Human Resource Management Gaining a Competitive Advantage

1. Human Resource ManagementGaining a Competitive Advantage • Chapter 1 Human Resource Management: Gaining a Competitive Advantage

2. Learning Objectives After reading this chapter, you should be able to: • Discuss the roles and activities of a company’s human resource management function • Discuss the implications of the economy, the makeup of the labor force, and ethics for company sustainability • Discuss how human resource management affects a company’s balanced scorecard • Discuss what companies should do to compete in the global marketplace • Identify the characteristics of the workforce and how they influence human resource management • Discuss human resource management practices that support high-performance work systems • Provide a brief description of human resource management practices

3. Introduction • Competitiveness – a company’s ability to maintain and gain market share • Human resource management – the policies, practices, and systems that influence employees’ behavior, attitudes, and performance

4. Responsibilities of HR Departments • Employment and recruiting • Training and development • Compensation • Benefits • Employee services • Employee and community relations • Personnel records • Health and safety • Strategic planning

5. What Roles Do HR Departments Perform? Business Partner Services Human Resources Administrative Services and Transactions Strategic Partner

6. What Competencies Do HR Professionals Need?

7. How is the HRM Function Changing? • Time spent on administrative tasks is decreasing and its roles as a strategic business partner, change agent, and employee advocate are increasing • This shift presents two important challenges: • Self-service – giving employees online access to information about HR issues • Outsourcing – the practice of having another company provide services

8. How is the HRM Function Changing? • As part of its strategic role, one of the key contributions that HR can make is to engage in evidence-based HR. • Evidence-based HR – demonstrating that human resource practices have a positive influence on the company’s bottom line or key stakeholders.

9. The HRM Profession • HR salaries vary depending on education and experience as well as the type of industry • The primary professional organization for HRM is the Society for Human Resource Management (SHRM)

10. Three competitive challenges that companies now face will increase the importance of HRM practices: Competitive Challenges Influencing HRM The Challenge of Sustainability The Global Challenge The Technology Challenge

11. The Sustainability Challenge • Sustainability refers to the ability of a company to survive and succeed in a dynamic competitive environment • Stakeholders refers to shareholders, the community, customers, and all other parties that have an interest in seeing that the company succeeds

12. The Sustainability Challenge • Sustainability includes the ability to: • provide a return to shareholders • provide high-quality products, services, and work experiences for employees • increase value placed on intangible assets and human capital • social responsibility • Adapting to changing characteristics and expectations of the labor force • Legal and ethical issues • Effectively use new work arrangements

13. The Sustainability Challenge • The changing structure of the economy • Skill demands for jobs are changing • Knowledge is becoming more valuable • Intangible assets -- human capital, customer capital, social capital, and intellectual capital • Knowledge workers – employees who contribute to the company through a specialized body of knowledge • Empowerment – giving employees responsibility and authority to make decisions regarding all aspects of product development or customer service • Learning organization

14. The Sustainability Challenge Changes in Employment Expectations: • Psychological contract • Alternative work arrangements

15. The Balanced Scorecard • The balanced scorecard gives managers the opportunity to look at the company from the perspective of internal and external customers, employees and shareholders. • The balanced scorecard should be used to: • Link human resource management activities to the company’s business strategy. • Evaluate the extent to which the human resource function is helping the company’s meet it’s strategic objectives.

16. The Balanced Scorecard • How do customers see us? • What must we excel at? • Can we continue to improve and create value? • How do we look to shareholders?

17. Customer Service and Quality Emphasis • Total Quality Management (TQM) • Core values of TQM include: • designing methods and processes to meet the needs of internal and external customers • all employees receive training in quality • promotion of cooperation with vendors, suppliers, and customers • management gives feedback on progress

18. Customer Service and Quality Emphasis • Malcolm Baldrige National Quality Award • ISO 9000:2000 • Six Sigma process

19. Changing DemographicsDiversity of the Workforce • Internal labor force is the labor force of current employees • External labor market includes persons actively seeking employment • The U.S. workforce is aging rapidly

20. Managing a Diverse Workforce • To successfully manage a diverse workforce, managers must develop a new set of skills, including: • Communicating effectively with employees from a wide variety of cultural backgrounds • Coaching and developing employees of different ages, educational backgrounds, ethnicity, physical ability, and race • Providing performance feedback that is based on objective outcomes • Creating a work environment that makes it comfortable for employees of all backgrounds to be creative and innovative

21. Legal and Ethical Issues • Five main areas of the legal environment have influenced HRM over the past 25 years • Equal employment opportunity legislation • Employee safety and health • Employee pay and benefits • Employee privacy • Job security • Women and minorities still face the “glass ceiling” • Sarbanes-Oxley Act of 2002

22. Legal and Ethical Issues • Ethical HR practices: • HRM practices must result in the greatest good for the 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

23. The Global Challenge • To survive companies must compete in international markets • Be prepared to deal with the global economy. • Offshoring – exporting of jobs from developed countries to less developed countries • Onshoring – exporting jobs to rural parts of the United States

24. The Technology Challenge • The overall impact of the Internet • The Internet has created a new business model – e-commerce – in which business transactions and relationships can be conducted electronically

25. The Technology Challenge • Advances in technology have: • changed how and where we work • resulted in high-performance work systems • increased the use of teams to improve customer service and product quality • changed skill requirements • increased working partnerships • led to changes in company structure and reporting relationships

26. The Technology Challenge • Advances in technology have: • increased the use and availability of Human Resource Information Systems (HRIS) • increased the use and availability of e-HRM • increased the competitiveness in high performance work systems

27. Meeting Competitive Challenges Through HRM Practices • HRM practices that help companies deal with the four competitive challenges can be grouped into four dimensions • The human resource environment • Acquiring and preparing human resources • Assessment and development of human resources • Compensating human resources

28. Meeting Competitive Challenges Through HRM Practices • Managing internal and external environmental factors allows employees to make the 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

29. Meeting Competitive Challenges Through HRM Practices • Managers need to ensure that employees have the necessary skills to perform current and future jobs. • Besides interesting work, pay and benefits are the most important incentives that companies can offer employees in exchange for contributing to productivity, quality, and customer service