1. 1

2. Gaining a Competitive Advantage
Chapter 1 2
Gaining a Competitive Advantage
Discuss the roles and activities of a company’s human resource management function
Discuss the implications of the economy, the makeup of the labor force, and ethics for company sustainability
Discuss how human resource management affects a company’s balanced scorecard
Discuss what companies should do to compete in the global marketplace

3. Gaining a Competitive Advantage
Chapter 1 3
Gaining a Competitive Advantage
Identify the characteristics of the workforce and how they influence human resource management
Discuss human resource management practices that support high-performance work systems
Provide a brief description of human resource management practices .

4. Introduction 4
Competitiveness refers to a company’s ability to maintain and gain market share in its industry
It is related to company effectiveness
Human resource management refers to the policies, practices, and systems that influence employees’ behavior, attitudes, and performance
Many companies refer to HRM as involving “people practices" .

5. Responsibilities of HR Departments5
Employment and recruiting
Training and development
Compensation
Benefits
Employee Services
Employee and community relations
Personnel records
Health and safety
Strategic planning

6. What Roles Do HR Departments Perform?6
Strategic Partner
Human
Resources
Administrative
Expert
Employee
Advocate
Change Agent

7. How is the HRM Function Changing?7
The amount of time that the HRM function devotes to administrative tasks is decreasing and its roles as a strategic business partner, change agent, and employee advocate are increasing
In shifting the focus from current operations to strategies for the future and preparing non-HR managers to develop and implement HR practices, HR managers face two important challenges:
Self-service refers to giving employees online access to information about HR issues
Outsourcing refers to the practice of having another company provide services

8. The HRM Profession 8
HR salaries vary depending on education and experience as well as the type of industry
HR specialists
HR generalists
College degrees are held by the vast majority of HRM professionals
Professional certification is less common than membership in professional associations
The primary professional organization for HRM is the Society for Human Resource Management (SHRM)

9. Competitive Challenges Influencing HRM9
Three competitive challenges that companies now face will increase the importance of HRM practices:
The Challenge of
Sustainability
The Global
Challenge
The Technology
Challenge

10. The Sustainability Challenge10
Sustainability refers to the ability of a company to survive and succeed in a dynamic competitive environment
Stakeholders refers to shareholders, the community, customers, and all other parties that have an interest in seeing that the company succeeds
Sustainability includes the ability to:
deal with economic and social changes,
engage in responsible and ethical business practices,
provide high quality products and services, and
put in place methods to determine if the company is meeting stakeholders’ needs

11. The Sustainability Challenge11
The changing structure of the economy
Impact of September 11, 2001
The competition for labor
Skill demands for jobs are changing
Knowledge is becoming more valuable
Intellectual capital refers to the creativity, productivity, and service provided by employees
Knowledge workers are employees who contribute to the company not through manual labor but through a specialized body of knowledge
Empowerment means giving employees responsibility and authority to make decisions regarding all aspects of product development or customer service

12. The Sustainability Challenge12
A learning organization embraces a culture of lifelong learning, enabling all employees to continually acquire and share knowledge
The psychological contract describes what an employee expects to contribute and what the company will provide to the employee for these contributions
Alternative work arrangements include independent contractors, on-call workers, temporary workers, and contract company workers

13. The Balanced Scorecard13
The balanced scorecard gives managers the opportunity to look at the company from the perspective of internal and external customers, employees and shareholders.
The balanced scorecard should be used to:
Link human resource management activities to the company’s business strategy.
Evaluate the extent to which the human resource function is helping the company’s meet it’s strategic objectives.
Measures of human resource practices primarily relate to productivity, people, and processes.

14. The Balanced Scorecard14
Customer
Internal
Innovation
and Learning
Financial
How do customers see us?
What must we excel at?
Can we continue to improve
and create value?
How do we look to
shareholders?
Time, quality, performance,
service, cost.
Processes that influence customer
satisfaction, availability of
information on service and/or
manufacturing processes.
Improve operating efficiency,
launch new products, continuous
improvement, empowering of
workforce, employee satisfaction.
Profitability, growth, shareholder
value.

15. Customer Service and Quality Emphasis15
Total Quality Management (TQM) is a company-wide effort to continuously improve the ways peoples, machines, and systems accomplish work
Core values of TQM include:
designing methods and processes to meet the needs of internal and external customers
all employees receive training in quality
promotion of cooperation with vendors, suppliers, and customers
management gives feedback on progress

16. Customer Service and Quality Emphasis16
Malcolm Baldrige National Quality Award
established in 1987 to promote quality awareness, to recognize quality achievements, and to publicize successful quality strategies.
ISO 9000:2000
quality standards adopted worldwide.
Six Sigma process
system of measuring, analyzing, improving, and controlling processes once they meet quality standards.

17. Changing Demographics Diversity of the Workforce17
Internal labor force is the labor force of current employees.
External labor market includes persons actively seeking employment.
The U.S. workforce is becoming increasingly diverse.
Women
Minorities
Disabled workers
Immigrants

18. Managing a Diverse Workforce18
To successfully manage a diverse workforce, managers must develop a new set of skills, including:
Communicating effectively with employees from a wide variety of cultural backgrounds.
Coaching and developing employees of different ages, educational backgrounds, ethnicity, physical ability, and race.
Providing performance feedback that is based on objective outcomes.
Creating a work environment that makes it comfortable for employees of all backgrounds to be creative and innovative.

19. Legal and Ethical Issues19
Five main areas of the legal environment have influenced HRM over the past 25 years
Equal employment opportunity legislation
Employee safety and health
Employee pay and benefits
Employee privacy
Job security
Women and minorities still face the “glass ceiling”
The Sarbanes-Oxley Act of 2002 sets strict rules for corporate behavior and sets heavy fines for noncompliance, especially in regards to accounting practices

20. Legal and Ethical Issues20
Human resource managers must satisfy three basic standards for their practices to be considered ethical:
HRM practices must result in the greatest good for the largest number of people
Employment practices must respect basic human rights of privacy, due process, consent, and free speech
Managers must treat employees equitably and fairly

21. The Global Challenge 21
Companies are finding that to survive they must compete in international markets as well as fend off foreign corporations’ attempts to gain ground in the U.S.
Every business must be prepared to deal with the global economy. This is made easier by technology.
Offshoring refers to the exporting of jobs from developed countries to less developed countries.
Many companies are entering international markets by exporting their products overseas, building manufacturing facilities in other countries, entering into alliances with foreign companies, and engaging in e-commerce

22. The Technology Challenge22
Technology has reshaped the way we play, plan our lives, and where we work
The overall impact of the Internet
The Internet has created a new business model – e-commerce – in which business transactions and relationships can be conducted electronically

23. The Technology Challenge23
Advances in technology have:
changed how and where we work,
resulted in high-performance models of work systems,
increased the use of teams to improve customer service and product quality,
changed skill requirements,
increased working partnerships,
led to changes in company structure and reporting relationships,
increased the availability of Human Resource Information Systems (HRIS), which are used to acquire, store, manipulate, analyze, retrieve, and distribute HR information,
increased the availability of e-HRM, which is the processing and transmission of digitalized information used in HRM,
increased the competitiveness of high performance work systems.

24. Meeting Competitive Challenges Through HRM Practices24
HRM practices that help companies deal with the four competitive challenges can be grouped into four dimensions
The human resource environment
Acquiring and preparing human resources
Assessment and development of human resources
Compensating human resources

25. Meeting Competitive Challenges Through HRM Practices25
Managing internal and external environmental factors allows employees to make the greatest possible contribution to company productivity and competitiveness
Customer needs for new products or services influence the number and type of employees businesses need to be successful
Besides interesting work, pay and benefits are the most important incentives that companies can offer employees in exchange for contributing to productivity, quality, and customer service
Human resource management practices of both managers and the human resource function must be aligned and contribute to the company’s strategic goals