CHAPTER 1 HOW IS THE HRM FUNCTION CHANGING?

HUMAN RESOURCE MANAGEMENT:  The amount of time that the HRM function devotes
GAINING A COMPETITIVE ADVANTAGE to administrative tasks is decreasing, and its roles as
a strategic business partner, change agent, and
INTRODUCTION
employee advocate are increasing.
 Competitiveness - refers to a company’s ability to  In shifting the focus from current operations to
maintain and gain market share in its industry. strategies for the future and preparing non-HR
managers to develop and implement HR practices,
 Human resource management (HRM) refers to the HR managers face two important challenges:
policies, practices, and systems that influence o Self-service refers to giving employees
employees’ behavior, attitudes, and performance.
online access to information about HR
o Many companies refer to HRM as involving issues
“people practices" o Outsourcing refers to the practice of having
another company provide services
HUMAN RESOURCE MANAGEMENT PRACTICES
DEMONSTRATING THE STRATEGIC VALUE OF HR

 Evidence-based HR refers to the demonstration

that human resources practices have a positive
influence on the company’s bottom or key
stakeholders (employees, customers, community,
shareholders).
 HR or workforce analytics refers to the practice of
using quantitative methods and scientific methods
to analyze big data.
RESPONSIBILITIES OF HR DEPARTMENTS o Big data refers to information merged from
human resource databases, corporate
 Employment and Recruiting financial statements, employee surveys, and
 Training and development other data sources to make evidence-based
 Compensation human resource decisions and show that
 Benefits HR practices influence the organization’s
 Employee Services bottom line, including profits and costs.
 Employee and community relations
 Personnel records THE HRM PROFESSION: POSITIONS & JOBS
 Health and Safety  HR salaries vary depending on education and
 Strategic Planning experience as well as the type of industry.
ROLES OF HR DEPARTMENTS TO PERFORM o HR specialists
o HR generalists
o College degrees are held by the vast
majority of HRM professionals
o Professional certification is less common
than membership in professional
associations
 The primary professional organization for HRM is
the Society for Human Resource Management
(SHRM)

COMPETITIVE CHALLENGES INFLUENCING HRM

HR AS A BUSINESS WITH THREE PRODUCT LINES
 o Link human resource management activities
to the company’s business strategy.
o Evaluate the extent to which the human
THE SUSTAINABILITY CHALLENGE resource function is helping the company’s
meet it’s strategic objectives.
 Sustainability refers to the ability of a company to
 Measures of human resource practices primarily
survive and succeed in a dynamic competitive
relate to productivity, people, and processes.
environment.
 Stakeholders refers to shareholders, the CUSTOMER SERVICE AND QUALITY EMPHASIS
community, customers, and all other parties that
have an interest in seeing that the company
succeeds.
 Sustainability includes the ability to:
o deal with economic and social changes
o engage in responsible and ethical business
practices
o provide high quality products and services,
and
o put in place methods to determine if the
company is meeting stakeholders’ needs

 The changing structure of the economy  Total Quality Management (TQM) is a company-
wide effort to continuously improve the ways
o Impact of September 11, 2001 peoples, machines, and systems accomplish work
o The competition for labor  Core values of TQM include:
o designing methods and processes to meet
 Skill demands for jobs are changing the needs of internal and external
customers
 Knowledge is becoming more valuable
o all employees receive training in quality
o Intellectual capital refers to the creativity, o promotion of cooperation with vendors,
productivity, and service provided by suppliers, and customers
employees o management gives feedback on progress
o Knowledge workers are employees who  Malcolm Baldrige National Quality Award
contribute to the company not through
manual labor but through a specialized o established in 1987 to promote quality
body of knowledge awareness, to recognize quality
achievements, and to publicize successful
o Empowerment means giving employees quality strategies.
responsibility and authority to make
decisions regarding all aspects of product  ISO 9000:2000
development or customer service o quality standards adopted worldwide.
 A learning organization embraces a culture of  Six Sigma process
lifelong learning, enabling all employees to
continually acquire and share knowledge o system of measuring, analyzing, improving,
and controlling processes once they meet
 The psychological contract describes what an quality standards.
employee expects to contribute and what the
company will provide to the employee for these MANAGING A DIVERSE WORKFORCE
contributions
 Internal labor force is the labor force of current
 Alternative work arrangements include employees.
independent contractors, on-call workers,  External labor market includes persons actively
temporary workers, and contract company workers seeking employment.
 The U.S. workforce is becoming increasingly
THE BALANCED SCORECARD diverse.
 The balanced scorecard gives managers the o Women Minorities
opportunity to look at the company from the o Disabled workers
perspective of internal and external customers, o Immigrants
employees and shareholders.
 The balanced scorecard should be used to:
CHANGING DEMOGRAPHICS DIVERSITY OF THE THE GLOBAL CHALLENGE
WORKFORCE
 Companies are finding that to survive they must
To successfully manage a diverse workforce, managers compete in international markets as well as fend off
must develop a new set of skills, including: foreign corporations’ attempts to gain ground in the
U.S.
1. Communicating effectively with employees from a
 Every business must be prepared to deal with the
wide variety of cultural backgrounds.
global economy. This is made easier by technology.
2. Coaching and developing employees of different  Offshoring refers to the exporting of jobs from
ages, educational backgrounds, ethnicity, physical developed countries to less developed countries.
ability, and race.  Many companies are entering international markets
by exporting their products overseas, building
3. Providing performance feedback that is based on
manufacturing facilities in other countries, entering
objective outcomes.
into alliances with foreign companies, and engaging
4. Creating a work environment that makes it in e-commerce
comfortable for employees of all backgrounds to be
THE TECHNOLOGY CHALLENGE
creative and innovative.
 Technology has reshaped the way we play, plan our
5. Recognizing and responding to generational issues.
lives, and where we work
LEGAL AND ETHICAL ISSUES o The overall impact of the Internet
o The Internet has created a new business model
 Five main areas of the legal environment have
– e-commerce – in which business transactions
influenced HRM over the past 25 years
and relationships can be conducted
o Equal employment opportunity legislation
electronically
o Employee safety and health
o Employee pay and benefits  Advances in technology have:
o Employee privacy
o changed how and where we work,
o Job security
 Women and minorities still face the “glass ceiling” o resulted in high-performance models of work
 The Sarbanes-Oxley Act of 2002 sets strict rules for systems,
corporate behavior and sets heavy fines for
o increased the use of teams to improve
noncompliance, especially in regards to accounting
customer service and product quality,
practices
o changed skill requirements,
 Human resource managers must satisfy three basic
standards for their practices to be considered o increased working partnerships,
ethical:
o led to changes in company structure and
o HRM practices must result in the greatest reporting relationships,
good for the largest number of people
o increased the availability of Human Resource
o Employment practices must respect basic Information Systems (HRIS),
human rights of privacy, due process,
consent, and free speech o which are used to acquire, store, manipulate,
analyze, retrieve, and distribute HR information,
o Managers must treat employees equitably
and fairly o increased the availability of e-HRM, which is the
processing and transmission of digitalized
information used in HRM,

o increased the competitiveness of high

performance work systems.
EXAMPLES OF HOW HRM PRACTICES CAN HELP
COMPANIES MEET COMPETITIVE CHALLENGES

MEETING COMPETITIVE CHALLENGES THROUGH HRM

PRACTICES

 HRM practices that help companies deal with the

four competitive challenges can be grouped into
four dimensions
o The human resource environment
o Acquiring and preparing human resources
o Assessment and development of human
resources
o Compensating human resources

 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