1. Copyright © 2004 South-Western. All rights reserved.

2. Objectives After studying this chapter, you should be able to:
Identify how firms gain sustainable competitive advantage through people.
Explain how globalization is influencing human resources management.
Describe the impact of information technology on managing people.
Identify the importance of change management.
State HR’s role in developing intellectual capital.
Differentiate how TQM and reengineering influence HR systems.
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3. Objectives (cont’d) After studying this chapter, you should be able to:
Discuss the impact of cost pressures on HR policies.
Discuss the primary demographic and employee concerns pertaining to HRM.
Provide examples of the roles and competencies of today’s HR managers.
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4. Competitive Advantage through People
Core Competencies
Integrated knowledge sets within an organization that distinguish it from its competitors and deliver value to customers.
Sustained competitive advantage through people is achieved if these human resources:
Have value.
Are rare and unavailable to competitors.
Are difficult to imitate.
Are organized for synergy.
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5. Overall Framework for Human Resource Management
COMPETITIVE CHALLENGES
Globalization
Technology
Managing change
Human capital
Responsiveness
Cost containment
HUMAN RESOURCES
Planning
Recruitment
Staffing
Job design
Training/development
Appraisal
Communications
Compensation
Benefits
Labor relations
EMPLOYEE CONCERNS
Background diversity
Age distribution
Gender issues
Educational levels
Employee rights
Privacy issues
Work attitudes
Family concerns
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Presentation Slide 1–1
Figure 1.1

6. Competitive Challenges and Human Resources Management
The most pressing competitive issues facing firms:
Going global
Embracing technology
Managing change
Developing human capital
Responding to the market
Containing costs
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7. Going Global Globalization Impact of Globalization
The trend toward opening up foreign markets to international trade and investment.
Impact of Globalization
Partnerships with foreign firms
“Anything, anywhere, anytime” markets
Lower trade and tariff barriers
NAFTA, EU, APEC trade agreements
WTO and GATT
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8. Going Global (cont’d) Impact on HRM
Different geographies, cultures, laws, and business practices
Issues:
Identifying capable expatriate managers.
Developing foreign culture and work practice training programs.
Adjusting compensation plans for overseas work.
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9. Embracing New Technology
Knowledge Workers
Workers whose responsibilities extend beyond the physical execution of work to include planning, decision making, and problem solving.
The Spread of E-commerce
The Rise of Virtual Workers
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10. Influence of Technology in HRM
Human Resources Information System (HRIS)
Computerized system that provides current and accurate data for purposes of control and decision making.
Benefits:
Store and retrieve of large quantities of data.
Combine and reconfigure data to create new information.
Institutionalization of organizational knowledge.
Easier communications.
Lower administrative costs, increase productivity and response times.
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11. Major Uses For HR Information Systems
Source: HR and Technology Survey, Deloitte & Touche and Lawson Software, 1998.
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HRM 1

12. Transformational Impact
Impact of IT on HRM
Operational Impact
Relational Impact
HRM
Transformational Impact
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13. A Guide To Internet Sites
American Management Association ( AMA membership, programs, training, etc.
Society for Human Resource Management ( Current events, information, connections, articles.
HR Professional’s Gateway to the Internet ( Links to HR-related web pages.
Training and Development Homepage ( Job mart, training links, T&D electronic mailing list links.
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HRM 2

14. A Guide To Internet Sites (cont’d)
FedWorld ( A gateway to many government web sites.
U.S. Department of Labor ( Job bank, labor statistics, press releases, grants, contract information.
Occupational Safety and Health Resources ( OSHA-related sites, government pages, resources, etc.
AFL-CIO ( Union news, issue papers, press releases, links to labor sites.
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HRM 2

15. HRM IT Investment Factors
Initial costs and annual maintenance costs
Fit of software packages to the employee base
Ability to upgrade Increased efficiency and time savings
Compatibility with current systems
User-friendliness
Availability of technical support
Needs for customizing
Time required to implement
Training time required for HR and payroll
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16. Managing Change Types of Change
Reactive change
Change that occurs after external forces have already affected performance
Proactive change
Change initiated to take advantage of targeted opportunities
Formal change management programs help to keep employees focused on the success of the business.
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17. Managing Change Why Change Efforts Fail:
Not establishing a sense of urgency.
Not creating a powerful coalition to guide the effort.
Lacking leaders who have a vision.
Lacking leaders who communicate the vision.
Not removing obstacles to the new vision.
Not systematically planning for and creating short-term “wins.”
Declaring victory too soon.
Not anchoring changes in the corporate culture.
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18. Developing Human Capital
The knowledge, skills, and capabilities of individuals that have economic value to an organization.
Valuable because capital:
Is based on company-specific skills.
Is gained through long-term experience.
Can be expanded through development.
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19. Responding to the Market
Total Quality Management (TQM)
A set of principles and practices whose core ideas include understanding customer needs, doing things right the first time, and striving for continuous improvement.
Six Sigma
A process used to translate customer needs into a set of optimal tasks that are performed in concert with one another.
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20. Responding to the Market
Reengineering
Fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in cost, quality, service, and speed.
Requires that managers create an environment for change.
Depends on effective leadership and communication processes.
Requires that administrative systems be reviewed and modified.
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21. Containing Costs Downsizing Outsourcing Employee Leasing
The planned elimination of jobs (“head count”).
Outsourcing
Contracting outside the organization to have work done that formerly was done by internal employees.
Employee Leasing
The process of dismissing employees who are then hired by a leasing company (which handles all HR-related activities) and contracting with that company to lease back the employees.
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22. Downsizing and Upsizing
Percent of companies reporting that they:
Source: Gene Koretz, “Hire Math: Fire 3, Add 5,” Business Week Online (March 13, 2000).
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*All annual readings are for 12 months ending at midyear. Categories are not mutually exclusive.
Figure 1.2

23. Containing Costs (cont’d)
Hidden Costs of Layoff
Severance and rehiring costs
Accrued vacation and sick day payouts
Pension and benefit payoffs
Potential lawsuits from aggrieved workers
Loss of institutional memory and trust in management
Lack of staffers when the economy rebounds
Survivors who are risk-averse, paranoid, and political
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24. Containing Costs (cont’d)
Benefits of a No-Layoff Policy
A fiercely loyal,more productive workforce
Higher customer satisfaction
Readiness to snap back with the economy
A recruiting edge
Workers who aren’t afraid to innovate, knowing their jobs are safe.
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25. Productivity Enhancements
ENVIRONMENT
Empowerment
Teams
Leader support
Culture
Perf = f (A,M,E)
MOTIVATION
Job enrichment
Promotions
Coaching
Feedback
Rewards
ABILITY
Recruitment
Selection
Training
Development
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Presentation Slide 1–2
Figure 1.3

26. Social Issues and HRM Changing Demographics
Shrinking pool of entry-level workers
Productivity
Individual differences
Retirement benefits
Social Security contributions
Skills development
Use of temporary employees
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HRM 4

27. Social Issues and HRM (cont’d)
Employer/Employee Concerns
Job as an entitlement
Right to work
Whistle-blowing
Employment at will
AIDS
Comparable worth
Concern for privacy
Mandated benefits
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HRM 4

28. Social Issues and HRM (cont’d)
Attitudes Toward Work and Family
Day care
Flextime
Job sharing
Alternative work schedules
Elder care
Job rotation
Parental leave
Telecommuting
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HRM 4

29. Labor Force and Racial Distribution
Source: “Labor Force,” Occupational Outlook Quarterly 45. no. 4 (Winter 2001/2002): 36–41.
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Figure 1.4a

30. Labor Force Growth By Race And Hispanic Origin, Projected 2000–2010
Source: “Labor Force,” Occupational Outlook Quarterly 45. no. 4 (Winter 2001/2002): 36–41.
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Figure 1.4b

31. Labor Force Share By Race And Hispanic Origin, 2000 And Projected 2010
Source: “Labor Force,” Occupational Outlook Quarterly 45. no. 4 (Winter 2001/2002): 36–41.
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Figure 1.4c

32. Labor Force Participation Rate By Sex, 1950–2000 And Projected 2000–2010
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Figure 1.5a

33. Labor Force Growth By Sex, Projected 2000–2010
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Figure 1.5b

34. Labor Force Share By Sex, 1990, 2000, And Projected 2010
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Figure 1.5c

35. Education Pays
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Source: U.S. Department of Labor.
Figure 1.6

36. Model of Diversity Management Strategy
Source: Kathleen Iverson, “Managing for Effective Workforce Diversity,” Cornell Hotel and Restaurant Administration Quarterly 41, no. 2 (April 2000): 31–38.
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Figure 1.7

37. Why Diversity?
The primary business reasons for diversity management include…
Increased marketplace understanding (80%)
Better utilization of talent (93%)
Enhanced creativity (53%)
Increased quality of team problem solving (40%)
Breadth of understanding in leadership positions (60%)
Source: Association of Executive Search Consultants (member survey). Used with permission of the Association of Executive Search Consultants,
Presentation Slide 1–3
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HRM 5

38. Top Issues for Managers in Balancing Work and Home
Executive recruiters say 75 percent of senior management candidates and 88 percent of middle managers raised concerns about balancing work and home. Top issues:
Source: Association of Executive Search Consultants (member survey). Used with permission of the Association of Executive Search Consultants,
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Figure 1.8

39. Qualities of Human Resources Managers
Responsibilities
Advice and counsel
Service
Policy formulation and implementation
Employee advocacy
Competencies
Business mastery
HR mastery
Change mastery
Personal credibility
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40. Human Resource Competency Model
Business Mastery
Business acumen
Customer orientation
External Relations
Human Resource Competency Model
HR Mastery
Staffing
Performance appraisal
Rewards system
Communication
Organization design
Change Mastery
Interpersonal skills and influence
Problem-solving skills
Innovation and creativity
Personal Credibility
Trust
Personal relationships
Lived values
Courage
Source: Arthur Yeung, Wayne Brockbank, and Dave Ulrich, “Lower Cost, Higher Value: Human Resource Function in Transformation.” Reprinted with permission from Human Resource Planning, Vol. 17, No. 3 (1994). Copyright 1994 by The Human Resource Planning Society, 317 Madison Avenue, Suite 1509, New York, NY 10017, Phone: (212) , Fax: (212)
Presentation Slide 1–4
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Figure 1.9