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Strategic Human Resource Management for Competitive Business Advantage

This chapter explores the strategic approach to Human Resource Management (HRM) focused on effectively managing an organization's workforce to gain a competitive edge. It discusses critical components like Human Resource Planning, workforce demographics, and mobility, emphasizing the importance of recruiting the right people with the right skills at optimal times and costs. The chapter also covers training, performance appraisal, dismissal processes, and the implications of redundancy and layoffs in maintaining a financially secure organization. Understanding these elements is crucial for adapting to changing labor markets.

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Strategic Human Resource Management for Competitive Business Advantage

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  1. 2.1 Human Resources Chapter 10

  2. Human Resource Management • The strategic approach to the effective management of an organization’s workers so that they help the business gain a competitive edge.

  3. Human Resource Planning • Get the right number of people • With the right skills • With the right experience • With the right competencies • In the right jobs • At the right time • At the right cost

  4. Demographics Affect Labor Supply • Changing demographics can affect businesses: • Birth rate • Migration rate • Retirement age • Unemployment • Mobility of workers • Flexibility of workers • Education level of workers • Women working/returning to work • Aging population

  5. Labor Mobility • Occupational MobilityWorkers are willing and able to move to different jobs requiring different skills • Geographical MobilityWorkers are willing and able to move to new regionsto take new jobs • High levels of skill and home ownership tend to make workers IMMOBILE. Why?

  6. Workforce Planning • Forecasting the NUMBER of staff required • Change in demand for product • Staff productivity • Business objectives • Economic and business outlook • Changes in employment law • Technological changes • Historical trends • Changes in employee skills available for hire

  7. Workforce Planning • Forecasting the SKILLS of staff required • Keeping pace with technologyProduction methods, complexity of machinery,computer applications. • Flexible or multi-skilled staffRecruit and train workers with more than oneskill to be applied in many ways.

  8. Recruitment • What is the nature of the job vacancy? Create a job description • What skills are needed of the applicant? Create a person specification • Advertise Include the job description and person specification • Short list of applicants Review CV’s (curriculum vitae – type of resume) • Conduct Interviews

  9. Training • Induction TrainingGiven to all new employees (introduces them to company policies and procedures) • On-the-Job TrainingOn-site job instruction. New employee may be paired with an experienced employee • Off-the-Job TrainingTraining that occurs off of the jobsite. Includes college courses, training centers, or from a vendor.

  10. Training & Poaching • Training is can be expensive. Why? • NOT training can be expensive. Why? • Well-trained staff can be recruited by other firms and leave for better paying jobs. This is called “POACHING”

  11. Appraisal of Staff • Usually completed annually – 1 X per year • An appraisal form is used. Why? • Employee and Manager discuss employee performance. • Employee and manager establish career plans and skills to develop the employee. • MBO – Management by ObjectiveDeveloping skills in and with employee agreement that furthers the objectives of the company.

  12. Dismissal • Employee is unable to perform job duties to the standard required by the company • Employee may have broken a condition of employment (example: failed random drug test) • Unfair dismissal may lead to lawsuits • HR must assist employee with improvement efforts before dismissal can occur to avoid lawsuits for unfair dismissal

  13. Redundancy (Layoff) • A workers job is no longer required by the company. • A replacement employee will not be hired. • Causes of redundancy: • Job no longer required by the company • Budget cuts • Reduction in workforce (RIF – Reduction in Force)

  14. Retrenchment (Downsizing) A company policy of reducing expenditures or redirecting focus to particular market, product, or service to become more financially secure. This usually involves layoffs of employeesand restructuring expenses.

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