CHAPTER 1
Human Resource Management: Gaining a
Competitive Advantage
Competitiveness - refers to a company’s ability
to maintain and gain market share in its industry.
Human resource management (HRM) refers to
the policies, practices, and systems that
influence employees’ behavior, attitudes, and
performance. Many companies refer to HRM as
involving “people practices"
Responsibilities of HR Departments
Employment and Recruiting
Training and development
Compensation
Benefit
Employee Services
Employee and community relations
Personnel records
Health and Safety
Strategic Planning
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 issues
Outsourcing - refers to the practice of having
another company provide Services
Demonstrating the Strategic Value of HR
Evidence-based HR - refers to the demonstration
that human resources practices have a positive
influence on the company’s bottom or key
stakeholders
(employees,
customers,
community, shareholders).
HR or workforce analytics - refers to the practice
of using quantitative methods and scientific
methods to analyze big data.
Big data - refers to information merged from
human resource databases, corporate financial
statements, employee surveys, and other data
sources to make evidence-based human
resource decisions and show that HR practices
influence the organization’s bottom line,
including profits and costs.
The HRM Profession: Positions & Jobs
HR salaries - vary depending on education and
experience as well as the type of industry.
 HR specialist
 HR generalists
 College degrees are held by the vast
majority of HRM professionals
 Professional certification is less common
than membership in professional
associations
The primary professional organization for HRM is
the Society for Human Resource Management
(SHRM)
The 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
The Sustainability Challenge
The changing structure of the economy
- Impact of September 11, 2001
- The competition for labor
Skill demands for jobs are changing
Knowledge 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
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
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 its strategic objectives.
Measures of human resource practices primarily
relate to productivity, people, and processes.
Customer Service and Quality Emphasis
Total Quality Management (TQM) is a companywide effort to continuously improve the ways
peoples, machines, and systems accomplish
work
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
Malcolm Baldrige National Quality Award established in 1987 to promote quality
awareness, to recognize quality achievements,
and to publicize successful quality strategies.
ISO 9000:2000 - quality standards adopted
worldwide.
Six Sigma process - system of measuring,
analyzing, improving, and controlling processes
once they meet quality standards.
Managing a Diverse Workforce
Internal labor force - is the labor force of current
employees.
External labor market includes persons actively
seeking employment.
The U.S. workforce is becoming increasingly
diverse.
- Women Minorities
- Disabled workers
- Immigrants
Changing Demographics Diversity of the
Workforce
1. Communicating
effectively
with
employees from a wide variety of
cultural backgrounds.
2. Coaching and developing employees of
different ages, educational backgrounds,
ethnicity, physical ability, and race.
3. Providing performance feedback that is
based on objective outcomes.
4. Creating a work environment that makes
it comfortable for employees of all
backgrounds to be creative and
innovative.
5. Recognizing
and
responding
to
generational issues.
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”
The Sarbanes-Oxley Act of 2002 sets strict rules
for corporate behavior and sets heavy fines for
noncompliance, especially in regards to
accounting practices
Human resource managers must satisfy three
basic standards for their practices to be
considered ethical:
- 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
equitably and fairly
The 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
The Technology Challenge
Technology has reshaped the way we play, plan
our lives, and where we work
- 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 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.
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
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 employee
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