Chapter 1

The Dynamic Environment of HRM

Learning Outcomes
1. Discuss how globalization affects HRM practices.
2. Describe how human resource managers use technology.
3. Explain regulation and legislation issues relevant to HRM.
4. Identify trends in the composition of the workforce and how HRM
must adapt.
5. Explain how HRM supports diversity and inclusion in the workplace.
6. Explain the contingent workforce and other methods used to
control labor costs.
7. Explain how HRM supports continuous improvement programs.
8. Define employee involvement and list its critical components.
9. Outline emerging challenges facing HRM.

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 Introduction
HRM is a subset of
management with
five main goals.

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Understanding Cultural
Environments
HRM operates in a global business environment
Countries have different
• values
• morals
• customs
• political, economic, and legal systems

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Understanding Cultural
Environments
HRM needs to address:
 Language differences in a multi-lingual workplace.
 Cultural variables such as status differentiation, societal
uncertainty, assertiveness, and individualism.
 Group and individual conflict caused by differences in
background, language, and customs.
 The differences between an individualistic society, like
the United States, and a collective society, such as
Japan.

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Understanding Cultural
Environments
HRM policies and practices are affected by cultural
values

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Technology
Technology changes:
 How people work
 The way information is created, stored, used and
shared.
 How countries, companies and individuals compete.
 Global politics and economies.

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Technology
Information Technology
 Creating and maintaining technology infrastructure.
Information Systems
 Use technology to enhance organizational decision
making.
 Create organizational efficiencies and competitive
advantage.

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Technology
Knowledge Workers
 Use technology to acquire and apply information.
 Technology skills are required in a wide variety of jobs,
making it difficult to find a career area that doesn't
require technology skills.
 Social media policies need to spell out rights and
responsibilities when employees use social media, blogs
or any other public online forum.

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Technology
Human Resource Information Systems (HRIS)
automate many HR tasks:
 Employee access to payroll and benefits.
 Applicant tracking, orientation, training and
development.
 Performance management.
Software as a Service (SaaS)

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Technology
Technology and HR issues:
 Staffing
 Training and development
 Ethics and employee rights
 Compensation
 Communication
 Telecommuting
 Competitiveness

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Regulations and Legislation
Legal Compliance is a major HR responsibility that
includes:
 Recordkeeping
 Reporting
 Safety monitoring
 Communicating employee rights

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Workforce Composition
Workforce composition trends:
Not getting younger
 Number of workers over 65 is growing.
Shifting demographics
 Increasing number of women.
 Hispanics and Asians are fastest growing. ethnic groups
Skilled Labor
 Shortages exist in many areas.

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Diversity and Inclusion
HR's Challenge:
 Create a culture that welcomes diverse groups of people
by addressing different lifestyles, family needs, and work
styles.
 Attract and maintain a work force that is reflective of the
diversity in the general population.
 Increased sensitivity to group differences.
 Accommodate different values, needs, interests, and
expectations of employees.

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Diversity and Inclusion
Many organizations go beyond EEO laws to also
recognize and protect:
 Politics
 Spirituality
 Socioeconomic status
 Family
 Culture
 In addition to legally protected characteristics.
Inclusion refers to a culture of acceptance.

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Diversity and Inclusion
Different groups have different needs and
expectations out of life and work:
 Age groups
 Ethnic groups
 Lifestyle

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Labor Costs
HRM considers many factors to manage one
of the organization’s biggest expenses –
labor.
 Downsizing
 Contingent workers
• Part-time
• Contract

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Labor Costs
Contingent worker issues:
 Strategic decisions about pay, benefits, culture.
 Pay and benefits conflicts
 Classification
• Fair Labor Standards Act (FLSA) differentiates between employee
and contractor.
• Department of Labor and Internal Revenue Service enforce the
law.

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Who is an employee?
The employment relationship is determined by:

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Labor Costs
Offshoring
 Lower labor costs.
 Lower production costs.
 Tax advantages.
 Weaker union environment.
 Favorable business climate with fewer regulations.

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 Continuous Improvement
HR managers help workers
adapt to continuous
improvement changes
through retraining,
providing answers, and
monitoring expectations.

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Employee Involvement
It’s all about employee empowerment through
involvement, which increases worker productivity
and loyalty.
 Delegation
 Participative management
 Work teams
 Goal setting
 Empowering employees

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Other HRM Challenges
To list just a few:
 Economy
 Mergers
 Labor unions
 Ethics
 Sustainability

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