© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Gaining a Competitive Advantage

Gaining a Competitive Advantage

Discuss the roles and activities of a company’s human resource management functionDiscuss the implications of the economy, the makeup of the labor force, and ethics for company sustainabilityDiscuss how human resource management affects a company’s balanced scorecardDiscuss what companies should do to compete in the global marketplace

Chapter

1

Identify the characteristics of the workforce and how they influence human resource managementDiscuss human resource management practices that support high-performance work systemsProvide a brief description of human resource management practices

Gaining a Competitive Advantage

Gaining a Competitive Advantage

.

Chapter

1

© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

The importance of HRMThe importance of HRM

(1) People is the key factor of production.

(2) Productivity is the key to measure a nation’s economic growth potential, and labor quality is the key to improving productivity.

(3) Competition today is the competition for talents.

(4) Since man is the most uncontrollable and unpredictable variable of all production variables, organizational success depends on the management of people.

© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Evolution of HRMEvolution 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

© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

What is human resource managementWhat 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"

© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Functions of HRMFunctions of HRM

a. Analysis and design of work

b. HR Planning

c. Recruiting

d. Training and development

e. Compensation

f. Performance management

g. Employee relations

© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Responsibilities of HR DepartmentsResponsibilities of HR Departments

Employment and recruitingTraining and developmentCompensationBenefitsEmployee ServicesEmployee and community relationsPersonnel recordsHealth and safetyStrategic planning

© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

What Roles Do HR Departments Perform?

What Roles Do HR Departments Perform?

AdministrativeExpert

Change Agent

Strategic Partner

EmployeeAdvocate

HumanResources

© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

How is the HRM Function Changing?

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 future and 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 issuesOutsourcing refers to the practice of having another company

provide services

© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

The HRM ProfessionThe HRM Profession

HR salaries vary depending on education and experience as well as the type of industryHR specialistsHR generalistsCollege degrees are held by the vast majority of HRM

professionalsProfessional certification is less common than membership in

professional associationsThe primary professional organization for HRM is the

Society for Human Resource Management (SHRM)

© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Competitive Challenges Influencing HRM

Competitive Challenges Influencing HRM

Three competitive challenges that companies now face will increase the importance of HRM practices:

The GlobalChallenge

The Challenge ofSustainability

The TechnologyChallenge

© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

The Sustainability ChallengeThe 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

© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

The Sustainability ChallengeThe Sustainability Challenge

The changing structure of the economy Impact of September 11, 2001 The competition for labor

Skill demands for jobs are changingKnowledge 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

© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

The Sustainability ChallengeThe 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

© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

The Global ChallengeThe 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

© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

The Technology ChallengeThe Technology Challenge

Technology has reshaped the way we play, plan our lives, and where we workThe overall impact of the InternetThe Internet has created a new business

model – e-commerce – in which business transactions and relationships can be conducted electronically

© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

The Technology ChallengeThe 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.

© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Meeting Competitive Challenges Through HRM Practices

Meeting Competitive Challenges Through HRM Practices

HRM practices that help companies deal with the four competitive challenges can be grouped into four dimensionsThe human resource environmentAcquiring and preparing human resourcesAssessment and development of human

resourcesCompensating human resources

© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Meeting Competitive Challenges Through HRM Practices

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