CHAPTER 1
Human Resource Management: Gaining a
Competitive Advantage
INTRODUCTION
Human Resource Management (HRM):
● Plays a role in company’s survival, effectiveness,
and competitiveness
→ companies are formed by people
→ company’s strengths are only kept when the
people are taken care of
● Refers to the policies, practices, and systems that
influence employees’ behavior
development.
development.
Performance
management.
Performance measures, preparation and administration of
performance appraisals, feedback and coaching,
discipline.
Compensation and
benefits.
Wage and salary administration, incentive pay, insurance,
vacation, retirement plans, profit sharing, health and
wellness, stock plans.
Employee relations/labor
relations.
Attitude surveys, employee handbooks, labor law
compliance, relocation and outplacement services.
Personnel policies.
Policy creation, policy communications.
Employee data and
information systems.
Record keeping, HR information systems, workforce
analytics, social media, intranet and Internet access.
Legal compliance.
Policies to ensure lawful behavior; safety inspections,
accessibility accommodations, privacy policies, ethics.
Support for business
strategy.
Human resource planning and forecasting, talent
management, change management, organization
development.
→ usually each function is a department on its own
→ performance management tends to be with analysis
and design of work in one department.
→ you can specialize in one of these or be a generalist
→ one not functioning well => affect company’s
performance
What Responsibilities and Roles Do HR Departments
Perform?
High-Impact HR Functions:
● More integrated with the business.
● Skilled at attracting and retaining employees.
● Can adapt quickly.
→ be able to respond quickly
● Identify and promote talent from within.
→ not let it be a dead-end job w/o promotions
● Identify what motivates employees.
→ not only money as motivation
● Continuously building talent and skills.
→ learning is not a one time thing
→ internal programs to build talent and skills
→ sends a message to employees that they are
thought of and valued
Table 1.1 Responsibilities of HR Departments
FUNCTION
RESPONSIBILITIES
Analysis and design of
work.
Job analysis, work analysis, job descriptions.
Recruitment and
selection.
Recruiting, posting job descriptions, interviewing, testing,
coordinating use of temporary employees.
Training and
Orientation, skills training, development programs, career
Strategic Role of the HRM Function
HRM Role:
● Time spent on administrative tasks is decreasing.
● Roles as a strategic business partner, change
agent, and employee advocate are increasing.
→ from heavy focus in admin tasks to strategic partner
→ in small companies, hr deparment may not exist
Role of Technology:
● Reducing HRM role in administrative tasks,
maintaining records, and providing self-service to
employees.
● Shift to self-service gives employees access to
many HR functions.
● HR managers have more time to work with
managers on employee issues.
→ because technology has made way for tasks like
encoding for more time => automation
Strategic Role of the HRM Function
Demonstrating the Strategic Value of HRM: HR Analytics
and Evidenced-Based HR.
HR can engage in evidence-based HR.
● Requires use of HR or workforce analytics.
→ something tangible
→ make tangible HR decisions based on the data that you
have
Big data:
● Information merged from HR databases, corporate
financial statements, employee surveys, and other
data sources.
● Results in evidence-based HR decisions.
● Show that HR practices influence the
organization's bottom line, including profits and
costs.
Competitive Challenges Influencing Human Resource
Management
Emphasize Empowerment and Continuous Learning:
● Give employees responsibility and authority.
● Hold them accountable.
● Employees share in the rewards and losses.
● Learning organization.
→ giving opportunities for employees to learn from
each other
Adapt to Change:
● Inevitable.
● Employees expected to take more responsibility
for own careers.
● Challenge is how to build a committed, productive
workforce.
● Employees manage change through agility.
● Changes in the employment relationship.
→ not everyone responds well to change
Maximize Employee Engagement:
● Passionate about their work.
● Committed to the company and its mission.
● Work hard to contribute.
● Measured with attitude or opinion surveys.
● Focus on employee experience.
● Employee value proposition (EVP).
→ collective term that encompasses all the things
that make an employee want to work for your
company
COMMON THEMES OF EMPLOYEE ENGAGEMENT
1.
2.
3.
4.
5.
6.
7.
Pride in employer.
Satisfaction with employer.
Satisfaction with the job.
Opportunity to perform challenging work.
Recognition and positive feedback.
Personal support from manager.
Effort above and beyond the minimum.
8. Understand link between one's job and
company's mission.
9. Prospects for future growth with the company.
10. Intention to stay with the company
→ high salaries are not enough to keep employees
Manage Talent:
● Acquiring and assessing employees.
● Learning and development.
● Performance management.
● Compensation.
→ all these are challenges
→ ex: people are joining learning and development just for
compliance then it defeats the purpose
Provide Flexibility to Help Employees Meet Work and Life
Demands.
● 46% of employees work more than 45 hours per
week.
● Both the company and employees can benefit.
● Desire to continue working remotely
post-pandemic.
● Companies' policies on remote work vary.
Meet the Needs of Stakeholders, Shareholders,
Customers, Employees, and Community.
● Demonstrate performance to stakeholders: the
balanced scorecard.
→ you focus on a number of dimensions to say that
you are successful
→ not purely just focusing on profits
● Being customer-focused.
● Improving quality.
● Emphasizing teamwork.
● Reducing new product and service development
times.
● Managing for the long term.
Demonstrate Social Responsibility.
● Helps boost company's image with customers.
● Helps gain access to new markets.
● Helps attract and retain talented employees.
→ instill pride in employees => become walking advocates
of the company
Aging of the Workforce:
● Labor force participation of those 55 years and
older expected to grow.
● HRM issues such as career plateauing, retirement
planning, and retraining older workers.
The Multigenerational Workforce:
● Five generations.
Competing through Globalization.
Entering International Markets.
● Exporting products overseas.
● Building manufacturing facilities or service centers
in other countries.
● Entering into alliances with other companies.
● Engaging in e-commerce.
● Offshoring and reshoring.
→ offshoring: sending work to another country
Ex: filipinos answering for american calls
→ reshoring: bring back
Competing through Technology.
● Artificial intelligence and robotics:
○ Provide skills that are difficult to find.
○ Perform some job tasks previously
completed by employees.
○ May eliminate some jobs.
→ as machines become more reliable, less people needed
in jobs
→ ex: making of cars
●
→ usually 3-5 generations
→ each generation adapt differently
Legal Issues:
● Employment laws and regulations.
● Eliminating discrimination and harassment.
● Health care coverage.
● Data security practices and protecting intellectual
property.
Ethical Issues.
● Ethics are the fundamental principles of right and
wrong.
● HR managers must satisfy these standards for their
practices to be considered ethical:
1. HRM practices must result in greatest good
for largest number of people.
2. Employment practices must respect basic
human rights of privacy, due process,
consent, and free speech.
3. Managers must treat employees and
customers equitably and fairly.
→ bad behaviors in company can spread if not regulated
Use HRIS, mobile devices, cloud computing, and
HR dashboards:
○ HRIS stores large quantities of employee
data.
○ Mobile devices increasingly used to
provide employees with anytime,
anywhere access to HR applications.
○ Cloud computing allows companies to
lease software and hardware.
○ HR dashboard provides access to
important HR metrics for workforce
analytics.
→ visual representation of data
CHAPTER 2
Strategic Human Resource
Management
WHAT IS STRATEGIC MANAGEMENT?
Strategic Human Resource Management (SHRM):
● A process.
● Approach to addressing competitive challenges
organizations face.
→ good employees = competitive advantage
→ so it’s a goal of the company to have the
majority of their employees to be good
● Managing the "pattern or plan that integrates an
organization's major goals, policies, and action
sequences into a cohesive whole."
→ includes how they are going to achieve it
● Developing strategies for achieving company's
goals in light of its current environment.
Components of the Strategic Management Process:
● Strategy formulation:
○ Strategic planning groups decide on
strategy.
● Strategy implementation:
○ Organization follows through on strategy.
→ plan -> implementation
→ ex: putting up a milktea store when there is already five
(5) in the area
❌❌
STRATEGY FORMULATION
Five Major Components:
● Mission (a statement of the organization's reason
for being).
→ a company’s North Star
● Goals (how to operationalize the mission).
→ something concrete
→ Vision: to be in the Top 5 Fast Food Chains
→ Mission: to serve good food and make people
happy
●
●
●
→ Goal: how do you do that?; specific targets
External analysis.
Internal analysis.
○ External analysis and internal analysis
combined constitute SWOT analysis.
Strategic choice.
→ decide which direction to go
STRATEGY IMPLEMENTATION
After an organization has chosen its strategy, it has to
execute that strategy-make it come to life in its day-to-day
workings. → executing what’s on paper; aka the doers
Five variables:
● Organizational structure.
● HRM tasks:
○ Task design.
○ Selection, training, and development of
people.
○ Reward systems.
● Types of information and information systems.
Table 2.3 Menu of HRM Practice Options
HRM Practice Options
→ the different areas of HR which would be influenced
by strategy formulation
● Job Analysis and Design.
● Recruitment and Selection.
● Training and Development.
● Performance Management.
● Pay Structure, Incentives, and Benefits.
● Labor and Employee Relations.
HRM Practices
→ the most prominent ones of the above [table 2.3]
● Recruitment:
○ Process through which the organization
seeks applicants for potential employment.
→ strategy you decide on will influence recruitment
→ ex: how will you recruit? Word of mouth,
advertisement, etc.
● Selection:
○ Process by which the organization
attempts to identify applicants with the
necessary knowledge, skills, abilities, and
other characteristics to help it achieve its
goals.
→ strategy will decide how stringent you are
→ ex: panel interview, personality tests, etc.
● Training:
○ Planned effort to facilitate the learning of
job-related knowledge, skills, and behavior.
→ for the actual job at hand
● Development:
○ Acquiring knowledge, skills, and behavior
that improve emplovees' ability to meet
challenges of existing jobs or jobs that do
not yet exist.
→ more long-term
→ prepare for the future
→ strategy will dictate how much effort you will put
into training and development
●
Pay structure, incentives, and benefits:
○ High pay and/or benefits relative to
competitors can help company attract and
retain high-quality employees.
■ Might have negative impact on
overall labor costs.
○ Tying pay to performance can elicit specific
activities and levels of performance from
employees.
→ strategy will decide whether you will pay
minimum wage or higher, bonus, etc.
●
Labor and employee relations:
○ Employees. Assets or expenses?
→ sir thinks they are both
→ assets: lifeblood, no employees = no
organization
→ expenses: salaries are usually the
highest + bonuses, etc.
○ How much should employees participate in
decision-making?
○ What rights do employees have?
○ What is the company’s responsibility to
employees?
→ if treated as family, more responsibilities
(ex: help even if not required)
→ tactical role: told exactly what to do, do
what is in the plan
→ strategic role: told the goal/objective,
but up to you how you do it