Learning Objectives
• roles and activities of a company’s human resource
management function
Human Resource Management
Gaining a Competitive Advantage
• 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
Chapter 1
Human Resource Management:
Gaining a Competitive Advantage
• 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
• human resource management practices
McGraw-Hill/Irwin Copyright © 2008 by The McGraw-Hill Companies, All Rights Reserved.
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Some Responsibilities of HR
Departments
Introduction
•
•
•
•
•
•
Employment and recruiting
Training and development
Compensation
Benefits
Employee services
Employee and community
relations
• Personnel records
• Health and safety
• Strategic planning
• 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
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Basic Marketing – Chapter 6
Handout 6-
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What Roles Do
HR Departments Perform?
What Competencies Do HR
Professionals Need?
Business
Partner Services
Administrative
Services and Transactions
Human
Resources
Strategic Partner
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How is the HRM Function
Changing?
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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
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.
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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Basic Marketing – Chapter 6
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Competitive Challenges
Influencing HRM
The HRM Profession
• 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 Challenge of
Sustainability
• The primary professional organization for
HRM is the Society for Human Resource
Management (SHRM)
The Global
Challenge
The Technology
Challenge
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The Sustainability Challenge
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The Sustainability Challenge
Sustainability includes the ability to:
• Sustainability refers to the ability of
a company to survive and succeed
in a dynamic competitive
environment
™Provide a return to shareholders
• Stakeholders refers to
shareholders, the community,
customers, and all other parties that
have an interest in seeing that the
company succeeds
™Increase value placed on intangible
assets and human capital
™Provide high-quality products,
services, and work experiences for
employees
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Basic Marketing – Chapter 6
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The Sustainability Challenge
The Sustainability Challenge
• The changing structure of the economy
™Social responsibility
• Skill demands for jobs are changing
™Adapting to changing characteristics
and expectations of the labor force
• 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
™Legal and ethical issues
™Effectively use new work arrangements
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The Sustainability Challenge
• Learning organization
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The Balanced Scorecard
• Psychological contract
• The balanced scorecard gives managers the
opportunity to look at the company from the
perspective of internal and external customers,
employees and shareholders.
• Alternative work arrangements
• The balanced scorecard should be used to:
Changes in Employment Expectations:
– 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.
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Basic Marketing – Chapter 6
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Customer Service and
Quality Emphasis
The Balanced Scorecard
• How do customers see us?
• Total Quality Management (TQM)
• At what must we excel?
• 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
• Can we continue to improve and create
value?
• How do we look to shareholders?
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Customer Service and
Quality Emphasis
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Changing Demographics
Diversity of the Workforce
• Malcolm Baldrige National
Quality Award
• Internal labor force is the labor force of
current employees
• ISO 9000:2000
• External labor market includes persons
actively seeking employment
• Six Sigma process
• The U.S. workforce is aging rapidly
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Basic Marketing – Chapter 6
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Managing a Diverse Workforce
Legal and Ethical Issues
To successfully manage a diverse workforce,
managers must develop a new set of skills,
including:
• Five main areas of the legal environment have
influenced HRM over the past 25 years
¾Communicating effectively with employees from a
wide variety of cultural backgrounds
¾Coaching and developing employees of different
ages, educational backgrounds, ethnicity, physical
ability, and race
¾Providing performance feedback that is based on
objective outcomes
¾Creating a work environment that makes it
comfortable for employees of all backgrounds to be
creative and innovative
– 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
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Legal and Ethical Issues
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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
• 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 Technology Challenge
The Technology Challenge
• Advances in technology have:
–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
–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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Meeting Competitive Challenges
Through HRM Practices
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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Basic Marketing – Chapter 6
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• 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
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
• Managers need to ensure that employees
have the necessary skills to perform
current and future jobs.
• Customer needs for new products or
services influence the number and type of
employees businesses need to be
successful
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Basic Marketing – Chapter 6
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• 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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