HRMGT280 -- Human Resource Management

							          HRMGT280 -- Human Resource Management
                              Section 1 (T/Th 8:00-9:45 AM, S170)
                            Section 2 (T/Th 10:00-11:45 AM, S170)
                              Section 3 (T/Th 1:15-3.00 PM, S170)


                                   Professor Hayagreeva Rao
                                  Graduate School of Business
                                       Stanford University




                                     Course Description

Many managers and organizations now recognize that a critical source of competitive advantage
often comes not from having the most ingenious product design, the best marketing strategy, or
the most state-of-the-art production technology, but rather from having an effective system for
obtaining, mobilizing, and managing the organization’s human assets. A number of recent
developments—including demographic changes in the labor force, rapid technological change,
increased global competition, tight labor markets in many sectors, experiments with new
organizational arrangements, and public policy attention to work force issues—are making
human resource management (HRM) increasingly important for senior managers in organizations
and for entrepreneurs. Indeed, some commentators contend that in today’s economy with such
open access to information, technology, capital, and other resources adroit human resource
management may be one of the few remaining sustainable sources of competitive advantage.
This course has two central themes: (1) How to think systematically and strategically about
aspects of managing the organization’s human assets, and (2) What needs to be done to
implement these policies and, if appropriate for a given organization, to achieve competitive
advantage through people.
Where relevant, please bring your own experiences and illustrations into class discussion.
Throughout the course—virtually in every session—we will consider how what we are discussing
differs across countries. Students with global experience are especially encouraged to bring this
knowledge into the classroom.
The course is divided into three main sections. We begin by addressing the implementation of
strategy and the importance of aligning human resource practices so that they are internally
consistent and produce the skills and behaviors required to make the strategy work (sessions 1-2).
Next, we examine a number of key HR practices available to managers and their relationship to
the development of an effective personnel system (sessions 3-8). Finally, we summarize and
integrate the material (in session 9) with one final case.
                  Logistics, Classroom Dynamics, and Responsibilities

I encourage you to prepare for class in a study group and to discuss course concepts with each
other. However, this is entirely optional.
To reinforce students’ collective responsibility for the learning environment, Professor James
Baron (who often teaches this class) developed a web-based peer feedback tool. This tool was
first used in this class a few years ago and you may have used versions of this tool in other core
courses earlier this year. In addition to helping illustrate some issues in performance management,
the tool will provide an opportunity for class members to provide feedback to their colleagues on
their contributions to the learning environment. Near the middle of the course, you will have an
opportunity to provide me with feedback on the course. In the meanwhile, I welcome any
feedback you care to provide during the quarter, communicated in any form you are comfortable
with (verbally, office hours, anonymous note, etc).
Preparation before class. I expect students to be prepared for each class session, including having
read the assigned case and background reading carefully. I will use a variety of techniques to
stimulate class discussion and to ensure broad participation from all section members, including
cold calls. If you have specific expertise on a particular issue, firm, or industry that we will be
discussing, I appreciate knowing about this in advance, so we can best take advantage of your
knowledge in class discussion.
Class notes. In a typical class session, I will use a PowerPoint presentation. When possible and
appropriate, I will distribute a hard copy of the slides in class. I will always post the presentation
(in PDF format) on the course web site shortly after class. For some class sessions, there will also
be supplemental notes that I will post on the class web site and, if possible, distribute in class.
Seating chart. I will not use a seating chart and you are free to sit wherever you like. However, to
assist me in learning people's names and assessing class participation, it is probably a good idea to
sit in the same general area as often as possible.
Absenteeism and tardiness. I will not take attendance and you need not let me know when or
why you will be missing class. However, absenteeism and tardiness will adversely affect your
grade, and the negative impact increases with each instance. Please attend only the section of the
course for which you are officially enrolled. If you must miss a class and wish to attend my other
section of H280, I am generally willing to oblige(please ask my permission in advance).
Feedback from me. If you desire feedback on your class participation at any point in the course,
don’t hesitate to contact me.
Additional information. For more information on classroom norms and policies, please see the
“Classroom Dynamics Form” included in the syllabus packet.
                                           Reaching Me
Office:
       Knight 306
Office Phone:
       (650) 724-7708
Office Fax:
       (650) 725-6152
Email: hrao@stanford.edu
H280 Web Page http://faculty-gsb.stanford.edu/rao_class/HRMGT_280/h280.htm

Office Hours
       Wednesdays from 10AM-Noon or by appointment

Faculty Assistant: Tina Bernard Littlefield 278, (650) 723-3726, bernard_tina@gsb.stanford.edu



                                               Grades
          1. Take Home Exam: 60% of grade. You are allowed to refer to your notes and any
          materials you like. I will hand the exam out at the end of the last class and it will be due
          on May 8 at noon. Please plan your schedule in advance, as no exceptions can be made
          regarding the exam date.
          2. Class Participation: 40% of grade. Class participation grades will reflect my assessment
          of your total contribution to the learning environment, both in the classroom itself and
          through the peer feedback tool. Your contributions in class will affect your grade not
          simply based on the frequency of your class comments, but also: (1) comment quality
          (ability to draw on course materials and your own experience productively, ability to
          advance or sharpen in-class discussion and debate, willingness to take risky or unpopular
          points of view, use of logic, precision, and evidence in making arguments); and (2) the
          professionalism of your conduct (attendance, punctuality, preparedness, respecting
          section members and their contributions, and refraining from conduct that is distracting).
          You will be asked to provide feedback to a subset of your classmates regarding their
          contributions to the learning environment, using a web-based evaluation tool linked to
          the course website. (The feedback, submitted electronically, will be anonymous to your
          peers but not to me.) Participation in peer feedback is a course requirement and will
          affect your grade. The first set of peer feedback comments are due by April 19 (before
          midnight); the second set of evaluations is due by May 3.
                                            Readings
For most classes, I have suggested some reading from the text Strategic Human Resources:
Frameworks for General Managers, by James N. Baron and David M. Kreps, (New York: John
Wiley and Sons, 2000). The text is referred to as BK in the assigned readings below. The text is
highly recommended as a means of providing a framework for the issues we will discuss in most
classes. However, the text is not strictly required and I will not expect you to know the details of
concepts in the book that are not covered in class or in class notes. Another highly recommended
book is by Jeffrey Pfeffer and Robert Sutton “Hard Facts : Dangerous Half-Truths and Total
Nonsense: Profiting From Evidence Based Management”, HBS Press. 2006) which deftly dispels
myths about recruitment, motivation and leadership. This text is referred to as PS. There are
several other books you may want to use during the quarter. They include:
       1. Edward P. Lazear, Personnel Economics for Managers, New York: Wiley, 1998. Lazear
       is an innovative labor economist who has creatively used rigorous economic analyses to
       illuminate HR topics. His book complements Baron/Kreps, often providing useful but
       non-intuitive ways of understanding alternative approaches to a problem. This book is
       used more extensively in H302 -- "Incentives and Productivity."
       2. Jeffrey Pfeffer, The Human Equation: Building Profits by Putting People First, Boston,
       MA: Harvard Business School Press, 1998. A thoughtful argument for the power of “high
       commitment” work systems. Pfeffer identifies a bundle of interrelated HR practices that
       he believes are key to sustained success. He summarizes evidence concerning the
       bottom-line effects of “people-centered” management practices, notes some reasons why
       organizations fail to utilize these practices, and recommends steps managers can take to
       create and sustain a “people-centered” approach to HRM.
       3. Robert S. Kaplan and David P. Norton, The Balanced Scorecard, Boston: Harvard
       Business School Press, 1996. You have already been exposed to the concept of the
       balanced scorecard in your accounting class. This book outlines the steps necessary to
       think through the measurements that will drive the execution of strategy. Although not
       specifically oriented toward HR, the logic for deriving relevant HR measures is similar.
       4. Frederick Reichheld (with Thomas Teal), The Loyalty Effect: The Hidden Force
       Behind Growth, Profits, and Lasting Value, Boston: Harvard Business School Press, 1996.
       Reichheld is a Bain consultant who has discovered the importance of employee loyalty
       and HRM. The book argues that economic value may be created in business through
       employee and customer loyalty. Reichheld also discusses the analyses necessary to make
       sound economic decisions with regard to these issues.

Optional readings can be accessed through links on this web site. New readings will be added
regularly throughout the class, so make a point of checking the web site regularly.
Session 1 -- April 3
Topics
         Talent Acquisition, Retention, Development and Strategy
         Can People Be a Source of Sustained Advantage?
Case
      Infosys: Building a Talent Engine to Sustain Growth. (Stanford Case #HR-30)
Reading
          Class Notes: Chapter 1, "Human Resource Management Strategy"
      Michael E. Porter, ``What is Strategy?'' Harvard Business Review, November/December
      1996. (This was assigned in the core strategy class and should be in your case packet from
      that class.)
      Peter Capelli and Anne Crocker-Hefter. 1996. “Distinctive human resources
      are firms’ core competencies,” Organizational Dynamics, 24(3):7-22.

Discussion Questions

         1. What is Infosys’s source of competitive advantage?
         2. What are the key HR practices to implement their strategy?
         3. Is Infosys is investing in general human capital – are the skills employees are trained in can
         be used by other firms that poach talent away from Infosys. According to human capital
         theory, firms generally should invest in only firm-specific human capital. Why do you think
         this investment has paid off for Infosys?
         4. What do you think of the proposal before Mr. Pai? How would you structure such a
         market?
         5. What other challenges confront Infosys? What would you recommend that Nilekani
         do?
Recommended Reading
     BK, ``Introduction,'' Chapter 1
     BK, "The Five Factors” and “Employment as a Social Relation.” Chapters 2 & 5.
     BK, "Training” and “Promotion and Career Concerns.” Chapters 15 & 16.
     Sol E. Solomon “The Battle for Asia’s Tech Talent”, Business Week, February 12, 2008.
     Pete Engardio “India’s Talent Gets Loads of TLC”, Business Week, august 9, 2007

Related Web Site



Session 2 -- April 8
Topic
         Selection and Recruiting
Case
         S.G. Cowen: New Recruits (HBS #9-402-028)
Reading
   A Note on the Hiring and Selection Process, HBS # 9-393-093

Discussion Questions
      1. What skills should Cowen look for? What is the role of culture and strategy in
      determining the firm's optimal skill mix?
        2. What is the value of "informational interviews" given that they are costly and not used
        to screen people?
        3. Which of the four candidates do you think has the "highest upside"? Which has the
        "lowest downside"? How should this affect the firm's hiring decision?
        4. Cowen has chosen not to recruit at the very best schools because of competition for
        students. Is this a good idea? Why or why not?
        5. Which two of the four candidates would you make offers to? Why?
Recommended Reading
       BK, " “Staffing and Recruitment.” Chapters 3 & 14.
       PS “Do the best Organizations have the Best People”, Chapter 4
       Michael Spence, "Job Market Signaling," Quarterly Journal of Economics, 1971. (This is
       the paper that won our former dean the Nobel Prize in Economics in 2001. The first 5
       pages or so -- through Section 3 -- are not at all technical and lay out his idea very clearly.)
       Kurt Roon “Rethinking Talent Acquisition”, Business Week, March 5, 2007
Related Web Site




Session 3 -- April 10

Topic
        Designing jobs and work

Case
      Building to a Crescnedo. HBS (9-804-009)
Reading


Discussion Questions
        1. What are the elements of the ‘radical’ structure used at Crescendo? Under what
           conditions can it outperform the traditional VC early stage model?
        2. Would you invest in Crescendo’s fund? Would you work for them as an MBA? As a
           GP?
        3. Should Spreng change the organization of work? If so, how?
Recommended Reading
     BK, "High-Commitment HRM” and “Job Design.” Chapters 9 & 13.
     “For Cognizant Two’s Company”, Business Week, January 17, 2008
     “ I Can’t Believe They Took the Whole Team”, Business Week, December 16, 2006.
     Ruth Wageman, “Critical Success Factors for Creating Superb Self-Managing Teams,”
     Organizational Dynamics (Summer, 1997), pp 49-61. (On reserve in Jackson Library.)


Session 4 -- April 15
Topic
Subjective and Objective Measures of Performance

Case
Bezner, Bonder Lambert and Murphy. Ivey School of Business. 9B02D013 ( available from
ECCH).

Reading
   Delving into the Dark Side: The Politics of Executive Appraisal, Gioia, Dennis and Clinton
   Longenecker, Organizational Dynamics, Winter 94, 22, Issue 3: 47-49.

Discussion Questions
      1. Did Bezner make the right decision to institute the merit system?
       2. What should be the subjective and objective criteria of performance? Is the mix right?
       How should they be weighted?
       3. What is your position of the sample of six individuals? What will you recommend?
Recommended Reading
       BK, "Performance Evaluation.” Chapter 10.
       PS “Do Financial Incentives Drive Company performance”, Chapter 5
       “Reshaping Microsoft’s HR Agenda”, Business Week, September 10, 2007
       “The Struggle to Measure Performance”, Business Week, January 9, 2006
       PS “
Related Web Site



 Session 5 -- April 17
Topic
       Reward Systems
Case
       Lincoln Electric in China
       (INSEAD Case, European Case Clearing House Case #499-021-1)
Discussion Questions
      1. What were the key factors in Lincoln's historical success?
      2. Why might there be cultural barriers to exporting Lincoln's business model?
      3. Will Lincoln continue to be successful (generally, not just in China)? If not, what has
     changed? If so, do they have to do any further adapting?
     4. How should Lincoln adapt its US policies to operate in China?
Recommended Reading
     BK, "Pay For Performance” and “Compensation Systems: Forms, Bases, and
     Distribution of Rewards.” Chapters 11 & 12.


                                     Steven Greenhouse, "Altering of Worker Time Cards
       Spurs Growing Number of Suits," April 4, 2004.
       ``Lincoln Electric Experiences Season of Worker Discontent,'' Cleveland Plain Dealer,
       December 10, 1995.
                           ``A Model Incentive Plan Gets Caught in a Vise,'' January 22, 1996.

Related Web Sites
       Learn more about Lincoln Electric...




       ... and then buy yourself some great Lincoln Electric paraphernalia




Session 6 -- April 22
Topic
       Rewards: The Psychology of Employee Recognition
Case
       Employee Recognition at Intuit (Stanford Case #HR-31)
Reading
       Pfeffer, Jeffrey. 1998. “Six Dangerous Myths About Pay.” Harvard Business Review,
       May-June:109-119.
       Merit pay, performance appraisal, and individual motivation: An analysis and alternative
       Human Resource Management; New York; Donald Campbell and others, 37, 2:141-146.

                                       Jennifer Sarinow, ``Anybody Want to Take a Nap?,''
       January 24, 2005.

Discussion Questions
      1. What are the strengths and weaknesses of the employee recognition program at
          Intuit?
      2. Is it better for rewards to be scarce and selective, or frequent? What is the right
          frequency? How do you ensure it?
      3. What is the role of surprise in rewards? Are unexpected rewards better? How would
          you structure a program for them?
Recommended Reading
          PS: Is Work Fundamentally Different from the Rest of Life, and Should it be”?
          Chapter 3
                Matt Richtel, "Fringes vs. Basics in Silicon Valley," March 9, 2005.



Session 7 -- April 24

Topic
        Information Sharing and Empowerment: Markets for Ideas

Case
Rite Solutions: Mavericks Unleashing the Quiet Genius of Employees. Stanford CaseHR27

Reading
The Road to Empowerment: Seven Questions Every Leader Should Ask, Robert Quinn,
Gretchen Spreitzer, Organizational Dynamics, Autumn, 1997, Vol 26. 37-50.

Discussion Questions
      1. What is the Mutual Fun? An electronic suggestion box? Or is it more than that?
      2. What makes it work?
      3. Where can it be generalized?

Recommended Reading
PS: Change or Die, Chapter 7
Tom Davenport “Some Predictions about Prediction Markets”, Business Week, January 14, 2008
Rachel King “Hollywood Games People Play”, Business Week, August 7, 2006
Noam Cohen. “Google’s Lunchtime Betting Game”, New York Times, January 7, 2008


Session 8 -- April 29
Topic Cross-Cultural HRM

Cases
      NUMMI Stanford Case HR - 11
        People Management Fiasco at Honda Motorcycles and Scooters India. HKU 624
      (available from HBS)
Discussion Questions
      1. How did NUMMI convert rabble-rousing former GM employees into a high
          performance work unit?

        2. Why did workers at Honda Motorcyles and Scooters unionize?

        3.. Reflecting on the companies we have studied in this course, as well as your own work
        experience, what lessons do you draw about the respective roles that general managers
        and the HR function in organizations should play in the management of human
        resources?
Recommended Reading
Choe Sang-Hun “Two Hyundai Companies Deal Far Differently with Labor”, New York Times,
July 27, 2006
Jeremy Peters “Hardly a Union Hotbed, Toyota’s Kentucky Plant is a Test for Organizers, New
York Times. Sepetmber 4, 2007


Session 9 -- May 1
Topic
        Summary: Putting it all Together

Case
        Kenexa. Ivey School of Business. 9BO7C004.(Available from ECCH)

Discussion Questions
      3. As Wiley and Brooks, how would you use the data given to you to inform NCB
          managers of the drivers of service quality in branches.
      4. What recommendations would you offer to improve the performance of NCB?
      5. How would you organize the presentation to NCB top management?
        4. Reflecting on the companies we have studied in this course, as well as your own
        work experience, what lessons do you draw about the respective roles that general
        managers and the HR function in organizations should play in the management of
        human resources.
Recommended Reading
     PS: Why Every Company needs Evidence Based Management? Chapter 1
     PS: How to Practice Evidence Based Management, Chapter 2.