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Chapter
1
Gaining a Competitive
Advantage
Discuss
the roles and activities of a company’s human
resource management function
Discuss the implications of the economy, the makeup of
the labor force, and ethics for company sustainability
Discuss how human resource management affects a
company’s balanced scorecard
Discuss what companies should do to compete in the
global marketplace
Chapter
1
Gaining a Competitive
Advantage
Identify
the characteristics of the workforce and how
they influence human resource management
Discuss human resource management practices that
support high-performance work systems
Provide a brief description of human resource
management practices
.
The importance of HRM
(1)
(2)
People is the key factor of production.
Productivity is the key to measure a nation’s economic
growth potential, and labor quality is the key to
improving productivity.
(3)
Competition today is the competition for talents.
(4)
Since man is the most uncontrollable and unpredictable
variable of all production variables, organizational
success depends on the management of people.
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Evolution of HRM
(1)Scientific management
 Robert Owens: Pioneer of HRM, performance appraisal
and pay for performance (fair treatment of employees)
 Frederic Taylor: Father of scientific management
(2)Human behavior and relations
 The Hawthorne Studies by Westing House
 The happy workers are the most productive workers.
(3)Behavioral science
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What is human resource management
Definition of HRM:
 Human
resource management refers to the policies,
practices, and systems that influence employees’ behavior,
attitudes, and performance
 Many
companies refer to HRM as involving “people
practices"
McGraw-Hill/Irwin
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Functions of HRM
a.
b.
c.
d.
e.
f.
g.
Analysis and design of work
HR Planning
Recruiting
Training and development
Compensation
Performance management
Employee relations
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Responsibilities of HR Departments
 Employment
and recruiting
 Training and development
 Compensation
 Benefits
 Employee Services
 Employee and community relations
 Personnel records
 Health and safety
 Strategic planning
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What Roles Do
HR Departments Perform?
Strategic Partner
Administrative
Expert
Employee
Advocate
Human
Resources
Change Agent
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How is the HRM Function
Changing?
 The
amount of time that the HRM function devotes to
administrative tasks is decreasing and its roles as a strategic
business partner, change agent, and employee advocate are
increasing
 In shifting the focus from current operations to strategies
for the future and preparing non-HR managers to develop
and implement HR practices, HR managers face two
important challenges:
 Self-service
refers to giving employees online access to
information about HR issues
 Outsourcing refers to the practice of having another company
provide services
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The HRM Profession
 HR
salaries vary depending on education and experience as
well as the type of industry
 HR
specialists
 HR generalists
 College degrees are held by the vast majority of HRM
professionals
 Professional certification is less common than membership in
professional associations
 The
primary professional organization for HRM is the
Society for Human Resource Management (SHRM)
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Competitive Challenges
Influencing HRM
 Three
competitive
challenges that
companies now face will
increase the importance
of HRM practices:
The Challenge of
Sustainability
The Global
Challenge
The Technology
Challenge
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The Sustainability Challenge

Sustainability refers to the ability of a company to survive and succeed
in a dynamic competitive environment
 Stakeholders
refers to shareholders, the community, customers,
and all other parties that have an interest in seeing that the
company succeeds
 Sustainability includes the ability to:
 deal
with economic and social changes,
 engage in responsible and ethical business practices,
 provide high quality products and services, and
 put in place methods to determine if the company is meeting
stakeholders’ needs
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The Sustainability Challenge
 The
changing structure of the economy
 Impact
of September 11, 2001
 The competition for labor
 Skill
demands for jobs are changing
 Knowledge is becoming more valuable
 Intellectual
capital refers to the creativity, productivity, and service
provided by employees
 Knowledge workers are employees who contribute to the company
not through manual labor but through a specialized body of
knowledge
 Empowerment means giving employees responsibility and
authority to make decisions regarding all aspects of product
development or customer service
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The Sustainability Challenge
A
learning organization embraces a culture of lifelong
learning, enabling all employees to continually acquire and
share knowledge
 The psychological contract describes what an employee
expects to contribute and what the company will provide to
the employee for these contributions
 Alternative work arrangements include independent
contractors, on-call workers, temporary workers, and
contract company workers
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The Global Challenge
 Companies
are finding that to survive they must compete in
international markets as well as fend off foreign
corporations’ attempts to gain ground in the U.S.
 Every business must be prepared to deal with the global
economy. This is made easier by technology.
 Offshoring refers to the exporting of jobs from developed
countries to less developed countries.
 Many companies are entering international markets by
exporting their products overseas, building manufacturing
facilities in other countries, entering into alliances with
foreign companies, and engaging in e-commerce
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The Technology Challenge
 Technology
has reshaped the way we play,
plan our lives, and where we work
 The
overall impact of the Internet
 The Internet has created a new business
model – e-commerce – in which business
transactions and relationships can be
conducted electronically
McGraw-Hill/Irwin
© 2006 The McGraw-Hill Companies, Inc. All rights reserved.
The Technology Challenge

Advances in technology have:
changed how and where we work,
 resulted in high-performance models of work systems,
 increased the use of teams to improve customer service and product quality,
 changed skill requirements,
 increased working partnerships,
 led to changes in company structure and reporting relationships,
 increased the availability of Human Resource Information Systems
(HRIS), which are used to acquire, store, manipulate, analyze, retrieve, and
distribute HR information,
 increased the availability of e-HRM, which is the processing and
transmission of digitalized information used in HRM,
 increased the competitiveness of high performance work systems.

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Meeting Competitive Challenges
Through HRM Practices
 HRM
practices that help companies deal
with the four competitive challenges can be
grouped into four dimensions
 The
human resource environment
 Acquiring and preparing human resources
 Assessment and development of human
resources
 Compensating human resources
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Meeting Competitive Challenges
Through HRM Practices
 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
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