MANAGEMENT INFORMATION SYSTEM SIM & TI session 13 & 14 HUMAN RESOURCE MANAGEMENT INFORMATION SYSTEM ( HR - MIS ) 1 1

Gambaran Umum Perkuliahan HR - MIS SIM & TI session 13 & 14 Gambaran Umum Perkuliahan HR - MIS 2 2

Struktur Perkuliahan Tugas/Kuis 30% UTS 30% UAS 30% Kehadiran 10% SIM & TI session 13 & 14 Struktur Perkuliahan Mata Kuliah : Human Resource–Management Information System (HR-MIS) Bobot : 3 SKS Frekuensi : (14 sesi kuliah tatap muka X 1 pekan sekali) + UTS + UAS Penilaian : Tugas/Kuis 30% UTS 30% UAS 30% Kehadiran 10% Buku Teks : 1. Haag. S., Cummings, M.(2008). Management Information Systems for the Information Age.7. McGraw-Hill International. New York. 2. Turban, E,;Leidner, D.; Mc Lean, E.; & Wetherbe, J. (2007). Information Technology for Management: Transforming Organizations in the Digital Economy.7. John Wiley & Sons. New York. 3. Laudon, K. C.; Laudon, J. P.(2007). Management Information Systems: Managing the Digital Firm.10. Pearson Prentice Hall. New Jersey. 4. McLeod, R. Jr.;Schell, G. P. (2007). Management Information Systems.10. Pearson Prentice Hall. New Jersey. 5. Baltzan, P.; Phillips, A. (2009). Business Driven Information Systems.2. McGraw-Hill International. New York. 3 3

Struktur Perkuliahan ( Lanjutan ) SIM & TI session 13 & 14 Struktur Perkuliahan ( Lanjutan ) Buku Teks : 6. Rainer Jr., R. K.; Turban, E. (2009). Introduction to Information Systems: Enabling and Transforming Business.2. John Wiley & Sons. New York. 7. Martin, E. W. (2005). Managing Information Technology.5. Pearson Prentice Hall. New Jersey. 8. Turban, E.; Aronson, J. E.; Liang, T. P. (2005). Decision Support Systems and Intelligent Systems. 7. Pearson Prentice Hall. New Jersey. 9.Meade, James G. (2003). The Human Resources Software Hanbook: Evaluating Technology Solutions for Your Organization. Pfeiffer. A Willey Imprint. SF. 10.Noe, R. A.; Hollenbeck, J. R.; Gerhart, B.; Wright, P. M. (2008). Human Resource Management: Gaining a Competitive Advantage.6. McGraw-Hill International. New York. 11.Dessler, G. (2008). Human Resource Management. 11. Pearson Prentice Hall. New Jersey. * Hand-outs. *Proquest * Internet. 4 4

Topik Bahasan Sesi Topik Bahasan 1. 2. 3. 4. SIM & TI session 13 & 14 Topik Bahasan Sesi Topik Bahasan 1. Pemahaman MSDM, Aktivitas, tanggung jawab , peran, dan fungsi HRD, kompetensi, tantangan, perencanaan strategis, dan formulasi strategi untuk meraih Competitive Advantage. Contoh, Diskusi, Tugas 1. Penjelasan tugas presentasi kelompok (dijelaskan berulang pada setiap kesempatan perkuliahan tatap muka) 2. Konsep Sistem, Informasi, knowledge, SI, Teknologi Informasi, Organisasi, Manajemen,SIM,Permodelan SIM,dan Sistem Pengolahan Transaksi pada divisi HRD Contoh, Diskusi, Tugas 2. 3. Investasi TI, Metode Perolehan Software, SDLC, RAD,Prototyping, Metode Implementasi Sistem. -Contoh, Diskusi, Review 1. 4. Decision Making, Systems Approach, Jenis Keputusan, Peran TI, BPM dan aplikasinya pada Divisi HRD. - Contoh, Diskusi, Tugas 3 5 5

Topik Bahasan (lanjutan) SIM & TI session 13 & 14 Topik Bahasan (lanjutan) Sesi Topik Bahasan 5. Business Intelligence, Artificial Intelligence, Office Automation, Decision Support Systems (DSS), Executive Information Systems (EIS), Expert Systems, dan Enterprice Resource Planning (ERP). Contoh, Diskusi, Review 2. 6. Database Management Systems (DBMS) Knowledge Management (KM) Contoh, Diskusi, Tugas 4. 7. Sistem Informasi SDM Competitive Advantage (Keunggulan Daya Saing) Contoh, Diskusi, KUIS 1. 8. U T S 9. Peran SDM dalam pelaksanaan E-Business, E-Commerce, E-Government, dan E-CRM (Electronic-Customer Relationship Management). Contoh, Diskusi , Tugas 5. 6 6

Topik Bahasan (lanjutan) SIM & TI session 13 & 14 Topik Bahasan (lanjutan) Sesi Topik Bahasan 10. Peran SDM dalam pelaksanaan proses bisnis E-SCM ( Supply Chain Management / Manajemen Rantai Pasokan). - Contoh, Diskusi. 11. Pengenalan beberapa penyedia utama HR-Software: SAP, Oracle, Peoplesoft, J.D. Edwards, Lawson Software, SAS, BAAN, dsb. - Konsultansi. Contoh, Diskusi, Tugas 6. 12. Pengenalan beberapa produk HR-Software: !Track-It HR, People Track, Employease, iVantage, Genesys Enterprise Series, dsb. - Contoh, Diskusi, Review 3. 13. Implikasi Etika dalam Teknologi Informasi dan Pengamanan Sistem Informasi. Contoh, Diskusi, kuis 2. 14. Presentasi Tugas Akhir Kelompok (Bagian I) 7 7

Topik Bahasan (lanjutan) SIM & TI session 13 & 14 Topik Bahasan (lanjutan) Sesi Topik Bahasan 15. Presentasi Tugas Akhir Kelompok (Bagian 2) Review 4. 16. U A S 8 8

Kesepakatan Aturan Perkuliahan SIM & TI session 13 & 14 Jam Kuliah Kuliah Sabtu : 10.45 – 13.15 Kuliah Minggu : 14.00 - 16.30 Toleransi keterlambatan bagi dosen dan mahasiswa: maksimum 15 menit. Tata tertib mhs dalam ruang kuliah: - Mengikuti perkuliahan dengan tertib - Tidak mengaktifkan Laptop - Bertanya dan berdiskusi - Mengejakan tugas dan presentasi sesuai instruksi. Maksimum ketidakhadiran dalam 1 semester: 4 kali perkuliahan dengan nilai minimal kehadiran hanya 65. 9 9

Human Resource Management Gaining a Competitive Advantage Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6-10

Learning Objectives 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 Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6-11

Introduction Competitiveness – a company’s ability to maintain and gain market share Human resource management – 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 --It is related to company effectiveness 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" Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6-12

Responsibilities of HR Departments Company Performance (P, O)Employment Analysis, Design, and Planning (St)Recruiting & Selecting (St)Training and development (St)Compensation (St)Benefits (St)Employee services (St)Employee and community relations (St, Ld,Ctr)Personnel records / Performance Management (St)Health and safety (P)Strategic planning This slide shows the responsibilities of HR departments. Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6-13

More Explanations: (1.Phys) Compensation: wage, salary, incentive pay, executive compensation, rewards. (2.Safe&Secr)Benefits: insurance, vacation leave, retirement plans, profit sharing. (2.Safe&Secr)Employee services: Employee assistance programs / counseling, relocation services, outplacement services. (3.Love&Belonging)Employee & community relations: attitude surveys, labor relations, publications, labor law compliance, discipline. (4.Esteem&Recog)Personnel records: HR-Information systems & Records. (2.Safe&Secr)Health and safety: safety inspection,drug testing,etc (5.Self Act)Strategic planning: forecasting, long-term planning, mergers and acquisitions, international human resources. Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6-14

What Roles Do HR Departments Perform? *Helping implement business plan *Designing effective system to ensure competencies Business Partner Services Administrative Services and Transactions: Human Resources Strategic Partner: One way to think the roles and responsibilities of HR department is to consider HR as a business within the company with three product lines. 1. Administrative services and transactions which includes compensation, hiring, staffing. 2. Business partner services includes developing effective HR systems and helping implement business plans, talent management, and 3. Strategic partner includes contributing to business strategy based on considerations of human capital, business capabilities, readiness, and developing HR practices as strategic differentiation. *Hiring *Staffing *Compensation, etc *Contributing to business strategy (Developing HR Practices) *Emphasizing HR Knowledge Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6-15

What Competencies Do HR Professionals Need? Figure 1.3 shows the six competencies that 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: develop talent, design reward systems, and shapes the organization. 4. Strategic architect: recognizes business trends and their impact on the business, 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. Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6-16

How is the HRM Function Changing? Time spent on administrative tasks is decreasing and its roles as a strategic business partner, change agent, and employee advocate are increasing This shift presents two important challenges: Self-service – giving employees online access to information about HR issues Outsourcing – the practice of having another company provide services 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 Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6-17

How is the HRM Function Changing? 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. 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. Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6-18

The HRM Profession HR salaries vary depending on education and experience as well as the type of industry 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) Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6-19

Competitive Challenges Influencing HRM Three competitive challenges that companies now face will increase the importance of HRM practices: The Challenge of Sustainability The Global Challenges: economic and societal/social 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 – with advances in technology, companies must change employees and managers work roles, create high performance work systems, and develop-commerce and e-HRM. The Technology Challenge Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6-20

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 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 Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6-21

The Sustainability Challenge 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 social responsibility Adapting to changing characteristics and expectations of the labor force Legal and ethical issues Effectively use new work arrangements As mentioned before: 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 social responsibility Adapting to changing characteristics and expectations of the labor force Legal and ethical issues Effectively use new work arrangements Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6-22

The Sustainability Challenge The changing structure of the economy Skill demands for jobs are changing Knowledge is becoming more valuable Intangible assets -- human capital, customer capital, social capital, and intellectual capital Knowledge workers – employees who contribute to the company through a specialized body of knowledge Empowerment – giving employees responsibility and authority to make decisions regarding all aspects of product development or customer service Learning organization There are several changes in the economy that has implications for HR: --Impact of September 11, 2001 – companies are spending more on security --The competition for labor – affected by the growth and decline of industries and availability of number and skills of persons. Also, 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 Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6-23

Examples of Intangible Assets Human Capital: Tacit knowledge, Education, Work-related knowhow & competence. Customer Capital: Customer relationships, Brands, Customer loyalty, Distribution channels. Social Capital: Corporate culture, Management practices, Informal networking systems, Coaching/mentoring relationship. Intellectual Capital: Patents, Copyrights, Trade secrets, Intellectual property. Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6-24

The Sustainability Challenge Changes in Employment Expectations: Psychological contract : what the company will provide in return. Alternative work arrangements: Independent contractors, on-call workers, temporary workers, part-time workers. Changes in Employment Expectations: The need for companies to make rapid changes are 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 Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6-25

The Balanced Scorecard 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 meet it’s strategic objectives. 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 it’s strategic objectives. Measures of human resource practices primarily relate to productivity, people, and processes. Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6-26

The Balanced Scorecard How do customers see us? What must we excel at? Can we continue to improve and create value? How do we look to shareholders? To show that HRM activities contribute to a company’s competitive advantage, managers need to consider the questions shown here from Table 1.9 and be able to identify critical indicators or metrics related to HR. Examples are provided in the table on page 25 of the text. Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6-27

The 10-Step HR Scorecards Process Define the business strategies. Outline the company’s value chain activities. Outline a strategy map. Identify the strategically required organizational outcomes. Identify the required workforce behaviors. Identify the strategically relevant HR System policies and activities, such as training and grievance systems. Create HR Scorecard. Design the HR Scorecard measurement system. Summarize the Scorecard measures in digital dashboard. Periodically re-evaluate the measurement system. Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6-28

SIM & TI session 13 & 14 The HR Scorecard PERSPECTIVE QUESTIONS ANSWERED EXAMPLES OF CRITICAL EXAMPLES OF CRITICAL BUSINESS INDICATOR HR INDICATORS Customer How do customers see us? Time, quality, performance, *Employee satisfaction with service, cost HR department services *Employee perceptions of the company as an employer Internal What must we excel at? *Processes that influence *Training cost per employee customer satisfaction *Turnover rates *Availability of information *Time to fill open positions on service and/or manufacturing processes Innovation Can we continue to *Improve operating efficiency *Employee/skills and to improve and create *Launch new products competency levels learning value? *Continuous improvement *Engagement survey results *Empowering of workforce *Change management *Employee satisfaction capability Financial How do we look to *Profitability *Compensation & benefits shareholders? *Growth per employee *Shareholder value *turnover costs *Profits per employee *Revenues per employee 29 29

Example of The Value Chain for a hotel SIM & TI session 13 & 14 Example of The Value Chain for a hotel Marketing & Sales Advertising Salesclerk training Market research Guest Reservation Take calls by 3rd ring Professional handling of questions *3-min faxed reservation Inbound Guest Services Airport pickup Front door welcome & Unloading *Quik front-desk service In-Room Services Clean rooms 24-hour room Servive *200-channel TV Amenities *5-star food & Service Expert personal Trainer 24-hour pool Outbound Guest Services *In-room TV Checkout *Fast front-desk *Airport Vans Every 10 min *Bellboy service Support Activities: Human Resource Management Recruitment, Selection, Training, Appraisal, and compensation. General Administration General Management, Accounting, Safety, and Maintenance Technology Computer Systems, Phone and Internet Systems, and TV Services 30

Example of a Strategy Map for X Airlines SIM & TI session 13 & 14 Example of a Strategy Map for X Airlines Shareholder value Financial aims Profit & return On assets Grow revenues Fewer planes Attract & keep customers Customer aims Low prices On-time flights Fast plane turnarounds Internal operations Committed Ground & Flight crews Employee Considerations 31

Customer Service and Quality Emphasis Total Quality Management (TQM): a cooperative form between labor and management to improve quality and productivity. Core values of TQM include: designing methods and processes to meet the needs of customers all employees receive training in quality promotion of cooperation with vendors, suppliers, and customers management gives feedback on progress Customer excellence requires attention to product and service features as well as to interactions with customers. Total Quality Management (TQM) is a company-wide 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 Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6-32

Customer Service and Quality Emphasis Malcolm Baldrige National Quality Award: An award established in 1987to promote quality awareness and achievements: 300-1000-hour exam, Leadership 120, KM 90, Strat Plan 85, Workforce focus 85, Process Managt 85, Bus result 450, Custmr&Market Focus 85 = total of 1000 points. ISO 9000:2000 : Certificate of Quality standards adopted worldwide. ISO: International Organization for Standardization. Six Sigma process: System of measuring, analyzing, improving, and controlling processes to meet quality standards. The emphasis on quality is seen in the following: 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. Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6-33

Changing Demographics Diversity of the Workforce Internal labor force is the labor force of current employees External labor market includes persons actively seeking employment The U.S. workforce is aging rapidly Internal labor force is the labor force of current employees External labor market includes persons actively seeking employment The U.S. workforce is aging rapidly The 55-year-old and older group is projected to increase by 49 percent between 2004 and 2014 Worker performance and learning are not adversely affected by aging Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6-34

Managing a 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 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 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 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 Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6-35

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” Sarbanes-Oxley Act of 2002: a congressional act passed in response to illegal and unethical behavior by managers and executives. There are five main areas of the legal environment that 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 Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6-36

Legal and Ethical Issues Ethical HR practices: 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 and customers equitably and fairly 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 and customers equitably and fairly Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6-37

The Global Challenge To survive companies must compete in international markets Be prepared to deal with the global economy. Offshoring – exporting of jobs from developed countries to less developed countries Onshoring – exporting jobs to rural parts of the United States 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 United States 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 Onshoring refers to exporting jobs to rural parts of the United States Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6-38

The Technology Challenge 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 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 Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6-39

The Technology Challenge Advances in technology have: changed how and where we work resulted in high-performance 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 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 Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6-40

The Technology Challenge Advances in technology have: increased the use and availability of Human Resource Information Systems (HRIS) increased the use and availability of e-HRM: *audio/video learning program *online job application,training, compensation and benefits. increased the competitiveness in high performance work systems: * peer interview *team-based performance pay Advances in technology have: increased the use and availability of Human Resource Information Systems (HRIS), which are used to acquire, store, manipulate, analyze, retrieve, and distribute HR information increased the use and availability of e-HRM, which is the processing and transmission of digitalized information used in HRM increased the competitiveness in high performance work systems Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6-41

Meeting Competitive Challenges Through HRM Practices HRM practices that help companies deal with the three competitive challenges (sustainability, global, and technology) can be grouped into four dimensions: The human resource environment : linking HRM practices to the company’s business objectives, complying with laws, motivating & satisfying the employees, maximizing customer service, quality, and productivity. Acquiring and preparing human resources: Employment analysis, design, and planning, recruiting ,selecting. Educating, and training. Assessment and development of human resources: measuring employees’ performance, preparing for future work roles, and promoting. Compensating human resources: Creating pay systems, Rewarding contributions, giving benefits,etc. HRM practices that help companies deal with the four competitive challenges can be grouped into four dimensions: A. Managing the Human Resource Environment—HRM practices should be linked to strategy, legal compliance must be assured, and work should be designed to maximize employee effectiveness and motivation. B. Acquiring and Preparing Human Resources—Human resource planning must occur, employees must be recruited and placed in appropriate jobs, methods of employee selection must be determined, and ensuring employees have skills to perform particular jobs. C. Assessment and Development of Human Resources—This area of HRM deals with measuring employee performance, preparing employees for future work roles, identifying and responding to employee interests, and creating a beneficial and effective work environment. D. Compensating Human Resources—Appropriate pay systems must be developed, employee contributions must be rewarded, and employees must be provided with benefits. Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6-42

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 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 Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6-43

Meeting Competitive Challenges Through HRM Practices 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 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 Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6-44

Human Resource Management Gaining a Competitive Advantage Strategic Human Resource Management McGraw-Hill/Irwin Copyright © 2008 by The McGraw-Hill Companies, All Rights Reserved. Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6-45

Learning Objectives After reading this chapter, you should be able to: Describe the differences between strategy formulation and strategy implementation. List the components of the strategic management process. Discuss the role of the HRM function in strategy formulation. Describe the linkages between HRM and strategy formulation. Discuss the more popular typologies of generic strategies and the various HRM practices associated with each. Describe the different HR issues and practices associated with various directional strategies. Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6-46

Introduction Goal of strategic management – To deploy and allocate resources in a way that gives organization a competitive advantage. HRM function must be integrally involved in the company’s strategic management process. The goal of strategic management in an organization is to deploy and allocate resources in a way that gives it a competitive advantage. Human resource managers should: have input into the strategic plan, have specific knowledge of the organization’s strategic goals, know what types of employee skills, behaviors, and attitudes are needed to support the strategic plan, and develop programs to ensure that employees have those skills, behaviors, and attitudes. Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6-47

What is Strategic Management? Strategic Management is a process, an approach to addressing the competitive challenges an organization faces. Strategic human resource management is the pattern of planned human resource deployments and activities intended to enable an organization to achieve its goals. Strategic Management is a process for analyzing a company's competitive situation, developing the company's strategic goals, and devising a plan of action and allocation of resources that will help a company achieve its goals. HR Managers should be trained to identify the competitive issues faced by the organization. Strategic human resource management is the pattern of planned human resource deployments and activities intended to enable an organization to achieve its goals. Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6-48

Components of the Strategic Management Process Strategy Formulation Strategy Implementation Strategic Management has two distinct yet independent components: Strategy Formulation: Strategic planning groups decide on a strategic direction by defining the company’s mission and goals, its external opportunities and threats, and its internal strengths and weaknesses. Strategy Implementation: The organization follows through on the strategy that has been chosen. This includes structuring the organization, allocating resources, ensuring that the firm has skilled employees in place, and developing reward systems that align employee behavior with the strategic goals. Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6-49

Model of the Strategic Management Process Forecasts of Labor Demand Strategy Formulation Strategy Implementation External Analysis Opportunities Threats HR Practices Recruiting, Training, Performance management, Labor relations, Employee relations, Job analysis Job design, Selection, Development, Pay structure, Incentives, Benefits Firm Performance Productivity, Quality, Profitability Mission Goals Strategic Choice Human Resource Needs Skills Behavior Culture Human Resource Capability Skills, Abilities, Knowledge This figure presents the strategic management process. Human Resource Actions Behaviors, Results Internal Analysis Strengths Weaknesses Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6-50

The Role of HRM in Strategy Formulation Four levels of integration seems to exist between the HRM function and the strategic management function. Administrative Linkage — Lowest level of integration; HRM function’s attention is focused on day-to-day activities. No input from the HRM function to the company’s strategic plan is given. One-Way Linkage — The strategic business planning function develops the plan and then informs the HRM function of the plan. HRM then helps in the implementation. Two-Way Linkage — Allows for consideration of human resource issues during the strategy formulation process. The HRM function is expected to provide input to potential strategic choices and then help implement the chosen option. Integrative Linkage — Is based on continuing, rather than sequential, interaction. The HR executive is an integral member of the strategic planning team. Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6-51

Strategy Formulation External analysis Opportunities Threats Mission Goals Strategic Choice Internal analysis Strengths Weaknesses This figure presents the five major components of the strategic management process are relevant to strategy formulation. Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6-52

Strategy Formulation Five components of the strategic management process: A mission is a statement of the organization's reasons for being. Goals are what the organization hopes to achieve in the medium-to long-term future External analysis consists of examining the organization's operating environment to identify strategic opportunities and threats. Internal analysis attempts to identify the organization's strengths and weaknesses. Strategic choice is the organization's strategy, which describes the ways the organization will attempt to fulfill its mission and achieve its long term goals. Five components of the strategic management process relevant to strategy formulation: A mission is a statement of the organization's reasons for being. Goals are what the organization hopes to achieve in the medium-to long-term future External analysis consists of examining the organization's operating environment to identify strategic opportunities and threats. Internal analysis attempts to identify the organization's strengths and weaknesses. Strategic choice is the organization's strategy, which describes the ways the organization will attempt to fulfill its mission and achieve its long term goals. Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6-53

Strategy Implementation Organizational structure Types of Information Task Design Product market strategy Performance This figure presents the variables to be considered in strategy implementation. Reward systems Selection, training, and development of people Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6-54

HRM Practices Job Analysis - the process of getting detailed information about jobs. Recruitment - the process through which the organization seeks applicants. Training - a planned effort to facilitate learning of job-related knowledge, skills, and behavior. Job design - making decisions about what tasks should be grouped into a particular job. Selection - identifying the applicants with the appropriate knowledge, skills, and ability. Development - the acquisition of knowledge, skills, and behavior that improves employees' ability to meet the challenges of future jobs. HRM function can be thought of as having six menus of HRM practices, from which companies can choose the ones most appropriate for implementing their strategy. Each of these menus refers to a particular functional area of HRM: job analysis/design, recruitment/selection, training and development, performance management, pay structure, incentives, and benefits, and labor-employee relations. Performance management - helps ensure that employees’ activities and outcomes are congruent with the organization’s objectives. Pay structure, incentives, and benefits. Labor and employee relations. Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6-55

Porter's Generic Strategies Strategic Types Porter's Generic Strategies overall cost leadership Differentiation Focus Michael Porter has hypothesized that competitive advantage comes from creating value by: -reducing costs (overall cost leadership), or -charging a premium price for a differentiated product or service (differentiation). Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6-56

HRM Needs in Strategic Types Different strategies require different types of employees. Role Behaviors: Cost strategy firms seek efficiency and therefore carefully define the skills they need in employees and use worker participation to seek cost-saving ideas. Differentiation firms need creative risk takers. Different strategies require different types of employees. Role Behaviors are the behaviors required of an individual in his or her role as a jobholder in a social work environment. Cost strategy firms seek efficiency and therefore carefully define the skills they need in employees and use worker participation to seek cost-saving ideas. Differentiation firms need creative risk takers. Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6-57

Directional Strategies Mergers and Acquisitions External Growth Strategy Concentration Strategy Downsizing Internal Growth Strategy: new market, differentiation, International Expansion. Companies have used five possible categories of directional strategies to meet objectives: external growth, concentration, internal growth, mergers and acquisitions, and downsizing. Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6-58

The Role of HR in Providing a Competitive Advantage Emergent Strategies - Those that evolve from the grass roots of the organization: the company facilitates communication throughout the organization. Enhancing Firm Competitiveness : Continually learning organizations. HR can provide a strategic competitive advantage in two additional ways: Emergent Strategies - Those that evolve from the grass roots of the organization. What actually is done versus what is planned. HR plays an important role in facilitating the communication of emergent strategies between levels in the hierarchy. Enhancing Firm Competitiveness By developing a rich pool of talent, HR can assure the company's ability to adapt to a dynamic environment. Multimedia Lecture Support Package to Accompany Basic Marketing Lecture Script 6-59

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