Gaining a Competitive Advantage

2. Chapter 1 Gaining a Competitive Advantage 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

3. Chapter 1 Gaining a Competitive Advantage 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 .

4. The importance of HRM • People is the key factor of production. • Productivity is the key to measure a nation’s economic growth potential, and labor quality is the key to improving productivity. • Competition today is the competition for talents. • Since man is the most uncontrollable and unpredictable variable of all production variables, organizational success depends on the management of people.

5. Evolution of HRM (1)Scientific management • Robert Owens: Pioneer of HRM, performance appraisal and pay for performance (fair treatment of employees) • Frederic Taylor: Father of scientific management (2)Human behavior and relations • The Hawthorne Studies by Westing House • The happy workers are the most productive workers. (3)Behavioral science

6. What is human resource management Definition of HRM: • Human resource management refers to the policies, practices, and systems that influence employees’ behavior, attitudes, and performance • Many companies refer to HRM as involving “people practices"

7. Functions of HRM • Analysis and design of work • HR Planning • Recruiting • Training and development • Compensation • Performance management • Employee relations

8. 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

9. What Roles Do HR Departments Perform? Strategic Partner Human Resources Administrative Expert Employee Advocate Change Agent

10. How is the HRM Function Changing? • The amount of time that the HRM function devotes to administrative tasks is decreasing and its roles as a strategic business partner, change agent, and employee advocate are increasing • In shifting the focus from current operations to strategies for the futureand preparing non-HR managers to develop and implement HR practices, HR managers face two important challenges: • Self-service refers to giving employees online access to information about HR issues • Outsourcing refers to the practice of having another company provide services

11. The HRM Profession • HR salaries vary depending on education and experience as well as the type of industry • HR specialists • HR generalists • College degrees are held by the vast majority of HRM professionals • Professional certification is less common than membership in professional associations • The primary professional organization for HRM is the Society for Human Resource Management (SHRM)

12. 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

13. 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 • Sustainability includes the ability to: • deal with economic and social changes, • engage in responsible and ethical business practices, • provide high quality products and services, and • put in place methods to determine if the company is meeting stakeholders’ needs

14. The Sustainability Challenge • The changing structure of the economy • Impact of September 11, 2001 • The competition for labor • Skill demands for jobs are changing • Knowledge is becoming more valuable • Intellectual capital refers to the creativity, productivity, and service provided by employees • Knowledge workers are employees who contribute to the company not through manual labor but through a specialized body of knowledge • Empowerment means giving employees responsibility and authority to make decisions regarding all aspects of product development or customer service

15. The Sustainability Challenge • A learning organization embraces a culture of lifelong learning, enabling all employees to continually acquire and share knowledge • The psychological contract describes what an employee expects to contribute and what the company will provide to the employee for these contributions • Alternative work arrangements include independent contractors, on-call workers, temporary workers, and contract company workers

16. The Global Challenge • Companies are finding that to survive they must compete in international markets as well as fend off foreign corporations’ attempts to gain ground in the U.S. • Every business must be prepared to deal with the global economy. This is made easier by technology. • Offshoring refers to the exporting of jobs from developed countries to less developed countries. • Many companies are entering international markets by exporting their products overseas, building manufacturing facilities in other countries, entering into alliances with foreign companies, and engaging in e-commerce

17. The Technology Challenge • Technology has reshaped the way we play, plan our lives, and where we work • 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

18. The Technology Challenge • Advances in technology have: • changed how and where we work, • resulted in high-performance models of 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, • increased the availability of Human Resource Information Systems (HRIS), which are used to acquire, store, manipulate, analyze, retrieve, and distribute HR information, • increased the availability of e-HRM, which is the processing and transmission of digitalized information used in HRM, • increased the competitiveness of high performance work systems.

19. 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

20. 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 • 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 • Human resource management practices of both managers and the human resource function must be aligned and contribute to the company’s strategic goals