2 Gaining a Competitive Advantage Chapter12Gaining a Competitive AdvantageDiscuss the roles and activities of a company’s human resource management functionDiscuss the implications of the economy, the makeup of the labor force, and ethics for company sustainabilityDiscuss how human resource management affects a company’s balanced scorecardDiscuss what companies should do to compete in the global marketplace
3 Gaining a Competitive Advantage Chapter13Gaining a Competitive AdvantageIdentify the characteristics of the workforce and how they influence human resource managementDiscuss human resource management practices that support high-performance work systemsProvide a brief description of human resource management practices.
4 Introduction4Competitiveness refers to a company’s ability to maintain and gain market share in its industryIt is related to company effectivenessHuman resource management refers to the policies, practices, and systems that influence employees’ behavior, attitudes, and performanceMany companies refer to HRM as involving “people practices".
5 Responsibilities of HR Departments 5Employment and recruitingTraining and developmentCompensationBenefitsEmployee ServicesEmployee and community relationsPersonnel recordsHealth and safetyStrategic planning
6 What Roles Do HR Departments Perform? 6Strategic PartnerHumanResourcesAdministrativeExpertEmployeeAdvocateChange Agent
7 How is the HRM Function Changing? 7The 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 increasingIn 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 issuesOutsourcing refers to the practice of having another company provide services
8 The HRM Profession8HR salaries vary depending on education and experience as well as the type of industryHR specialistsHR generalistsCollege degrees are held by the vast majority of HRM professionalsProfessional certification is less common than membership in professional associationsThe primary professional organization for HRM is the Society for Human Resource Management (SHRM)
9 Competitive Challenges Influencing HRM 9Three competitive challenges that companies now face will increase the importance of HRM practices:The Challenge ofSustainabilityThe GlobalChallengeThe TechnologyChallenge
10 The Sustainability Challenge 10Sustainability refers to the ability of a company to survive and succeed in a dynamic competitive environmentStakeholders refers to shareholders, the community, customers, and all other parties that have an interest in seeing that the company succeedsSustainability includes the ability to:deal with economic and social changes,engage in responsible and ethical business practices,provide high quality products and services, andput in place methods to determine if the company is meeting stakeholders’ needs
11 The Sustainability Challenge 11The changing structure of the economyImpact of September 11, 2001The competition for laborSkill demands for jobs are changingKnowledge is becoming more valuableIntellectual capital refers to the creativity, productivity, and service provided by employeesKnowledge workers are employees who contribute to the company not through manual labor but through a specialized body of knowledgeEmpowerment means giving employees responsibility and authority to make decisions regarding all aspects of product development or customer service
12 The Sustainability Challenge 12A learning organization embraces a culture of lifelong learning, enabling all employees to continually acquire and share knowledgeThe psychological contract describes what an employee expects to contribute and what the company will provide to the employee for these contributionsAlternative work arrangements include independent contractors, on-call workers, temporary workers, and contract company workers
13 The Balanced Scorecard 13The 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.Measures of human resource practices primarily relate to productivity, people, and processes.
14 The Balanced Scorecard 14CustomerInternalInnovationand LearningFinancialHow do customers see us?What must we excel at?Can we continue to improveand create value?How do we look toshareholders?Time, quality, performance,service, cost.Processes that influence customersatisfaction, availability ofinformation on service and/ormanufacturing processes.Improve operating efficiency,launch new products, continuousimprovement, empowering ofworkforce, employee satisfaction.Profitability, growth, shareholdervalue.
15 Customer Service and Quality Emphasis 15Total Quality Management (TQM) is a company-wide effort to continuously improve the ways peoples, machines, and systems accomplish workCore values of TQM include:designing methods and processes to meet the needs of internal and external customersall employees receive training in qualitypromotion of cooperation with vendors, suppliers, and customersmanagement gives feedback on progress
16 Customer Service and Quality Emphasis 16Malcolm Baldrige National Quality Awardestablished in 1987 to promote quality awareness, to recognize quality achievements, and to publicize successful quality strategies.ISO 9000:2000quality standards adopted worldwide.Six Sigma processsystem of measuring, analyzing, improving, and controlling processes once they meet quality standards.
17 Changing Demographics Diversity of the Workforce 17Internal 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.WomenMinoritiesDisabled workersImmigrants
18 Managing a Diverse Workforce 18To 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.
19 Legal and Ethical Issues 19Five main areas of the legal environment have influenced HRM over the past 25 yearsEqual employment opportunity legislationEmployee safety and healthEmployee pay and benefitsEmployee privacyJob securityWomen 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
20 Legal and Ethical Issues 20Human 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 peopleEmployment practices must respect basic human rights of privacy, due process, consent, and free speechManagers must treat employees equitably and fairly
21 The Global Challenge21Companies 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
22 The Technology Challenge 22Technology has reshaped the way we play, plan our lives, and where we workThe overall impact of the InternetThe Internet has created a new business model – e-commerce – in which business transactions and relationships can be conducted electronically
23 The Technology Challenge 23Advances 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.
24 Meeting Competitive Challenges Through HRM Practices 24HRM practices that help companies deal with the four competitive challenges can be grouped into four dimensionsThe human resource environmentAcquiring and preparing human resourcesAssessment and development of human resourcesCompensating human resources
25 Meeting Competitive Challenges Through HRM Practices 25Managing internal and external environmental factors allows employees to make the greatest possible contribution to company productivity and competitivenessCustomer needs for new products or services influence the number and type of employees businesses need to be successfulBesides interesting work, pay and benefits are the most important incentives that companies can offer employees in exchange for contributing to productivity, quality, and customer serviceHuman resource management practices of both managers and the human resource function must be aligned and contribute to the company’s strategic goals