Human Resource Management
Human Resource Management MGNT 3334
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This 13 page Class Notes was uploaded by Gillian Mosciski on Monday October 12, 2015. The Class Notes belongs to MGNT 3334 at Georgia Southern University taught by Feruzan Irani in Fall. Since its upload, it has received 39 views. For similar materials see /class/222036/mgnt-3334-georgia-southern-university in Business, management at Georgia Southern University.
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Date Created: 10/12/15
CHAPTER 1 Human Resource Management Gaining a Competitive Advantage I Introduction A Competitiveness refers to a company39s ability to maintain and gain market share in its industry 1 Competitiveness is related to effectiveness which is determined by whether the company satisfies the needs of stakeholders groups affected by business practices B Human Resource management HRM refers to policies practices and systems that in uence employees behaviors attitudes and performance See Figure 11 1 Effective HRM practices have been shown to relate to company performance by contributing to employee and customer satisfaction 39 quot I J quoty and d 39 of a favorable reputation in the community in which the firm is located C 2 The HRM contribution has only recently been recognized 11 What responsibilities and roles do HR departments perform A Responsibilities that the HR department is solely responsible for include outplacement Labor Law Compliance record keeping testing unemployment compensation and some aspects of benefit administration See Table 11 B Many different roles and responsibilities can be performed by the HR department depending on the size of the company the characteristics of the workforce the industry and the value system of the company s management C HRM as a Business with Three Product Lines 1 Administrative services and transactions compensation hiring staffing 0 An emphasis is placed on resource efficiency and service quality 2 Business partner services developing effective HR systems and helping implement business plans talent management 0 An emphasis is placed on knowing the business and exercising in uenceiproblem solving designing effective systems to ensure needed competencies 3 Strategic partner contributing to business strategy based on considerations of human capital business capabilities readiness and developing HR practices as strategic differentiation 0 An emphasis is placed on knowledge of HR and of the business competition the market and business strategies CHAPTER 1 Human Resource Management Gaining a Competitive Advantage 111 VI What competencies do HR professionals need Figure 13 shows the six competencies that are needed for the HR profession I Credible activist delivers results with integrity shares information builds trusting relationships and in uences others providing candid observation taking appropriate risks 2 Cultural steward facilitates change develops and values the culture and helps employees navigate the culture 3 Talent manager organizational designer develop talent design reward systems and shapes the organization 4 Strategic architect recognizes business trends and their impact on the business evidencebased HR and develops people strategies that contribute to the business strategy 5 Business Ally understands how the business makes money and the language of the business 6 Operational executor implements workplace policies advances HR technology and administers daytoday work of maintaining people How is the HRM function changing A The amount of time that the HR function is devoting to administrative tasks is decreasing and its role as a strategic business partner change agent and employee advocate are increasing B Advancement in technology is enhancing selfservice Self service is the process of giving employees control of HR transactions This allows employees to take greater responsibility for their own careers C Outsourcing refers to the practice of having another company provide services D Evidence based HR refers to demonstrating that human resources practices have a positive in uence on the company s bottom line or key stakeholders The HRM Profession 1 There are many different types of jobs in the HRM profession See Table 13 2 The primary professional organization for HRM is the Society for Human Resource Management SHRM Competitive Challenges In uencing Human Resource Management See Figure 14 CHAPTER 1 Human Resource Management Gaining a Competitive Advantage A The Sustainability Challenge 1 Sustainability refers to the ability of a company to survive and succeed in a dynamic competitive environment Company success is based on how well the company meets the needs of its stakeholders Stakeholders refer to shareholders the community customers and all of the other parties that have an interest in seeing that the company succeeds Several changes in the economy have important implications for human resource management Some key statistics about the economy and the workforce are shown in Table 14 The competition for labor is affected by the growth and decline of industries jobs and occupations Competition for labor is also in uenced by the number and skills of persons available for fulltime work See Table 15 a The most significant percentage change in employment from 2004 to 2014 is expected to be home health aides and network systems and data communications analysts b The largest number of j ob openings will be in occupations requiring a doctoral degree Increased Value Placed On Intangible Assets and Human Capital a Intellectual assets refer to a type of company asset including human capital customer capital social capital and intellectual capital See Table 17 b Knowledge workers are employees who own the intellectual means of producing a product or service c Empowerment means giving employees responsibility and authority to make decisions regarding all aspects of product development or customer service d As more companies become knowledgebased they must promote and capture learning at the employee team and company levels e A changing environment means that all employees must embrace a philosophy of learning A learning organization embraces a CHAPTER 1 Human Resource Management Gaining a Competitive Advantage 7 culture of lifelong learning enabling all employees to continually acquire and share knowledge Changes in the Employment Expectations a The need for companies to make rapid changes has played a major role in changing the employment relationship The psychological contract describes what an employee expects to contribute and what the company will provide to the employee for these contributions b In the new economy a new type of psychological contract is emerging Companies demand excellent customer service and high productivity levels Employees are expected to take more responsibility for their own careers from seeking raining to balancing work and family In exchange employees want companies to provide exible work schedules comfortable working conditions more autonomy in accomplishing work training and development opportunities and nancial incentives based on how the company performs Concerns with Employee Engagement a Employee engagement refers to the degree in which employees are fully involved in their work and the strength of their job and company commitment See Table 18 b Employees who are engaged in their work and committed to the company they work for give companies competitive advantages higher productivity better customer service lower turnover Talent Management a Talent management involves attracting retaining developing and motivating highly skilled employees and managers b Companies report that one of the most important talent management challenges they face is developing existing employees for managerial positions and attracting and retaining top level managers in leadership positions Use of Alternative Work Arrangements a Alternative work arrangements include use of independent contractors on call workers temporary workers and contract company workers CHAPTER 1 Human Resource Management Gaining a Competitive Advantage B Demanding Work but with More Flexibility a The globalization of the world economy and the development of ecommerce have made the notion of a 40hour work week obsolete b Many companies are taking steps to provide more exible work schedules protect employees free time and more productively use employees work time The balanced scorecard Measuring performance to stakeholders See Table 19 1 The balanced scorecard gives managers the opportunity to look at the company from the perspective of internal and external customers employees and shareholders The balanced scorecard should be used to a Link human resource management activities to the company s business strategy b Evaluate the extent to which the human resource function is helping the company s meet its strategic objectives Customer Service and Quality emphasis 1 Customer excellence requires attention to product and service features as well as to interactions with customers Total Quality Management can be defined as quota cooperative form of doing business that relies on the talents and capabilities of both labor and management to continually improve quality and productivity using work teamsquot This is one strategy companies are currently using a The TQM movement has alerted management to the key role HRM plays in the achievement of quality b The Malcolm Baldrige National Quality Award was established by President Reagan to publicize successful quality strategies See Table 110 for the award criteria Example Xerox Corporation received the Malcolm Baldrige Award in 1989 after changing its policies 71 to satisfy the customer and 2 to make quality improvement the job of every employee Operations Management International Inc OMI is a 2001 Baldrige Award winner in the service category c The ISO 90002000 standards were developed by the International Organization for Standardization in Geneva CHAPTER 1 Human Resource Management Gaining a Competitive Advantage Switzerland ISO 9000 is the name of a family of standards ISO 9001 ISO 9004 that includes requirements such as how to establish quality standards and document work processes to help workers understand quality system requirements ISO 90002000 has been adopted as a quality standard in nearly 100 countries The Six Sigma process refers to a system of measuring analyzing improving and then controlling processes once they have been brought within the narrow Six Sigma quality tolerances or standards The objective of Six Sigma is to create a total business focus on serving the customerithat is deliver what customers really want when they want it D Changing demographics and diversity of the workplace 1 The labor force of current employees is often referred to as the internal labor force The external labor market includes persons actively seeking employment Aging of the workplace a Figure 15 compares the projected distribution of the age of the workforce in 2004 and 2014 The labor force will continue to age with the 55yearold and older group projected to increase by 49 percent Despite myths to the contrary worker performance and learning are not adversely affected by aging As figure 16 shows the US workforce is becoming increasingly diverse To successfully manage a diverse workforce managers must develop a new set of skills including a Communicating effectively with employees from a wide variety of cultural backgrounds Coaching and developing employees of different ages educational backgrounds ethnicity physical ability and race Providing performance feedback that is based on objective outcomes rather than values and stereotypes that work against women minorities and handicapped persons by prejudging the persons abilities and talents CHAPTER 1 Human Resource Management Gaining a Competitive Advantage E d Creating a work environment that makes it comfortable for employees of all backgrounds to be creative and innovative Managing cultural diversity can provide a competitive advantage to companies See Table 112 Legal and Ethical Issues 1 Five main areas in the legal environment have in uenced HRM practice equal opportunity legislation safety and health legislation pay and bene ts legislation employee privacy and job security Most recently the Americans with Disabilities Act regulations require employers to accommodate mental and physical limitations of otherwise quali ed individuals unless undue expense would be incurred Ethical criteria should be used in company and employee interactions Ethical principles include the emphasis of mutual bene ts employees assuming responsibility for company actions a meaningful corporate Vision for employees and fairness Example The Raytheon Company has a checklist including several questions that is distributed to each employee to use when considering whether an action is ethical Raytheon reinforces its ethics codes with formal training programs a tollfree ethics line and fulltime ethics of ces and of cers in all of its major business units Mandatory one hour ethics training for all employees uses case studies to make employees aware of the ethical problems that may occur at work a The Sarbanes Oxley Act of 2002 sets strict rules for corporate behavior especially in regards to accounting procedures The Global Challenge In order to survive US companies must improve HRM practices develop global markets and better prepare employees for global assignments 1 Development of Global Markets The most admired and successful companies in the world have not only created multinational corporations but have created organizations with workforces and corporate cultures that re ect the characteristics of the global markets in which they operate Global business expansion has been made easier by technology Using the Internet email and Videoconferencing business deals can be completed between companies thousands of miles apart CHAPTER 1 Human Resource Management Gaining a Competitive Advantage Globalization has affected not only businesses with international operations Companies without international operations buy or use goods that have been produced overseas hire employees with diverse backgrounds and compete with foreignowned companies operating within and outside of United States Globalization is not limited to a particular sector of the economy or product market To compete in the world economy US companies need to put greater eff01t into effective HRM practices US companies must do a better job of preparing employees and their families for international assignments especially given the current high failure rate Offshoring refers to the exponing of j obs from developed countries to less developed countries Onshoring refers to exponing jobs to rural parts of the United States G The Technology Challenge 1 Advances in sophisticated technology along with reduced costs for the technology are changing many aspects of human resource management Technology is pushing the boundaries ofa1tif1cial intelligence speed synthesis wireless communications and networked ViItual reality High Performance Work Systems maximize the fit between the company s social system and its technical system a Change in Employees39 Work Roles and Skill Requirementsi New technology often requires new basic skills For example mtmt 39 A f iug requires my J to monitor equipment and troubleshoot problems with sophisticated equipment More organizations want employees cross trained in multiple jobs Interpersonal skills are increasingly important as teams are used b Increase in the Use of Teams to Perform WorkiEmployees are now expected to make decisions at point of sale to improve customer service Work teams form one method of increasing both employee responsibility and control These teams frequently assume managerial activities Quality control may be integrated into the team s functions Cost savings may be real ized by the use ofteams c Through technology the information needed to improve customer service and product quality becomes more accessible CHAPTER 1 Human Resource Management Gaining a Competitive Advantage I to employees Popular methods for increasing employee responsibility and control are through work teams and cross training 3 Changes in skill requirements 7 High performance work systems have implication for employee selection and training 4 Working in partnerships 7 Technology has allowed companies to form partnerships with one or more other companies A Virtual team is separated by time geographic distance culture andor organizational boundaries and relies 39 39 39y on 39 39 J for39 39 between team members 5 Changes in Company Structure and Reporting Relationships 7 In the adaptive organizational structure employees are in a constant state of learning and performance improvement They are free to move wherever they are needed in the company 6 Increased Availability of human resource management databases and e HRM7A human resource information system may contain large amounts of data regarding the company39s employees An HRIS may be used to support strategic decisionmaking and ensure legal compliance as well as to evaluate programs and policies or support daily operating concerns Example Northern Telecom has facilities in 90 countries and has created a central database of employee records worldwide Headcount salary and recruiting data are updated regularly This system has improved Northern Telecom39s ability to meet customer needs and address global staffing 1ssues 7 Electronic human resource management e HRM EHRM has the potential to change all traditional human resource management functions See Table 113 8 An HR dashboard is an HR metrics such as productivity absenteeism that are accessible by employees and managers through the company intranet or human resource information system Competitiveness in HighPerformance Work Systems7ln order for new technologies or new structures to support organizational improvement the integration of these two factors must be carefully examined Human resource practices that support highperformance work systems are listed in Table 114 These practices are designed to provide employees with skills incentives knowledge and autonomy Global Engineering Manufacturing Alliance GEMA endorsed the highperformance workplace because it recognized that the company CHAPTER 1 Human Resource Management Gaining a Competitive Advantage needs to be competitive to avoid losing jobs By rotating jobs the plant was able to keep workers motivated in their work and avoid injuries VII VIII Meeting the Competitive Challenges through HRM Practices HRM practices that help companies respond to the four competitive challenges can be grouped into the following four dimensions See Figures 17 and 18 A E Managing the Human Resource EnvironmentiHRM practices should be linked to strategy legal compliance must be assured and work should be designed to maximize employee effectiveness and motivation Acquiring and Preparing Human ResourcesiHuman resource planning must occur employees must be recruited and placed in appropriate jobs methods of employee selection must be determined and ensuring employees have skills to perform particularjobs Assessment and Development of Human Resourcesirlhis area of HRM deals with measuring employee performance preparing employees for future work roles identifying and responding to employee interests and creating a beneficial and effective work environment Compensating Human ResourcesiAppropriate pay systems must be developed employee contributions must be rewarded and employees must be provided with benefits Special IssuesiLabor unions create an additional HRM challenge The final paragraph and Table 115 present the overall organization of the text CHAPTER 2 Strategic Human Resource Management I Introduction Business organizations exist in an environment of competition The goal of strategic management in an organization is to deploy and allocate resources in ways that provide a competitive advantage To be maximally effective the HRM function must be integrally involved in the company39s strategic management process 11 What is a Business Model A A business model is a story of how a rm will create value for customers and more importantly how it will do so pro tably There are a few accounting terms to familiarize students with in order to understand a business model Fixed costs are generally considered the costs that are incurred regardless of the number of units produced Variable costs are costs that vary directly with the units produced Contribution margin is the difference between what you charge for your product and the variable costs of the product Gross margin is the total amount of margin you made 111 What Is Strategic Management A Strategic Management is a process for analyzing a company39s competitive situation developing the company39s strategic goals and devising a plan of action and allocation of resources human organizational and physical that will increase the likelihood of achieving those goals Strategic human resource management is the pattern of planned human resource deployments and activities intended to enable an organization to achieve its goals Components of the Strategic Management ProcessiThere are two distinct phases of this process 1 Strategy Formulation During this phase strategic planning groups decide on a strategic direction by defining the company39s mission and goals its external opportunities and threats and its internal strengths and weaknesses 2 Strategy Implementation During this phase the organization follows through on the strategy that has been chosen This includes structuring the organization allocating resources ensuring that the rm has skilled employees in place and developing reward systems that align employee behavior with the strategic goals Linkage between HRM and the Strategic Management Process The strategic choice really consists of answering questions about competition These decisions consist of addressing the issues of where to compete how to compete and with what to compete See Slide 6 CHAPTER 2 Strategic Human Resource Management 111 E The Role of HRM in Strategy Formulation 7 Both strategy formulation and strategy implementation involve peoplerelated issues and therefore necessitate the involvement of the HR function Four levels of integration exist between the HR function and the strategic management function as shown in Slide 7 1 Administrative LinkageiThis is the lowest level of integration in which the HRM function s attention is focused on daytoday activities No input from the HRM function to the company39s strategic plan is given 2 OneWay LinkageiThe firm39s strategic business planning function develops the plan and then informs the HRM function of the plan HRM then helps in the implementation 3 TwoWay LinkageiThis linkage allows for consideration of human resource issues during the strategy formulation process The HRM function is expected to provide input to potential strategic choices and then help implement the chosen option 4 Integrative LinkageiThis is based on continuing rather than sequential interaction The HR executive is an integral member of the strategic planning team Strategy FormulationiThis includes five major components see Slide 8 l A mission is a statement of the organization39s reasons for being it usually specifies the customers served the needs satisfied andor the value received by the customers and the technology used Goals are what the organization hopes to achieve in the medium to longterm future they re ect how the mission will be operationalized External analysis consists of examining the organization s operating environment to identify strategic opportunities and threats Internal analysis attempts to identify the organization s strengths and weaknesses Strategic choice is the organization s strategy which describes the ways the organization will attempt to fulfill its mission and achieve its long term goals Strategy ImplementationiFive variables determine success in strategy implementation see Slide 10 HR has responsibility for three of these task people and reward systems The role of the HRM function is one of l ensuring that the company has the number of appropriately skilled workers and 2 developing quotcontrolquot systems that ensure that those employees contribute to goal achievement This is accomplished through various HR practices see text Figure 27 CHAPTER 2 Strategic Human Resource Management A HRM Practicesilhe HR function has six quotmenusquot of practices from which companies can choose to fit their strategic direction 1 Job analysis is the process of getting detailed information about jobs Job design deals with making decisions about what tasks should be grouped into a particular job Jobs can range from very narrow sets of tasks that demand a limited set of skills to a complex array of tasks that requires multiple highlevel skills Many jobs today are being broadened Recruitment is the process through which the organization seeks applicants for employment Selection refers to the process of identifying applicants with the appropriate knowledge skills and ability to help the company achieve its goals Frequently employees need new skills when jobs are modified Training refers to a planned effort to facilitate learning of j obrelated knowledge skills and behavior Development involves the acquisition of knowledge skills and behavior that improves employees ability to meet the challenges of a variety of existing jobs or jobs that do not yet exist TQM programs require extensive training of employees Performance management is used to ensure that employee activities and outcomes are congruent with the organization s objectives Pay structure incentives and benefits have an important role in implementing strategies High pay levels help to attract and retain highquality employees Performancebased pay plans help motivate appropriate performance The pay system includes the base pay as well as incentives and benefits Labor and employee relations refer to the general approach the company takes in interacting with its employees whether unionized or not Companies can choose to treat employees as assets resources to be invested in for the long term Strategic Typesiseveral different quottypologiesquot of strategies exist Porter s Generic StrategiesiMichael Porter has hypothesized that competitive advantage comes from creating value by l reducing costs overall cost leadership or 2 charging a premium price for a differentiated product or service differentiation HR Needs in Strategic TypesiDifferent strategies require different types of employees with different skills and also require employees to exhibit different quotrole behaviorsquot Role behaviors are the behaviors required of an individual in his or her role as a jobholder in a social work environment 1 2 Cost strategy firms seek efficiency and therefore carefully define the skills they need in employees and use worker participation to seek costsaving ideas Differentiation firms need creative risk takers
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