaum, Scott I., and Woods, Steven B “Determining a Strategy for Evaluating Training: Operating Within Organizational Constraints,” Human Resource Planning 15, no (1992): 63–81 32 Tsui and Gomez-Mejia “Evaluating Human Resource Effectiveness,” p 200 33 Tsui and Gomez-Mejia “Evaluating Human Resource Effectiveness”; Peterson and Malone “The Personnel Effectiveness Grid (PEG): A New Tool for Estimating Personnel Department Effectiveness.” 34 Butler, John E., Gerald R Ferris, and Nancy K Napier Strategy and Human Resources Management Cincinnati: South-Western Publishing Co., 1991 Page 726 STRATEGIC HUMAN RESOURCE MANAGEMENT Section Six 35 Mills, D Quinn “Planning with People in Mind,” Harvard Business Review 63, no (1985): 97–105; Robbins, Stephen P Management, 3rd ed Upper Saddle River, NJ: Prentice Hall, 1991 36 Walker, James W Human Resource Strategy New York: McGraw-Hill, 1992 37 Ibid 38 Bowen, David E., Gerald E Ledford Jr., and Barry R Nathan “Hiring for the Organization, Not the Job,” Academy of Management Executive 5, no (1991): 35– 51 39 Cascio, Wayne F Applied Psychology in Personnel Management, 4th ed Upper Saddle River, NJ: Prentice Hall, 1991 40 Ibid.; Cronshaw, Steven F., and Ralph A Alexander “One Answer to the Demand for Accountability: Selection Utility as an Investment Decision,” Organizational Behavior and Human Decision Processes 35, no (1985): 102–18; Schmitt and Klimoski Research Methods in Human Resources Management; Boudreau, John W “Economic Considerations in Estimating the Utility of Human Resource Productivity Improvement Programs,” Personnel Psychology 36, no (1983): 551–76 Page 727 STRATEGIC HUMAN RESOURCE MANAGEMENT Section Six 41 Schmitt and Klimoski Research Methods in Human Resources Management; Schmidt, Frank L., Murray J Mack, and John E Hunter “Selection Utility in the Occupation of U.S Park Ranger for Three Modes of Test Use,” Journal of Applied Psychology 69, no (1984): 490–97 42 Schmitt and Klimoski Research Methods in Human Resources Management; Schmidt, Mack, and Hunter “Selection Utility in the Occupation of U.S Park Ranger for Three Modes of Test Use”; Cascio, Wayne F Costing 43 44 45 46 47 Human Resources: The Financial Impact of Behavior in Organizations, 3rd ed Boston: PWS-Kent Publishing Company, 1991 Kerr, Steven “On the Folly of Rewarding A While Hoping for B,” Academy of Management Journal 18, no (1975): 769–83 Kerr “On the Folly of Rewarding A While Hoping for B,” p 774 Tannenbaum and Woods “Determining a Strategy for Evaluating Training: Operating Within Organizational Constraints.” Ibid Boettger, Richard D., and Charles R Greer “The Wisdom of Rewarding A While Hoping for B,” Organization Science (1994): 569–82 Page 728 STRATEGIC HUMAN RESOURCE MANAGEMENT Section Six 48 Tannenbaum and Woods “Determining a Strategy for Evaluating Training: Operating Within Organizational Constraints.” 49 Cascio Applied Psychology in Personnel Management; Goldstein, Irwin L Training in Organizations: Needs Assessment, Development, and Evaluation, 2nd ed Monterey, CA: Brooks/Cole Publishing Company, 1986; Tannenbaum and Woods “Determining a Strategy for Evaluating Training: Operating Within Organizational Constraints.” 50 Cascio Applied Psychology in Personnel Management; Goldstein Training in Organizations: Needs Assessment, Development, and Evaluation 51 Mathieu, John E., Scott I Tannenbaum, and Eduardo Salas “Influences of Individual and Situational Characteristics on Measures of Training Effectiveness,” Academy of Management Journal 35, no (1992): 828–47 52 Cascio Applied Psychology in Personnel Management; Goldstein Training in Organizations: Needs Assessment, Development, and Evaluation; Tannenbaum and Woods “Determining a Strategy for Evaluating Training: Operating Within Organizational Constraints.” Page 729 STRATEGIC HUMAN RESOURCE MANAGEMENT Section Six 53 Cascio Applied Psychology in Personnel Management; Goldstein Training in Organizations: Needs Assessment, Development, and Evaluation 54 Ibid 55 Cascio Applied Psychology in Personnel Management 56 Burke, Michael J., and Russell R Day “A Cumulative Study of the Effectiveness of Managerial Training,” Journal of Applied Psychology 71, no (1986): 232–45 57 Campbell, Donald R., and Julian C Stanley 58 59 60 61 Experimental and Quasi-Experimental Designs for Research Boston: Houghton Mifflin Company, 1966; Tannenbaum and Woods “Determining a Strategy for Evaluating Training: Operating Within Organizational Constraints.” Campbell and Stanley Experimental and QuasiExperimental Designs for Research; Cascio Applied Psychology in Personnel Management Schmitt and Klimoski Research Methods in Human Resources Management, p 385 Campbell and Stanley Experimental and QuasiExperimental Designs for Research; Cascio Applied Psychology in Personnel Management Ibid.; Goldstein Training in Organizations: Needs Assessment, Development, and Evaluation Page 730 STRATEGIC HUMAN RESOURCE MANAGEMENT Section Six 62 Campbell and Stanley Experimental and QuasiExperimental Designs for Research 63 Paquet, Basil, Elizabeth Kasi, Laurence Weinstein, and William Waite “The Bottom Line,” Training and Development Journal 41, no (1987): 27–33 64 Gomez-Mejia, Luis R., and David B Balkin Compensation, Organizational Strategy, and Firm Performance Cincinnati: South-Western Publishing Co., 1992; Henn, William R “What the Strategist Asks from Human Resources,” Human Resource Planning 8, no (1985): 193–200 65 Emerson, Sandra M “Job Evaluation: A Barrier to Excellence?” Compensation and Benefits Review 23, no (1991): 39–51 66 Gomez-Mejia “Dimensions and Correlates of the Personnel Audit as an Organizational Assessment Tool.” 67 Labig, Chalmer E., and Charles R Greer “Grievance Initiation: A Literature Survey and Suggestions for Future Research,” Journal of Labor Research 9, no (1988): 1–27; Allen, Robert E., and Timothy J Keaveny “Factors Differentiating Grievants and Nongrievants,” Human Relations 38, no (1985): 519–34 Page 731 STRATEGIC HUMAN RESOURCE MANAGEMENT Section Six 68 U.S Bureau of Labor Statistics “Union Members Summary,” Labor Force Statistics from the Current Population Survey Internet address: stats.bls.gov/newsrels.htm (January 19, 2000) 69 Hewlett-Packard Corporation Annual Report, 1985; Peters, Tom Thriving on Chaos: Handbook for a Management Revolution New York: Harper and Row, 1987; Hoerr, John, and Wendy Zellner “A Japanese Import That’s Not Selling,” Business Week (February 26, 1990): 86; Burke, Steven “PC Operations Spared the Worst of IBM’s Cost-Cutting Programs,” PC Week (December 11, 1989): 1, 70 Hoerr and Zellner “A Japanese Import That’s Not Selling”; Wilke, John R “Digital Equipment, in Its First Layoffs, To Dismiss About 3,500 Workers by July,” Wall Street Journal (January 10, 1991): A3; Burke “PC Operations Spared the Worst of IBM’s Cost-Cutting Programs.” 71 Freeman, Richard B., and James L Medoff What Do Unions Do? New York: Basic Books, 1984 72 Mitchell, Daniel J B Human Resource Management: An Economic Approach Boston: PWS-Kent Publishing Company, 1989 Page 732 STRATEGIC HUMAN RESOURCE MANAGEMENT Section Six 73 Northrup, Herbert R., and Richard L Rowan “Multinational Union Activity in the 1976 U.S Rubber Tire Strike,” Sloan Management Review 18, no (1977): 17–28 74 U.S Bureau of Labor Statistics “Union Members Summary.” 75 Cox, Taylor H., and Stacy Blake “Managing Cultural Diversity: Implications for Organizational Competitiveness,” Academy of Management Executive 5, no (1991): 45–56 76 Hammonds, Keith H “Corning’s Class Act,” Business Week (May 13, 1991): 68–76 77 Thomas, R Roosevelt “From Affirmative Action to Affirming Diversity,” Harvard Business Review 90, no (1990): 107–17 78 Ibid., p 114 79 Thomas “From Affirmative Action to Affirming Diversity.” 80 Ibid 81 Cox, Taylor Jr “The Multicultural Organization,” Academy of Management Executive 5, no (1991): 34–47 Page 733 STRATEGIC HUMAN RESOURCE MANAGEMENT Section Six 82 7Hart, Christopher, and Leonard Schlesinger “Total Quality Management and the Human Resource Professional: Applying the Baldrige Framework to Human Resources,” Human Resource Management 30, no (1991): 433–54 83 Hart and Schlesinger “Total Quality Management and the Human Resource Professional: Applying the Baldrige Framework to Human Resources.” 84 Ibid., pp 442–43 85 Hart and Schlesinger “Total Quality Management and the Human Resource Professional: Applying the Baldrige Framework to Human Resources.” 86 Ulrich, Brockbank, and Yeung “Beyond Belief: A Benchmark for Human Resources,” p 329 87 Ulrich, Brockbank, and Yeung “Beyond Belief: A Benchmark for Human Resources.” 88 Tsui “Defining the Activities and Effectiveness of the Human Resource Department: A Multiple Constituency Approach,” p 65 89 Ulrich, Brockbank, and Yeung “Beyond Belief: A Benchmark for Human Resources.” Page 734 ... EVALUATION OF HUMAN RESOURCE EFFECTIVENESS 711 SUMMARY 712 NOTES 720 xi STRATEGIC HUMAN RESOURCE MANAGEMENT Table of Contents xii SECTION ONE STRATEGIC HUMAN RESOURCE MANAGEMENT. .. STRATEGY AND HUMAN RESOURCE PLANNING 257 THE HUMAN RESOURCE MANAGER AND STRATEGIC PLANNING 268 SUMMARY 272 NOTES 281 vii STRATEGIC HUMAN RESOURCE MANAGEMENT Table... 237 STRATEGIC HUMAN RESOURCE ACTIVITY TYPOLOGY 239 CLASSIFYING HUMAN RESOURCE TYPES 245 NETWORK ORGANIZATIONS AND STRATEGY 252 vi STRATEGIC HUMAN RESOURCE MANAGEMENT Table