Transcript Slide 1
Human Resource Management:
Gaining a Competitive Advantage
Chapter 01
Human Resource Management:
Gaining a Competitive Advantage
McGraw-Hill/Irwin
Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.
Learning Objectives
Discuss roles and activities of HRM function
Discuss implications of the economy, makeup of the
labor force and ethics for company sustainability
Discuss how HRM affects a balanced scorecard
Discuss what companies should do to compete in
global marketplace
Identify how technology such as social networking is
influencing HRM
Discuss HRM practices that support highperformance work systems
Provide a brief description of HRM practices
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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.
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HRM Practices
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Responsibilities of HR Departments
1. 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
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HR as a Business with 3 Product Lines
Business
Partner
Services:
Developing
Effective HR
Systems,
Implementing
Plans, Talent
Management
Emphasis:
Knowing &
Influencing
Business
Strategic
Partner:
Contributing
To Business
Strategy
Emphasis:
Knowledge of
HR and the
Competition
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6 HR Competencies
Credible
Activist
Cultural
Steward
Talent Manager/
Organizational
Designer
Business
Ally
Strategic
Architect
Operational
Executor
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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-service – giving employees more direct
access to HR information (training, benefits, etc.)
Outsourcing – third party or consultant provides
HR services (payroll, benefits, etc.)
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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.
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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.
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HR Playing a Strategic Role
in the Business?
1. What is HR doing to provide value-added
services to internal clients?
2. What can HR add to the bottom line?
3. How are you measuring HR effectiveness?
4. How can we reinvest in employees?
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Questions, cont.
5. What HR strategy will get the business from
point A to point B?
6. What makes an employee want to stay?
7. How will we invest in HR for a better HR
department than competitors have?
8. What should we be doing to improve our
marketplace position?
9. What’s the best change to prepare for the
future?
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The HRM Profession
HR salaries vary according to position,
experience, education, training, location and
firm size. See: and Also
The primary professional organization for
HRM is the Society for Human Resource
Management (SHRM) (www.shrm.org)
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14
3 Competitive Challenges
Influencing HRM
Technology
Sustainability
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16
The Sustainability Challenge
Sustainability is the company’s ability to
make a profit without sacrificing the
resources of its employees, the community,
or the environment; 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.
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The Sustainability Challenge
Sustainability includes the ability to:
deliver a return to shareholders
provide high-quality products, services
and work experiences for employees
increase value placed on intangible
assets, human capital and social
responsibility
adapt to changing characteristics and
expectations
of the labor force
address legal and ethical issues
effectively use new work arrangements
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Economy- Implications for HR
Structure of the economy
Development and speed of social media
Growth in professional and service occupations
Skill demands for jobs are changing
Knowledge is becoming more valuable
Intangible assets
Knowledge workers
Empowerment
Learning organization
Social collaboration and social networking
technology
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The Sustainability Challenge
Psychological
Contract – what
employers and
employees bring
to the
relationship
Alternative
Work
Arrangements
Changes in
Employment
Expectations
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Common Themes of 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
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Talent Management
Talent management is the systematic planned
strategic effort by a company to use bundles of
HRM practices including acquiring and assessing
employees, learning and development,
performance management , and compensation to
attract, retain, develop, and motivate highly skilled
employees and managers.
Growth of contingent workers and part-time
employees
Alternative work arrangements
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23
The Balanced Scorecard
The balanced scorecard provides a view
of the company from the perspective of
internal and external customers, employees
and shareholders.
The balanced scorecard should be used
to:
Link HRM activities to the company’s business
strategy.
Evaluate the extent to which HR is helping meet
the company’s strategic objectives.
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The Balanced Scorecard
How do customers see us?
What must we excel at?
Can we continuously improve and create
value?
How do we look to shareholders?
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Customer Service and Quality
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.
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Customer Service and Quality
Malcolm Baldrige National Quality Award
ISO 9000:2000
Six Sigma Process
Lean Thinking
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Changing Demographics
Workforce Diversity
Internal labor force - current employees
External labor market - persons outside
the firm actively seeking employment
U.S. workforce is aging rapidly
Increased workforce diversity
Influence of immigration
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Managing a Diverse Workforce
To manage a diverse workforce, managers must develop
new skills to:
Communicate, coach and develop employees from a
variety of cultural and educational backgrounds,
ethnicity, age, ability and race.
Provide performance feedback based on objective
outcomes.
Create a work environment that makes it comfortable
for employees of all backgrounds to be creative and
innovative.
Recognize and respond to generational issues.
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30
Legal and Ethical Issues
5 legal areas that influenced HRM :
1.
2.
3.
4.
5.
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
Federal health care legislation
Companies which employ unlawful immigrants or abuse
laborers
Data-security practices and protecting intellectual property
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Legal and Ethical Issues
Ethics - the fundamental principles by which employees and
companies interact
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
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4 Principles of Ethical Companies
1. Successful companies, in relationships with
customers, vendors and clients, emphasize mutual
benefits.
2. Employees assume responsibility for the actions of
the company.
3. Companies have a sense of purpose or vision the
employees value and use in their day-to-day work.
4. They emphasize fairness; another person’s interests
count as much as their own.
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The Global Challenge
To survive companies must deal with the
global economy, compete in and develop
global markets and prepare employees for
global assignments.
Offshoring – exporting jobs from developed
countries to less developed countries
Onshoring – exporting jobs to rural parts of
the United States
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Technology Challenge
The overall impact of the Internet
The Internet has created a new
business model – e-commerce – for
conducting business transactions and
relationships electronically.
Social networking
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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
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The Technology Challenge
Advances in technology have increased:
use and availability of Human Resource
Information Systems (HRIS)
use and availability of e-HRM
competitiveness in high-performance work
systems
HR Dashboard Metrics
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High-Performance Work Systems
Work in teams, virtual teams’ and partnerships
Changes in skill requirements
Changes in company structure and reporting
relationships
Increased use and availability of e-HRM and Human
Resource Information Systems (HRIS)
HRM practices support high-performance work
systems through staffing, work design, training,
compensation and performance management.
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Meeting 4 Competitive Challenges
Through HRM Practices
HRM practices that help companies deal with
the four competitive challenges can be
grouped into four dimensions:
1.
2.
3.
4.
The HR environment
Acquiring and preparing HR
Assessment and development of HR
Compensating HR
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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.
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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.
Create pay systems, reward employee
contributions and provide benefits
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Summary
HR has three product lines: administrative services, business partner
services, and strategic services.
To successfully manage HR, individuals need personal credibility,
business and technology knowledge, understanding of business
strategy, and ability to deliver HR services.
HR management practices should be evidence-based.
HR practices are important for helping companies deal with
sustainability, globalization, and technology challenges.
HR managers must address global and technology challenges.
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