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Dr. Sumita Mishra

ASBM
sumita@asbm.ac.in
Sumita.mishra@gmail.com
 þ mployees are R
 that increase in
value to the organization and the marketplace
when investments of appropriate policies and
programs are applied.

þ ffective organizations recognize that their

employees do have value, much as same as the
organization·s physical and capital assets have
value.

þ mployees are a valuable source of sustainable

competitive advantage.
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þ
echnical Knowledge
² Markets, Processes, Customers, nvironment
þ Ability to Learn and Grow
² Openness to new ideas
² Acquisition of knowledge and skills
þ Decision Making Capabilities
þ Motivation
þ Commitment
þ
eamwork
² Interpersonal skills, Leadership ability

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þ Internal and external equity for employees in return
for their contributions to the organization.
þ Organization placement of resources and returns on
employee development are aligned and well-matched.
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þ Developing current employees creates motivation and
permits promotion from within.
² 
 

 
 
þ ffective means of retaining valuable employees
allows for the recapture of the invested costs of
their development.

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² Sees people as central to its mission/strategy.

² Has a mission statement and strategic

objectives that espouse the value of human
assets in achieving goals.

² 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.
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þ Senior Management Values and Actions
² An organization·s willingness to invest in its human
resources is determined by the ´investment
orientationµ of its managers.
þ Attitude
oward Risk
² Investment in human resources is inherently
riskier due to lack of absolute ´ownershipµ of the
asset.
þ ature of Skills eeded by mployees
²
he 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.
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þ tilitarian (´Bottom Lineµ) Mentality
² An attempt is made to quantify employee
worth to the organization through a cost-
benefit analysis.
²
he ´softµ 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.
þ Availability of Outsourcing
² If cost-effective outsourcing is available,
investments will be made only in HR activities
producing the highest returns and largest
sustainable competitive advantages.
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þ Investments in
raining and
Development

þ Investment Practices for Improved

retention

þ Investments in Job Secure Workforces

þ on-
raditional Investment Approaches

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þ Investments in mployability
-Job Security vs. Career Security
-Provision of growth opportunities, learning environment,
training & re-training
-G & ´eutron Jackµ!!!
Having a workforce that is characterized by its
employability is perhaps a pre-requisite for the
survival of organizations
-µIt is the employer·s responsibility to get the maximum
benefit out of an employee prior to terminating themµ
(Bruce llig, the former VP of Human Resources for
Pfizer)

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þ Current Practices in
raining & Development
-Apprenticeship Programs
-
raining & the Corning experience
-Boeing, Ford, G , IBM, Motorola etc. make substantive
Investments in training & development
-Dana Corporation invested $10million to gain a
competitive advantage vis-à-vis its competitors
þ On the Job training
² Method by which employees are given hands-on
experience with instructions from their
supervisor or other trainer.
þ Drawbacks
²
he lack of a well-structured training environment
² Poor training skills of managers
²
he absence of well-defined job performance
criteria

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þ Overcoming OJ
training problems

1. Develop realistic goals and/or measures for

each OJ
area.
2. Plan a specific training schedule for each
trainee, including set periods for evaluation
and feedback.
3. Help managers establish a non threatening
atmosphere conducive to learning.
4. Conduct periodic evaluations, after training is
completed, to prevent regression.

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þ Investments in Management Development
-Participative decision making & leaner organizations
-Job rotation & Cross Functional Assignments
-Advantages of Job rotation include development of generalists,
avoidance of over dependency on one supervisor, the challenge of
new assignments, avoidance of dead-end career paths etc.
-Disadvantages include the institutionalization of the short term
perspective, ´rotated outµ concept, under-developed peer
relationships, reduced loyalty to the organization etc.
-High level executives & senior managers to executive programs at
leading universities
-Shorter in-house programs for junior members
-Management development is given low priority in most org. & is
considered as an avoidable cost

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þ Prevention of Skill Obsolescence
-
echnological change
-Provision of challenge, Job enrichment, periodic reassignments,
encourage of knowledge acquisition activities to stay abreast with
developments & its linkages with performance appraisal
-HP·s experience with removal of obsolescence
þ Reductions in Career Plateaus
-Career Plateaus occur when employees have stayed in a particular
job for a long time, mastered all aspects of the job & are now
awaiting promotions
-Lack of proper skills for promotion & lack of proper development
programs may cause plateaus to occur
-Job rotation & dual career paths
-Managerial recognition in the absence of promotions

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 Dual-Career Ladder for ngineers

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þ Organizational Cultures emphasizing
Interpersonal Relationship values

þ ffective Selection procedures

-Realistic Job previews (RJPs)
-se of the Bio data
þ Compensation & Benefits
- quity in terms of the ratio of inputs to outcomes
- quitable & Fair compensation
- SOPs of Merck & Cisco Systems
-Retention bonuses (
he oil industry pays a retention bonus of
15 to 50% of the annual salary spread over three years to
employees who µstick aroundµ

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þ Job nrichment & Satisfaction

þ Practices providing work life balance

-Flexi-time &
elecommuting
-Deloitte &
ouche , Plante & Moran (child care on
Saturday during the tax season)
þ Organization Direction Creating
confidence in the future

þ Retention of
echnical mployees

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þ Recognition of the costs of downsizing & layoffs
Costs related to µbumpingµ less senior employees
-Reduced productivity during learning periods
-costs of training employees assigned to other jobs
-Wage supplements for reassignment to jobs having lower
compensation
Costs related to the termination of employees
-Separation payments, Higher rates for nemployment
compensation, Depletion of the firm·s resources in training
employees
Administrative Costs

Intangible costs

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þ Avoiding Business Cycle Lay offs
-
he advisability of laying off workers during economic
downturns has been questioned by some companies
-Loaning of workers to Daimler Benz for one year
-Sony & Akio Morita
mployment Guarantees of HP, Hallmark, ucor
Corporation etc.
þ Alternatives to layoffs
-Shutting down the inflow of personnel
-Pay cuts
-Flexible employment arrangements (Walt Disney World)
-Reduction of costs during downturns

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þ mployment Guarantees
- mployment Guarantees are oral agreements to move
heaven and earth to avoid layoffs
-nderstaffing (IBM & Motorola)
-Flexibility in Job assignment
-Work Sharing
Benefits of having a secure workforce

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þ Investments in Disabled employees
-Adjustment of physical space & provision of employees
to help disabled employees remain productive
-A
&
, Sears, IBM are sharing with other companies the
knowledge that they have acquired in accommodating
disabled workers
-Chicago bank & the Pennsylvania Power & light Company
þ Investments in mployee health
-on smoking zone
-Fitness centers
-Close monitoring of self esteem of employees to prevent
burnout
-Sunbeam Oster Housewares
þ Counter Cyclical Hiring

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