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The Challenge of Human Resource Management. Chapter 1 March 12, 2014. Objectives. Identify how firms gain sustainable competitive advantage through people. Explain how globalization is influencing human resources management. Describe the impact of information technology on managing people.

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The Challenge of Human Resource Management

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The Challenge of Human Resource Management

Chapter 1

March 12, 2014


  • Identify how firms gain sustainable competitive advantage through people.

  • Explain how globalization is influencing human resources management.

  • Describe the impact of information technology on managing people.

  • Identify the importance of change management.

  • State HR’s role in developing intellectual capital.

  • Differentiate how TQM and reengineering influence HR systems.

MQM 323/Fall 2004

Objectives (cont.)

  • Discuss the impact of cost pressures on HR policies.

  • Discuss the primary demographic and employee concerns pertaining to HRM.

  • Provide examples of the roles and competencies of today’s HR managers.

MQM 323/Fall 2004

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.

MQM 323/Fall 2004

Overall Framework for Human Resource Management


  • Globalization

  • Technology

  • Managing change

  • Human capital

  • Responsiveness

  • Cost containment


  • Planning

  • Recruitment

  • Staffing

  • Job design

  • Training/development

  • Appraisal

  • Communications

  • Compensation

  • Benefits

  • Labor relations


  • Background diversity

  • Age distribution

  • Gender issues

  • Educational levels

  • Employee rights

  • Privacy issues

  • Work attitudes

  • Family concerns

MQM 323/Fall 2004

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

MQM 323/Fall 2004

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

MQM 323/Fall 2004

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.

MQM 323/Fall 2004

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

MQM 323/Fall 2004

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.

MQM 323/Fall 2004

Major Uses ForHR Information Systems

MQM 323/Fall 2004

Impact of IT on HRM





MQM 323/Fall 2004

A Guide To Internet Sites

  • American Management Association ( membership, programs, training, etc.

  • Society for Human Resource Management ( events, information, connections, articles.

  • HR Professional’s Gateway to the Internet ( Links to HR-related web pages.

  • Training and Development Homepage ( mart, training links, T&D electronic mailing list links.

MQM 323/Fall 2004

A Guide To Internet Sites (cont’d)

  • FedWorld ( A gateway to many government web sites.

  • U.S. Department of Labor( Job bank, labor statistics, press releases, grants, contract information.

  • Occupational Safety and Health Resources( OSHA-related sites, government pages, resources, etc.

  • AFL-CIO( news, issue papers, press releases, links to labor sites.

MQM 323/Fall 2004


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


Availability of technical support

Needs for customizing

Time required to implement

Training time required for HR and payroll

HRM IT Investment Factors

MQM 323/Fall 2004

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.

MQM 323/Fall 2004

Managing Change: Why Change Efforts Fail

  • Not establishing a sense of urgency.

  • Not creating a powerful coalition to guide the effort.

  • Lacking leaders who have a vision.

  • Lacking leaders who communicate the vision.

  • Not removing obstacles to the new vision.

  • Not systematically planning for and creating short-term “wins.”

  • Declaring victory too soon.

  • Not anchoring changes in the corporate culture.

MQM 323/Fall 2004

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.

MQM 323/Fall 2004

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.

MQM 323/Fall 2004

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.

MQM 323/Fall 2004

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.

MQM 323/Fall 2004

Downsizing and Upsizing

Percent of companies reporting that they:

MQM 323/Fall 2004

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

MQM 323/Fall 2004

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.

MQM 323/Fall 2004

Productivity Enhancements


  • Empowerment

  • Teams

  • Leader support

  • Culture

Perf = f (A,M,E)


  • Job enrichment

  • Promotions

  • Coaching

  • Feedback

  • Rewards


  • Recruitment

  • Selection

  • Training

  • Development

MQM 323/Fall 2004

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

MQM 323/Fall 2004

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

MQM 323/Fall 2004

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

MQM 323/Fall 2004

Labor Force and Racial Distribution

MQM 323/Fall 2004

Labor Force Growth By Race And Hispanic Origin, Projected 2000–2010

MQM 323/Fall 2004

Labor Force Share By Race And Hispanic Origin, 2000 And Projected 2010

MQM 323/Fall 2004

Labor Force Participation Rate By Sex, 1950–2000 And Projected 2000–2010

MQM 323/Fall 2004

Labor Force Growth By Sex,Projected 2000–2010

MQM 323/Fall 2004

Labor Force Share By Sex,1990, 2000, And Projected 2010

MQM 323/Fall 2004

Figure 1.5c


MQM 323/Fall 2004

Why Diversity?

The primary business reasons for diversity management include…

Increased marketplace understanding (80%)

Better utilization of talent(93%)

Enhanced creativity(53%)

Increased quality of team problem solving(40%)

Breadth of understanding in leadership positions(60%)

MQM 323/Fall 2004

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:

MQM 323/Fall 2004

  • HRMastery

  • Staffing

  • Performance appraisal

  • Rewards system

  • Communication

  • Organization design

  • ChangeMastery

  • Interpersonal skillsand influence

  • Problem-solving skills

  • Rewards system

  • Innovation and creativity

Human Resource Competency Model

  • BusinessMastery

  • Business acumen

  • Customer orientation

  • External Relations

  • Personal Credibility

  • Trust

  • Personal relationships

  • Lived values

  • Courage

MQM 323/Fall 2004

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