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Every organisation, whether for profit or as non-profit, needs motivated employees. HR Management is often not seen as a core function and most managers do not receive a systematic and sustainable leadership training either. In this book, the essential basics of modern HR Management and Leadership are presented systematically and always with practical examples. The focus is on the scope of action as a manager responsible on any hierarchical and process level or in HR Management. Step-by-step, to understand HR Management and Leadership policy, strategies and concepts as well as for current challenges in International Management, in 4.0 and in Social Business. The target group are graduates and specialists who are systematically preparing for a new management position (e.g. in a General Management or MBA program), consultants, management trainer and lecturers.
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Seitenzahl: 272
Edition Management Essentials
by IfTQ-Cert
International Institute for Training Quality Certification
Bonn/Germany (www.iftq-cert.de)
Vol. 1 Business Management (2020)
Vol. 2 HR Management and Leadership (2021)
Vol. 3 Entrepreneurship (2021/2022)
Vol. 4 Social Business (in prep.)
Vol. 5 Intercultural Management (in prep.)
Vol. 6 Intercultural Project Management (in prep.)
Edition Management Essentials
by IfTQ-Cert
International Institute for Training Quality Certification
Organisations, whether private or public, profit or non-profit oriented, need human resources and managers to accomplish the corporate strategies and operational tasks. Mostly, managers are having a specific professional expertise and work experience, when they apply or being promoted for their first leadership function. And they need to understand HR Management, which is creating and controlling the leadership tools. The basics of modern HR Management and Leadership are introduced systematically and easily understandable.
Parallel and step-by-step structured, this manual leads from the corporate policy and strategies and external socio-economic trends to day-by-day HR Management organisation and operations and Leadership situations and behaviour including the basic common theories and always with examples from practises. Also, HR Management and Leadership specifics are reflected in International Management and Diversity, in Industry 4.0 and Artificial Intelligence, and in CSR, Social Businesses and NGOs.
This book is based on the author's own experience in managing teams and organisations, in HR management and consulting as well as on conception and lectures in MBA programs worldwide. The target group is for example, lecturers and management trainer and consultants, young managers and specialists from other fields of expertise who are preparing for a management position e.g. with a degree in General Management or an MBA.
Bonn, January 2021
Since English is the first or second official language with its own expressions and spellings in more than 80 countries, no uniform spelling is considered.
Numbers are in German style: 1.000.000 is for e.g. 1,000,000 for US/UK.
Coming together is a beginning;
staying together is progress;
working together is success.
Henry Ford, 1863-1947
Preface
HR Management Policy and Strategy
1.1 HR Management Policy
1.2 Concepts and Instruments of HR Policy
Leadership
2.1 Organisational Psychology and Leadership
2.2 Operational Leadership Instruments
2.3 Leadership Development
HR-Organisation and Operations
3.1 HR Management Organisation
3.2 HR Management Operations
3.3 HR Controlling
Challenges in HR Management and Leadership
4.1 International HR, Leadership and Diversity
4.2 HR Management and Leadership in Industry 4.0
4.3 Social Business HR Management and Leadership
Preface
Figures
Abbreviations
HR Management Policy and Strategy
1.1 HR Management Policy
1.1.1 Corporate Policy and HR Management
1.1.2 Governance, Compliance and Co-determination
1.1.3 HR and Leadership related Megatrends
1.1.4 Strategic HR and Human Capital Management
1.2 Concepts and Instruments of HR Policy
1.2.1 HR and Leadership Guidelines
1.2.2 Employee Relations, HR Research and Survey
1.2.3 Works Agreement
1.2.4 Employer Branding
1.2.5 Annual HR Report and Staff Meeting
1.2.6 Change Management
Leadership
2.1 Organisational Psychology and Leadership
2.1.1 Organisational Theory, Behaviourism and Work
2.1.2 Motivational Theory
2.1.3 Leadership Roles
2.1.4 Leadership Theory
2.1.5 Leadership Styles
2.2 Operational Leadership Instruments
2.2.1 HR Policy related Leadership instruments
2.2.2 Personnel Planning, Job Profile and Staff Selection
2.2.3 Work Introduction and Onboarding
2.2.4 Staff Dialogue and Team Meeting
2.2.5 Employee Evaluation Report
2.2.6 Team Development
2.3 Leadership Development
2.3.1 Action Maze: Leadership case
2.3.2 Management Development
HR-Organisation and Operations
3.1 HR Organisation
3.1.1 Organisational Theory and HR Management
3.1.2 HR Management Organisation
3.2 HR Management Operations
3.2.1 Personnel Planning Scheme
3.2.2 HR Marketing and Recruitment
3.2.3 Onboarding and Retention Management
3.2.4 Training and Development
3.2.5 Personnel Downsizing
3.2.6 HR Administration and Feelgood Management
3.3 HR Controlling
3.3.1 HR Information System
3.3.2 Personnel Costs, Budgeting and Index Analysis
3.3.3 Personnel Statistics and Key Factors
3.3.4 HR Early Warning System
3.3.5 HR Portfolio and HC Reporting
Challenges in HR Management & Leadership
4.1 International HR, Leadership and Diversity
4.1.1 International HR Management
4.1.2 Intercultural Leadership
4.1.3 Diversity Management
4.2 HR Management and Leadership in Industry 4.0
4.2.1 Artificial Intelligence and Industry 4.0
4.2.2 HR Management and Leadership with AI
4.3 Social Business HR Management and Leadership
4.3.1 Ethics, CSR and Social Business
4.3.2 HR and Leadership in NGOs and Social Business
Bibliography
Index
Fig. 1.1: Corporate Business Plan and HR Management
Fig. 1.2: Development of the Age Structure
Fig. 1.3: International Demography
Fig. 1.4: Potential Workers till 2060
Fig. 1.5: Personnel Management – HR Management
Fig. 1.6: HR Management Concept
Fig. 1.7: HR Commitment Index
Fig. 1.8: Life phase-oriented Personnel Policy
Fig. 1.9: Generations XYZ
Fig. 1.10: Employee Survey
Fig. 1.11: Change in the Corporate Organisation
Fig. 2.1: Theory X, Theory Y
Fig. 2.2: Pyramid of Needs
Fig. 2.3: Two-factor Theory
Fig. 2.4: Dynamic Leadership Roles and Hybrid Skills
Fig. 2.5: Trait Theory of Leadership
Fig. 2.6: Behavioural Leadership Theory
Fig. 2.7: Leadership Situation Theory
Fig. 2.8: Managerial Grid
Fig. 2.9: Leadership Styles and Leadership Corridor
Fig. 2.10: Job Requirement Profile
Fig. 2.11: Checklist Employee Introduction
Fig. 2.12: Checklist Supervisor Conversation Rules
Fig. 2.13: Checklist Conflict Moderation
Fig. 2.14: Employee Evaluation Report
Fig. 2.15: Project Team Size
Fig. 2.16: Management Seminar Moderation
Fig. 2.17: Corporate Career Models
Fig. 3.1: Centralised HR Department
Fig. 3.2: Decentralised HR Department
Fig. 3.3: HR Department
Fig. 3.4: Planning the Manpower Demand
Fig. 3.5: Personnel Planning Scheme
Fig. 3.6: Traineeship Program
Fig. 3.7: Change in Company Qualification Structures
Fig. 3.8: HR in a Management Information System
Fig. 3.9: HR Marketing Budget
Fig. 3.10: Calculation Personnel Process Costs
Fig. 3.11: Distribution of Salary Groups
Fig. 3.12: Balanced Scorecard
Fig. 3.13: HR Portfolio
Fig. 3.14: Strategic HR Planning Portfolio
Fig. 4.1: Employees and Turnover of large Companies
Fig. 4.2: Cultural shock and assimilation process
Fig. 4.3: Personnel Costs International Assignments
Fig. 4.4: Cultural Map – World Value Survey
Fig. 4.5: Telemetry – Smart Factory Connection
Fig. 4.6: Leadership Styles in Industry 4.0
Fig. 4.7: Distribution of employee structures
AD
anno domini
AG
Aktiengesellschaft (corporation)
approx.
approximately
BC
before Christ
BetrVG
Betriebsverfassungsgesetz (works constitution act)
chap.
Chapter
cent.
century
CRM
Customer Relationship Management
CSR
Corporate Social Responsibility
CSV
Corporate Shared Value
c.v.
curriculum vitae
Dpt.
Department
Dinks
Double income no kids
DCC
Double career couple
DCGK
Deutscher Corporate Governance Code
Ed.
Edition
e.g.
exempli gratia (for example)
esp.
especially
est.
established
EU
European Union
EUR
Euro
e.V.
eingetragener Verein
excl.
excluding
Expat
Expatriate manager
FAQ
frequently asked question
Fig.
Figure
F&I
Finance and Investment
gGmbH
gemeinnützige GmbH (non-profit)
GmbH
Gesellschaft mit beschränkter Haftung
HC
Human Capital
HCM
Human Capital Management
HCR
Human Capital Reporting
HCVA
Human Capital Added Value
HR
Human Resources
HRM
Human Resources Management
ICT
Information and Communication Technology
i.e.
id est (that is)
Impat
Impatriate manager
incl.
including
in prep.
in preparation
IsT
Internet of Things
ISO
International Organisation for Standardisation
KPI
Key Performance Indicator
MBA
Master of Business Administration
MbD
Management by delegation
MbO
Management by objectives
m
million
min/s
minute/s
MIS
Management Information System
MIT
Massachusetts Institute for Technology
NGO
Non-governmental Organisation
OECD
Organisation for Economic Co-operation and Development
QM
Quality Management
p. / pp.
page / pages
p.a.
per annum
PLC
Public Limited Company
PPP
Public Private Partnership
ppp
planet, people, profit
R&D
Research and Development
SCM
Supply Chain Management
SE
Societas Europaea
spec.
specific
sq.km
square kilometre
STEM
Science, technology, engineering, and mathematics
TG
Tarifgruppe (tariff group)
TQM
Total Quality Management
TV
Television
UA
Unified Architecture
UK
United Kingdom
UN
United Nations
US
United States (of America)
USD
US Dollar
WW
World War
www
World wide web
1.1 HR Management Policy
1.1.1 Corporate Policy and HR Management
1.1.2 Governance, Compliance and Co-determination
1.1.3 HR and Leadership related Megatrends
1.1.4 Strategic HR and Human Capital Management
1.2 Concepts and Instruments of HR Policy
1.2.1 HR and Leadership Guidelines
1.2.2 Employee Relations, HR Research and Survey
1.2.3 Works Agreement
1.2.4 Employer Branding
1.2.5 Annual HR Report and Staff Meeting
1.2.6 Change Management
Corporate Policy (policy: consciously enforcing will) is decision making and design of the long-term corporate goals and their adaptation to internal and external framework conditions or influences – as basis for following operationalized divisional, department etc. planning activities (see following example in the HR Division).
ExampleCorporate Policy Operationalisation
The example is showing a typical corporate policy objective (increase profit and rentability) operationalised top down to an individual workplace objective:
Corporate Policy: Increase Profit + Rentability
HR division
Reduce HR costs, increase performance.
HR Dpt. Recruitment
Reduce Recruiting Costs.
Reduce general fluctuation.
Team Management Recruitment
Train Recruiting staff in virtual interviews.
Legal check per country (maximal possible
probation times).
Reduce absent time (shorter business trip).
and fluctuation in Recruiter teams.
…
Recruiting Manager
Reduce business trips (for interviews) and do virtual selection interviews.
Negotiate longer probation times (6 months), and
reduced salary during probation time.
Overtime/shift-work (in foreign interviews).
Performance related bonus (low fluctuation in recruiting process/first two years related to your recruiting segment’s performance.
…
Influences on Corporate Policy
The diversity and complexity of influences on an HR and Leadership policy are resulting from many different internal and external stakeholders, company history and culture, megatrends (demography, globalisation …) and socio-political discussions (minimum wage, work-life balance …) in the society. Typical HR and Leadership related claims of stakeholders are e.g.:
Manager
: job satisfaction, high income, prestige, power and career, self-development, ...
Employees
: job and social security, healthy work conditions, training and career opportunities, social contacts, ...
Collective partner
(e.g. union, works council): compliance with and participation in a collective agreement, fairness of the negotiations, …
Economy: labour market situation, purchase power, …
Compliance environment:
labour law, co-determination due unions and works council, …
Socio-political:
values, education, demography, diversity, income tax, policy, income distribution, minimum wage, working time regulations, …
Technology:
ICT acceptance, home office, virtual work, …
Shareholder Value- and Stakeholder orientated HR Policy
While a traditional shareholder value-orientated corporate policy is mainly stability-, conservative- and short term-oriented, the stakeholder-oriented approach is progressive and focused on long-term corporate development, investing in training and personal development of the employees.
Shareholder Value-oriented HR and Leadership:
HR is seen as a cost factor, e.g.:
This traditional one-dimensional focus on a short-term return on invest equity has becoming increasingly critical, not only because of the discussion about ethics.
Stakeholder orientated HR and Leadership policy:
HR Development seen as an investment,
In the same as in the general corporate policy companies often move between these polarities due situational factors and corporate policy dynamics, or larger ones follow different policies parallel in their different divisions. Especially in the last two decades in the background of corporate ethics, work-life balance and CSR more and more companies are tending to become more stakeholder-oriented.
The individual corporate profit orientation as a guiding principle must to be see critically today, as it often leads beside environmental damage to individual psychological and social problems (e.g. mental problems, unemployment).
ExampleCriticism of the Shareholder Value approach
In our times almost 200 of the leading US-entrepreneurs (e.g. from Apple to Pepsi and Walmart) are moving away from maximizing profits in a public statement. They distanced themselves from a pure shareholder-value approach by defining new principles of corporate management: … we know that many Americans have problems. Too often hard work is not rewarded and enough is not done to allow workers to adapt to the rapid pace of economic change. In the future, the focus will be more on investing in employees, in environmental protection and in fair and ethical dealings with suppliers.1
Corporate Governance and Corporate Compliance are partly interdepend-dent: the governance focus in on the corporate's constitutional (legal) basis, compliance aims at whether and how these are followed, and if necessary other voluntary rules of conduct such as Business Ethics and CSR. Co-determination due unions and works council or employee participation is (culturally depending) by laws and/or a lived social standard in a society.
Corporate Governance and Compliance
Traditionally, corporate governance in the sense of shareholder value-oriented management aims at responsible management and corporate control to create value.
This has played an important role for HRM and Leadership in recent years, esp. against the backdrop of spectacular bankruptcies and the legally and ethically dubious management behaviour of known consulting firms (e.g. Arthur Anderson, EY) and companies (e.g. Wirecard, Enron, Volkswagen Dieselgate). Frequent criticism (esp. from foreign investors) is e.g. lack of transparency in company management or lack of independence of German supervisory boards. Or the unusually high manager salaries or success bonuses in Germany with the simultaneous systematic destruction of company values. Accordingly, more and more socially recognized rules for responsible corporate management are being discussed in public.
ExampleCorporate Governance in Germany
Corporate Governance
The German Corporate Governance Code (DCGK) developed by a government commission in 2002 contains various rules and recommendations on different levels of commitment:
Corporate Governance Report (DHL Group, excerpt)2
Essential elements of its corporate governance structures: the declaration of conformity by the executive board and the supervisory board, essential corporate governance practices that go beyond the legal requirements, e.g. as
Management Ethics
Even if there is little talk on corruption and fraud in industrialized countries, corruption in and by companies is more widespread than is publicly known. For example, in Germany approx. 70% of companies have corporate compliance guidelines (see example below). There are just a few cases shown in the media (e.g. emission scandal by Volkswagen, known as Dieselgate), but for years the number of corruption and fraud cases uncovered has been increasing – also through the corporates' compliance policy. The spectrum ranges from culturally expected invitations (restaurants, events) to company services (e.g. untaxed private use of company vehicles/aircraft) to active bribery.
ExampleGlobal Fraud Survey – results for Germany
A study of over 2.500 companies in 55 countries worldwide by EY shows, among other things:3
Examples of ethical goals for managers should be:
Knowledge and implementation of ethical aspects in their functional responsibility (e.g. customers, purchasing, production),
as well as in relation to their employees and team leadership.
Induce and empower your team members to self-critically examine their own values and actions.
They should encourage their employees to raise ethical concerns, and
support them in making decisions about ethical behaviour.
Ensure that everyone feels committed to the common corporate values and basic social values.
Freedom and support for ethically justified changes in the work area.
ExampleCorporate Compliance Policy (Bayer)4
With its corporate compliance policy as a basis for action, Bayer (active in nearly all countries, 104.000 employees) wants to be successful in competition through innovation, quality, reliability and fairness, while adhering to company-specific and legal rules: Our decisions are legal, ethical and responsible. Doing the right thing is not always easy or clear, but it is necessary. For help, consult our internal experts for input or guidance.
Examples and rules of action are set out under following headings for implementation:
We compete fairly in every market.
We act with integrity in all our business dealings.
We balance economic growth with ecological and social responsibility.
We observe trade controls that regulate our global business.
We safeguard equal opportunity in securities trading.
We keep accurate books and records.
We treat each other with fairness and respect.
We protect and respect intellectual property rights.
We act in Bayer’s best interest.
We protect and secure personal data.
Labour Law and Co-determination
Even despite the widespread slavery, already the Romans were familiar with the principles of labour law in ancient times, such as to the service contract (locatio conductio operarum) for Roman citizens.
Today’s labour law developed through the first forms of wage-related labour in the late 18th cent., e.g. limiting child work in the UK. As a result, the increasing political discussion of the contradiction between capital and labour gradually developed workers' rights and often a kind corporate social policy in industrializing countries. Today, usually individual employees and/or their committees like a works council have a wide range of rights, depending on the different labour law cultures in the industrial and threshold countries. In most countries it distinguishes between:
Individual labour law
inside the company between employees (often represented by their elected works council) and the company, and
Collective labour law
as general rights and obligations (like, for example, collective tariff agreements) between employers (or associations) and employee representatives (such as works councils and unions) for a region or an industry.
Internationally, labour law sows a broad spectrum:
from general to situational self-image (in sense of friendly-cooperative community of interests up to open-fighting opposition,
both at the socio-political level between trade unions and business associations, as well as
in companies between works councils (or unions) and companies,
up to a direct participation of trade unions and/or works councils in management bodies like board of directors and supervisory board.
ExampleCultural Roles of Unions
Globalization led in global companies to international associations for the employers (e.g. Association of International Motor Vehicle Manufacturers) and employees (e.g. European Works Council or World Group Works Council at Volkswagen, or international union associations like International Trade Union Confederation) as well as Equal Opportunity Officers (or Committees) as representatives for the rights of young people, disabled employees, gender equality, etc.
ExampleWorks Council rights (Germany)
Participation rights for Works Council
In Germany the Betriebsverfassungsgesetz (BetrVG, kind of Works Constitution Act) regulates participation of employees through their works council, elected by them in companies with at least five regularly employed employees, e.g. the right of …
Global Works Council adopts Charter for Temporary Employees
VW group was one of the first set up a European Works Council (by EU law) and Global Works Council voluntarily. The approx. 671.000 employees have representatives from more than 60 locations in about 15 countries worldwide (as of 2019). Main objective (acting in addition to national works councils) is to represent, coordinate and act as a main negotiating partner for the employees worldwide with the VW board on global issues.
For example, in 2013 the VW group board, the European and the Global Works Council adopted the charter for temporary employees at VW group with principles for them worldwide: among other things about employment and payment conditions as well as qualification offers in terms of equality with the VW permanent workforce.
Megatrends are medium and long-term changes over one or more product life cycles with a fundamental, often for decades change for companies. The typical ongoing Megatrends like Demography, Social Change, Technology and Digitalisation, Globalisation, Climate Change etc. are having mostly, depending on the industry, more or less influence on HRM and Leadership, e.g. for industrial countries like Germany:
this means for HRM for example: fewer young school and university graduates on the labour market and in companies, but lot more 50+ employees in future, more applicants and employees with a migrant background, higher life expectancy leads to socio-political discussion about retirement age (currently 67, up to 70+ is in discussion in Germany), the Young old as a new labour potential, age-adapted work- and workplace conditions etc., and
for Leadership more elder employees and migrant backgrounds, therefore onboarding and team development activities, reorganising work, working time and work-place related to age, intercultural sensitivity leadership and communication training for the manager and for the team, …
this means for HRM for example, more employees with migrant background or international staff in the home country, local staff in foreign subsidiaries, and esp. due global production, sales and procurement more cross-national business trips and Expat management due foreign assignments (incl. family). In this nearly all HR operations are involved, e.g. highly diverse income tax and social insurance due different country laws and cultural standards, assignment contracts with very different compensation factors and salary, preparing (e.g. language and intercultural training), mentoring (while working abroad), re-integration of expats etc., and
for the manager e.g. more business trips abroad, staff with migrant background up to an intercultural team, intercultural onboarding and team development incl. intercultural conflict management (due intercultural misunderstandings or prejudices) and tolerance. In big or in global oriented companies like the medium-sized hidden champignons often the operations language turns generally into English.
Among others, these trends partially influence each other, e.g. demography and changing social values or globalisation. They affect the majority of companies in industrialized countries regardless of their size or industry. In addition, there are relatively new trends that so far have only affected a few countries, industries or companies (Urbanization, Individualization and New Work, Mobility and Migration, Gender Equality). For example, Migration (national, cross-national, global) has now become one global megatrend that goes beyond demographic aspects.
ExampleDemography and Labour Market Germany (I)
Nobody can help the Germans is a typical headline in the media for many years. Like other industrialized countries, Germany has a steadily declining and aging population (fig. 1.2). Cuts in the 1983 statistic are showing a lack of people e.g. due first global economic crisis, WW I+II, invention of the birth control pill, and more recently changing social values towards Singles, DINKs and DCCs.
Similar developments apply to all industrialized countries worldwide. And the emerging economies with their industrial regions with a growing income-secure middle class are showing the same developments (fig. 1.3).
Stable demographics in industrialized countries require an average of 2,1 children/woman. Due to the low birth rates in the past, there are now fewer women. An increasing birth rate in the next two decades will have relatively little effect on demography – to stabilize the population, which has been reduced for decades, 3,6 children per woman are now required – and the new-borns will only reach the labour market in around 20 years.
A common misconception that migrants would have many children is wrong. On one hand, migrants (e.g. Germany) are pre-dominantly men. And on the other hand, their birth rates will slowly adjust to the society's average (demonstrably in the next generation).
Future Employment Potential
Often without needed experiences (e.g. language, school or vocational qualification, professional experience) and with problems to accept or understand local cultural values, their professional integration is an essential requirement for their (and their family) social integration. But the sometime lower level of education and qualifications must not be generalized: overall, their academic quota (20%) is almost equal to Germany (22%). For example, migrants from Eastern Europe (esp. women) have on average a significantly higher level of education than native German. And more importantly: Every second child graduates at high school a generation later, because most parents invest heavily into their education.5
ExampleDemography and Labour Market Germany (II)
15 m potential new employees (born 1992-2012) are now entering the labour market and at the same time approx. 25 m (born 1947-1967) will leave. Germany currently needs a high level of immigration. Even with an (assumed) higher employment rate (e.g. longer working time, higher retirement age, more female employment) and (assumed) net immigration of approx. 200.000 people/ year.
The forecast by IAB (German state research institute for labour market and vocational training) on labour integration shows that approx. 50% of migrants are in regular work after five years. Many are initially in internships, part-time or less-valuable employment. There are annual increases: 10% of those who came to Germany in 2015 were employed in the first half of 2016, 22% which came in 2014 and 31% of those from 2013. Main reason for this relatively positive development is that approx. 70% of these migrants are relatively young. This development is correspondent to previous migrations and current OECD studies in Europe.
Fig. 1.4 shows the development of the potential number of working people in three different scenarios until 2060: Parallel to the negative demographic development, the new megatrend Global Migration can only partially compensate for the shortage of young people.
The HR Management approach
The approach of Human Resources Management (HRM) is becoming more and more popular (in contrast to traditional Personnel Management) in modern companies. HRM is based on a strategic importance of the human resource factor – staff is no longer seen as an entrepreneurial planning and support function, but rather focuses on creating optimal framework conditions for the procurement, development and motivation of human performance potential.
Even if both, Personnel Management and HRM mostly are simply used synonymously in many companies and publications, they differ in their clear strategic and stakeholder orientation. While in traditional Personnel Management employees were mainly seen as a cost factor, HRM aims to see employees as indispensable and to encourage and bind them accordingly for the company's development (fig. 1.5).
ExampleHR Management (Harvard approach)8
The HRM approach at Harvard Business School sees HR as a contribution to strategy implementation with a focus on a general management perspective: This is why administrative HR tasks such as personnel administration and accounting, personnel controlling, etc. belong to Personnel Management, whereas strategy-implementing tasks belong to HRM with four central HRM policy areas:
Employee participation
(participation philosophy),
HR movements
(recruitment, deployment, adjustment),
Salary system
(incentive, salary and participation systems),
Work organisation
(work structuring).
These policy areas are influenced by different stakeholder interests (employees, works council, management, trade unions, state ...) and situational factors (employment structure, corporate strategy, labour market conditions, technology, social values ...).
Due to the dynamically changing framework conditions (megatrends, see chap. 1.1.3), employees and esp. their qualifications and motivation are becoming a corporate strategy factor. Since more and more products, quality and prices are similar, the qualified advice and support of customers or the motivation, qualification and flexibility of the employees’ preference-forming factors for customer demand. The HR Department accompanies the employees in the different phases of their operational careers, from job selection and job introduction, to training and development, performance and potential assessment, up to compensation and retirement from the professsional life.
ExampleRevolution in the Labour Market
The ongoing shortage of young talent and skilled workers and the further demographic development cannot be compensated for by migration, more working women and longer working hours (fig. 1.4 in chap. 1.1.3). For HRM, digital modernization and rationalization with AI and networked robotics (Industry 4.0 in chap. 4.2) with an estimated productivity increase of up to 50% depending on the industry in the coming years is the greatest strategic challenge (according to Bain & Company).9
Over the time, relatively more traditional jobs are lost because, as a rule, the demand for goods and services grows much more slowly than the production potential. It is forecast that approx. a quarter of the current jobs – this applies not only to traditional low-skilled jobs but also to high-skilled jobs, with the exception of digital experts – there is a threat of division the corporate’s workforce. In addition to this relatively dramatic assessment, there is also recent experience that gigantic technological developments (e.g. in the 1980s there was talk of winners and losers in rationalization) do not have such a radical effect on the labour market and the workforce. Statements relating to HRM regarding personnel policy can be expressed using different instruments, e.g. in company and personnel guidelines, through management principles or the leadership style, through company agreements or through regular employee surveys.10
Human Capital
The term Human Capital usually describes the economically usable knowledge and potential of employees as a quasi-immaterial value in the company – extended definitions incl. e.g. also the working atmosphere or a knowledge database and the leadership quality of management.
Human capital is not, like e.g. machines and material stocks, capital in traditional accounting or (mostly also qualitatively oriented) controlling with the traditional instruments of finance and accounting are only inadequately recorded and evaluated in a statistically quantifiable manner. However, human capital is an asset and entrepreneurial potential for success, which is e.g. is reflected in share prices or is assessed qualitatively in the case of company acquisitions.
When calculating human capital in the sense of the shareholder value approach (chap. 1.1.1), one usually refers to short-term successes with the attempt to calculate human capital as a key figure or value, e.g. the (less informative) key figure Human Capital Value Added (HCVA, chap. 3.3.5) as a value contribution from HR measures or the profitability of employees. However, development opportunities, innovation, creativity, esp. through teams, changing working and environmental conditions as well as changing customer behaviour or life phases of employees are not taken into account.
ExampleHuman Capital Index
HR Commitment Index (Telekom)11
The employee satisfaction (commitment index) is according to the group-wide employee surveys carried out in 2017/2019 …