Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Human Resource Management GAINING A COMPETITIVE ADVANTAGE Fourth Edition Raymond A. Noe The Ohio State University John R. Hollenbeck Michigan State University Barry Gerhart Vanderbilt University Patrick M. Wright Cornell University

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Objectives After reading this chapter, you should be able to: Chapter 1.Discuss the roles and activities of a company’s activities of a company’s human resource function. 2.Discuss the implications of the new economy and e-business for HRM practices 3.Discuss how human resource practices affect a company’s balanced scorecard. 4.Discuss what companies should do to be competitive in the global marketplace 5.Identify the characteristics of the work force and how they influence human resource management practices. 6.Discuss human resource practices that support high- performance work systems. 7.Provide a brief description of human resource management practices. Human Resource Management: Gaining a Competitive Advantage 1

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Competitiveness and HRM Competitiveness- refers to the company’s ability to maintain and gain market share in its industry. HRM- refers to policies, practices and systems that influence employees behaviors, attitudes and performance. Effective HRMCompany PracticesPerformance affects 1-2 Irwin/McGraw-Hill

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. HR Function in Transition AdministrativeStrategic FunctionBusiness Partner 1-3 Irwin/McGraw-Hill

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Competitive Challenges Influencing HRM Competing in the New Economy The Global Challenge The Challenge of Meeting Stakeholders’ Needs The High Performance Work System Challenge 1-4 Irwin/McGraw-Hill

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Competing in the New Economy Develop an E-Business Competition of Labor Knowledge Value Increase Required Skills 1-5

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Competing in the New Economy Employment Relationship Changes More Flexibility Included in Demanding Work Ways of to Win the War for Talent 1-6

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Competing Through Globalization Expand into foreign markets. HRM practices that create competitiveness in foreign markets. Prepare employees to work in foreign locations. 1-7 Irwin/McGraw-Hill

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Competing by Meeting Stakeholders’ Needs 1-8 Irwin/McGraw-Hill

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Competing by Meeting Stakeholders’ Need The balanced scorecard Meeting customer needs for quality Labor force of economy Legislation and litigation Ethical considerations 1-9 Irwin/McGraw-Hill

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Principles of Total Quality Management 1-10 Irwin/McGraw-Hill 1. Customer Focus 6. FEEDBACK 5. Fact-based decision-making 5. Fact-based decision-making 4. employee’s expertise 4. employee’s expertise TRANSFORMATION PROCESS 2. focus on process 3. prevention vs. inspection TRANSFORMATION PROCESS 2. focus on process 3. prevention vs. inspection

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Categories and Point Values: Malcolm Baldrige Award 1-11 Irwin/McGraw-Hill Business Results points Customer Focus - 80 points & Market Focus Process Management points HRD & Management points Leadership points Information Analysis - 80 points Strategic Planning - 80 points Total points = 1000

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. ISO 9000 It was developed by the International Organization for Standardization in Geneva, Switzerland. It is the name of a family of standards that includes requirements such as how to establish quality standards and document work processes to help workers understand quality system requirements. It has been adopted as a quality standard in nearly 100 countries. 1-12

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Six Sigma Process The Six Sigma Process System of measuring, analyzing, improving, and then controlling processes once they have been brought within the narrow Six Sigma quality tolerances or standards. Objective is to create a total business focus on serving the customer—that is, deliver what customers really want when they want it. 1-13

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Composition of the Labor Force Internal Labor Force – the labor force of the current employees External Labor Force – persons actively seeking employment Managing Diversity To successfully manage a diverse workforce, managers much develop a new set of skills. Many US companies have already made a commitment to ensuring that diversity in their workforce is recognized and effectively used for competitive advantage. 1-14

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. HIGH-PERFORMANCE Work System Challenge Change in work roles & skills Use of teams Change in nature of managerial work Change in company structures Availability of HRM databases and e-HRM Increased competitiveness 1-15 Irwin/McGraw-Hill

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Dimensions of HR Practices Managing the HR Environment Acquiring and Preparing HR Assessing and Developing HR Compensating HR COMPETITIVENESS 1-16 Irwin/McGraw-Hill