Chapter 16 Strategically Managing the HRM Function Copyright © 2015 McGraw-Hill Education All rights reserved No reproduction or distribution without the prior written consent of McGraw-Hill Education Introduction HRM practices can help companies gain a competitive advantage Virtually every HR function in top companies is going through a transformation process to play a new strategic role while fulfilling its other roles For HR to become truly strategic in its orientation, it must view itself as a separate business entity Customer orientation is one of the most important changes in HR's attempt to become strategic Products of HR must be identified Technologies through which HR meets customer needs vary depending on the need being satisfied 16-2 Categories of HRM Activities Transformational Figure 16.1 Knowledge Management Cultural Change Strategic Redirection & Renewal Management Development Traditional Recruitment and Selection Training Performance Management Compensation Employee Relations Transactional Benefits Administration Record Keeping Employee Services 16-3 Customer-Oriented Perspective Figure 16.2 16-4 Basic Process for HR Strategy Figure 16.4 Identify strategic business issues 16-5 Types of Cost–Benefit Analyses HR Accounting Utility Analysis • capitalization of salary • turnover costs • net present value of expected wage payments • absenteeism and sick leave costs • returns on human assets and human investments • gains from selection and training programs • impact of positive employee attitudes 16-6 Restructuring to Improve HRM 16-7 Outsourcing Outsourcing - Contracting with an outside vendor to provide a product or service to the firm Outsourcing partner can provide the service more cheaply, efficiently and effectively Firms primarily outsource transactional activities and services of HR such as payroll, pension and benefits administration 16-8 Reengineering Reengineering is a complete review of critical work processes and redesign to make them more efficient and able to deliver higher quality Steps of The Reengineering Process : Identify process to be reengineered 16-9 When Evaluating A Process, Consider: What is the value of the process? Can employees be given more autonomy? Can jobs be combined? Can decision making and control be built into the process by streamlining it? Are all the steps and tasks in the process necessary? Are data redundancy, unnecessary checks, and controls built into the process? How many special cases and exceptions have to be dealt with? Are the steps in the process arranged in their natural order? Are all of the tasks necessary? 10 What is the desired outcome? 16-10 Summary HRM functions have transformed from solely transactional activities to strategic activities HRM roles include administrative expert, employee advocate, change agent, and strategic partner to deliver transactional, traditional, and transformational services and activities efficiently and effectively HRM must develop measures of HRM performance through customer surveys and analytical methods to improve performance Reengineering and information technology, and outsourcing can improve HRM performance HR professionals need knowledge of four competencies: business, change process, integration competence and people’s role in competitive advantage HR professionals need to understand social and ethical issues, tools, management of change and other processes and HR technologies, policies, programs and practices such as staffing, development, rewards, communication and organizational design 16-11 ... Transformational Figure 16.1 Knowledge Management Cultural Change Strategic Redirection & Renewal Management Development Traditional Recruitment and Selection Training Performance Management Compensation Employee... present value of expected wage payments • absenteeism and sick leave costs • returns on human assets and human investments • gains from selection and training programs • impact of positive employee... in competitive advantage HR professionals need to understand social and ethical issues, tools, management of change and other processes and HR technologies, policies, programs and practices such