3. Objectives
After studying this chapter, you
should be able to:
1. Identify how firms gain sustainable competitive
advantage through people.
2. Explain how globalization is influencing human
resources management.
3. Describe the impact of information technology on
managing people.
4. Identify the importance of change management.
5. State HR’s role in developing intellectual capital.
6. Differentiate how TQM and reengineering
influence HR systems.
4. Objectives (cont’d)
After studying this chapter, you
should be able to:
7. Discuss the impact of cost pressures on HR
policies.
8. Discuss the primary demographic and
employee concerns pertaining to HRM.
9. Provide examples of the roles and
competencies of today’s HR managers.
5. Competitive Advantage through
People
• Core Competencies
– Integrated knowledge sets within an organization that
distinguish it from its competitors and deliver value to
customers.
• Sustained competitive advantage through people is
achieved if these human resources:
– Have value.
– Are rare and unavailable to competitors.
– Are difficult to imitate.
– Are organized for synergy.
6. Overall Framework for
Human Resource Management
Presentation Slide 1–1
COMPETITIVE
CHALLENGES
• Globalization
• Technology
• Managing change
• Human capital
• Responsiveness
• Cost containment
HUMAN
RESOURCES
• Planning
• Recruitment
• Staffing
• Job design
•Training/development
• Appraisal
• Communications
• Compensation
• Benefits
• Labor relations
EMPLOYEE
CONCERNS
• Background diversity
• Age distribution
• Gender issues
• Educational levels
• Employee rights
• Privacy issues
• Work attitudes
• Family concerns
Figure 1.1
7. Competitive Challenges and
Human Resources Management
• The most pressing competitive issues facing
firms:
– Going global
– Embracing technology
– Managing change
– Developing human capital
– Responding to the market
– Containing costs
8. Going Global
• Globalization
– The trend toward opening up foreign markets to
international trade and investment.
• Impact of Globalization
– Partnerships with foreign firms
– “Anything, anywhere, anytime” markets
– Lower trade and tariff barriers
• NAFTA, EU, APEC trade agreements
• WTO and GATT
9. Going Global (cont’d)
• Impact on HRM
– Different geographies, cultures,
laws, and business practices
– Issues:
• Identifying capable expatriate
managers.
• Developing foreign culture and work
practice training programs.
• Adjusting compensation plans for
overseas work.
10. Embracing New Technology
• Knowledge Workers
– Workers whose responsibilities extend beyond
the physical execution of work to include
planning, decision making, and problem
solving.
• The Spread of E-commerce
• The Rise of Virtual Workers
11. Influence of Technology in HRM
• Human Resources Information System (HRIS)
– Computerized system that provides current and
accurate data for purposes of control and decision
making.
– Benefits:
• Store and retrieve of large quantities of data.
• Combine and reconfigure data to create new information.
• Institutionalization of organizational knowledge.
• Easier communications.
• Lower administrative costs, increase productivity and response
times.
13. Impact of IT on HRM
Transformational
Impact
Operational
Impact
Relational
Impact
HRM
14. HRM IT Investment Factors
• Initial costs and annual
maintenance costs
• Fit of software packages
to the employee base
• Ability to upgrade
Increased efficiency and
time savings
• Compatibility with current
systems
• User-friendliness
• Availability of
technical support
• Needs for customizing
• Time required to
implement
• Training time required
for HR and payroll
15. Managing Change
• Types of Change
– Reactive change
• Change that occurs after external forces have already affected
performance
– Proactive change
• Change initiated to take advantage of targeted opportunities
• Formal change management programs help to
keep employees focused on the success of the
business.
16. Managing Change
• Why Change Efforts Fail:
1. Not establishing a sense of urgency.
2. Not creating a powerful coalition to guide the effort.
3. Lacking leaders who have a vision.
4. Lacking leaders who communicate the vision.
5. Not removing obstacles to the new vision.
6. Not systematically planning for and creating short-term
“wins.”
7. Declaring victory too soon.
8. Not anchoring changes in the corporate culture.
17. Developing Human Capital
• Human Capital
– The knowledge, skills, and capabilities of
individuals that have economic value to an
organization.
– Valuable because capital:
• Is based on company-specific skills.
• Is gained through long-term experience.
• Can be expanded through development.
18. Responding to the Market
• Total Quality Management (TQM)
– A set of principles and practices whose core
ideas include understanding customer needs,
doing things right the first time, and striving for
continuous improvement.
• Six Sigma
– A process used to translate customer needs into
a set of optimal tasks that are performed in
concert with one another.
19. Responding to the Market
• Reengineering
– Fundamental rethinking and radical redesign of
business processes to achieve dramatic improvements
in cost, quality, service, and speed.
• Requires that managers create an environment for change.
• Depends on effective leadership and communication processes.
• Requires that administrative systems be reviewed and
modified.
20. Containing Costs
• Downsizing
– The planned elimination of jobs (“head count”).
• Outsourcing
– Contracting outside the organization to have work done
that formerly was done by internal employees.
• Employee Leasing
– The process of dismissing employees who are then
hired by a leasing company (which handles all HR-
related activities) and contracting with that company to
lease back the employees.
21. Downsizing and Upsizing
Percent of companies reporting that they:
*All annual readings are for 12 months ending at
midyear. Categories are not mutually exclusive.
Source: Gene Koretz, “Hire Math: Fire 3, Add 5,”
Business Week Online (March 13, 2000). Figure 1.2
22. Containing Costs (cont’d)
• Hidden Costs of Layoff
– Severance and rehiring costs
– Accrued vacation and sick day payouts
– Pension and benefit payoffs
– Potential lawsuits from aggrieved workers
– Loss of institutional memory and trust in management
– Lack of staffers when the economy rebounds
– Survivors who are risk-averse, paranoid, and political
23. Containing Costs (cont’d)
• Benefits of a No-Layoff Policy
– A fiercely loyal,more productive workforce
– Higher customer satisfaction
– Readiness to snap back with the economy
– A recruiting edge
– Workers who aren’t afraid to innovate,
knowing their jobs are safe.
25. Social Issues and HRM
• Changing Demographics
– Shrinking pool of entry-level workers
– Productivity
– Individual differences
– Retirement benefits
– Social Security contributions
– Skills development
– Use of temporary employees
HRM 4
26. Social Issues and HRM (cont’d)
• Employer/Employee Concerns
– Job as an entitlement
– Right to work
– Whistle-blowing
– Employment at will
– AIDS
– Comparable worth
– Concern for privacy
– Mandated benefits
HRM 4
27. Social Issues and HRM (cont’d)
• Attitudes Toward Work and Family
– Day care
– Flextime
– Job sharing
– Alternative work schedules
– Elder care
– Job rotation
– Parental leave
– Telecommuting
HRM 4
28. Labor Force and Racial Distribution
Figure 1.4a
Source: “Labor Force,” Occupational Outlook
Quarterly 45. no. 4 (Winter 2001/2002): 36–41.
29. Labor Force Growth By Race And
Hispanic Origin, Projected 2000–
2010
Figure 1.4b
Source: “Labor Force,” Occupational Outlook
Quarterly 45. no. 4 (Winter 2001/2002): 36–41.
30. Labor Force Share By Race And
Hispanic Origin, 2000 And Projected 2010
Figure 1.4c
Source: “Labor Force,” Occupational Outlook
Quarterly 45. no. 4 (Winter 2001/2002): 36–41.
36. Why Diversity?
The primary business reasons for
diversity management include…
HRM 5
Source: Association of Executive Search Consultants (member survey). Used with
permission of the Association of Executive Search Consultants, http://www.aesc.org.
Presentation Slide 1–3
Better utilization
of talent
(93%)
Increased
marketplace
understanding
(80%)
Enhanced
creativity
(53%)
Increased
quality of team
problem solving
(40%)
Breadth of
understanding in
leadership
positions
(60%)
37. Top Issues for Managers
in Balancing Work and Home
Executive recruiters say 75 percent of senior management candidates
and 88 percent of middle managers raised concerns about balancing
work and home. Top issues:
Source: Association of Executive Search
Consultants (member survey). Used with
permission of the Association of Executive
Search Consultants, http://www.aesc.org.
Figure 1.8
38. Qualities of Human Resources
Managers
• Responsibilities
– Advice and counsel
– Service
– Policy formulation
and implementation
– Employee advocacy
• Competencies
– Business mastery
– HR mastery
– Change mastery
– Personal credibility
39. Human
Resource
Competency
Model
Source: Arthur Yeung, Wayne Brockbank, and Dave Ulrich, “Lower Cost, Higher Value: Human Resource Function in
Transformation.” Reprinted with permission from Human Resource Planning, Vol. 17, No. 3 (1994). Copyright 1994 by The Human
Resource Planning Society, 317 Madison Avenue, Suite 1509, New York, NY 10017, Phone: (212) 490-6387, Fax: (212) 682-6851. Figure 1.9
Presentation Slide 1–4
Business
Mastery
• Business acumen
• Customer orientation
• External Relations
HR
Mastery
• Staffing
• Performance appraisal
• Rewards system
• Communication
• Organization design
Change
Mastery
• Interpersonal skills
and influence
• Problem-solving skills
• Rewards system
• Innovation and creativity
Personal
Credibility
• Trust
• Personal
relationships
• Lived values
• Courage
