1. Human Resource Management: Gaining a Competitive Advantage
Chapter 1
Human Resource Management:
Gaining a Competitive Advantage
Chapter I discusses the roles, skills and practices of a company’s human resource management (HRM) function, implications of the economy, the makeup of the labor force, and ethics for company sustainability. It discusses how HRM affects a company’s balanced scorecard, what companies should do to compete in the global marketplace, how technology such as social networking is influencing HRM and what HRM practices support high-performance work systems.
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

2. Learning Objectives Discuss roles and activities of HRM function
Discuss implications of the economy, makeup of the labor force and ethics for company sustainability
Discuss how HRM affects a balanced scorecard
Discuss what companies should do to compete in global marketplace
Identify how technology such as social networking is influencing HRM
Discuss HRM practices that support high-performance work systems
Provide a brief description of HRM practices
Human Resources will be referred to as HR and Human Resource Management as HRM. After reading this chapter, you should be able to:
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
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

3. Introduction
Competitiveness – a company’s ability to maintain and gain market share.
Human resource management (HRM) – the policies, practices, and systems that influence employees’ behavior, attitudes and performance.
Competitiveness refers to a company’s ability to maintain and gain market share in its industry. Competitiveness is related to company effectiveness, which is determined by whether the company satisfies the needs of stakeholders (groups affected by business practices). Important stakeholders include stockholders, who want a return on their investment; customers, who want a high-quality product or service; and employees, who desire interesting work and reasonable compensation for their services.
Human resource management (HRM) refers to the policies, practices, and systems that influence employees’ behavior, attitudes, and performance.
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4. HRM Practices
Figure 1.1 emphasizes that there are several important HRM practices. The strategy underlying these practices needs to be considered to maximize their influence on company performance. As the figure shows, HRM practices include analyzing and designing work, determining human resource needs (HR planning), attracting potential employees (recruiting), choosing employees (selection), teaching employees how to perform their jobs and preparing them for the future (training and development), rewarding employees (compensation), evaluating their performance (performance management), and creating a positive work environment (employee relations).

5. 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
This graphic shows the responsibilities of HR departments. The HR department is solely responsible for outplacement, labor law compliance, record keeping, testing, unemployment compensation, and some aspects of benefits administration. The HR department is most likely to collaborate with other company functions on employment interviewing, performance management and discipline, and efforts to improve quality and productivity. Large companies are more likely than small ones to employ HR specialists, with benefits specialists being the most prevalent. Other common specializations include recruitment, compensation, and training and development. Many different roles and responsibilities can be performed by the HR department depending on the size of the company, the characteristics of the workforce, the industry, and the value system of company management.
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6. HR as a Business with 3 Product Lines
Partner
Services
Strategic Partner
Administrative
Services and
Transactions
Human
Resources
Consider HR as a business within the company with three product lines.
Administrative Services and Transactions: Compensation, hiring and staffing
• Emphasis: Resource efficiency and service quality.
2. Business Partner Services: Developing effective HR systems and helping implement business plans, talent management.
• Emphasis: Knowing the business and exercising influence—problem solving, designing effective systems to ensure needed competencies.
3. Strategic Partner: Contributing to business strategy based on considerations of human capital, business capabilities, readiness, and developing HR practices as strategic differentiators
• Emphasis: Knowledge of HR and of the business, the competition, the market, and business strategies.
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7. 6 HR Competencies Credible Activist Cultural Steward Business Ally
Strategic
Architect
Operational Executor
Talent Manager/
Organizational
Designer
Six competencies are needed for the HR profession.
1. Credible activist: delivers results with integrity, shares information, builds trusting relationships, and influences others, providing candid observation, taking appropriate risks.
2. Cultural steward: facilitates change, develops and values the culture, and helps employees navigate the culture.
3. Talent manager/organizational designer: develops talent, designs reward systems, and shapes the organization.
4. Strategic architect: recognizes business trends and their impact on the business, practice evidence-based HR, and develops people strategies that contribute to the business strategy.
5. Business Ally: understands how the business makes money and the language of the business.
6. Operational executor: implements workplace policies, advances HR technology, and administers day-to-day work of maintaining people.

8. Strategic Role of the HRM Function
Time spent on administrative tasks is decreasing.
HR roles as a strategic business partner, change agent and employee advocate are increasing.
HR is challenged to shift focus from current operations to future strategies and prepare non-HR managers to develop and implement HR practices.
This shift presents two challenges:
Self-service
Outsourcing
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 (a vendor, consultant or third-party) provide services to save money and spend more time on strategic business issues.
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9. Shared Service Model
Shared Service Model is a way to organize the HR function that includes centers of expertise or excellence, service centers and business partners to help control costs and improve business- relevance and timeliness of HR practices.
Shared service model is a way to organize the HR function that includes centers of expertise or excellence, service centers and business partners to help control costs and improve business-relevance and timeliness of HR practices.
Centers of expertise or excellence include HR specialists such as staffing or training.
Service centers are a central place for administration and transactional tasks such as enrolling in training programs or benefits that employees and managers can access online.
Business partners are HR staff members who work with managers on strategic issues such as creating new compensation plans or development programs for preparing high–level managers.

10. HR’s Strategic Role in the Business
What is HR doing to provide value-added services to internal clients?
How are you measuring HR effectiveness?
How can we reinvest in employees?
What HR strategy will get the business from point A to point B?
What makes an employee want to stay?
How will we invest in HR for a better HR department than competitors?
What should we be doing to improve our marketplace position?
What’s the best change to prepare for the future?
This provides questions that managers can use to determine if HRM is playing a strategic role in the business. If these questions have not been considered, it is highly unlikely that (1) the company is prepared to deal with competitive challenges or (2) human resources are being used to help a company gain a competitive advantage. The bottom line for evaluating the relationship between human resource management and the business strategy is to consider this question: “What is HR doing to ensure that the right people with the right skills are doing the right things in the jobs that are important for the execution of the business strategy?” Why have HRM roles changed? Managers see HRM as the most important lever for companies to gain a competitive advantage over both domestic and foreign competitors. Managers see HRM as the most important lever for companies to gain a competitive advantage over both domestic and foreign competitors. HRM practices are directly related to companies’ success in meeting competitive challenges.

11. How is the HRM Function Changing?
As part of its strategic role, HR can engage in evidence-based HR.
Evidence-based HR – demonstrating that HR practices have a positive influence on the company’s bottom line or key stakeholders.
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. It requires using HR or workforce analytics that uses quantitative and scientific methods to analyze data from HR decisions, financial statements, employee surveys and other data-sources to make evidence-based HR decisions and show that HR influences the organization’s “bottom-line” including profits and costs.

12. The HRM Profession
HR salaries vary according to position, experience, education, training, location and firm size.
The primary professional organization for HRM is the Society for Human Resource Management (SHRM) (
HR salaries vary depending on education and experience as well as the type of industry.
--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).

13. 3 Competitive Challenges Influencing HRM
Technology
Sustainability
Three competitive challenges that companies now face will increase the importance of HRM practices:
The Challenge of Sustainability – includes providing a return to shareholders, providing high quality products and services and experiences for employees, social responsibility, and effectively using new work arrangements.
The Global Challenge - In order to survive, U.S. companies must improve HRM practices, develop global markets and better prepare employees for global assignments.
The Technology Challenge –Along with advances in technology such as use of social networking tools and development of HR dashboards and use of HR analytics, companies change employees’ and managers’ work roles, create high performance work systems, and develop e-commerce to compete through technology.
Globalization
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14. The Sustainability Challenge
Sustainability is the ability of a company to survive and succeed in a dynamic competitive environment.
Stakeholders include shareholders, the community, customers and all other parties that have an interest in seeing that the company succeeds
Sustainability refers to the ability of a company to survive and succeed in a dynamic competitive environment. Sustainability includes the ability to deal with economic and social changes, practice environmental responsibility, 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.
Stakeholders refers to shareholders, the community, customers, and all other parties that have an interest in seeing that the company succeeds.
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15. The Sustainability Challenge
Sustainability includes the ability to:
deliver a return to shareholders
provide high-quality products, services and work experiences for employees
increase value placed on intangible assets, human capital and social responsibility
adapt to changing characteristics and expectations of the labor force
address legal and ethical issues
effectively use new work arrangements
Sustainability includes the ability to
provide a return to shareholders
provide high-quality products, services, and work experiences for employees
increase value placed on intangible assets and human capital and social responsibility
adapt to changing characteristics and expectations of the labor force
address legal and ethical issues
effectively use new work arrangements

16. Economy - Implications for HR
Structure of the economy
Social collaboration and social networking technology
Growth in professional and service occupations
Changing job skill demands
Intangible assets
Knowledge workers
Empowerment
Learning organization
The competition for labor – affected by the growth and decline of industries and availability of number and skills of persons.
Skill demands for jobs are changing. Knowledge is becoming more valuable.
--Intangible assets refer to a type of company asset including human capital, customer capital, social capital, and intellectual capital
--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. Improvements in product or service quality do not stop when formal training is completed. Employees need to have the financial, time, and content resources (courses, experiences, development opportunities) available to increase their knowledge. Managers take an active role in identifying training needs and helping to ensure that employees use training in their work. Also, employees should be actively encouraged to share knowledge with colleagues and other work groups across the company using and the Internet. For a learning organization to be successful requires that teams of employees collaborate to meet customer needs. Managers need to empower employees to share knowledge, identify problems, and make decisions. This allows the company to continuously experiment and improve. Social collaboration and social networking technology contribute to the learning organization.
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17. Change and Its Effect on Employment Relationships
Psychological Contract
Alternative Work Arrangements
Changes in Employment Expectations
Changes in Employment Expectations: The need for companies to make rapid changes is reshaping the employment contracts. 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. In the new economy a new type of psychological contract is emerging. The competitive business environment demands frequent changes in the quality, innovation, creativeness, and timeliness of employee contributions and the skills needed to provide them. This has led to company restructuring, mergers and acquisitions, layoffs, and longer hours for many employees. Companies demand excellent customer service and high productivity levels. Employees are expected to take more responsibility for their own careers, from seeking training to balancing work and family. In exchange for top performance and working longer hours without job security, employees want companies to provide flexible work schedules, comfortable working conditions, more autonomy in accomplishing work, training and development opportunities, and financial incentives based on how the company performs. Employees realize that companies cannot provide employment security, so they want employability—that is, they want their company to provide training and job experiences to help ensure that employees can find other employment opportunities. The HRM challenge is how to build a committed, productive workforce in turbulent economic conditions that offer opportunity for financial success but can also quickly turn sour, making every employee expendable.
Psychological Contract Expectations of employee contributions and what the company will provide in return. Employee engagement refers to the degree to which employees are fully involved in their work and the strength of their commitment to their job and the company. Employees who are engaged in their work and committed to the company they work for give companies competitive advantage including higher productivity, better customer service, and lower turnover.

18. Common Themes Employee Engagement
Pride and satisfaction with employer and job
Opportunity to perform challenging work
Recognition and positive feedback from contributions
Personal support from manager
Effort above and beyond the minimum
Understanding link between one’s job and company’s mission
Prospects for future growth with the company
Intention to stay with the company
Employee engagement - degree to which employees are fully involved in their work and strength of their commitment. Employees’ engagement is influenced by how managers treat employees as well as human resource practices such as recruiting, selection, training and development, performance management, work design, and compensation. Employees who are engaged in their work and committed to the company they work for give companies competitive advantage including higher productivity, better customer service, and lower turnover Companies measure employees’ engagement levels with attitude or opinion surveys. Although the types of questions asked on these surveys vary from company to company, research suggests the questions generally measure these common themes.
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19. Talent Management
Talent management is the systematic planned strategic effort to use bundles of HRM practices acquiring and assessing employees, learning and development, performance management and compensation to attract, retain, develop and motivate highly skilled employees and managers.
Alternative work arrangements include independent contractors, on-call workers, temporary workers, and contract company workers.
Demanding Work, but with more flexibility.
Talent management is the systematic planned strategic effort by a company to use bundles of HRM practices including acquiring and assessing employees, learning and development, performance management, and compensation to attract, retain, develop, and motivate highly skilled employees and managers. This means recognizing that all HR practices are related and aligned with business needs, and help the organization manage talent to meet business goals. Alternative work arrangements include independent contractors, on-call workers, temporary workers, and contract company workers. Demanding Work, but with More Flexibility- employees may face longer hours, shifts, increasing work demands and accessibility to accommodate globalization and technology and may result in more stress and less satisfaction.

20. Balanced Scorecard and Social Responsibility
Balanced scorecard provides a view of the company from the perspective of internal and external customers, employees and shareholders and is used to:
Link HRM activities to company’s business strategy.
Evaluate extent HR is helping meet company’s strategic objectives.
Questions to identify HR related critical indicators or metrics:
How do customers see us?
What must we excel at?
Can we continuously improve and create value?
How do we look to shareholders?
Company effectiveness and competitiveness are determined by whether the company satisfies the needs of stakeholders. Stakeholders include stockholders (who want a return on their investment), customers (who want a high-quality product or service), and employees (who desire interesting work and reasonable compensation for their services). The community, which wants the company to contribute to activities and projects and minimize pollution of the environment, is also an important stakeholder. 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 business strategy.
-- Evaluate the extent to which the human resource function is helping the company’s meet its strategic objectives. It measures HR practices primarily relate to productivity, people, and processes. To show that HRM activities contribute to a company’s competitive advantage, managers need to consider these questions and be able to identify critical indicators or metrics related to HR.:
How do customers see us?
What must we excel at?
Can we continuously improve and create value?
How do we look to shareholders?
Social responsibility can help boost a company’s image with customers, gain access to new markets, and help attract and retain talented employees. Companies thus try to meet shareholder and general public demands that they be more socially, ethically, and environmentally responsible.
Social, ethical and environmental responsibility
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21. Customer Service and Quality
Customers expect excellent service.
Total Quality Management (TQM) Core Values
Methods and processes are designed to meet internal and external customers’ needs.
Every employee receives training in quality.
Promote cooperation with vendors, suppliers and customers.
Managers measure progress with feedback based on data.
Quality is designed into a product or service so that errors are prevented rather than being detected and corrected.
Customer excellence requires attention to product and service features as well as to interactions with customers. Customer-driven excellence includes understanding
what the customer wants, anticipating future needs, reducing defects and errors, meeting specifications, and reducing complaints. How the company recovers from defects and errors is also important for retaining and attracting customers. Total Quality Management (TQM) is a company-wide effort to continuously improve the ways peoples, machines, and systems accomplish work. A cooperative form of doing business that relies on the talents and capabilities of both labor and management to continually improve quality and productivity. 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
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22. Customer Service and Quality
Malcolm Baldrige National Quality Award
ISO 9000:2000
Six Sigma Process
Lean Thinking
The emphasis on quality is seen in the following: Malcolm Baldrige National Quality Award was established in 1987 to promote quality awareness, to recognize quality achievements, and to publicize successful quality strategies. The categories of examination include: leadership, measurement, analysis and knowledge, strategic planning, workforce, operations, customer focus and design improvement. ISO 9000:2000 quality standards adopted worldwide. Six Sigma process system of measuring, analyzing, improving, and controlling processes once they meet quality standards. Lean thinking is a way to do more with less effort, time, equipment, and space, but still provide customers with what they need and want. Part of lean thinking includes training workers in new skills or how to apply old skills in new ways so they can quickly take over new responsibilities or use new skills to help fill customer orders.

23. Changing Demographics and Workforce Diversity
Internal labor force - current employees
External labor market - persons outside the firm actively seeking employment
Average age of U.S. workforce will age.
Increased workforce diversity
Influence of immigration
Generational differences.
Gender and racial composition of the workforce
Worker performance and learning are not adversely affected by aging. Companies will have to ensure that older workers are not discriminated against in hiring, training, and workforce reduction decisions, encourage retirement and make it financially and psychologically acceptable and find ways to capture the unique knowledge and expertise of those leaving so it can be used and shared with remaining employees. Generational differences- Members of each generation may have misperceptions of each other causing tensions and misunderstanding in the workplace. Managing diversity involves many different activities including creating an organizational culture that values diversity, ensuring that HRM systems are bias-free, facilitating higher career involvement of women, promoting knowledge and acceptance of cultural differences, ensuring involvement in education both within and outside the company, and dealing with employees’ resistance to diversity. Workforce diversity will increase. Due to immigration, Hispanics and Asians have been the fastest growing groups in the labor force. Companies are challenged to create HRM practices that ensure that the talents, skills and values of all employees are fully utilized to help deliver high-quality products and services. Disabled workers can also be a source of competitive advantage. To gain a competitive advantage, companies must harness the power of the diverse workforce. To successfully manage a diverse workforce, managers must develop a new set of skills, including:
Communicating effectively with employees from a wide variety of cultural and educational backgrounds, ethnicity, age, ability and race.
Coaching and developing employees of different ages, educational backgrounds, ethnicity, physical ability, and race.
Providing performance feedback that is based on objective outcomes.
Recognizing and responding to generational issues. Understanding diversity is important for tapping all employees’ creative, cultural, and communication skills and using those skills to provide competitive advantage.
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24. Legal Issues Employment laws and regulations
Eliminating discrimination and harassment
Workplace safety
Data security practices and protecting intellectual property
Electronic monitoring and surveillance
Employee privacy rights, intellectual property rights and social media
Federal health care legislation
Companies who employ unlawful immigrants or abuse laborers
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25. Ethical Issues
Ethics - fundamental principles of right and wrong by which employees and companies interact
Ethical HR practices:
HRM practices must result in greatest good for 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
Develop and distribute a Code Of Ethics, policy, process
and procedures, audit and train employees
Sarbanes-Oxley Act of 2002
The Sarbanes-Oxley Act of 2002 sets strict rules for corporate behavior and sets heavy fines and prison terms for noncompliance: organizations are spending millions of dollars each year to comply with regulations under the Sarbanes-Oxley Act, which imposes criminal penalties for corporate governing and accounting lapses, including retaliation against whistle-blowers reporting violations of Security and Exchange Commission rules. Due to Sarbanes-Oxley and new Security and Exchange Commission regulations that impose stricter standards for disclosing executive pay, corporate boards are paying more attention to executive pay as well as issues like leadership development and succession planning.
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26. 4 Principles of Ethical Companies
Emphasize mutual benefits in customer, vendor, client and community relationships.
Employees assume responsibility for the actions of the company.
Sense of purpose or vision the employees value and use.
Emphasize fairness; another person’s interests count as much as their own.
Ethical, successful companies can be characterized by four principles shown in Figure First, in their relationships with customers, vendors, and clients, these companies emphasize mutual benefits. Second, employees assume responsibility for the actions of the company. Third, such companies have a sense of purpose or vision the employees value and use in their day-to-day work. Finally, they emphasize fairness; that is, another person’s interests count as much as their own.

27. Global Challenges Reshoring –
moving jobs from overseas to U.S.
Onshoring –
exporting jobs to rural parts of the United States
Companies must deal with the global economy, compete in and develop global markets and prepare employees for global assignments.
Offshoring – exporting jobs from developed countries to less developed countries
Onshoring – exporting jobs to rural parts of the United States
Companies must deal with the global economy, compete in and develop global markets and prepare employees for global assignments.
Jobs are offshored because workers in other countries earn a fraction of the wages of American workers performing the same job. reshoring is becoming more common due to concerns about the level of service customers receive from overseas operations, demoralizing effects on U.S. employees, potential negative affects of offshoring on the company’s public image, need for employees to be located close to business partners, and rising wages overseas (e.g., China)
Entering International Markets Many companies are entering international markets by exporting their products overseas, building manufacturing facilities or service centers in other countries, entering into alliances with foreign companies, and engaging in e-commerce. Developing economies and emerging markets such as those found in the BRIC nations (Brazil, Russia, India, and China) will be responsible for 68% of the growth of the world’s economy.
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28. Advanced technologies
Technology Challenge
Internet
Social networking
Advanced technologies
Technology has reshaped the way we play, plan our lives, and where we work. The Internet has created a new business model – e-commerce – in which business transactions and relationships can be conducted electronically. Social networking facilitates communication, decentralized decision making and collaboration. Social networking refers to websites such as Facebook, Twitter, and LinkedIn, Wikis, and blogs that facilitate interactions between people usually around shared interests.
Advances in technology have:
changed how and where we work.
resulted in high-performance work systems, which maximize the fit between the company’s social system and technical system.
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. Robotics, tracking systems radio frequency identification, and nanotechnology
are also transforming work.

29. HRIS, Cloud Computing, and HR Dashboards
Advances in technology have increased:
HR Information Systems (HRIS)
Cloud computing
HR Dashboard Metrics
Technology is pushing the boundaries of artificial intelligence, speech synthesis, wireless communications, and networked virtual reality. Advances in technology have:
Increased use and availability of HR Information Systems (HRIS), which are used to acquire, store, manipulate, analyze, retrieve, and distribute HR information .
Cloud computing -computing system that provides information technology infrastructure over a network in a self-service, modifiable, and on-demand Model.
Increased use of HR Dashboard Metrics such as productivity and absenteeism that are accessible by employees and managers through the company internet or HRIS.

30. High-Performance Work Systems
Work Teams, Virtual Teams and Partnerships
Changes in Skill Requirements and new technology
Changes in Company Structure and Reporting Relationships.
HRM practices support high-performance work systems through staffing, work design, training, compensation and performance management.
New technology causes changes in skill requirements and work roles and often results in redesigning work structures (e.g., using work teams). High-performance work systems maximize the fit between the company’s social system (employees) and its technical system. Work teams involve employees with various skills who interact to assemble a product or provide a service and may assume many of the activities usually reserved for managers, including selecting new team members, scheduling work, and coordinating activities with customers and other units in the company. Virtual teams are separated by time, geographic distance, culture, and/or organizational boundaries and that rely almost exclusively on technology ( , Internet, videoconferencing) to interact and complete their projects. Virtual teams can be formed within one company whose facilities are scattered throughout the country or the world. A company may also use virtual teams in partnerships with suppliers or competitors to pull together the necessary talent to complete a project or speed the delivery of a product to the marketplace. High-performance work systems have implications for employee selection and training. Virtual teams are separated by time, geographic distance, culture and/or organizational boundaries and rely exclusively on technology for interaction between team members. Employees need job-specific knowledge and basic skills to work with the equipment created with the new technology.
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31. Meeting 4 Competitive Challenges Through HRM Practices
Dimensions of HRM Practices
HR environment
Acquiring and preparing HR
Assessment and development of HR
Compensating HR
HRM practices that help companies deal with the competitive challenges can be grouped into the four dimensions shown in Figure These dimensions include the HR environment, acquiring and preparing HR , assessment and development of HR , and compensating HR. In addition, some companies have special issues related to labor–management relations, international HRM , and managing the HR function.
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32. Meeting Competitive Challenges Through HRM Practices
Managing internal and external environmental factors allows employees to make 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.
Assessment, Development and Compensation of HR
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.
•Linking HRM practices to the company’s business objectives—that is, strategic human resource management.
• Ensuring that HRM practices comply with federal, state, and local laws.
• Designing work that motivates and satisfies the employee as well as maximizes customer service, quality, and productivity. Managers must also identify current or potential employees who can successfully deliver products and service and ensure that employees have the necessary skills to perform current and future jobs. Managers need to ensure that employees have the necessary skills to perform current and future jobs. 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.

33. Summary
HR has three product lines: administrative services, business partner services, and strategic services.
HR managers need personal credibility, business and technology knowledge, understanding of business strategy, and ability to deliver HR services.
HR practices are important for helping companies deal with sustainability, globalization, and technology challenges and should be evidence-based.
To successfully manage HR , individuals need personal credibility, business knowledge, understanding of the business strategy, technology knowledge, and the ability to deliver HR services. HRM practices should be evidence- based, that is, based on data showing the relationship between the practice and business outcomes related to key company stakeholders (customers, shareholders, employees, community). In addition to contributing to a company’s business strategy, HR practices are important for helping companies deal with sustainability, globalization, and technology challenges. Global challenges include entering international markets, immigration, and offshoring. Technology challenges include using new technologies to support flexible and virtual work arrangements, high-performance work systems, and developing effective e-HRM practices and HRIS.