BUS 532 Strategic Human Resource Management

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BUS 532Strategic Human Resource Management

• 10/28/1998
• Professor Allen

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Agenda

• Case Accountants and Business Advisors
• Lecturette
• Up-or-out systems
• Promotion policy
• Turnover

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A career in an internal labor market

• Hire at entry level
• Advance to more responsible positions
• Jobs, pay structured to encourage training,
  promotions
• Seniority matters a lot
• Low turnover
• Remain until retirement or buyout

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A career in an up-or-out system

• Hire at entry level
• Advance to more responsible positions
• Jobs, pay structured to encourage training,
  promotions
• Seniority matters a lot
• High turnover
• Some get partnership, tenure others leave

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Comparing up-or-out to ILM

• SIMILARITIES
• Opportunity for career
• Training encouraged
• Better job matches

• DIFFERENCES
• Incentives for stars
• Cost structure
• Flexibility
• Role of losers
• Backstabbing
• Short-term focus

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Promotion decisions

• Criteria
• Seniority
• Best performer in current job
• Best predicted performer in open job
• Environmental factors influencing policy
• Growth, age mix in organization
• Firm-specific skills
• Steepness, height of pyramid
• Culture cooperation or competition

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Causes of turnover

• Wage level
• Wage growth with service
• Deferred compensation, defined benefit pension
• Firm characteristics size, training, growth
• Worker characteristics age, family
• Working conditions

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Evaluating turnover policy

• Cost of higher wages, better benefits and working
  conditions
• Payoff
• -- Response of turnover to policy
• -- Savings in turnover costs (mostly hiring and
  training)