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Author Topic: INVESTMENT PERSPECTIVE of HRM  (Read 6271 times)

Offline nupur

INVESTMENT PERSPECTIVE of HRM
« on: July 16, 2008, 01:42 AM »
Read more to find out how MNCs nowadays value their most prolific performing asset- Their Employees. Topics covered are:

Strategic view of Human Resources.
Valuation of Human Assets.
Investment Orientation & Factors.
Effective HRM practices.

========================================================

AN INVESTMENT PERSPECTIVE OFHUMAN RESOURCE MANAGEMENT

THE STRATEGIC VIEW OF HUMAN RESOURCES=
-Employees are human assets that increase in value to the organization and the marketplace when investments of appropriate policies and programs are applied.
-Effective organizations recognize that their employees do have value, much as same as the organization?s physical and capital assets have value.
-Employees are a valuable source of sustainable competitive advantage.
---------------------------------------------------------------------------
SOURCES OF EMPLOYEE VALUE

1. Technical KnowledgE
?Markets, Processes, Customers, Environment
2. Ability to Learn and Grow
?Openness to new ideas
?Acquisition of knowledge and skills
3.Decision Making Capabilities
4.Motivation
5.Commitment
6.Teamwork
?Interpersonal skills, Leadership ability
---------------------------------------------------------

VALUATION OF HUMAN ASSETS

?Implications for Individuals and Organizations
?Determination of compensation
?Internal and external equity for employees in return for their contributions to the organization.
?Organization placement of resources and returns on employee development are aligned and well-matched.
?Advancement opportunities
?Developing current employees creates motivation and permits promotion from within.
?Development of retention strategies
?Effective means of retaining valuable employees allows for the recapture of the invested costs of their development.
---------------------------------------------------------------------------

THE INVESTMENT ORIENTED ORGANISATION=

?Organizational Characteristics
?Sees people as central to its mission/strategy.
?Has a mission statement and strategic objectives that espouse the value of human assets in achieving goals.
?Has a management philosophy that encourages the development and retention of human assets and does not treat or regard human assets in the same ways as physical assets.

THE INVESTMENT ORIENTATION FACTORS=
?Senior Management Values and Actions
?An organization?s willingness to invest in its human resources is determined by the ?investment orientation? of its managers.
?Attitude Toward Risk
?Investment in human resources is inherently riskier due to lack of absolute ?ownership? of the asset.
?Nature of Skills Needed by Employees
?The more likely that skills developed by employees are marketable outside the firm, the more risky the firm?s investment in the development of those skills.
?Utilitarian (?Bottom Line?) Mentality
?An attempt is made to quantify employee worth to the organization through a cost-benefit analysis.
?The ?soft? benefits of HR programs and polices are difficult to objectively quantify because they affect many different organizational areas and have differential effects on individual employees.
?Availability of Outsourcing
?If cost-effective outsourcing is available, investments will be made only in HR activities producing the highest returns and largest sustainable competitive advantages.
===========================================================

READING 1.1- THE SWA VALUE CYCLE-
Value at Southwest Airlines is:
1.Createdthrough satisfaction of employee needs.
2.Converted to customer and share holder value via organizational capabilities (the design of specific operating processes).
3.Capturedby SWA as competitive advantage through lower costs and superior service (productivity) in relation to its competitors.

READING 1.2- EFFECTIVE HRM PRACTICES-
?Employment Security
?Selectivity in Recruiting
?High Wages
?Incentive pay
?Employee Ownership
?Information Sharing
?Participation & Ownership
?Self-Managed Teams
?Training & Development
?Cross-Utilization & Cross-Training
?Symbolic Egalitarianism
?Wage Compression
?Promotion From Within
?Taking the Long View
?Measurement of Practice
?Overall Philosophy
 

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