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Gaining a Competitive Advantage

Gaining a Competitive Advantage

Discuss the roles and activities of a company’s human resource management functionDiscuss the implications of the economy, the makeup of the labor force, and ethics for company sustainabilityDiscuss how human resource management affects a company’s balanced scorecardDiscuss what companies should do to compete in the global marketplace

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Identify the characteristics of the workforce and how they influence human resource managementDiscuss human resource management practices that support high-performance work systemsProvide a brief description of human resource management practices

Gaining a Competitive Advantage

Gaining a Competitive Advantage

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IntroductionIntroduction

Competitiveness refers to a company’s ability to maintain and gain market share in its industryIt is related to company effectiveness

Human resource management refers to the policies, practices, and systems that influence employees’ behavior, attitudes, and performanceMany companies refer to HRM as involving “people

practices"

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Responsibilities of HR DepartmentsResponsibilities of HR Departments

Employment and recruitingTraining and developmentCompensationBenefitsEmployee ServicesEmployee and community relationsPersonnel recordsHealth and safetyStrategic planning

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What Roles Do HR Departments Perform?

What Roles Do HR Departments Perform?

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AdministrativeExpert

Change Agent

Strategic Partner

EmployeeAdvocate

HumanResources

How is the HRM Function Changing?

How is the HRM Function Changing?

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 issuesOutsourcing refers to the practice of having another company

provide services

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The HRM ProfessionThe HRM Profession

HR salaries vary depending on education and experience as well as the type of industryHR specialistsHR generalistsCollege degrees are held by the vast majority of HRM

professionalsProfessional certification is less common than membership in

professional associationsThe primary professional organization for HRM is the

Society for Human Resource Management (SHRM)

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Competitive Challenges Influencing HRM

Competitive Challenges Influencing HRM

Three competitive challenges that companies now face will increase the importance of HRM practices:

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The GlobalChallenge

The Challenge ofSustainability

The TechnologyChallenge

The Sustainability ChallengeThe Sustainability Challenge

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

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The Sustainability ChallengeThe Sustainability Challenge

The changing structure of the economy Impact of September 11, 2001 The competition for labor

Skill demands for jobs are changingKnowledge 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

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The Sustainability ChallengeThe Sustainability Challenge

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

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The Balanced ScorecardThe Balanced Scorecard

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.

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The Balanced ScorecardThe Balanced Scorecard

Customer

Internal

Innovation and Learning

Financial

How do customers see us?

What must we excel at?

Can we continue to improveand create value?

How do we look toshareholders?

Time, quality, performance,service, cost.

Processes that influence customersatisfaction, availability ofinformation on service and/ormanufacturing processes.

Improve operating efficiency, launch new products, continuousimprovement, empowering ofworkforce, employee satisfaction.

Profitability, growth, shareholdervalue.

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Customer Service and Quality Emphasis

Customer Service and Quality Emphasis

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 customersall employees receive training in qualitypromotion of cooperation with vendors, suppliers, and

customersmanagement gives feedback on progress

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Customer Service and Quality Emphasis

Customer Service and Quality Emphasis

Malcolm Baldrige National Quality Awardestablished in 1987 to promote quality

awareness, to recognize quality achievements, and to publicize successful quality strategies.

ISO 9000:2000quality standards adopted worldwide.

Six Sigma processsystem of measuring, analyzing, improving,

and controlling processes once they meet quality standards.

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Changing DemographicsDiversity of the WorkforceChanging Demographics

Diversity of the WorkforceInternal 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.

WomenMinoritiesDisabled workersImmigrants

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Managing a Diverse WorkforceManaging a Diverse Workforce

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.

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Legal and Ethical IssuesLegal and Ethical Issues

Five main areas of the legal environment have influenced HRM over the past 25 yearsEqual employment opportunity legislationEmployee safety and healthEmployee pay and benefitsEmployee privacyJob 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

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Legal and Ethical IssuesLegal and Ethical Issues

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

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The Global ChallengeThe Global Challenge

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

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The Technology ChallengeThe Technology Challenge

Technology has reshaped the way we play, plan our lives, and where we workThe overall impact of the InternetThe Internet has created a new business

model – e-commerce – in which business transactions and relationships can be conducted electronically

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The Technology ChallengeThe Technology Challenge

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.

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Meeting Competitive Challenges Through HRM Practices

Meeting Competitive Challenges Through HRM Practices

HRM practices that help companies deal with the four competitive challenges can be grouped into four dimensionsThe human resource environmentAcquiring and preparing human resourcesAssessment and development of human

resourcesCompensating human resources

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Meeting Competitive Challenges Through HRM Practices

Meeting Competitive Challenges Through HRM Practices

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

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