HUMAN RESOURCE MANAGEMENT CHAPTER 1-7

Gaining a Competitive Advantage Strategic Role of the HRM Function The amount of time that the
HRM function devotes to administrative tasks is decreasing, and its
Competitiveness - refers to a company’s ability to maintain and gain roles as a strategic business partner, change agent, and employee
market share in its industry. advocate are increasing.

-Competitiveness is related to company effectiveness, which is HR managers face two important challenges: shifting their focus
determined by whether the company satisfies the needs of from current operations to strategies for the future and preparing
stakeholders (groups affected by business practices). non-HR managers to develop and implement human resource
practices. To ensure that human resources contributes to the
Human Resource Management (HRM)- Policies, practices, and company’s competitive advantage many HR departments are
systems that influence employees’ behavior, attitudes, and organized on the basis of a shared service model. The shared service
performance model can help control costs and improve the business relevance
-involving “people practices. and timeliness of HR practices.

Shared Service Model A way to organize the HR function that

includes centers of expertise, service centers, and business partners.
-enrolling in training programs or changing benefits
that employees and managers can access online.

NOTE: The role of HRM in administration is decreasing as technology

is used for many administrative purposes, such as managing
employee records and allowing employees to get information about
and enroll in training, benefits, and other programs. The availability
of the Internet has decreased the HRM role in maintaining records
and providing self-service to employees. means that HR can focus
more time on consulting with managers on important employee
issues and less time on day-to-day transactional tasks.

Self-service Giving employees online access to HR information.

- giving employees online access to, or apps which provide,
information about HR issues such as training, benefits,
compensation, and contracts; enrolling online in programs and
services; and completing online attitude surveys.

Outsourcing The practice of having another company provide

services.
-The major reasons that company executives choose to outsource
human resource practices include cost savings, increased ability to
recruit and manage talent, improved HR service quality, and
protection of the company from potential lawsuits by standardizing
processes such as selection and recruitment.

Traditionally, the HRM department (also known as “Personnel” or

“Employee Relations”) was primarily an administrative expert and
employee advocate. The department took care of employee
problems, made sure employees were paid correctly, administered
labor contracts, and avoided legal problems. The HRM department
* The HR department may take full responsibility for human
resource activities in some companies, whereas in others it may share ensured that employee-related issues did not interfere with the
the roles and responsibilities with managers of other departments manufacturing or sales of products or services.It was primarily
such as finance, operations, or information technology. In some reactive; that is, human resource issues were a concern only if they
companies the HR department advises top-level management; in directly affected the business.
others the HR department may make decisions regarding staffing,
training, and compensation after top managers have decided relevant DEMONSTRATING THE STRATEGIC VALUE OF HR:
business issues. Evidence-Based HR Demonstrating that human resource practices
have a positive influence on the company’s bottom line or key
stakeholders (employees, customers, community, shareholders).
- requires the use of HR or workforce analytics

HR or workforce analytics refers to the practice of using

quantitative methods and scientific methods to analyze big data.
- HR or Workforce Analytics The practice of using data from HR
databases and other data sources to make evidence-based human
resource decisions.

Big Data Information merged from a variety of sources, including HR

databases, corporate financial statements, and employee surveys,
to make evidencebased HR decisions and show that HR practices
can influence the organization’s bottom line.
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Stakeholders The various interest groups who have relationships
Each business unit completes a “People Scorecard” that shows the with, and consequently, whose interests are tied to the organization
flow of talent in, up, and out of the company. This includes data on (e.g., employees, suppliers, customers, shareholders, community).
headcount, retentions, terminations, new hires, and promotions.
Managers can access this data on dashboards which make it easy to
“see” the data. Intangible Assets A type of company asset including human capital,
customer capital, social capital, and intellectual capital.
THE HRM PROFESSION: POSITIONS AND JOBS:
- Salaries for HR professionals vary according to position, level of Learning Organization A culture of lifelong learning in which
experience, training, location, and firm size. employees are continually trying to learn new things
Need to Adapt to Change Change refers to the adoption of a new
Competitive Challenges Influencing Human Resource Management idea or behavior by a company. Technological advances, changes in
the workforce or government regulations, globalization, and new
competitors are among the many factors that require companies to
change. Change is inevitable in companies

Concerns with Employee Engagement. Employee engagement

refers to the degree to which employees are fully involved in their
work and the strength of their commitment to their job and the
company.64 How do we know if an employee is engaged? An
engaged employee is passionate about his or her work, is committed
to the company and its mission, and works hard to contribute.

Talent Management. Talent management refers to the systematic

planned strategic effort by a company to use bundles of human
resource management practices including acquiring and assessing
employees, learning and development, performance management,
and compensation to attract, retain, develop, and motivate highly
skilled employees and managers. This means recognizing that all HR
practices are inter-related, aligned with business needs, and help
the organization manage talent to meet business goals.
Sustainability A company’s ability to meet its needs without
sacrificing the ability of future generations to meet their needs.
Alternative Work Arrangements Independent contractors, on-call
workers, temporary workers, and contract company workers who
*“triple bottom line”: economic, social, and environmental benefits.
are not employed full-time by the company.
Company success is based on how well the company meets the
needs of its stakeholders.
Balanced Scorecard A means of performance measurement that
gives managers a chance to look at their company from the
perspectives of internal and external customers, employees, and
shareholders.
-. Companies need to customize their balanced scorecards based on
different market situations, products, and competitive
environments.

The balanced scorecard should be used to (1) link human resource

management activities to the company’s business strategy and (2)
evaluate the extent to which the HRM function is helping the
company meet its strategic objectives. Communicating the
scorecard to employees gives them a framework that helps them
see the goals and strategies of the company, how these goals and
strategies are measured, and how they influence the critical
indicators.

Measures of HRM practices primarily relate to productivity, people,

and process. Productivity measures involve determining output per
employee (such as revenue per employee). Measuring people
includes assessing employees’ behavior, attitudes, or knowledge.
Process measures focus on assessing employees’ satisfaction with
people systems within the company
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countries with a central governing body
in Geneva

ISO 9000:2000 Quality standards

adopted worldwide.

Six Sigma Process System of

measuring, analyzing, improving, and
controlling processes once they meet
quality standards.
social responsibility can help boost a - objective of Six Sigma is to create a
company’s image with customers, gain total business focus on serving the
access to new markets, and help attract customer, that is, to deliver what
and retain talented employees. customers really want when they want
Companies thus try to meet shareholder it. Six Sigma involves highly trained
and general public demands that they be employees known as Champions, Master
more socially, ethically, and Black Belts, Black Belts, and Green Belts
environmentally responsible who lead and teach teams that are
focusing on an ever-growing number of
Total Quality Management (TQM) A quality projects
cooperative form of doing business that
relies on the talents and capabilities of Lean Thinking A process used to
both labor and management to determine how to use less effort, time,
continually improve quality and equipment, and space but still meet
productivity. customers’ requirements
- way to do more with less effort, time,
Core values of TQM include the equipment, and space, but still provide
following: customers with what they need and
∙ Methods and processes are designed want. Part of lean thinking includes
to meet the needs of internal and training workers in new skills or how to
external customers. apply old skills in new ways so they can
∙ Every employee in the company quickly take over new responsibilities or
receives training in quality. use new skills to help fill customer
∙ Quality is designed into a product or orders.
service so that errors are prevented
from occurring rather than being Internal Labor Force Labor force of
detected and corrected. current employees.
∙ The company promotes cooperation External Labor Market Persons
with vendors, suppliers, and customers outside the firm who are actively
to improve quality and hold down costs. seeking employment.
∙ Managers measure progress with
feedback based on data. .How diversity issues are managed has
implications for creativity, problem
Malcolm Baldrige National Quality solving, retaining good employees, and
Award An award established in 1987 to developing markets for the firm’s
promote quality awareness, to recognize products and services. To successfully
quality achievements of U.S. companies, manage a diverse workforce, managers
and to publicize successful quality must develop a new set of skills,
strategies. including: 1. Communicating effectively
with employees from a wide variety of
ISO- International Organization for cultural backgrounds.
Standardization., a network of national 2. Coaching and developing employees
standards institutes including 160 of different ages, educational
 HUMAN RESOURCE MANAGEMENT CHAPTER 1-7
backgrounds, ethnicity, physical ability,
and race.
3. Providing performance feedback that
is based on objective outcomes rather
than values and stereotypes that work
against women, minorities, and
handicapped persons by prejudging
these persons’ abilities and talents.
4. Creating a work environment that
makes it comfortable for employees of
all backgrounds to be creative and
innovative.
5. Recognizing and responding to
generational issues.