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Gaining a Competitive Advantage

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2 Gaining a Competitive Advantage
Chapter 1 Gaining a Competitive Advantage Discuss the roles and activities of a company’s 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 company’s balanced scorecard Discuss what companies should do to compete in the global marketplace

3 Gaining a Competitive Advantage
Chapter 1 Gaining a Competitive Advantage 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 .

4 The importance of HRM People is the key factor of production.
Productivity is the key to measure a nation’s economic growth potential, and labor quality is the key to improving productivity. Competition today is the competition for talents. Since man is the most uncontrollable and unpredictable variable of all production variables, organizational success depends on the management of people.

5 Evolution of HRM (1)Scientific management
Robert Owens: Pioneer of HRM, performance appraisal and pay for performance (fair treatment of employees) Frederic Taylor: Father of scientific management (2)Human behavior and relations The Hawthorne Studies by Westing House The happy workers are the most productive workers. (3)Behavioral science

6 What is human resource management
Definition of HRM: Human resource management refers to the policies, practices, and systems that influence employees’ behavior, attitudes, and performance Many companies refer to HRM as involving “people practices"

7 Functions of HRM Analysis and design of work HR Planning Recruiting
Training and development Compensation Performance management Employee relations

8 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

9 What Roles Do HR Departments Perform?
Strategic Partner Human Resources Administrative Expert Employee Advocate Change Agent

10 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

11 The HRM Profession HR salaries vary depending on education and experience as well as the type of industry HR specialists 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)

12 Competitive Challenges Influencing HRM
Three competitive challenges that companies now face will increase the importance of HRM practices: The Challenge of Sustainability The Global Challenge The Technology Challenge

13 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

14 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

15 The Sustainability Challenge
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

16 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

17 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

18 The Technology Challenge
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.

19 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

20 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 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

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