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7/30/2019 Gaining a Competitive Advantage-Human Resources Perspective
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Human Resource Management:
Gaining a Competitive Advantage
Chapter 01
Human Resource Management:
Gaining a Competitive Advantage
Copyri ght 2013 by The McGraw-H il l Companies, In c. All ri ghts reserved.McGraw-Hill/Irwin
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Learning Objectives
Discuss roles and activities of HRM function
Discuss implications of the economy, makeup of thelabor force and ethics for company sustainability
Discuss how HRM affects a balanced scorecard
Discuss what companies should do to compete inglobal marketplace
Identify how technology such as social networking isinfluencing HRM
Discuss HRM practices that support high-performance work systems
Provide a brief description of HRM practices
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Introduction
Competitivenessa companys ability to
maintain and gain market share.
Human resource management(HRM) thepolicies, practices, and systems that influence
employees behavior, attitudes and
performance.
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HRM Practices
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HR as a Business with 3 Product Lines
Business
Partner
Services
Strategic Partner
HumanResources
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6 HR Competencies
Credible
ActivistCultural
Steward
Business
Ally
Strategic
Architect
OperationalExecutor
Talent Manager/
Organizational
Designer
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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 currentoperations to future strategies and prepare non-HRmanagers 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 centersand business partners to help control costs
and improve business-relevance and
timeliness of HR practices.
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HR Playing a Strategic Role
in the Business?
1. What is HR doing to provide value-addedservices to internal clients?
2. What can HR add to the bottom line?
3. How are you measuring HR effectiveness?
4. How can we reinvest in employees?
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Questions, cont.
5. What HR strategy will get the business frompoint A to point B?
6. What makes an employee want to stay?
7. How will we invest in HR for a better HRdepartment than competitors have?
8. What should we be doing to improve our
marketplace position?
9. Whats the best change to prepare for thefuture?
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How is the HRM Function Changing?
As part of its strategic role, HR can engagein evidence-based HR.
Evidence-based HR demonstrating thatHR practices have a positive influence onthe companys bottom line or keystakeholders.
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The HRM Profession
HR salaries vary according to position,experience, education, training, location andfirm size.
The primary professional organization forHRM is the Society for Human ResourceManagement (SHRM) (www.shrm.org)
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3 Competitive Challenges
Influencing HRM
Sustainability
Technology
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The Sustainability Challenge
Sustainability is the ability of a company tosurvive and succeed in a dynamiccompetitive environment.
Stakeholders include shareholders, thecommunity, customers and all other partiesthat 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 intangibleassets, human capital and socialresponsibility
adapt to changing characteristics andexpectationsof 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
Development and speed of social media
Growth in professional and service occupations
Skill demands for jobs are changing
Knowledge is becoming more valuable
Intangible assets
Knowledge workers
Empowerment
Learning organization
Social collaboration and social networkingtechnology
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The Sustainability Challenge
PsychologicalContract
AlternativeWork
Arrangements
Changes in
EmploymentExpectations
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Common Themes of 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 plannedstrategic effort by a company to use bundles of
HRM practices including acquiring and
assessing employees, learning and
development, performance management , and
compensation to attract, retain, develop, and
motivate highly skilled employees and
managers. Growth of contingent workers and part-time
employees
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The Balanced Scorecard
The balanced scorecard provides a viewof the company from the perspective of
internal and external customers, employees
and shareholders.
The balanced scorecard should be used
to:
Link HRM activities to the companys business
strategy.Evaluate the extent to which HR is helping meet
the companys strategic objectives.
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The Balanced Scorecard
How do customers see us?
What must we excel at?
Can we continuously improve and create
value?
How do we look to shareholders?
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Customer Service and Quality
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 andcustomers.
Managers measure progress with feedback basedon data.
Quality is designed into a product or service so thaterrors are prevented rather than being detected andcorrected.
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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 DemographicsWorkforce Diversity
Internal labor force - current employees
External labor market - persons outside
the firm actively seeking employment
U.S. workforce is aging rapidly
Increased workforce diversity
Influence of immigration
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Managing a Diverse Workforce
To manage a diverse workforce, managers must developnew skills to:
Communicate, coach and develop employees from a
variety of cultural and educational backgrounds,
ethnicity, age, ability and race. Provide performance feedback based on objective
outcomes.
Create a work environment that makes it comfortable
for employees of all backgrounds to be creative andinnovative.
Recognize and respond to generational issues.
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Legal and Ethical Issues
5 legal areas that influenced HRM :1. Equal employment opportunity legislation2. Employee safety and health3. Employee pay and benefits4. Employee privacy5. Job security
Women and minorities still face the glass cei l ing
Sarbanes-Oxley Act of 2002
Federal health care legislation
Companies which employ unlawful immigrants or abuselaborers
Data-security practices and protecting intellectual property
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Legal and Ethical Issues
Ethics - the fundamental principles by which employees andcompanies interact
Ethical HR practices:
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 and customers equitably
and fairly Managers must develop and distribute a Code of Ethics,
policies, processes and procedures, audit and train
employees
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4 Principles of Ethical Companies
1. Successful companies, in relationships withcustomers, vendors and clients, emphasize mutual
benefits.
2. Employees assume responsibility for the actions ofthe company.
3. Companies have a sense of purpose or vision theemployees value and use in their day-to-day work.
4. They emphasize fairness; another persons interestscount as much as their own.
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The Global Challenge
To survive companies must deal with theglobal economy, compete in and developglobal markets and prepare employees for
global assignments.Offshoring exporting jobs from developed
countries to less developed countries
Onshoring exporting jobs to rural parts ofthe United States
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Technology Challenge
The overall impact of the Internet
The Internet has created a new
business model e-commerce forconducting business transactions and
relationships electronically.
Social networking
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The Technology Challenge
Advances in technology have:changed how and where we work
resulted in high-performance worksystems
increased the use of teams to improvecustomer service and product quality
changed skill requirements
increased working partnerships
led to changes in company structure andreporting relationships
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The Technology Challenge
Advances in technology have increased: use and availability ofHuman Resource
Information Systems(HRIS)
use and availability ofe-HRM competitiveness in high-performance work
systems
HR Dashboard Metrics
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High-Performance Work Systems
Work in teams, virtual teams and partnerships
Changes in skill requirements
Changes in company structure and reporting
relationships
Increased use and availability of e-HRM and Human
Resource Information Systems (HRIS)
HRM practices support high-performance worksystems through staffing, work design, training,
compensation and performance management.
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Meeting 4 Competitive Challenges
Through HRM Practices
HRM practices that help companies deal withthe four competitive challenges can begrouped into four dimensions:
1. The HR environment2.Acquiring and preparing HR
3.Assessment and development of HR4. Compensating HR
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Meeting Competitive Challenges
Through HRM Practices
Managing internal and external environmentalfactors allows employees to make the greatestpossible contribution to company productivity
and competitiveness.
Customer needs for new products or servicesinfluence the number and type of employeesbusinesses need to be successful.
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Meeting Competitive Challenges
Through HRM Practices
Managers need to ensure that employeeshave the necessary skills to perform currentand future jobs.
Besides interesting work, pay and benefitsare the most important incentives thatcompanies can offer employees in exchangefor contributing to productivity, quality, and
customer service. Create pay systems, reward employee
contributions and provide benefits
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Summary
HR has three product lines: administrative services, business partnerservices, and strategic services.
To successfully manage HR, individuals need personal credibility,
business and technology knowledge, understanding of business
strategy, and ability to deliver HR services.
HR management practices should be evidence-based.
HR practices are important for helping companies deal with
sustainability, globalization, and technology challenges.
HR managers must address global and technology challenges.