Competitive advantage through Human Resource

COMPETITIVE ADVANTAGE

THROUGH HUMAN RESOURCES

By:Maged Elsakka

Competitive Advantage Through Human Resources

Objectives

• Competitive advantage: what and why?

• How HRM activities may provide competitive advantage

• Identify needed skills

Competitive Advantage Through Human Resources

Competitive advantage

• Customer value

• Maintaining uniqueness

HRM as a competitive advantage

• HRM and strategy implementation

• HR and the capacity for change

• Human resources and strategic unity

Skills required for HRM Competitiveness

• General manager skills

• HRM professional skills

Sample of Strategic Activities within HRM Domains

Organizational Design

• Formal/informal

• Independence and responsiveness

• Job design

• Processes used

Staffing

• Criteria for bringing in new employees

• Procedures for recruiting and orienting

• Design of career paths and ladders

• Processes for succession planning

• Types of programs for terminated employees


Performance Appraisal and Management

• Types of standards set

• Types of performance review

• Processes used to ensure feedback

• Sources of data for measurement

Reward and Benefits Systems

• Types of financial incentives

• Linkage of rewards to strategic plans

• Individual vs. group incentives

• Structure of nonfinancial rewards


Employee Training and Organizational Development

• Desired outcomes of development

• Types of participants in development programs

• Content of programs and integration with strategic direction

• Delivery of programs

Health and Safety Issues

• Compliance with health and safety (OSHA)

• Reduce stress

• Reduce illness and accidents

Sample of Strategic Activities within HRM Domains(continued)

Employee/Employer Relationships

• Types of information presented

• Types of communication channels

• Design of communication programs

Productivity Improvement Programs

• TQM

• Design issues

• Assessments of outcomes/deliverables

• Customer based focus

Analysis of SWOT

Organizational Environmental Capabilities Conditions

Strengths Opportunities

Weaknesses Threats

Effective Human Resource

Planning

A Diagnostic Framework: Internal and External Consistency

1. Organization’s strategy

Distinguish from competition

Intended competencies

Differentiating features

2. Skills, abilities, attitudes and behaviors needed

3. Current or proposed policies on:

Recruitment

Selection

Compensation

Career development

Training

Employment security

Use of contract employees

Ownership

Performance appraisal

Division of labor

Organization of work

4. Coordination of 1, 2 and 3 with organization’s strategy

HR Competencies Needed for Strategic Business Partners

HRM Design and Delivery Competencies

• Organization design

• Staffing

• Employee training and organization development

• Performance appraisal and management

• Reward and benefits systems

• Employee/employer relationships

• Productivity improvement

• Health and safety

Business Competencies

• Financial or economic

• Strategic or product capabilities

• Technological

Management-of-Change Competencies

• Contracting

• Diagnosing

• Intervening

• Implementing

• Evaluating

• Influencing

Seven Key Factors for Success in Making Change Happen

Key Success Factors for Change

Leading change (who)

Shared need (why)

Shaping a vision

(what)

Commitment

(who else)

Questions to Assess and Accomplish the Key Success Factors for Change

Do we have a leader who champions?

who commits personally? who commits resources?

Do employees see the reason for and understand why the change?

see how it will help them?

Do employees see the outcomes of change?

get excited and understand how customers are affected?

Do the sponsors enlist support of all needed for the change to happen?

build a responsibility matrix?

Seven Key Factors for Success in Making Change Happen(continued)

Key Success Factors for

Change

Systems (how)

Monitoring (how measured)

Making it last (how long)

Questions to Assess and Accomplish the Key Success Factors for Change

Do the sponsors link change to other HR systems?

recognize the implications of the change?

Do the sponsors measure the success?

benchmark progress and implement process?

Do the sponsors know how to start and keep it going?

have a plan of adaptation?

Human Resource Professional Staff Advisor

Internal Consultant

Change Agent

Provider of Personnel Services Controller of

Organizational Design Personnel Policies

Staffing Auditing

Employee and Organizational Stabilizing

Development

Performance Appraisal

and Management

Reward and Benefits Systems

Employee/Employer

Relationships Liason RoleProductivity Improvement Coordination

Health and Safety Integration

HRM Activities and Sample Issues

Major Activities of HRM Professionals

Organization Design

Job Design

Staffing

Recruiting/interviewing/hiring

Sample of Issues and Choices for

HRM Practices

Organization Design

How can we design jobs so that individuals within the organization work on tasks which are rewarding and self-reinforcing

Staffing

What criteria do we set Short term vs. long term Full-time vs. part-time Contract vs. leased Job-focused vs. career focused Customer perspective

The Competitive Advantage of Marriott Corporation

Objectives

1. Identify HRM practices to create “employer of choice.”

2. Connect “employer of choice” with “provider of choice.”


Part A: Individual Analysis

Step 1: Generate a list of three HR actions to get to “employer of choice”

Step 2: Identify the top three actions and justify using:

• Marriott's competitive advantage

• Major HR issues

• Strategies

• Complete Form 2.2.1

• Complete Assessment Questions


Part B: Group Analysis

Step 1: As a group:

• Identify competitive advantage of accounting department

• Review individual 2.2.1 forms

• Reach consensus on top three issues

• Discuss how the activities could bring Marriott “employer of choice” and develop HR

competencies.

• Identify benefits/drawbacks of each recommendation

Step 2: Consensus recommendations to class


Priority List

1. Survey new employees on job preferences

Justification: Relative importance of the various options

2. Study these data and run some cost figures

Justification: Which options financially feasible.

3. Increase the starting salary to the top of the competitive scale.

Justification: Direct compensation important

4. Look at indirect compensation

Justification: Total cost less than perceived value


1. To what extent do your recommendations generalize to other organizations other than Marriott?

Study preferences of potential employees generalizes to all organizations

Recommendation for the travel package is unique to Marriott.


2. What additional information would assist you in developing the most valid list of HRM activities?

List of all HRM activities now implemented

Statistics on the success ratio and cost factors

Current compensation policy


3. What other preparation could you have made for class discussion on the Marriott Corporation?

Strategic plans

Marriott's competitive position

Interviews with Marriott employees


4. What competitive advantage principle did you consider in compiling your priority list?

Financial capability enhances the "organizational capability" by:

attracting and retaining more effective employees

1. What is meant by the term competitive advantage? Why is it important for an organization?

• Strategies to exploit profitable opportunities

• Perceived customer value and uniqueness

• Maximizing return on investment

• Necessary to survive and prosper

2. How can HRM activities be used to assist organizations in becoming competitive?

• HRM activities:

Hire

Train

Motivate

Employee treatment

Employee commitment

• Competitive advantage through organizational capability

Manage organizational systems and people to match customer and strategic needs

Flexibility/adaptability in dynamic/turbulent environment

Continuity and stability in more stable environments

3. To what extent do you consider corporate social responsibility when considering a product or service? Interview five friends to determine if any of them have considered social issues such as the environment or labor policies in their decision to purchase.

Customer value

Price

Quality

Convenience

Service

Dependability

Operational excellence

Customer intimacy

Product leadership

Diverse practices

Fair labor practices

Environmentally concerned

4. Provide some recommendations for how general managers and HRM professionals can acquire the skills they need to utilize HRM programs effectively.

• Seminars, conferences/workshops, literature, networking

• Develop interpersonal and management skills

Self-paced learning

Case studies

Management games

Assessment centers

Example of food manufacturing company in

SE U.S.

• Characteristics

Controls 65% of local market

Unionized

• Problems

Lack of HRM planning

Employees feel manipulated by

management

Low morale

Poor work scheduling

(no one has two consecutive days

off)

• Possible HRM activities

Cross training

Flextime

Job sharing

Compressed work weeks

5. Provide two examples of companies you are familiar with which are

not using their HRM programs to utilize HRM programs effectively.

6. In the context of a SWOT analysis, evaluate the strategic state of Personnel Assessment Systems. What additional data do you need as a part of your SWOT analysis?

Strengths Opportunities

Scientifically valid testing International markets

Stable customers Mass marketing

Weakness Threat

Change in testing media (Internet) Behind on on-line testing

Additional data

“Mass market” test similar to “core business” test?

How far away PAS is from having web site?

Will test be offered in host country dialects?

What are the KASOC’s of the current personnel of PAS?