MGT 563 OPERATIONS STRATEGIES Dr Aneel SALMAN Department

MGT 563 OPERATIONS STRATEGIES Dr. Aneel SALMAN Department of Management Sciences COMSATS Institute of Information Technology, Islamabad

Recap Lecture 26 • Inventory Management • Inventory Models – Independent versus Dependent Demand – Holding, Ordering, and Setup Costs • Inventory Models For Independent Demand – Basic Economic Order Quantity (EOQ) Model – Minimizing Costs – Reorder Points – Production Order Quantity Model – Quantity Discount Models

HR Branding • Firm’s corporate image or culture • Embodies values and standards that guide peoples’ behavior • People know what company stands for, people it hires, fit between jobs and people, and results it recognizes and rewards • Important in getting highest quality applicants to join firm

Human Resource Management • Utilization of individuals to achieve organizational objectives • All managers at every level must concern themselves with human resource management • Five functions

Human Resource Management Functions St ensa Safety and Health Com p bor d La e an s loye n Emp Relatio Human Resource 1 Management Hu m De an ve Res lop ou me rce nt tion g in aff

Staffing • Job Analysis • Human Resource Planning • Recruitment • Selection

Staffing (Cont. ) • Staffing - Process through which organization ensures it always has proper number of employees with appropriate skills in right jobs at right time to achieve organizational objectives • Job analysis - Systematic process of determining skills, duties, and knowledge required for performing jobs in organization

Staffing (Cont. ) • Human resource planning - Systematic process of matching the internal and external supply of people with job openings anticipated in the organization over a specified period of time. • Recruitment - Process of attracting individuals on a timely basis, in sufficient numbers, and with appropriate qualifications, to apply for jobs with an organization

Staffing (Cont. ) • Selection - Process of choosing from a group of applicants the individual best suited for a particular position and the organization

Human Resource Development • Training • Development • Career Planning • Career Development • Organizational Development • Performance Management • Performance Appraisal

Human Resource Development (Cont. ) • Training - Designed to provide learners with knowledge and skills needed for their present jobs • Development - Involves learning that goes beyond today's job; it has more long-term focus • Career planning - Ongoing process whereby individual sets career goals and identifies means to achieve them

Human Resource Development (Cont. ) • Career development - Formal approach used by organization to ensure that people with proper qualifications and experiences are available when needed • Organization development - Planned process of improving organization by developing its structures, systems, and processes to improve effectiveness and achieving desired goals

Human Resource Development (Cont. ) • Performance management - Goal-oriented process directed toward ensuring organizational processes are in place to maximize productivity of employees, teams, and ultimately, the organization • Performance appraisal - Formal system of review and evaluation of individual or team task performance

Compensation - All rewards that individuals receive as a result of their employment

Compensation • Direct Financial Compensation - Pay that person receives in form of wages, salaries, bonuses, and commissions. • Indirect Financial Compensation (Benefits) - All financial rewards not included in direct compensation such as paid vacations, sick leave, holidays, and medical insurance. • Nonfinancial Compensation - Satisfaction that person receives from job itself or from psychological and/or physical environment in which person works.

Safety and Health Employees who work in safe environment and enjoy good health are more likely to be productive and yield long-term benefits to organization.

Safety and Health • Safety - Involves protecting employees from injuries caused by work-related accidents • Health - Refers to employees' freedom from illness and their general physical and mental well being

Employee and Labor Relations • Private-sector union membership has fallen from 39 percent in 1958 to 7. 8 percent in 2005. • Business is required by law to recognize a union and bargain with it in good faith if the firm’s employees want the union to represent them • Human resource activity is often referred to as industrial relations • Most firms today would rather have a union-free environment

Human Resource Research • Human resource research is not separate function. • It pervades all HR functional areas.

Interrelationships of HRM Functions • All HRM functions are interrelated • Each function affects other areas

Dynamic Human Resource Management Environment

Environment of Human Resource Management Safety and Health Competition pens ation Hu m De an ve Res lop ou me rce nt Other Functional Areas Labor Market Shareholders Customers Human Resource 1 Management Operations Com f f Sta Finance ing Society Unanticipated Events Legal Considerations Marketing bor d La e an s loye n Emp Relatio Economy EXTERNAL ENVIRONMENT INTERNAL ENVIRONMENT Technology Unions

Labor Market • Potential employees located within geographic area from which employees are recruited • Always changing

Legal Considerations • Federal, state and local legislation • Court decisions • Presidential executive orders

Society • No longer content to accept, without question, the actions of business • Ethics - Discipline dealing with what is good and bad, or right and wrong, or with moral duty and obligation • Social responsibility - Implied, enforced or felt obligation of managers to serve or protect interests of groups other than themselves

Unions • Group of employees who have joined together for purpose of dealing collectively with their employer • Become a third party when dealing with the company

Shareholders • Owners of corporation • Because they have invested money in firm, they may at times challenge programs considered by management to be beneficial to organization

Competition • Firms may face intense competition in both their product or service and labor markets • Must maintain a supply of competent employees • Bidding war often results

Customers • People who actually use firm’s goods and services • Management has task of ensuring its employment practices do not antagonize members of market it serves • Workforce should be capable of providing top-quality goods and services

Technology • The world has never before seen technological changes occur as rapidly as they are today. • Created new roles for HR professionals • Additional pressures on them to keep abreast of technology

Economy • In general, when economy is booming, it is often more difficult to recruit qualified workers. • When a downturn is experienced, more applicants are typically available.

Unanticipated Events • Occurrences in the external environment that could not be foreseen • Every disaster, whether manmade or by nature, requires a tremendous amount of adjustment with regard to human resource management

Cyberwork • Possibility of never-ending workday • Black. Berrys, cell phones, text messaging, and e-mail create endless possibilities for communication • Some workers believe their employer wants them available 24/7

HR’s Changing Role: Questions That Are Being Asked • Can some HR tasks be performed more efficiently by line managers or outside vendors? • Can some HR tasks be centralized or eliminated altogether? • Can technology perform tasks that were previously done by HR personnel? • Many HR departments continue to get smaller

HR’s Changing Role: Who Performs Human Resource Management Tasks? • Human Resource Managers • HR Outsourcing • HR Shared Service Centers • Professional Employer Organization (Employee Leasing) • Line Managers

Human Resource Manager • Acts in advisory or staff capacity • Works with other managers to help them deal with human resource matters • Today HR departments continue to get smaller because others are accomplishing certain functions

HR Outsourcing • Transfers responsibility to an external provider • Market for HR outsourcing is growing dramatically

Ways HR Outsourcing is Done • Discrete services • Multi-process services • Total HR outsourcing

Discrete Services • One element of business process or single set of high-volume repetitive functions is outsourced to a third-party • Large majority of companies outsource transactional HR activities, such as 401(k) administration

Multi-process Services • Complete outsourcing of one or more human resource processes • Example: Procter & Gamble outsourced entire training operations

Total HR Outsourcing • Transfer majority of HR services to third party • Example: Whirlpool Corporation signed 10 -year deal to outsource HR business processes for 68, 000 employees to Convergys Corporation

HR Shared Service Centers (SSCS) Takes routine, transaction-based activities that are dispersed and consolidates them in one location

Professional Employer Organization (Employee Leasing) Company that leases employees to other businesses.

Professional Employer Organization (Cont. ) • Company releases its employees who are then hired by PEO • PEO pays the employees • PEO is the employees’ legal employer and has the rights to hire, fire, discipline, and reassign an employee • Charges a fee of from 1 to 4 percent of the customer’s gross wages

Line Managers Performing HR Tasks • Involved with human resources by nature of their jobs • Line managers are now performing some duties typically done by HR

HR as a Strategic Partner • HR executives must understand complex organizational design • Sharp deviation from what has traditionally been an administrative type role for HR

Strategic Activities CEOs Want from HR • Make workforce strategies integral to company strategies and goals • Leverage HR’s role in major change initiatives • Earn the right to a seat at the corporate table • Understand finance and profits • Help line managers achieve their goals

Human Capital Metrics Measures of HR performance

Examples of HR Metrics • • • Time to fill open positions HR headcount ratios Administrative cost per employee Turnover cost Training return on investment Cost per employee for HR administration ranges from $1, 200 - $1, 600

HR Scorecard • Report card of effectiveness of specific person • Metrics that will best suit each company depends on variety of factors

Human Resource Designations