Chapter 1

Human Resource Management:

Gaining a Competitive Advantage

Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

1-2

Learning Objectives

1. Discuss roles and activities of HRM function

2. Discuss implications of the economy, makeup of the labor force and ethics for company sustainability

3. Discuss how HRM affects a balanced scorecard

4. Discuss what companies should do to compete in global marketplace

5. Identify how technology such as social networking is influencing HRM

6. Discuss HRM practices that support high-performance work systems

7. Provide a brief description of HRM practices

Introduction

Competitiveness – a company’s ability to maintain and gain market share.

Human resource management (HRM) – the policies, practices, and systems that influence employees’ behavior, attitudes and performance.

1-3

1-4

HRM Practices

Responsibilities of HR Departments1. Employment and Recruiting

2. Training and Development

3. Compensation

4. Benefits

5. Employee Services

6. Employee and Community Relations

7. Personnel Records

8. Health and Safety

9. Strategic Planning

1-5

HR as a Business with 3 Product Lines

Business Partner Services

Strategic Partner

HumanResources

1-6

1-7

6 HR Competencies

Strategic Role of the HRM Function

Time spent on administrative tasks is decreasing.

HR roles as a strategic business partner, change agent and employee advocate are increasing.

HR is challenged to shift focus from current operations to future strategies and prepare non-HR managers to develop and implement HR practices.

This shift presents two challenges:Self-serviceOutsourcing

1-8

1-9

Shared Service Model

Shared Service Model is a way to organize the HR function that includes centers of expertise or excellence, service centers and business partners to help control costs and improve business-relevance and timeliness of HR practices.

1-10

HR’s Strategic Role in the Business

1. What is HR doing to provide value-added services to internal clients?

2. How are you measuring HR effectiveness?

3. How can we reinvest in employees?

4. What HR strategy will get the business from point A to point B?

5. What makes an employee want to stay?

6. How will we invest in HR for a better HR department than competitors?

7. What should we be doing to improve our marketplace position?

8. What’s the best change to prepare for the future?

1-11

How is the HRM Function Changing?

As part of its strategic role, HR can engage in evidence-based HR.

Evidence-based HR – demonstrating that HR practices have a positive influence on the company’s bottom line or key stakeholders.

1-12

The HRM ProfessionHR salaries vary according to position,

experience, education, training, location and firm size.

The primary professional organization for HRM is the Society for Human Resource Management (SHRM) (www.shrm.org)

3 Competitive Challenges Influencing HRM

1-13

The Sustainability Challenge

Sustainability is the ability of a company to survive and succeed in a dynamic competitive environment.

Stakeholders include shareholders, the community, customers and all other parties that have an interest in seeing that the company succeeds

1-14

1-15

The Sustainability Challenge

Sustainability includes the ability to:deliver a return to shareholders provide high-quality products, services and work

experiences for employeesincrease value placed on intangible assets,

human capital and social responsibilityadapt to changing characteristics and

expectations of the labor forceaddress legal and ethical issueseffectively use new work arrangements

Economy - Implications for HRStructure of the economy

Social collaboration and social networking technology

Growth in professional and service occupations

Changing job skill demands

Intangible assetsKnowledge workersEmpowermentLearning organization

1-16

1-17

Change and Its Effect on Employment Relationships

Common Themes Employee Engagement

Pride and satisfaction with employer and job

Opportunity to perform challenging work

Recognition and positive feedback from contributions

Personal support from manager

Effort above and beyond the minimum

Understanding link between one’s job and company’s mission

Prospects for future growth with the company

Intention to stay with the company

1-18

1-19

Talent Management

Talent management is the systematic planned strategic effort to use bundles of HRM practices acquiring and assessing employees, learning and development, performance management and compensation to attract, retain, develop and motivate highly skilled employees and managers.

Alternative work arrangements include independent contractors, on-call workers, temporary workers, and contract company workers.

Demanding Work, but with more flexibility.

Balanced Scorecard and Social ResponsibilityBalanced scorecard provides a view of the company from the perspective of internal and external customers, employees and shareholders and is used to:

Link HRM activities to company’s business strategy.Evaluate extent HR is helping meet company’s strategic

objectives.Questions to identify HR related critical indicators or metrics:

1. How do customers see us?2. What must we excel at?3. Can we continuously improve and create value?4. How do we look to shareholders?

Social, ethical and environmental responsibility

1-20

Customer Service and Quality

Customers expect excellent service.

Total Quality Management (TQM) Core Values• Methods and processes are designed to meet internal and

external customers’ needs.• Every employee receives training in quality.• Promote cooperation with vendors, suppliers and

customers.• Managers measure progress with feedback based on data.• Quality is designed into a product or service so that errors

are prevented rather than being detected and corrected.

1-21

1-22

Customer Service and Quality

Malcolm Baldrige National Quality Award

ISO 9000:2000

Six Sigma Process

Lean Thinking

Changing Demographics and Workforce Diversity Internal labor force - current employees

External labor market - persons outside the firm actively seeking employment

Average age of U.S. workforce will age.

Increased workforce diversity

Influence of immigration

Generational differences.

Gender and racial composition of the workforce

1-23

Legal Issues

Employment laws and regulations

Eliminating discrimination and harassment

Workplace safety

Data security practices and protecting intellectual property

Electronic monitoring and surveillance

Employee privacy rights, intellectual property rights and social media

Federal health care legislation

Companies who employ unlawful immigrants or abuse laborers

1-24

Ethical Issues

Ethics - fundamental principles of right and wrong by which employees and companies interact

Ethical HR practices: HRM practices must result in greatest good for largest number of

people Employment practices must respect basic human rights of privacy,

due process, consent, and free speech Managers must treat employees and customers equitably and fairly Develop and distribute a Code Of Ethics, policy, process and procedures, audit and train employees

Sarbanes-Oxley Act of 2002

1-25

1-26

4 Principles of Ethical Companies

Global Challenges

1-27

1-28

Technology Challenge

1-29

HRIS, Cloud Computing, and HR Dashboards

High-Performance Work Systems

Work Teams, Virtual Teams and Partnerships

Changes in Skill Requirements and new technology

Changes in Company Structure and Reporting Relationships.

HRM practices support high-performance work systems through staffing, work design, training, compensation and performance management.

1-30

1-31

Meeting 4 Competitive Challenges Through HRM Practices

1-31

1-32

Meeting Competitive Challenges Through HRM Practices

Managing internal and external environmental factors allows employees to make greatest possible contribution to company productivity and competitiveness.

Customer needs for new products or services influence the number and type of employees businesses need to be successful.

Assessment, Development and Compensation of HR

1-33

Summary

HR has three product lines: administrative services, business partner services, and strategic services.

HR managers need personal credibility, business and technology knowledge, understanding of business strategy, and ability to deliver HR services.

HR practices are important for helping companies deal with sustainability, globalization, and technology challenges and should be evidence-based.