Human Resource Management Gaining a Competitive Advantage

Chapter 1 Human Resource Management: Gaining a Competitive Advantage

McGraw-Hill/Irwin Copyright 2008 by The McGraw-Hill Companies, All Rights Reserved.

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Learning Objectives
After reading this chapter, you should be able to:
Discuss the roles and activities of a companys 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 companys 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

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Introduction
Competitiveness a companys ability to maintain and gain market share. It is related to companys competitiveness. Human resource management the policies, practices, and systems that influence employees behavior, attitudes, and performance
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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
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What Roles Do HR Departments Perform?

Business Partner Services

Administrative Services and Transactions

Human Resources

Strategic Partner

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What Competencies Do HR Professionals Need?

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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

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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 companys bottom line or key stakeholders.

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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)

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Competitive Challenges Influencing HRM

Three competitive challenges that companies now face will increase the importance of HRM practices: Challenge of The
Sustainability
includes providing a return to shareholders, providing high quality products and services and experiences for employees, social responsibility, and effectively using new work arrangements.

The Global Challenge The Technology Challenge

In order to survive, companies must, improve HRM Practices, develop global markets and better prepare employees for global assignments.

with advances in technology, companies must change employees and managers work roles, create high performance work systems, and develop-commerce and e-HRM.

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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
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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

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The Sustainability Challenge

Changes in Employment Expectations: Psychological contract Alternative work arrangements

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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 companys business strategy. Evaluate the extent to which the human resource function is helping the companys meet its strategic objectives.

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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?

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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

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Customer Service and Quality Emphasis

Malcolm Baldrige National Quality Award ISO 9000:2000 Six Sigma process

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Changing Demographics Diversity of the Workforce

Internal labor force is the labor force of current employees External labor market includes persons actively seeking employment The workforce is aging rapidly

year old and older is projected to increase Work performance and learning are not adversely affected by aging

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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
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Legal and Ethical Issues

Five main areas of the legal environment have influenced HRM in Malaysia
Employment law Trade unionism and Industrial Relations law Employee safety and health (OCHA 1994) Employee pay and benefits Employee privacy sexual harrassment Job security

Women and minorities still face the glass ceiling

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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

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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

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The Technology Challenge

The overall impact of the Internet The Internet has created a new business model ecommerce in which business transactions and relationships can be conducted electronically

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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 the use and availability of Human Resource Information Systems (HRIS) increased the use and availability of eHRM increased the competitiveness in high performance work systems

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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
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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

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