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.
Competitive Challenges and Human Resources Management
- The most pressing competitive issues facing firms:
1. Going global
2. Embracing technology
3. Managing change
4. Developing human capital
5. Responding to the market
6. Containing costs
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
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.
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
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.
A Guide To Internet Sites (cont’d)
- FedWorld (http://www.fedworld.gov) A gateway to many government web sites.
- U.S. Department of Labor (http://www.dol.gov) Job bank, labor statistics, press releases, grants, contract information.
- Occupational Safety and Health Resources (http://osh.net) OSHA-related sites, government pages, resources, etc.
- AFL-CIO (http://www.aflcio.org/home.htm) Union news, issue papers, press releases, links to labor sites.
HRM IT Investment Factors
- 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
- User-friendliness
- Availability of technical support
- Needs for customizing
- Time required to implement
- Training time required for HR and payroll
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.
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.
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.
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.
- 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.
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.
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
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.
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
Employer/Employee Concerns
- Job as an entitlement
- Right to work
- Whistle-blowing
- Employment at will
- AIDS
- Comparable worth
- Concern for privacy
- Mandated benefits
Attitudes Toward Work and Family
- Day care
- Flextime
- Job sharing
- Alternative work schedules
- Elder care
- Job rotation
- Parental leave
- Telecommuting
Qualities of Human Resources Development
1. Responsibilities
- Advice and counsel
- Service
- Policy formulation and implementation
- Employee advocacy
2. Competencies
- Business mastery
- HR mastery
- Change mastery
- Personal credibility
(Bohlander and Snell, 2004)
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