PowerPoint Presentation by Charlie Cook The University of West Alabama Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved. M ANAGING H UMAN R ESOURCES Managing Human Resources through Strategic Partnerships Chapter 1

Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved. 1–21–2 The Strategic Importance of Managing Human Resources “The industrial revolution was about economies of scale. The internet revolution will be about economies of skill and how you empower people.” John Chambers CEO Cisco Systems

Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved. 1–31–3 Satisfying Multiple Stakeholders “Chief executives should heed the interests of various stakeholders including shareholders, customers, suppliers, and the employees.” Sidney Harman CEO, Harman International

Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved. 1–41–4 Stakeholders and Examples of Their Objectives EX 1.1

Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved. 1–51–5 Satisfying Multiple Stakeholders Organizations must satisfy multiple stakeholders –Effective HRM contributes to stakeholder satisfaction Stakeholders –Individuals or groups that have interests, rights or ownership in an organization and its activities Primary stakeholders –Those whose concerns the organization must address in order to ensure its own survival. Success is defined by how effectively these groups are served.

Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved. 1–61–6 Owners and Investors (cont’d) Old economy: –Investors focused on measuring tangible assets in order to determine a firm’s value. New economy: –Investors recognize that intangible assets can be just as valuable as tangible assets. Reputation as an employer-of-choice, depth of employee talent and loyalty, and the firm’s ability to innovate and change. Studies have shown that effective HR practices can positively affect the bottom line.

Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved. 1–71–7 Stakeholder Groups Customers –Employees can have a direct impact on customer satisfaction. Understanding the customer’s perspective Organizational Members (The Employees) –Employees themselves are a stakeholder group that cares about: Pay and benefits Quality of work life Employability

Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved. 1–81–8 Stakeholder Groups (cont’d) Society –Legal compliance: legitimacy and community support –Community relations: public opinion and expectations –Social Responsiveness in HRM Type of employees the company chooses to hire Criteria used to evaluate their performance The scheduling and coordinating of activities within work units Compensation practices in paying employees for time spent in the community (voluntary labor).

Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved. 1–91–9 Stakeholder Groups (cont’d) Other Organizations –Suppliers Physical and human resources –Unions Adversarial to collaborative, problem-solving relationship with management –Alliance Partners Achieve common goals –Influence government actions –Collaborate on research Establish joint ventures

Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved. 1–10 Stakeholders and HRM Win-Win situations –HRM can create synergies from the diverse concerns of various stakeholders. Properly managing human resources can provide solutions to how best to satisfy the objectives of multiple stakeholders, even when the objectives seem to conflict.

Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved. 1–11 Gaining and Sustaining a Competitive Advantage Sustainable Competitive Advantage –When a company’s advantage is difficult for competitors to understand and copy. How firms can use HRM to gain sustainable competitive advantage: –Maximize the value added by all employees— especially by “core” employees –Acquire employees who are rare (high quality) –Develop a strong culture that can’t be copied.

Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved. 1–12 Human Resource Management Activities Human Resource Management (HRM) Activities –The formal HRM policies developed by the company as well as the actual ways these policies are implemented in the daily practices of supervisors and managers. Formal Policies –Statements of expectations and aspirations Are modified and influenced by daily practices.

Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved. 1–13 Human Resource Policies and Practices HR planning for alignment and change Job analysis and competency modeling Recruiting and retaining qualified employees Selecting employees to fit the job and the organization Training and developing a competitive workforce Developing an approach to total compensation Measuring performance and providing feedback Using performance-based pay to enhance motivation Providing benefits and services Promoting workplace safety and health Unionization and collective bargaining

Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved. 1–14 The Human Resources Triad Line managers have always been responsible. Employees share responsibility. HR has specialized and technical knowledge. “Human Resources are too important to be left to the HR department.” HR Professionals Line Managers All Other Employees

Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved. 1–15 Ethical Behavior HR profession’s code of ethics –HR professionals must regard the obligation to implement public objectives and protect the public interest as more important than blind loyalty to an employer’s preferences. –Expectations Understand problems and maintain professionalism Maintain high standards of honesty and integrity Respect the dignity of all employees Assure that the organization respects the public and its employees

Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved. 1–16 Four Special HRM Challenges

Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved. 1–17 Managing Teams Teams help satisfy customers by achieving: –Improved on-time results delivery –Improved customer relations –Innovation in products and services –Improved product quality –Cost reductions and improved efficiency HR managers are still learning about what makes teams work!

Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved. 1–18 Managing Teams (cont’d) Working on teams helps satisfy employees by: –Facilitating management development and career growth –Reinforcing or expanding informal networks in the organization –Improving employees’ understanding of the business –Increasing employee ownership, commitment, and motivation

Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved. 1–19 Why Organizations Use Work Teams TO SATISFY EMPLOYEES Improve on-time delivery of results Improve customer relations Facilitate innovation in products and services Improve quality Reduce costs and improve efficiency TO SATISFY CUSTOMERS Facilitate management development and career growth Reinforce or expand Improve employees’ understanding of the business informal networks in the organization Increase employee ownership, commitment, and motivation EX 1.6 THE MOST COMMON REASONS FOR HAVING EMPLOYEES WORK IN TEAMS

Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved. 1–20 Managing Diversity Diversity management practices must be sensitive to issues of: –Religion, sexual orientation, marital and family status, age, and various other “unifying life experiences,” as well as gender and ethnicity.

Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved. 1–21 Managing Globalization Aspects of Globalization –Exporting –Overseas manufacturing –Transnational firms Challenge –Developing an approach to managing human resources that works at home as well as abroad.

Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved. 1–22 Managing Change Issues in managing change –Shortages of qualified employees –New technologies –Changing laws and regulations –Mergers and structural changes