Chapter 1 Human Resource Management Introduce

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Chapter 1Human Resource ManagementIntroduce
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CHAPTER OUTLINE
1. HRM Practices 2. Who is responsible for HRM 3.
Competitive advantage 4. A Model Linking HRM to
Competitive advantage 5. Sustained Competitive
advantage
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Human Resource Management

• The organizational function that consists of
  practices that help the organization deal
  effectively with its people during the various
  phases of the employment cycle .

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1.1The Employment Cycle
Pre-Selection Phase
Selection Phase
Post-Selection Phase
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Pre-Selection Phase

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Human Resource Planning
Demand Forecasting
Strategic Plan
Number of Employees Types of Employees
Supply Forecasting
A process that helps companies identify their
future hrm needs and how those needs can be met
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Job Analysis
is a systematic procedure for

• Gathering job information
• Analyzing job information
• Documenting job information

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Job Analysis
Job Qualifications
Productivity Improvement Programs
Uses of Job Analysis
Pay Rates
Selection Techniques
Performance Appraisal
Training Programs
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Selection Phase

• Recruitment
• Selection

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Recruitment Goals

• Identify suitable pool of applicants
• Timely
• Cost efficient
• Legal

Recruitment is an HRM practice designed to locate
and attract job applicants for particular
positions.
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Selection Goals

• Accurate hiring
• Cost efficient
• Legal

Selection is a HRM practice in which companies
assess and choose from among job candidates.
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Post-Selection Phase

• Training and development
• Performance appraisal
• Compensation
• Productivity improvement programs

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Training and Development
Training planned learning experiences that teach
workers how to perform their current jobs
effectively Development planned learning
experiences that prepare workers to perform
possible future jobs effectively

• Training current jobs
• Development future jobs

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Training and Development Goals

• Improve organizational performance
• Enhance knowledge and skill levels of employees

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Performance Appraisal

• Job performance measurement
• Communication

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Performance Appraisal Goals

• Continue appropriate behaviors.
• Correct inappropriate behaviors.
• Make HRM-related decisions.

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Compensation

• Pay
• Wages
• Salaries
• Benefits
• Health insurance
• Employee discounts
• Other

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Compensation Goals

• Establish competent and loyal workforce.
• Maintain competent and loyal workforce.
• Control costs.

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Productivity Improvement Programs

• Tie job behaviors to rewards
• Rewards
• financial
• non-financial

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Productivity Improvement Program Goals

• Motivate employees.
• Improve productivity.

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External Influences on HRM
Legal Environmental
Workplace Justice
Unions
HRM
International
Safety Health
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The Employment Cycle
HR plan Job analysis
Pre-Selection Phase
Selection Phase
recruitment selection

• Training and development
• Performance appraisal
• Compensation
• Productivity improvement programs

Post-Selection Phase
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In-Class Exercise 1 Discussion of Managers' HRM
Responsibilities

• "Think of your current (or most recent) manager.
  If you have never worked, think of a specific
  college professor or instructor. List an HRM
  practice engaged in by this person and how this
  practice was conducted.
• For example If a student chooses a college
  professor, he or she could list things like
  orientation (first day of class), performance
  appraisal (how performance in the course was
  graded), productivity improvement (the
  motivational techniques used by the professor),
  or workplace justice (policies designed to ensure
  that students are treated fairly).

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In-Class Exercise 1 Discussion of Managers' HRM
Responsibilities

• Was the HRM practice effective?
• If not, how could it have been improved?
• How important was the HRM practice? That is, in
  what ways did it affect employee (or student)
  productivity, motivation, and attitudes?

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CHAPTER OUTLINE

• 1. HRM Practices
• 2. Who is responsible for HRM
• 3. Competitive advantage
• 4. A Model Linking HRM to Competitive advantage
• 5. Sustained Competitive advantage

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1.2Who is Responsible for HRM?
HR Professionals
Line Managers
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HR Professionals Responsibilities

• Establish HRM procedures
• Develop/choose HRM methods
• Monitor/evaluate HRM practices
• Advise/assist managers on HRM- related activities

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Line Managers Responsibilities

• Implement HRM practices
• Provide input for HRM practices

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HRM Conducted by Line Managers

• Interview job applicants
• Provide orientation, coaching, OJT
• Evaluate job performance
• Recommend pay increases

• Discipline employees
• Investigate accidents
• Settle grievance issues

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CHAPTER OUTLINE

• 1. HRM Practices
• 2. Who is responsible for HRM
• 3. Competitive advantage
• 4. A Model Linking HRM to Competitive advantage
• 5. Sustained Competitive advantage

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1.3 Competitive Advantage

• Superior marketplace position relative to
  competition

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How Can You Gain Competitive Advantage?

• Cost leadership
• Product differentiation

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Cost Leadership

• Provide same services or products as competitors
  but at a lower cost.

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Cost Leadership
of units produced
total cost of production
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Five Strategies to Achieve Cost leadership

• Increase output faster than inputs.
• Increase output while holding input stable.
• Increase output with reduced inputs.
• Decrease inputs faster than output.
• Maintain output with reduced inputs.

Source Personnel/Human Resource Management A
Diagnostic Approach (4th ed.) by G. T. Milkovich
W. F. Glueck (1985) BPI.
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How could a firm accomplish this aim?

• Increasing productivity
• cutting cost

• Using new technology
• Devising more efficient work methods
• Cutting overhead costs

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Product Differentiation

• Produce a product or service that is preferred by
  buyers.

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Four Ways to Achieve Product Differentiation

• Create a better quality product/service.
• Provide innovative products/services.
• Choose a superior location.
• Promote uniqueness of product/service.

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In-Class Exercise 2 Discussing "Top-Notch"
Organizations

• think of one organization with which they prefer
  doing business (e.g., auto repair, dry cleaners,
  restaurant, clothing store) and why.
• trace the organization's success to its HRM
  practices

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SIXTEEN HRM PRACTICES THAT ENHANCE COMPETITIVE
ADVANTAGE

• Employment security
• Selectivity in recruiting
• High wages
• Incentive pay
• Employee ownership
• Information sharing
• Participation and empowerment
• Teams and job redesign

• 9. Training and skill development
• 10. Cross-utilization and cross-training
• 11. Symbolic egalitarianism
• 12. Wage compression
• 13. Promotion from within
• 14. Long-term perspective
• 15. Measurement of practices
• 16. Overarching philosophy

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CHAPTER OUTLINE

• 1. HRM Practices
• 2. Who is responsible for HRM
• 3. Competitive advantage
• 4. A Model Linking HRM to Competitive advantage
• 5. Sustained Competitive advantage

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HRM and Competitive Advantage
HR Planning Job Analysis
Recruitment Selection
Output Retention Legal Compliance Company Image
Competence Motivation Work Attitudes
Cost Leadership Product Differentiation
Training/Develop. Performance App. Compensation Pr
oductivity Imp.
Workplace Justice Unions Safety
Health International
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1.4 HRM Practices and Competitive Advantage

• Direct path
• (x------gtz)
• immediate impact on competitive advantage
• Indirect path
• (x------gty------gtz)
• causes certain outcomes which create competitive
  advantage

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Restaurant A help wanted ads cost
75/hire Restaurant B employee referral cost
10/hire
Restaurant
Sales/Day
Price/Unit
Cost/Unit
Total Revenue
A
1000
1.00
.75
250
B
1000
1.00
.50
500
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Indirect Impact of HRM on Competitive Advantage
HRM Practices
Employee-Centered Outcomes
Organization-Centered Outcomes
Competitive Advantage
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Employee-Centered Outcomes

• Competence
• knowledge, skills, and abilities
• Motivation
• willingness to exert effort
• Work-related attitudes
• job satisfaction
• organizational commitment
• organizational citizenship

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HRM Practices that Affect Employee Competence
Recruitment
Selection
Employee Competence
Training
Performance Appraisal
Compensation
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HRM Practices that Affect Employee Motivation
Selection
Employee Motivation
Productivity Improvement Programs
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HRM Practices that Affect Employee Work-related
attitudes
Work-related attitudes
fairness
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Organization-Centered Outcomes

• Output
• Retention
• Legal Compliance
• Company Reputation

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How Employee Outcomes Affect Organization Outcomes

• Leads to organizations with
• quantity
• quality
• turnover
• HRM-related lawsuits
• Company reputation

• Employees with
• positive job attitudes
• who are competent
• who are motivated

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How Organization Outcomes Affect Competitive
quantity quality turnover HRM-related
lawsuits Company reputation
Cost leadership Product differentiation
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CHAPTER OUTLINE

• 1. HRM Practices
• 2. Who is responsible for HRM
• 3. Competitive advantage
• 4. A Model Linking HRM to Competitive advantage
• 5. Sustained Competitive advantage

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Why HRM is a Sustainable Competitive Advantage

• less visible --- more difficult to imitate
• harder to imitate an HRM system than a single
  practice

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Individual Assignments

• P19
• Review Questions4 5 9

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