Human resource management gaining a competitive advantage 2014 chapter 16

Categories of HRM ActivitiesTransformational Knowledge management Cultural Change Strategic redirection and renewal Management development Traditional Recruitment and selection Trainin

• Human resource management

practices can help companies

gain a competitive advantage

• Virtually every HR function in

top companies is going

through a transformation

process to create a function

that can play this new

strategic role while fulfilling its

other roles

Categories of HRM Activities

Transformational

Knowledge management Cultural Change Strategic redirection and

renewal Management development

Traditional

Recruitment and selection

Training Performance management

Compensation Employee relations

Transactional

Categories of HRM Activities

• Transactional activities are the day-to-day

transactions a company makes.

– Low in their strategic value

• Traditional activities are the nuts and bolts of

HR such as performance management, training, recruiting, selection, compensation, and

employee relations

– Moderate strategic value

• Transformational activities create long-term

capability and adaptability for the firm Activities include knowledge management, management development, cultural change, and strategic

redirection and renewal

– Comprise the greatest strategic value for the firm

Strategic Management of the HRM Function

• For the HR function to become truly strategic in its orientation, it must view itself as being a

separate business entity

• A customer orientation is one of the most

important changes in the HR function’s attempts

to become strategic

• The products of the HR department must be

identified

• The technologies through which HR meets

customer needs vary depending on the need

being satisfied

Customer-Oriented Perspective

Customers

Line managers Strategic planners Employees

HRM function

Technology

Staffing

Performance management

Rewards

Training and development

Customers’ Needs

Committed employees Competent employees

Basic Process for HR Strategy

Scan the

external

environment

Identify strategic business issues

Identify people issues

Develop HR strategy

Communicate the HR strategy

Involving Line Executives

• Involving those in charge of running the

business can increase the quality of

information from which the HR strategy is created

• Involvement can occur in a few ways:

– Line executives could simply provide input.

– Line executives could be members of a team

that develops HR strategy.

– Once strategy is developed, line managers

could receive communications with the HR strategy information.

– Line managers could formally approve a

strategy.

Characterizing HR Strategies

HR-Focused

People-Linked

Business-Linked

Business-Driven

People issues/

outcomes

People issues/

outcomes

HR strategy

HR strategy

HR strategy

Business issues/

outcomes People issues/ outcomes

Measuring HRM Effectiveness

• Marketing the function – evaluation is a sign that the

HR function cares about the organization as a whole and

is trying to support operations, production, marketing, and other functions in the company

• Providing accountability – evaluation helps determine whether the HRM function is meeting its objectives and effectively using its budget.

Approaches to Evaluating HRM

Effectiveness

Audit Approach

• Focuses on reviewing

the various outcomes

of the HR functional

areas

• Both key indicators and

customer satisfaction

measures are typically

collected.

• Employee assessment.

• Surveys of top-line

executives.

Analytic Approach

• Focuses on either:

– (1) determining whether the

introduction of a program or practice has the intended effect

or – (2) estimating the financial costs and benefits resulting from

an HR practice.

• More demanding than the audit approach because it requires the

Restructuring to Improve HRM Effectiveness

• The HRM function effectively is divided into three divisions:

– The Centers for Expertise - Consist of

functional specialists in the traditional areas

of HR These individuals ideally act as consultants in the development of state-of-the-art systems and processes for use in the organization

– The Field Generalists - Consist of the HRM generalists who are assigned to a business unit within the firm

– The Service Center - Consists of individuals who ensure that the transactional activities are delivered throughout the organization

Outsourcing

• Outsourcing - Contracting with an

outside vendor to provide a

product or service to the firm

• Usually this is done for one of two

reasons:

– The outsourcing partner can

provide the service more cheaply – The partner can provide it more

effectively.

• Firms primarily outsource transactional activities and

• Reengineering is a complete review of

critical work processes and redesign to make them more efficient and able to deliver higher quality

• The reengineering process has four steps:

Identify the

process to be

reengineered

Understand the process

Redesign the process

Implement the process

Feedback

Improving HRM Effectiveness

through New Technologies

• New technologies - Applications of knowledge,

procedures, and equipment that have not

previously been used

– Transaction Processing—Computations and

calculations used to review and document HRM decisions and practices These include documenting employee relocation, payroll expenses, and training course enrollments

– Decision Support Systems—These are systems

designed to help managers solve problems They

usually include a "what if" feature.

– Expert systems are computer systems incorporating

Network and Client Server Architecture

• A Network is a combination of

desktop computers, computer terminals, and mainframes or minicomputers that share

access to databases and a means to transmit information throughout the system

• Client-server architecture is a

common form of network that provides the means of

consolidating data and applications into a single system

Relational Database, Imaging, and

Groupware

• Relational database – Information is

stored in separate files that look like

tables and can be linked by common

elements such as name.

• Imaging – The process for scanning

documents, storing them electronically,

and retrieving them

• Groupware (or electronic meeting

software) – A software application that

enables multiple users to track, share,

Software Applications for HRM

• Improving HRM Effectiveness through New

Technologies–E-HRM - The speed requirements of e-business force HRM managers to explore how to leverage technology for the delivery of traditional

and transformational HRM activities.

• Recruitment and Selection - Technology has

enabled firms to monitor hiring processes to

minimize the potential for discriminatory hiring

decisions.

• Compensation and Rewards - Leveraging

technology may allow firms to better achive their

compensation goals with considerably less effort.

• Training and Development - Technology allows firms

to deliver training and development for at least some skills or knowledge faster, more efficiently, and

possibly more effectively.

The Future for HR Professionals

• The future for careers in HR

seems brighter than ever

• Firms need to seek balance

between attracting, motivating,

and retaining the very best talent

and keeping costs as low as

possible

• Finding such a balance requires

HR leaders who have a deep

knowledge of the business

combined with knowledge of HR