Role of HRM

Case Study 1 - The absenteeism costs of the common flu in the USA

• The USA spends $10.4bn per year in direct medical expenses - that's around $28 493 150 per day!
• The country loses $15.3bn a year from the common flu due to loss of earnings (which is equivalent to 17 million workdays a year!)
• Productivity losses amount to more than $21 billion a year (or over $57.53 million per day).

Source: adapted from www.healthline.com/health

ATL Activity 1 - To work or not to work, that is the question

On average, women have a higher life expectancy compared to men. This may be due to inherent biological factors. However, women also retire earlier in many countries as compared to men. The gap between the retirement age of men and women is smaller in high-income countries and larger in low-income and medium-income countries due to economic and social factors.

So, if men live shorter lives and are expected to work more (retire at a later stage in life), is this fair? What about equality for males? Are governments biased?

Refer to these three sources and discuss the above questions in small groups.

• Worldometer - Life Expectancy of the World Population
• OECD - Pensions at a Glance 2019
• OECD - Pensions and retirement ages

Key concept - Ethics

“Ethics is a code of values which guide our choices and actions, and determine the purpose and course of our lives”.
- Ayn Rand (1905 – 1982), Russian-American writer and philosopher

Ethics can be defined as the moral codes of conduct that drive business behaviour. Ethical business behaviour is what is deemed by society to be morally acceptable, i.e., what is “right”. By contrast, unethical business behaviour is what society regards as being immoral, unjust and unfair, i.e., what is “wrong”.

Ethics can affect all aspects of human resource management and decision-making. For example, unethical practices of some offshored businesses, such as the immoral exploitation of workers, have led more organizations to re-shore their operations. Other ethical considerations include:

• Should employers allow workers to have tattoos? Is it appropriate (acceptable) for teachers in international schools to have visible tattoos? Should there be a law about exposing tattoos in the workplace?
• Should employment laws be enforced across the globe to prevent discrimination against race, gender, marital status, age, religion and sexual orientation? Why/not?
• Is it ethical for senior executives to receive end-of-year bonuses that are more than double their employee’s annual salary?
• Is it morally acceptable for firms to hire more part-time and flexitime workers in order to lower their production costs?

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Unethical business behaviour can have major consequences for a business, such as poorer staff morale, lower productivity, an undesirable corporate image, and possible lawsuits against the organization. For example, Walmart has been accused of mistreating its workers, especially the exploitation of female workers on part time contracts.

Case Study 2 - Accusations of employee exploitation at iPhone factory

One of the key issues associated with offshoring is the potential for disputes between suppliers and workers, particularly in regions where labour regulations and enforcement mechanisms may differ from those in the home country of the multinational company.

In December 2020, reports emerged of workplace unrest at an iPhone factory operated by Wistron Infocomm Manufacturing near Bangalore, a major IT centre in India. Workers protested over concerns related to wages and working hours. According to media reports, some employees claimed they had experienced delays in payment and were required to work additional shifts. The protests resulted in damage to factory property.

Company representatives stated that they were committed to complying with local labour laws and relevant regulations. The factory employs approximately 15 000 workers.

In such circumstances, labour disputes can occur rapidly as governments, employers, and employees adjust to changing economic and cultural conditions. Such situations highlight the importance of effective human resource management, clear communications, and compliance with labour standards in global supply chains.

Source: adapted from South China Morning Post

Key concept - Creativity

In business management, a creative workforce and culture of creativity can give a business competitive edges. Consider some of the examples below:

• Airbnb has become the world’s largest property rentals company, but it does not own any properties.
• Alibaba.com is the world’s largest B2B (business to business) online platform, but does not have any inventories.
• Amazon.com transformed the (online) retail industry, putting lots of traditional retailers out of business in the process.
• Cloud computing, such as Google Drive and Dropbox, has reduced the demand for computers and laptops with large physical storage devices.
• Google Maps and mobile technologies have wiped out the demand for satellite navigation devices.
• iTunes and Spotify have revolutionised the music industry.
• Netflix is the world's largest provider of movies but doesn't own any cinemas of its own.
• Skype, Teams, and Zoom have changed the way in which many multinational companies conduct their meetings and interviews (via video conferencing technologies), yet these companies do not own any telecommunications infrastructure.
• Tesla’s creative and innovatively designed products have sparked huge interest in all-electric vehicles.
• Uber, the world’s largest taxi operator, does not own any taxis.

How do the above cases impact on the role of human resource management?

Business Management Toolkit (BMT) - Descriptive statistics

In order to support the HR department, organizations use a range of supporting quantitative information and statistical data, including:

• Annual labour turnover figures
• Absenteeism records
• Business objectives
• Demographic trends from government sources
• Labour productivity data
• Labour turnover rates
• Management knowledge and experience
• Growth rates of the organization (see chart below for Amazon from Statista)
• Sales forecasts
• The state of the economy, such as GDP, unemployment and inflation figures.

Discuss the use of descriptive statistics in supporting the role of human resource management.

Business Management Toolkit (BMT) - Hofstede's cultural dimensions (HL only)

Culture is often described as "the way things are done here". Corporate culture refers to a set of beliefs and work attitude that is accepted in an organization. It can refer to the norms within an organization (such as the dress code within a business) and national or regional cultures (and how these impact on the organizational culture).

In terms of business management, culture refers to the norms, attitudes, values, goals, and practices that characterises an organization. It can apply to an organization, a country or a region of the world. Organizations will want to develop a strong and cohesive culture, where labour turnover is low and productivity is high, due to effective human resource management.

Attitudes and approaches to:

Individuals can shape organizational culture, just as organizations can shape individuals. Procedures and processes for managing human resources are explicitly shaped by traditions and cultures. National and regional cultural differences still exist within any organization, despite the forces of globalization bringing the world closer together. Hence, to manage human resources successfully, businesses have to adapt to cultural diversity within their organizations.

ATL Activity 2 - Looking after your parents

Read this interesting article from The Economist, titled ‘Which countries are most generous to new parents?’ Click the link here.

Contrast how these practices differ from a country that you are familiar with.

ATL Activity 3 - Video documentary review

Watch this 43-minutes Undercover Boss video documentary about Buffalo Wings & Rings in the USA. The video follows the CEO, Nader Masadeh, as he goes undercover to find out about the staff behind the Buffalo Wings & Rings franchise, with hopes of further expansion. Along the way, Nader Masadeh finds good employees but also a bully who needs to be dealt with.

You can access the video on Daily Motion here.

Questions

Q1 - Where is Buffalo Wings & Rings headquartered and how many employees does the company have?

Q2 - Who is the President of Buffalo Wings & Rings, and how much does he earn a year?

Q3 - Where was the CEO of Buffalo Wings & Rings born?

Q4 - When did the first Buffalo Wings & Rings restaurant open?

Q5 - When did Masadeh buy the Buffalo Wings & Rings franchise, and how many stores did they have then?

Q6 - How many pounds (lbs) of chicken does Buffalo Wings & Rings use each year?

Q7 - What did Nader Masadeh purchase to celebrate the birth of the business in 1984?

Q8 - What is the reason behind Nader Masadeh going undercover?

Q9 - What was Nadeer Masadeh’s undercover name?

Q10 - Where is the first restaurant that Masadeh visited while going undercover?

Q11 - One of the employees is called Dave. What is his job at Buffalo Wings & Rings?

Q12 - Where is the location of the second restaurant that Masadeh visited?

Q13 - What was the second store’s staff turnover rate according to Amber?

Q14 - Where is the location of the 3rd restaurant that Masadeh visited while undercover?

Q15 - What is the name of the kitchen manager in the 3rd store that Masadeh visited?

Q16 - Who is the general manager in the third restaurant that Masadeh visited?

Q17 - What was the problem employees and “Pete” had with Wes?

Q18 - What was one of the company values that Nader Masadeh told Wes about?

Q19 - How much did Nader Masadeh award Dave for his retirement?

Q20 - What did Masadeh praise Amber for while undercover?

Download a PDF copy of the worksheet to use with your students by clicking the link here.