Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Chapter Strategic Human Resource Management in a Changing Environment 1

1-2 Human Resource Management  Products and services of HRM for personnel  organizational restructuring  job designing  personnel planning  recruiting  hiring  evaluating  training  developing  promoting  compensating  terminating

1-3 High-Performance Work Systems (HPWS)  Characteristics of HPWS  evaluate large numbers of highly qualified applicants for each strategic position  use validated selection and promotion models/procedures  implement extensive cross training and development of new employees  use formal performance appraisal and management  use multi-source (360 degree) performance appraisal and feedback  link merit increases to formal appraisal processes  above-market compensation for key positions  high percentage of entire workforce included in incentive system  high difference in pay between high and low performers  high percentage of workforce working in self-managed, project-based work teams  low percentage of employees covered by union contract  high percentage of jobs filled from within

1-4 Sustained Competitive Advantage  Keys to sustained competitive advantage  building and sustaining core competencies within the organization  maintaining flexibility  react quickly to the changing global marketplace and the advances in technology

1-5 Discrepancies Between Academic Research Findings and HRM Practice Source: H. J. Bernardin. “A Survey of Human Resource Practices,” Working Paper, 2005

1-6 Major Domains of HRM  Four major domains of HRM  acquiring human resource capability  developing human resource capability  rewarding and compensating human resources  managing human resources and enhancing productivity and quality of worklife

1-7 Major Activities of HR Management  Organizational Design  human resource planning  job analysis  job design  information systems  Staffing  recruiting/interviewing/hiring  affirmative action  promotion/transfer/separation  outplacement services  induction/orientation  employee selection methods

1-8 Major Activities of HR Management  Employee Training and Organizational Development  management/supervisory development  career planning/development  employee assistance/counseling programs  attitude surveys  training delivery options  diversity programs  Performance Management and Appraisal  management appraisal/management by objectives  productivity/enhancement programs  customer-focused performance appraisal  multi-rater systems

1-9 Major Activities of HR Management  Reward Systems, Benefits, and Compliance  safety programs/OSHA compliance  health/medical services  complaint/disciplinary procedures  compensation administration  wage/salary administration  insurance benefits administration  unemployment compensation administration  pension/profit-sharing plans  labor relations/collective bargaining

1-10 Major Trends Affecting HRM  Five major trends enhancing the importance of human resource management.  increased globalization of the economy  technological changes, challenges, and opportunities  need for flexible response to changing business environments  increase in litigation related to HRM  changing characteristics of the workforce

1-11 “Management by Measurement” System  “Management by measurement” system—ensuring all functional business units subscribe to guidelines for sound, strategic measurement  criteria to measure  performance (e.g., individual, team, unit)  quantity, quality, timeliness, cost-effectiveness, effects on others  productivity  customer satisfaction  absenteeism  turnover/retention/tenure/intentions to stay/leave  employee theft

1-12 “Management by Measurement” System  criteria to measure (continued)  violence in the workplace  job stress (e.g., role conflict, ambiguity)  job satisfaction/motivation/attitudes/commitment  creativity  perceived fairness (procedural, interactional)  error rates  accidents, health-related variables (worker stress, injuries)  organizational citizenship behavior

1-13 The Workforce Scorecard  Huselid, Becker, and Beatty (2005) state that a workforce that can execute strategy is the most critical and underperforming asset in most organizations.  three challenges organizations must take on to maximize workforce potential  call for the development of a “workforce scorecard” to determine how well the workforce executes strategy  outlines three challenges that face a successful workforce measurement and management system

1-14 Competitive Advantage  Competitive advantage—the ability of an organization to formulate strategies that place it at a favorable position relative to other companies in the industry  three major principles determine the extent of a business’s competitive advantage  customer value  uniqueness

1-15 Competitive Advantage & Customer Value  Customer value—customers feel that they receive more value from their transaction with an organization than from its competitors  factors in understanding the customer’s needs and expectations  particular product or service  tangible variables—corporate responsibility, environmental impacts, diversity policies, political issues, and affiliation with other products or services

1-16 Competitive Advantage & Uniqueness  Uniqueness—offering a product or service that your competitor cannot easily imitate or copy  four mechanisms for offering uniqueness  financial or economic capability—a business receives special access to financial funding or is able to produce a good or service cheaper than someone else  strategic or product capability—a business needs to offer a product or service that differentiates it from other products or services  technological or operational capability—a business can have a distinct way of building or delivering its product or service  organizational capability—the business’s ability to manage organizational systems and people in order to match customer and strategic needs