Session 1: The Strategic Importance of HR
Case: Southwest Airlines: Using Human Resources for Competitive Advantage (A), Stanford Case #HR-1.
Reading: Pfeffer, Jeffrey. The Human Equation: Building Profits by Putting People First. Boston, MA: Harvard Business School Press, 1998, chapters 1 and 2.
- What is Southwest's competitive strategy? What are the sources of its success? How does it make money?
- What are the foundations of Southwest's competitive advantage?
- How are these sources of competitive advantage produced and sustained by what the organization does and how it does it?
- To what extent are Southwest's sources of advantage difficult to imitate and likely to persist over time?
- To what extent is Southwest's success based on Herb Kelleher?
- How serious is the competitive threat? To what extent can United and/or Continental duplicate Southwest's business model? Why or why not?
Session 2: Strategic Execution and Economic Value: Internal and External Alignment
Case: Portman Hotel, HBS 9-489-104.
- What is Portman's strategy for competing successfully in its chosen market?
- What behaviors, skills, and attitudes will it need from its people, particularly the personal valets, to execute its strategy?
- How do Portman's human resource management practices (recruitment, selection, compensation, training, career development, performance appraisal, staffing and organizational design, management and supervision) help or hinder the development of the skills and behaviors listed in Question 2.
- Is Portman having problems? What are the symptoms? What are the causes of the problems Portman is experiencing?
- What should Portman do?
- How much should Portman be willing to invest to address its difficulties? Or alternatively, what is the successful implementation of Portman's strategy worth? Some operating figures are given in the case. FYI: the capital costs of the hotel work out to $310,000 per room.
Session 3: Work Systems
Cases: New United Motors Manufacturing, Inc (NUMMI), Stanford Case #HR-11.
Optional Reading: Rubinstein, Saul R., and Thomas A. Kochan. Learning from Saturn: Possibilities for Corporate Governance and Employee Relations. Ithaca, NY: Cornell University/ILR Press, 2001.
- What is motivating the workers at NUMMI?
- What are the design elements of the Toyota team-based manufacturing system?
- Why has General Motors had so much trouble learning from NUMMI and Saturn?
- Jamie Hresko is now running one of GM's largest assembly plants. What advice would you give him for how he might introduce some of the NUMMI methods to this facility?
Session 4: The Role of the HR Function
Reading: Ulrich, Dave. Human Resource Champions: The Next Agenda for Adding Value and Delivering Results. Boston, MA: Harvard Business School Press, 1998, pp. 23-31 and 231-254.
Session 5: Self-Managed Teams
Case: Slade Plating Department, HBS #9-496-018
Reading: Wageman, Ruth. "Critical Success Factors for Creating Superb Self-Managing Teams." Organizational Dynamics. Summer 1997, pp. 49-61.
- How would you describe the culture of the Sarto group? Be specific. How has it evolved? What impact has it had on the effectiveness of the group?
- What are the determinants of social status and influence within the plating department? The Sarto group? The Clark group?
- What do you learn by analyzing the data provided in the exhibits? How does this influence your interpretations of what is going on?
- Why did management previously ignored the illegal "punch-out" system?
- What actions would you take if you were Porter? What are the risks associated with these actions?
Important supplemental information: The 1996 starting salary in the Plating Department was $8.00; Tony Sarto's hourly wage was $12.00. The average wage for semi-skilled workers in the U.S. was $12.00. Firms similar to Slade in the Michigan area, such as suppliers to the auto industry, paid an average hourly wage of $14.70. United Auto Workers working at the 'Big Three (General Motors, Chrysler and Ford), had starting salaries around $13.00 an hour and earned on average $19.00 an hour. The minimum wage in 1996 was $4.25, raised to $4.75 on October 1, 1996.
Session 6: Participation and Involvement
Film: Breakdown at Eastern Airlines
Reading: Pfeffer, Jeffrey. "Can You Manage With Unions." Chap. 8 in The Human Equation: Building Profits by Putting People First. 2000, pp. 225-251.
Session 7: Training and Development
Case: ServiceMaster Industries, Inc., HBS #9-388-064.
- What role have ServiceMaster's values and goals played in the firm's success?
- Why haven't other companies successfully copied the ServiceMaster approach?
- How important are training and development in the ServiceMaster system? How does ServiceMaster socialize its employees? How does training and development affect the organization's continued growth?
- Why has ServiceMaster been willing to spend the resources it has on training and development for a set of jobs that many might see as comparatively low-skilled and for positions that typically experience high turnover?
- There have been proposals (particularly by former U.S. Secretary of Labor, Robert Reich) that the U.S. follow the lead of some other countries (e.g., France, Singapore) and mandate a certain level of training--for instance, as a percentage of the firm's payroll. What do you think of this policy? Why and when might organizations spend less than a socially optimal amount on training? What else might be done if one believes that too little training and skill development are occurring in the economy?
Session 8: Culture
Case: Morgan Stanley: Becoming a One-Firm Firm, HBS #9-400-043.
Reading: Kaplan, R. S., and D. P. Norton. "Linking the Balanced Scorecard to Strategy." California Management Review 39, no.1 (Fall 1996).
- What do you think of Mack's strategy for increased integration? Is this compelling to you? Why or why not?
- Given his strategy, what do you think of his emphasis on revamping the performance management system? What are the pros and cons of implementing a new system of the type being discussed?
- If Mack is to be successful at changing the strategy and culture at Morgan Stanley, what other actions would you recommend he take? What other HR levers should he be thinking about using?
- Given your answer to question #3, what recommendations do you have for how he should proceed? How should he implement these changes?
Session 9: Performance Appraisal
Case: The Firmwide 360 Performance Evaluation Process at Morgan Stanley, HBS #9-498053 and Rob Parson at Morgan Stanley (A), HBS #9-498-054.
- What is your assessment of Parson's performance? Should he be promoted?
- Using the data in the case, please complete the Evaluation and Development Summary presented in Exhibit 3 of the Rob Parson (A) case.
- If you were Paul Nasr, how would you plan to conduct the performance appraisal conversation? What would your goals be? What issues would you raise and why, and how would you raise them?
- If you were Rob Parson, how would you conduct yourself in the performance evaluation meeting? What are your goals? Be prepared to role-play the appraisal conversation in class as either Nasr or Parson.
Cases to be distributed in class: Rob Parson at Morgan Stanley (B), HBS #9-498-055, (C), HBS #9-498-056, and (D), HBS #9-498-058.
Session 10: Diversity
Case: The Case of the Part-time Partner.
Reading: Thomas, David A., and Robin J. Ely. "Making Differences Matter: A New Paradigm for Managing Diversity." Harvard Business Review (September-October 1996): 80-90.
- Would you vote to make Julie a partner? Why or why not?
- What are the pros and cons from the firm's viewpoint and from the society's viewpoint of this decision?
- What is your assessment of how the firm handled the situation?
- How might they have proceeded differently?
Session 11: Information Sharing
Case: Jack Stack (A) and (B), HBS #9-993-009 and #9-993-010.
Reading: Case, John. "Opening the Books." Harvard Business Review (March-April 1997): 118-127. (Reprint 97201)
- What does it take to succeed in the engine remanufacturing business? What are the critical skills and organizational competencies?
- What is it like to work in such a plant?
- What are the major risks of a leveraged buy-out such as this?
- What do you think of Stack's ideas about management?
- What are the key elements of the program Stack put in place?
- Can this approach be used elsewhere? Under which circumstances would it be more (less) appropriate? How could it be implemented?
Session 12: Benefits
Case: The SAS Institute: A Different Approach to Incentives and People Management Practices in the Software Industry, Stanford Case #HR-6.
Reading: Pfeffer, Jeffrey. "Six Dangerous Myths About Pay." Harvard Business Review (May-June 1998): 109-119.
- What are the complementary elements of the SAS HR system that make the compensation system effective?
- Why has SAS been able to get away with a compensation system that seems to violate industry conventions?
- Could the SAS approach work in other high technology organizations?
- What would happen if VDS tried to emulate the SAS approach? Why?
Session 13: Compensation Systems
Case: Visionary Design Systems, HBS #9-495-011.
- What is the basic philosophy and values of VDS?
- How would you characterize the VDS compensation (base, bonus, and stock) system? On what principles is it based?
- Why has VDS had problems with its Product Data Management effort? To what extent do you see incentive issues as important? What other issues are important?
- What should VDS do about the Product Data Management (PDM) problems?
- Would you make any changes to VDS' compensation systems? What? Why?
Session 14: Pay for Performance
Case: Performance Pay at Safelite Autoglass (A) HBS #9-800-291.
- What are the pros and cons of switching from wage rates to piece rate pay?
- Is Safelite a good candidate for switching from wage rates to piece rates?
- Should there be a guaranteed wage? If so, how should it be set?
- What are the likely consequences of a switch from wage to piece rates for turnover, recruitment, productivity, and product quality?
Session 15: Non-Profit Management
Case: The John Snow Institute.
- How successful is JSI?
- How effective is their current human resource management system?
- What should Joel Lamstein do?
Session 16: Managing Service Workers
Case: Harrah's Entertainment, Inc.: Rewarding Our People HBS #9-403-008.
- What were the challenges facing Gary Loveman when he took charge?
- What were the key changes he undertook?
- What were the consequences for employees?
Session 17: Alignment and Motivation
Case: Nordstrom Department Store. Center for Human Resources, Wharton School of the University of Pennsylvania.
Reading: Simons, Robert. "Control in an Age of Empowerment." Harvard Business Review. Reprint #95211.
- How effective is Nordstom's human resource management system? In what ways does it contribute to the firm's success?
- Do you have any concerns about the practices described in the case?
- Would you change management systems at Nordstrom? Why? Which systems?
Session 18: Review & Wrap-up
- 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?
Summary of Class Sessions and Assignment Due Dates (PDF)