Learning Objectives Human Resource Management Gaining a Competitive Advantage Chapter 1 Human Resource Management: Gaining a Competitive Advantage roles and activities of a company s human resource management function implications of the economy, the makeup of the labor force, and ethics for company sustainability how human resource management affects a company s balanced scorecard Strategies companies should use to compete in the global marketplace the characteristics of the workforce and how they influence human resource management human resource management practices that support high-performance work systems McGraw-Hill/Irwin Copyright 2008 by The McGraw-Hill Companies, All Rights Reserved. 1-1 human resource management practices 1-2 Introduction Some Responsibilities of HR Departments 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 Employment and recruiting Training and development Compensation Benefits Employee services Employee and community relations Personnel records Health and safety Strategic planning 1-3 1-4
What Roles Do HR Departments Perform? What Competencies Do HR Professionals Need? Business Partner Services Administrative Services and Transactions Human Resources Strategic Partner 1-5 1-6 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 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. 1-7 1-8
The HRM Profession Competitive Challenges Influencing HRM HR salaries vary depending on education and experience as well as the type of industry Three competitive challenges that companies now face will increase the importance of HRM practices: The primary professional organization for HRM is the Society for Human Resource Management (SHRM) The Global Challenge The Challenge of Sustainability The Technology Challenge 1-9 1-10 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: Provide a return to shareholders Provide high-quality products, services, and work experiences for employees Increase value placed on intangible assets and human capital 1-11 1-12
Social responsibility Adapting to changing characteristics and expectations of the labor force Legal and ethical issues Effectively use new work arrangements 1-13 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 1-14 The Balanced Scorecard Changes in Employment Expectations: Psychological contract Alternative work arrangements 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. 1-15 1-16
The Balanced Scorecard How do customers see us? Customer Service and Quality Emphasis Total Quality Management (TQM) At what must we excel? Can we continue to improve and create value? How do we look to shareholders? 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 1-17 1-18 Customer Service and Quality Emphasis Malcolm Baldrige National Quality Award ISO 9000:2000 Six Sigma process 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 U.S. workforce is aging rapidly 1-19 1-20
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 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 1-21 1-22 Legal and Ethical Issues The Global Challenge 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 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 1-23 1-24
The Technology Challenge 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 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 1-25 1-26 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 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 1-27 1-28
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 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 1-29 1-30