copyright © 2010 pearson education, inc. publishing as prentice hall14-1 human resource management...

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 14-1

Human Resource Management

Chapter Fourteen

Creating High-Performing HR Systems


Axioms for Effectively Managing Employees

No two companies are the same There is no one best way to manage

employees Using the wrong practice, or using the right

practice poorly, can cause more harm than good


High-Performing HR Systems

External alignment—managers select HR activities that help company meet its organizational demands, cope with environmental factors and comply with regulatory issues

Internal alignment—focuses on how well a firm’s employee management practices support one another


External AlignmentCompany’s strategy influences: How jobs are designed Workforce planning tactics Recruitment and selection practices Types of training and development Performance evaluation methods Decisions concerning compensation and

benefits Safety and wellness plans


Other External Factors

Labor force trends Diversity of the labor

force Ethical and social

responsibilities of the firm

Laws and regulations


Internal Fit of HR Practices

Each decision influences other choices companies make about managing employees

Synergies occur when combined with other HR practices

Powerful connections occur when practices support and reinforce each other


Managing the Employment Portfolio

HR systems may target a variety of employee contributions like:

Safety Customer service Productivity Creativity Quality


Strategic Value

Employees contribute different things to their firms

As the strategic value of an employee’s contributions decreases, the potential return from his/her contributions diminishes

This is often when employers turn to external sources (outsourcing)


Uniqueness The extent to which contributions employees make

are specialized or unique to a company and not readily available in the open market

Employers more willing to invest in employees to realize those contributions

Transactional relationships—economic relationships that focus on both parties meeting the terms of the agreement they have with each other

Relational relationships—involve much greater commitment to the individual by the company and vice versa


The Employment Relationship

Uniqueness of Employee Contributions and the Employment Relationship


Employment Portfolio

Strategic value of certain positions influences the following types of HR systems:

Commitment-based Productivity-based Compliance-based Collaborative-based


Core Employees

Most likely to contribute directly to a firm’s core competencies based on their knowledge

Companies invest in them for their long-term success

Firms may invest extensively in developing their competencies and empower them


Job-Based Employees

Do not contribute in a unique manner and are likely to be from the external labor market

Managers use a productivity–based HR system that involves standardized jobs and people who can contribute in these jobs

Focus is on efficiency and productivity improvements


Contract Workers

External workers who perform tasks that are neither strategically valuable nor unique

Use compliance-based HR systems focus on meeting preset rules, regulations, and/or procedures. They focus on short-term productivity and efficiency

Compensation of these workers likely to be hourly wages


Alliance Partners Individuals who make unique contributions of

limited value in terms of strategy Managers use a collaborative-based HR

system and turn to external labor on a long-term basis

Example of this type of employee is a consultant

copyright © 2010 pearson education, inc. publishing as prentice hall14-1 human resource management...

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