CHAPTER 1 Human Resource Management: Gaining a Competitive Advantage IRWIN a Times Mirror Higher Education Group, Inc., company, 1997

History of HumanResource Management Practises 1910 1920-30 1940 Scientific Management - performance related to working conditions First personnel depts. Hawthorne studies World War II - Selection tests 1960 -70 1980 - Now Employee relations - comply with laws - reactive - stand alone Integration with Business operations IRWIN a Times Mirror Higher Education Group, Inc., company, 1997

Human Resource Management THE 21st CENTURY What’s Next ? IRWIN a Times Mirror Higher Education Group, Inc., company, 1997

Dimensions of HR Practises COMPETITIVENESS Dimensions of HR Practises Managing Internal & External Environment Assessing Work & Work Outcomes Acquiring HR Developing HR Rewarding HR IRWIN a Times Mirror Higher Education Group, Inc., company, 1997

External Challenges Facing Organizations Legal Globalization Economic Corporate Competitiveness Social / Cultural Demographic Technology IRWIN a Times Mirror Higher Education Group, Inc., company, 1997

Economic Political / Legal Technological Social-Cultural The Organization and the Environment The General Environment The general environment consists of the economic, political, social, and technological conditions that can affect the management of organizations. The extent of influence of the general environment is less direct than that of the specific environment but also difficult to predict. Some general environmental factors, such as a severe economic recession, can lead to far-reaching effects on the organization. Economic Political / Legal Customer Economic Conditions Interest rates, inflation, changes in disposable income, stock market prices, and general business cycles all contribute to the general economic conditions. Recessions in one large industry can spread out to others as workers are laid off and consumers have less income to spend purchasing the products of other organizations. Political Conditions Political conditions include both the general stability of the countries in which the organization has operations and the attitudes that governments in those countries hold toward the role of business in their society. Social Conditions Each country and even area often has different social and cultural rules of conduct. Management must adapt its practices to the changing expectations of the society in which in operates. Areas of managerial decisions affected by changing social conditions includes not only the makeup of the products and services offered by the organization but its internal policies as well. In the United States, for example the changing demographics of the workforce are requiring organizations to recognize the needs of women and minority employees by adopting innovative management practices for to motivate and retain these important employee groups. Technological Conditions Innovations in technology are the most rapidly changing factor in the general environment. Technology dependent organizations can become obsolete almost overnight as innovations replace whole industries. Organization Labor Market Competitors Suppliers Technological Social-Cultural

The Role of HR in Strategy Formulation Administrative Linkage One-Way Linkage Two-Way Linkage Integrative Linkage Strategic Planning Strategic Planning Strategic Planning Strategic Planning HR Function HR Function HR Function HR Function SOURCE: Adapted from K. Golden and V. Ramanujam, “Between a Dream and a Nightmare: On the Integration of the Human Resource Function and the Strategic Business Planning Process,” Human Resource Management 24 (1985): 429-451.

Strategy Formulation External Analysis Mission Goals Strategic Choice - opportunities - threats Mission Goals Strategic Choice - reason for being - what it hopes to achieve - ways to fulfill goals and mission Internal Analysis - strengths - weaknesses HR Input IRWIN a Times Mirror Higher Education Group, Inc., company, 1997

Strategic HR Management Strategic Choice HR Practices - recruitment - training - performance management - labor relations - HR planning - job analysis - job design - selection - development - pay structure - incentives - benefits Strategic Choice HR Needs Firm Performance - skills - behaviors - culture - productivity - quality - profitability HR Capability HR Actions - behaviors - results - skills - abilities - knowledge IRWIN Emergent Strategies a Times Mirror Higher Education Group, Inc., company, 1997

Product Life Cycle and Operating Strategies Maturity Growth Formation Sales Porter strategies Differentiation Cost Leadership

HR needs in Strategy Formulation HR Role Differentiation Cost Leadership Focus of firm Employee role Training Staffing Compensation Performance management - creative, risk-taking - broader tasks creative risk-takers - broad career paths - recruit more from outside - external pay equity - results-oriented - efficiency - specific & repetitive - specific/short-term skills - promote internally - internal pay equity - behavior-oriented IRWIN a Times Mirror Higher Education Group, Inc., company, 1997