Chapter 1 Human Resource Management and Competitive Advantage

1-1 Human Resource Management Human resource management: Consists of practices that help the organization deal effectively with its people during the various phases of the employment cycle. Three phases of the employment cycle: Pre-selection – Planning practices. Selection – Recruiting applicants and selecting the most qualified. Post-selection – Practices designed to maximize the performance and satisfaction levels of employees.

1-1d HRM Practices Influenced by External Factors Legal and environmental issues: Federal, state, and local laws are designed to guarantee employees’ rights to fair and safe treatment. Social, economic, and technological events also strongly influence HRM practices. Workplace justice laws: Addresses the issue of employee rights. Union influences: Regulate many HRM practices such as discipline, promotion, grievance procedures, and overtime allocations.

1-1d HRM Practices Influenced by External Factors (cont.) Safety and health concerns: Institution of accident prevention programs, wellness programs, and employee assistance programs to ensure the health and mental well-being of employees. International influences: Development of globally oriented managers who understand foreign languages and cultures, as well as the dynamics of foreign marketplaces.

1-2 Who Is Responsible for Developing and Implementing HRM Practices? Human resource professionals Establish HRM procedures and methods. Monitor and evaluate HR practices. Advise and assist managers on HRM-related matters. Line managers Direct employees’ day-to-day tasks. Implement HRM practices. Provide HR professionals with needed inputs for developing effective practices.

1-3 Gaining a Competitive Advantage & 1-3a Competitive Advantage Defined Firms gain competitive advantage by effectively managing their human resources. Competitive advantage is a status achieved by a company when gaining a superior marketplace position relative to its competition. This is accomplished through cost leadership and product differentiation.

1-4a Evidence Linking HRM Practices to Competitive Advantage Jeffrey Pfeffer identified 16 HRM practices: Employment security Selectivity in recruiting High wages Incentive pay Employee ownership Information sharing Participation and empowerment Teams and job redesign

1-4a Evidence Linking HRM Practices to Competitive Advantage (cont.) Jeffrey Pfeffer identified 16 HRM practices (cont.): Training and skill development Cross-utilization and cross-training Symbolic egalitarianism Wage compression Promotion from within Long-term perspective Measurement of practices Overarching philosophy

Figure 1-4 A Model Linking HRM Practices to Competitive Advantage