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104 Cards in this Set
- Front
- Back
Succession Management |
The process of ensuring that pools of skilled employees are trained and available to meet the strategic objectives of the organization. |
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Reasons for Succession Management |
1. Provide opportunities for high-potential workers. 2. Identify replacement needs. 3. Increase talent pool of promotable employees. 4. Contribute to implementing organization's strategic business plans. 5. Help individuals realize career plans. 6. Tap potential for intellectual capital. |
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Reasons for Succession Management (p.2) |
7. Encourage advancement of diverse groups. 8. Improve employee ability to respond to changing environment. 9. Improve employee morale. 10. Cope with side effects of voluntary separation programs. 11. Decide which workers can be terminated. 12. Cope with effects of downsizing. 13. Reduce headcount to essential workers. |
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Replacement Planning |
The process of finding replacement employees for key positions. |
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Succession Management Process Steps (5) |
1. Align Succession Management Plans with Strategy.
2. Identify the Skills and Competencies needed to meet strategic objectives. 3. Identify High-Potential Employees. 4. Provide developmental opportunities 5. Monitor succession management. |
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Succession Management Planning Step #1 - Align Succession Management Plans with Strategy |
- organizations must start with business plan - use environmental scanning |
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Environmental Scanning |
Systematic monitoring of trends affecting the organization to try and predict where the organization will be in 3, 5, and 10 years. |
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Succession Management Process Step #2 - Identify the Skills and Competencies Needed |
1. Job Based Approach 2. Competency - Based Approach |
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Job vs Competency Based Approaches |
Job: focus on duties, skills, job experience, and responsibilities Competency: focus on measurable attributes that differentiate successful employees from those who are not; hard and soft skills; produces more flexible individuals. |
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Types of Competencies |
1. Core competencies - attributes that everyone in a company shares. 2. Role or specific competencies. 3. Unique or distinctive competencies. |
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Succession Management Process Step #3 - Identify High-Potential Employees |
Approaches to identify managerial talent: - Temporary replacements - Replacement charts - Strategic replacement - Talent management culture |
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Succession Management Process Step #4 - Provide Developmental Opportunities and Experiences |
Management Development Methods - Promotions - Job Rotations - Special Assignments - Formal Training and Development - Mentoring and Coaching |
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Job Rotations |
Process whereby an employee's upward advancement in the hierarchy of an organization is achieved by lateral as well as vertical moves.
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Mentors |
Executives who coach, advise, and encourage junior employees. |
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Succession Management Process Step #5 - Monitor Succession Management |
Corporations with strong succession management programs are higher performers in revenue growth, profitability, and market share. HR metrics can be used to help monitor succession management. |
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HR Metrics for Succession Management |
- Increased engagement scores. - Increase positive perceptions of development opportunities. - High potentials' perceptions of succession management process. - Higher participation in developmental activities. - Greater involvement in mentoring process. |
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HR Metrics - Lag Measures |
- Increased number of candidates - Reduced number of positions with no identified successors - Increase in managers with replacement plans - Increase in key positions filled according to plan - Increased ratio of internal to external hires - Increased retention rates of key talent - Increase in positive job evaluations - Increase in bosses as talent developers |
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Employee Role in Succession Management |
Advantages: invites employee participation, gain employee commitment Limitations: elitism, risk of spotlight, selection bias, unpredictable futures |
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Downsizing Strategy |
Strategy to improve an organization's efficiency by reducing workforce, redesigning work, or changing systems of organization. |
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Survivor |
Employee remaining with an organization after downsizing. -negative attitudes and behaviours -reduced performance - lower productivity - emotions: anger, anxiety, cynicism, resentment, retribution, hope |
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3 Types of Downsizing Strategies |
1. Workforce Reduction (short-term) 2. Work Redesign (medium-term) 3. Systematic Change (long-term) |
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Workforce Reduction |
- Short-term strategy - Attrition - Early retirement - Voluntary severance packages - Layoffs - Terminations |
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Work Redesign |
- Medium-term strategy - Focus on work processes - Assess whether functions, products, or services should be changed or elminated |
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Systematic Change |
- Long-term strategy - Change an organization's culture, attitudes, values - Goal of reducing costs and / or enhancing quality |
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Human Costs of Downsizing |
- Most workforce reduction programs fail to meet objectives - Morale sinks, productivity drops, and survivors distrust management |
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Ethical Considerations of Downsizing |
- May infringe on principles of distributive, procedural, interactional justice - Communications may be mismanaged - Managers may use and abuse information - Managers may conceal or distort information |
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Downsizing Alternatives |
1. Cutting non-personnel costs 2. Cutting personnel costs 3. Providing incentives for voluntary resignation or early retirement *Cutting other areas gives impression that company cares |
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Short-term Downsizing Alternatives |
1. Hiring freeze 2. Mandatory vacation 3. Reduce workweek 4. Reduce overtime 5. Reduce salaries 6. Facility shutdowns 7. Employee input into alternatives |
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Medium-term Downsizing Alternatives |
1. Extending reductions in salaries 2. Voluntary sabbaticals 3. Lending employees 4. Exit incentives |
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Outplacement |
Providing a program of counselling and job-search assistance for workers who have been terminated. |
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Inplacement |
Reabsorbing excess or inappropriately placed workers in a restructured organization. |
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Planning for Downsizing |
1. Determine how many people will lose jobs 2. Determine who will be let go 3. How will reduction be carried out 4. Determine legal consequences 5. Design current and future work plans 6. Implement decision 7. Perform follow-up evaluation/assessment |
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Impact of HR & Process Planning |
- Advance notification of layoffs - Severance pay and extended benefits - Education and retraining programs - Outplacement assistance - Clear, direct, and empathetic - Consideration of HR planning practices |
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Procedural Justice |
Procedures or rules used to determine which employees will be down-sized |
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Interactional Justice |
Interpersonal treatment that employees receive during implementation of downsizing decision |
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Distributive Justice |
Fairness of downsizing decision |
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Effective Downsizing Strategy |
-Increased communication - Increased employee participation - Systematic analysis of tasks and personnel requirements - Visibility of senior management - Focus on rightsizing - Establish sense of ownership - Monitor downsizing and link to org strategy - Train management with downsizing techniques |
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Best Practices of Downsizing |
1. Downsizing should be initiated from the top 2. Workforce reduction must be selective in application and long-term in emphasis 3. Special attention paid to survivors and terminated employees 4. Decision-makers should identify inefficiencies and costs 5. Result is formation of small semi-autonomous organization within broader organization 6. A proactive strategy focused on increasing performance |
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HRM Issues |
- Managing the changing Psychological Contract - "New Deal" in Employment - Altering the Psychological Contract - Downsizing and "High-Involvement" HRM - Labour Relations Issues |
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Domestic Strategy |
Internationalizing by exporting goods abroad as a means of seeking new markets |
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Multi-Domestic Strategy |
Strategy that concentrates on development of foreign markets by selling to foreign nationals |
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Multinational Strategy |
Standardizing products and services around the world to gain efficiency |
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Global Strategy |
Strategy that aims to introduce culturally "sensitive" products in chosen countries with the least amount of cost |
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Strategic International HRM |
- What is the corporate plan? - Who to relocate, who to hire locally? - Reasons for international moves - Compensation and Performance Mgmt - Local culture, customs, ethics, and risk mgmt |
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Adaptive IHRM Approach |
HRM systems that will be consistent with the local, economic, political, and legal environment |
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Exportive IHRM Approach |
Transferring home HRM systems to foreign subsidiaries without modifying or adapting to the local environment |
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Integrative IHRM Approach |
Combining home HR practices with local practices and selecting the most qualified people for the appropriate positions no matter where candidates are from |
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Home-Country Nationals (HCN) |
Host-country - individuals from the subsidiary country who know the foreign cultural environment well |
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Parent-Country Nationals (PCN) |
Individuals from headquarters who are highly familiar with the firm's products and services, as well as with corporate culture |
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Third Country Nationals |
Individuals from a third country who have intensive international experience and know the corporate culture from previous working experience with corporate branches in the third country. Home country pay to parent company workers may upset parent-country nationals -May offer per diem to offset |
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Expatriate |
Any individual who gives up residence in his/her home country to take up residence in a foreign country either temporarily or permanently. |
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Trainability |
An individual's ability to acquire certain skills to a desired level of performance |
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CCT - Cross Cultural Training |
Positively influences expatriate self-development, interpersonal skills, and cross-cultural perception |
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Repatriation |
The PCNs, TCNs, or even HCNs finish their overseas assignment and come back to their home headquarter or home subsidiaries |
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Reverse Culture Shock |
Feelings of anxiety, uncertainty and disorientation upon re-integration into one's home country and culture |
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Challenges for HR |
- Legal - Ethical - Internal equity & external competitiveness of compensation - Tax issues - Relocation and travel |
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3 Reasons Companies Merge |
1. Strategic Benefits 2. Financial Benefits 3. Needs of the CEO or managing team |
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Strategic Benefits |
Operating synergy Vertical integration Horizontal Integration |
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Operating Synergy |
Cost reduction achieved by economies of scale produced by a merger or acquisition |
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Vertical Integration |
Merger or acquisition of two organizations that have a buyer-seller relationship |
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Horizontal Integration |
Merger or Acquisition of rivals |
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Financial Benefits |
- Reduce variability and risk of cash flow - Use cash cows to fund stars - Growth strategies have different tax implications - Develop new products -Entering new markets is expensive - Undervalued organizations - Increase shareholders' wealth |
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Merger |
Consolidation of two organizations into a single organization |
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Horizontal Merger |
Merger of two competitors |
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Vertical Merger |
Merger of a buyer and seller or supplier |
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Conglomerate Merger |
Merger of two organizations competing in different markets |
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Acquisition |
Purchase of an entire company or controlling interest in a company |
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Consolidation |
Two or more organizations join and form a new organization |
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Takeover |
One company acquiring another company |
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Merger Methods |
Hostile takeovers Poison pills - right of key players to purchase shares in company at a discount to make takeover expensive White Knights - more acceptable buyers Pac-Man - defensive maneuver where targeted company makes a counteroffer for bidding firm |
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Success Rate of Mergers |
20% of all mergers are successful 60% are disappointments 20% are complete failures Best success rates are with similar businesses Mergers take a long time (resources neglected) More successful when large firm absorbs small Less successful in service industries |
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Financial Impact |
- Financial returns are rarely realized - Mergers fail because buyer overextends - Forecasted economies of scale aren't realized |
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Culture |
Set of important beliefs that members of an organization share |
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Cultural Options for Mergers and Acquisitions |
1. Assimilation 2. Integration 3. Deculturation 4. Separation |
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Assimilation |
Occurs when one organization willingly gives up its culture and is absorbed by the culture of the acquirer or the dominant partner |
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Integration |
Refers to the fusion of two cultures, resulting in the evolvement of a new culture representing the best of both cultures. This form rarely occurs because the marriage is rarely one of two equals, and one partner usually dominates. |
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Deculturation |
Sometimes the acquired organization does not value the culture of the dominant partner and is left in a confused, alienated, marginalized state known as deculturation. Temporary state, existing until some integration or separation occurs. |
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Separation |
Two cultures resist merging, and either the merged company operates as two separate companies or a divorce occurs. |
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Planning Moves |
1. Contingency Plans 2. HR Due Diligence 3. Transition Team |
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Contingency Plan |
- Plan should identify contact person and merger coordinator - Contact person should develop plan - Plan should outline the chain of command, communication methods, procedures and negotiation skills training |
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HR Due Diligence |
Process through which a potential acquirer evaluates a target firm for acquisition including review of: - collective agreement - employment contracts & policies - Executive compensation contracts - Benefit plans and policies - Incentive, commission, and bonus plans - Pension plans, retirement policies - WSIB statements, claims, assessments, experience rating data - complaints |
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Transition Team |
Deals with: 1. Urgency 2. Information gaps 3. Stress HR policy review might uncover complementary, duplicated or contradictory HR policies for merger companies |
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Impact of the Merger on HR |
Mergers affect the following functions: 1. Selection 2. Compensation 3. Performance appraisal 4. Training and Development 5. Labour Relations |
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Demotion |
Under new organizational structure, some employees are given less responsibility, less territory, or few lines due to amalgamation. |
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Competition for Same Job |
Some companies force employees to compete for their old jobs. |
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Termination |
Some employees are let go strategically. |
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Compensation |
Important compensation decisions: 1. Merge compensation systems? 2. Adopt new compensation system? 3. Create new compensation system? Benefits subject to same scrutiny. |
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Performance Appraisal |
Employee behaviour and performance is not typical after merger or acquisition: 1. Not knowing - remedied by communication 2. Not able - solution is training 3. Not willing - performance management through feedback and incentives |
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Labour Relations |
- important to interpret collective agreement for all relevant clauses that may affect employees and / or managers and their rights to job security, seniority, buy-outs, etc. - collective agreements need to be re-negotiated - early union participation helps merger process |
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Outsourcing |
Contractual relationship for provision of business services by external provider |
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Outsourced HR Functions |
1. Compensation 2. Recruitment & Selection 3. Training 4. Health & Safety 5. Legal Service |
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Why Outsource? 6 Major Reasons |
1. Financial savings 2. Strategic focus 3. Access to advanced technology 4. Improved service levels 5. Access to specialized expertise 6. Organizational politics |
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Financial Savings |
- Economies of scale from specialized firms who are more efficient at a given task - Cost control - Decreased capital commitments |
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Strategic Focus |
- Decide to focus on specific core competencies, like customer service or innovation. - Core work is transformational and adds value to employees or customers. - Move secondary functions (benefits administration) to firms that do these things well. |
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Advanced Technology |
- Technology enables a company to reduce transaction time - Organizations want to improve technical service if they cannot find tech talent |
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Improved Service |
- Quality improvement - Outsource to those who are excellent performers - More flexibility in hiring and rewarding employees - Improved response time, performance, and confidentiality |
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Specialized Expertise |
- Access to best practices - Use of experts reduces risks and liabilities - Outsource when somebody can do it better than you. |
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Organizational Politics |
-Outsourced function not as visible as in-house - Outsource to get rid of troublesome dept - Outsourcing reduces headcout |
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Service Risks |
- Contractual arrangements dictate services - Disruption of service poses challenges |
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Reduced Value |
- Extreme levels of outsourcing hollow out a company - organization experiences reduced capacity - 20% of outsourcing brought back in-house |
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Management of Outsourcing |
1. Selection of vendor 2. Negotiation of contract 3. Monitor arrangement |
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Request for Proposal (RFP) |
Describes the responsibilities to be outsourced and invites potential providers to present proposal |
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Negotiating the Contract |
- Customize and negotiate outsource contract - set performance standards or penalty clauses - Establish service benchmarks (response time, response cost, customer satisfaction ratings) |
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Monitoring the Arrangement |
Problems: -Poor service definition -Weak management process Check references Demand frequent and accurate reports Conduct internal & external client satisfaction surveys |