Video: External Influences on HR Strategies

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From the course by University of Minnesota

Preparing to Manage Human Resources

1827 ratings

University of Minnesota

Preparing to Manage Human Resources

1827 ratings

Course 1 of 5 in the Specialization Human Resource Management: HR for People Managers

One way or another, all employees are managed. But approaches to managing employees varying from employee-to-employee, job-to-job, manager-to-manager, organization-to-organization, and country-to-country. This course provides a foundation for developing your own approach to skillfully managing employees by illustrating alternative human resource management (HRM) strategies, introducing the importance of the legal context, and thinking about what motivates employees. This will then give you the factual and conceptual basis for developing specific, critical HRM skills in subsequent courses on hiring employees, managing performance, and rewarding employees. Don't know anything about HRM? That's OK! Leave this course with a new-found understanding of the range of options available for managing employees, a grasp of what makes workers tick, and the readiness to develop your own HRM skills.

From the lesson

Alternative Approaches to Managing Human Resources

Welcome to the first week of this course! This section starts with an introduction to the course, and then we'll spend two lessons looking at alternative ways of managing human resources. After completing this module, you will be able to… • Explain why managing people is important. • Compare strategies for managing human resources. • Evaluate the fit between an organization’s HR strategy, a manager’s style(s), and the business environment. • Recommend strategies and styles for managing people in a particular situation.

Video: External Influences on HR Strategies6:58

Video: The Importance of Organizational Strategy for HR Strategy6:04

Video: Speed Dating with HR Executives5:55

Video: Ideas Matter10:05

Meet the Instructors

John W. Budd
Professor and Director
Center for Human Resources and Labor Studies

Welcome back, this is the first video in lesson three.

In lesson two, we looked at organizational and managerial strategies for

managing employees.

We looked at high versus low road strategies at an organizational level and

we looked at six different managerial styles ranging from coercive to coaching.

Now the objective of this lesson is to look at different influences on both

organizational as well as managerial strategies.

So in this video, we're gonna focus on external influences on HR strategy.

In the second video, we're gonna turn our attention inside the organization and

look at the importance of organizational strategy.

And in the last video, we're gonna look at the importance of ideas.

So first, external influences on HR strategies.

To do this, I'm gonna look at four different categories.

First is competition and

consumers which includes both private as well as public sector consumers.

Second, labor markets and demographics.

Third, community and legal pressure.

And last, technology.

So first, competition and consumers.

Now there's an old saying in an old phrase in labor economics

that labor is a derived demand.

Labor demand, that is the strength of employees need for

employees is derived from employers competitive positions in their markets for

goods, services, whatever their market is.

So the labor demand for airline pilots for

example, stems from the role in satisfying customer's demands for flights.

As routes, as the types of aircrafts, as passengers' needs change, the demands for

different types of pilots changes accordingly, and

the need to deploy in certain ways changes as well.

So the need for pilots is derived from the marketplace.

The goods and services that the airline is trying to provide.

So, whatever affects demand for a product or service could influence HR.

For example, consumer tastes.

And again I'm thinking consumer here broadly, it's not just

private sector consumers but tax payer and public sector consumers as well.

All right, so does quality become more important?

This can effect an HR strategy.

Does being open late become more important?

This can affect an organization's HR strategy.

Also need to look at the influence of local and global competition.

Does global competition put a particular price pressure on an organization,

which then affects it's HR strategy?

Macroeconomic conditions such as the unemployment rate.

Whether an economy is in a recession or

not can affect an organization's HR strategy.

Can affect the appropriate choices that a manager might make in terms of his or

her personal style.

And lastly, I put this in brackets because it's not really flowing from the demand

for a product or service.

But thinking about cost pressures and marketplace pressures,

if investors are looking for a certain return from an organization,

that can affect HR strategy as well.

But remember, this goes back to our last lesson,

when our comparison of Sam's Club and Costco.

Remember that HR strategies are not completely determined by these factors.

You can probably think of different restaurants, grocery stores,

or businesses in your own area that are in the same competitive space but

choose to manage their employees differently.

Okay, next look at factors surrounding the Labor Market & Demographics.

So first, in terms of the labor market, all right, you need to assess,

what's the availability and competition for needed skills.

So you need to pay attention to labor supply supply and labor demand.

Captured by this simple graph that you might have seen in a basic

economics course.

Does your HR strategy give you the ability to recruit and

retain the workers you need in this competitive marketplace?

Changing demographics can also affect and influence an organization's

HR strategy and a manager's choice of individual styles.

So for example, do employees have evolving scheduling needs where

they need to increasingly take care of children or elderly parents?

That can effect an HR's strategy.

Do different generations have expectations for job stability or not?

Do they have expectations for autonomy for flexibility, for certain types of pay?

Do they like performance pay or not?

Are some workers, some generations, looking for benefits,

other generations looking for retirement benefits?

This can affect HR strategy.

And all of this is to say a good manager and

a good organization needs to manage diversity effectively.

Third, there is legal and social pressure.

Laws and regulations also shape HR strategies.

Does the law require you to provide certain benefits?

Do you have to provide advanced notice of scheduling?

Do you have to consult with the works council or bargain with a union?

Beyond the law, there are also social pressures.

Customers or politicians might have ethical expectations of you,

such that you treat labor and environment in a certain way.

And HR strategies also have to fit with a local culture.

So cultural norms can be another influence on HR strategy.

Lastly, technology.

Is there a skills gap?

Do employees have the skills needed to work with technology in your organization?

This can influence your HR strategy.

Technology might also change expectations around connectivity and

autonomy and independence.

So how does that fit with your HR strategy?

On the risk side, there's privacy concerns for employees that

are shaped by technology and in turn shape HR strategy and managerial choices.

On the organizational side, technology raises certain risks.

Employees might lose laptops with sensitive data.

They might post things on social media.

How is that handled by your HR set of policies and practices?

And lastly, technology can give different capabilities to HR systems.

Does this give you the ability as an organization to outsource certain

functions, for example, and how does that fit with your HR strategy?

So in conclusion, we've looked at four different categories of external

influences on HR and managerial strategies.

We've looked at competition and consumers, labor markets and demographics, legal and

social pressure, as well as technology.

In the next video, we're gonna turn our attention inside the organization and

look at the importance of organizational strategy on HR strategy and

managerial strategy.

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