Chapter 1

Human Resource Management:

Gaining a Competitive Advantage

Copyright 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

Learning Objectives
1. Discuss roles and activities of HRM function
2. Discuss implications of the economy, makeup of
the labor force and ethics for company
sustainability

3. Discuss how HRM affects a balanced scorecard

4. Discuss what companies should do to compete
in global marketplace

5. Identify how technology such as social

networking is influencing HRM

6. Discuss HRM practices that support highperformance work systems

7. Provide a brief description of HRM practices

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Introduction
Competitiveness a companys
ability to maintain and gain market
share.

Human resource management

(HRM) the policies, practices, and
systems that influence employees
behavior, attitudes and performance.

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HRM Practices

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Responsibilities of HR
Departments
1. Employment and Recruiting
2. Training and Development
3. Compensation
4. Benefits
5. Employee Services
6. Employee and Community Relations
7. Personnel Records
8. Health and Safety
9. Strategic Planning
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HR as a Business with 3 Product

Lines
Business
Partner
Services
Strategic Partner

Human
Resources

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6 HR Competencies

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Strategic Role of the HRM

Function
Time spent on administrative tasks is
decreasing.

HR roles as a strategic business partner, change

agent and employee advocate are increasing.

HR is challenged to shift focus from current

operations to future strategies and prepare nonHR managers to develop and implement HR
practices.

This shift presents two challenges:

Self-service
Outsourcing
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Shared Service Model

Shared Service Model is a way to
organize the HR function that includes
centers of expertise or excellence,
service centers and business
partners to help control costs and
improve business-relevance and
timeliness of HR practices.

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HRs Strategic Role in the Business

1. What is HR doing to provide value-added services to internal clients?
2. How are you measuring HR effectiveness?
3. How can we reinvest in employees?
4. What HR strategy will get the business from point A to point B?
5. What makes an employee want to stay?
6. How will we invest in HR for a better HR department than
competitors?

7. What should we be doing to improve our marketplace position?

8. Whats the best change to prepare for the future?

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How is the HRM Function

Changing?
As part of its strategic role, HR can
engage in evidence-based HR.

Evidence-based HR

demonstrating that HR practices have

a positive influence on the companys
bottom line or key stakeholders.

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The HRM Profession

HR salaries vary according to position,
experience, education, training,
location and firm size.

The primary professional organization

for HRM is the Society for Human
Resource Management (SHRM)

www.shrm.org)

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3 Competitive Challenges
Influencing HRM

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The Sustainability Challenge

Sustainability is the ability of a

company to survive and succeed in a

dynamic competitive environment.

Stakeholders include shareholders,

the community, customers and all
other parties that have an interest in
seeing that the company succeeds

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The Sustainability Challenge

Sustainability includes the ability to:
deliver a return to shareholders
provide high-quality products, services
and work experiences for employees
increase value placed on intangible
assets, human capital and social
responsibility
adapt to changing characteristics and
expectations of the labor force
address legal and ethical issues
effectively use new work
arrangements
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Economy - Implications for HR

Structure of the economy
Social collaboration and social networking
technology

Growth in professional and service occupations

Changing job skill demands
Intangible assets
Knowledge workers
Empowerment
Learning organization

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Change and Its Effect on Employment

Relationships

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Common Themes Employee

Engagement
Pride and satisfaction with employer and job
Opportunity to perform challenging work
Recognition and positive feedback from contributions
Personal support from manager
Effort above and beyond the minimum
Understanding link between ones job and companys
mission

Prospects for future growth with the company

Intention to stay with the company
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Talent Management
Talent management is the systematic planned
strategic effort to use bundles of HRM practices
acquiring and assessing employees, learning and
development, performance management and
compensation to attract, retain, develop and
motivate highly skilled employees and managers.

Alternative work arrangements include

independent contractors, on-call workers,
temporary workers, and contract company
workers.

Demanding Work, but with more flexibility.

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Balanced Scorecard and Social

Responsibility
Balanced scorecard provides a view of the company
from the perspective of internal and external customers,
employees and shareholders and is used to:
Link HRM activities to companys business strategy.
Evaluate extent HR is helping meet companys
strategic objectives.
Questions to identify HR related critical indicators or metrics :
1.
2.
3.
4.

How do customers see us?

What must we excel at?
Can we continuously improve and create value?
How do we look to shareholders?

Social, ethical and environmental

responsibility

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Customer Service and Quality

Customers expect excellent service.
Total Quality Management (TQM) Core Values
Methods and processes are designed to meet

internal and external customers needs.

Every employee receives training in quality.
Promote cooperation with vendors, suppliers and
customers.
Managers measure progress with feedback based
on data.
Quality is designed into a product or service so that
errors are prevented rather than being detected
and corrected.

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Customer Service and Quality

Malcolm Baldrige National Quality
Award

ISO 9000:2000
Six Sigma Process
Lean Thinking

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Changing Demographics and

Workforce Diversity
Internal labor force - current employees
External labor market - persons outside the firm
actively seeking employment

Average age of U.S. workforce will age.

Increased workforce diversity
Influence of immigration
Generational differences.
Gender and racial composition of the
workforce

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Legal Issues
Employment laws and regulations
Eliminating discrimination and harassment
Workplace safety
Data security practices and protecting intellectual property
Electronic monitoring and surveillance
Employee privacy rights, intellectual property rights and
social media

Federal health care legislation

Companies who employ unlawful immigrants or abuse
laborers

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Ethical Issues
Ethics - fundamental principles of right and wrong
by which employees and companies interact

Ethical HR practices:
HRM practices must result in greatest good for largest

number of people
Employment practices must respect basic human rights
of privacy, due process, consent, and free speech
Managers must treat employees and customers
equitably
and fairly
Develop and distribute a Code Of Ethics, policy, process
and procedures, audit and train employees

Sarbanes-Oxley Act of 2002

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4 Principles of Ethical
Companies

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Global Challenges

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Technology Challenge

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HRIS, Cloud Computing, and HR

Dashboards

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High-Performance Work
Systems
Work Teams, Virtual Teams and Partnerships
Changes in Skill Requirements and new
technology

Changes in Company Structure and Reporting

Relationships.

HRM practices support high-performance work

systems through staffing, work design,
training, compensation and performance
management.

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Meeting 4 Competitive
Challenges Through HRM
Practices

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Meeting Competitive
Challenges Through HRM
Practices
Managing internal and external

environmental factors allows employees to

make 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.

Assessment, Development and

Compensation of HR

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Summary
HR has three product lines: administrative services,
business partner services, and strategic services.

HR managers need personal credibility, business

and technology knowledge, understanding of
business strategy, and ability to deliver HR
services.

HR practices are important for helping companies

deal with sustainability, globalization, and
technology challenges and should be evidencebased.

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