Chapter 1

Gaining a Competitive Advantage

• Competitiveness – a company’s ability to maintain and gain market share

• Human resource management – the policies, practices, and systems that
influence employees’ behavior, attitudes, and performance

Responsibilities of HR Departments
• Employment and recruiting
• Training and development
• Compensation
• Benefits
• Employee services
• Employee and community relations
• Personnel records
• Health and safety
• Strategic planning

Roles HR Departments Perform

One way to think the roles and responsibilities of HR department is to consider HR
as a business within the company with three product lines.
1. Administrative services and transactions which includes compensation, hiring,
staffing.
2. Business partner services includes developing effective HR systems and
helping implement business plans, talent management, and
3. Strategic partner includes contributing to business strategy based on
considerations of human capital, business capabilities, readiness, and developing HR
practices as strategic differentiation.

Competencies HR Professionals Need

1. Credible activist: delivers results with integrity, shares information, builds trusting
relationships, and influences others, providing candid observation, taking appropriate
risks.
2. Cultural steward: facilitates change, develops and values the culture, and helps
employees navigate the culture.
3. Talent manager/organizational designer: develop talent, design reward systems,
and shapes the organization.
4. Strategic architect: recognizes business trends and their impact on the business,
evidence-based HR, and develops people strategies that contribute to the business
strategy.
5. Business Ally: understands how the business makes money and the language of
the business.
6. Operational executor: implements workplace policies, advances HR technology,
and administers day-to-day work of maintaining people.

How is the HRM Function Changing?

• Time spent on administrative tasks is decreasing and its roles as a strategic
business partner, change agent, and employee advocate are increasing
• This shift presents two important challenges:
– Self-service – giving employees online access to information about HR
issues
– Outsourcing – the practice of having another company provide services
• As part of its strategic role, one of the key contributions that HR can make is to
engage in evidence-based HR.
• Evidence-based HR – demonstrating that human resource practices have a
positive influence on the company’s bottom line or key stakeholders.
• The HRM Profession
• HR salaries vary depending on education and experience as well as the type of
industry

Competitive Challenges
Influencing HRM
Three competitive challenges that companies now face will increase the importance of
HRM practices:

Sustainability Challenge
• Sustainability refers to the ability of a company to survive and succeed in a
dynamic competitive environment
• Stakeholders refers to shareholders, the community, customers, and all other
parties that have an interest in seeing that the company succeeds

• Sustainability includes the ability to:

– provide a return to shareholders
– provide high-quality products, services, and work experiences for
employees
– increase value placed on intangible assets and human capital
– social responsibility
– Adapting to changing characteristics and expectations of the labor force
 – Legal and ethical issues
– Effectively use new work arrangements
• The changing structure of the economy
• Skill demands for jobs are changing
• Knowledge is becoming more valuable
– Intangible assets -- human capital, customer capital, social capital, and
intellectual capital
– Knowledge workers – employees who contribute to the company
through a specialized body of knowledge
– Empowerment – giving employees responsibility and authority to make
decisions regarding all aspects of product development or customer
service
– Learning organization

Changes in Employment Expectations:

The need for companies to make rapid changes are reshaping the employment
contracts.
The psychological contract describes what an employee expects to contribute and
what the company will provide to the employee for these contributions
Alternative work arrangements include independent contractors, on-call workers,
temporary workers, and contract company workers

The Balanced Scorecard

• The balanced scorecard gives managers the opportunity to look at the company
from the perspective of internal and external customers, employees and
shareholders.
• The balanced scorecard should be used to:
– Link human resource management activities to the company’s business
strategy.
– Evaluate the extent to which the human resource function is helping the
company’s meet it’s strategic objectives.
The Balanced Scorecard
• How do customers see us?
• What must we excel at?
• Can we continue to improve and create value?
• How do we look to shareholders?
Customer Service and
Quality Emphasis
• Total Quality Management (TQM)
• Core values of TQM include:
– designing methods and processes to meet the needs of internal and
external customers
– all employees receive training in quality
– promotion of cooperation with vendors, suppliers, and customers
– management gives feedback on progress
• ISO 9000:2000
• Six Sigma process
• Changing Demographics
Diversity of the Workforce
• Internal labor force is the labor force of current employees
• External labor market includes persons actively seeking employment
• The workforce is aging rapidly

Managing a Diverse Workforce

• To successfully manage a diverse workforce, managers must develop a new set of
skills, including:
– Communicating effectively with employees from a wide variety of cultural
backgrounds
– Coaching and developing employees of different ages, educational
backgrounds, ethnicity, physical ability, and race
– Providing performance feedback that is based on objective outcomes
– Creating a work environment that makes it comfortable for employees of
all backgrounds to be creative and innovative
Legal and Ethical Issues
• Five main areas of the legal environment have influenced HRM over the past 25
years
– Equal employment opportunity legislation
– Employee safety and health
– Employee pay and benefits
– Employee privacy
– Job security
Ethical HR practices:
– HRM practices must result in the greatest good for the largest number of
people
 – Employment practices must respect basic human rights of privacy, due
process, consent, and free speech
– Managers must treat employees and customers equitably and fairly

Global Challenge
• To survive companies must compete in international markets
• Be prepared to deal with the global economy.
• Offshoring – exporting of jobs from developed countries to less developed
countries
• Onshoring – exporting jobs to rural parts of the United States

Technology Challenge
– The overall impact of the Internet
– The Internet has created a new business model – e-commerce – in which
business transactions and relationships can be conducted electronically
• Advances in technology have:
– changed how and where we work
– resulted in high-performance work systems
– increased the use of teams to improve customer service and product
quality
– changed skill requirements
– increased working partnerships
– led to changes in company structure and reporting relationships
• Advances in technology have:
– increased the use and availability of Human Resource Information
Systems (HRIS)
– increased the use and availability of e-HRM
– increased the competitiveness in high performance work systems

Meeting Competitive Challenges Through HRM Practices

• HRM practices that help companies deal with the four competitive challenges can
be grouped into four dimensions
– The human resource environment
– Acquiring and preparing human resources
– Assessment and development of human resources
– Compensating human resources
• Managing internal and external environmental factors allows employees to make
the greatest possible contribution to company productivity and competitiveness
• Customer needs for new products or services influence the number and type of
employees businesses need to be successful
• Managers need to ensure that employees have the necessary skills to perform
current and future jobs.
• Besides interesting work, pay and benefits are the most important incentives that
companies can offer employees in exchange for contributing to productivity,
quality, and customer service
Chapter 2
Strategic Human Resource Management

Goal of strategic management – To deploy and allocate resources in a way that gives
organization a competitive advantage
• HRM function must be integrally involved in the company’s strategic
management process.

The goal of strategic management in an organization is to deploy and allocate

resources in a way that gives it a competitive advantage.

Human resource managers should:

• have input into the strategic plan,
• have specific knowledge of the organization’s strategic goals,
• know what types of employee skills, behaviors, and attitudes are needed to
support the strategic plan, and
• develop programs to ensure that employees have those skills, behaviors, and
attitudes.

What is Strategic Management?

• Strategic Management is a process, an approach to addressing the competitive
challenges an organization faces.
• Strategic human resource management is the pattern of planned human
resource deployments and activities intended to enable an organization to
achieve its goals.
• Strategic Management is a process for analyzing a company's competitive
situation, developing the company's strategic goals, and devising a plan of action
and allocation of resources that will help a company achieve its goals.

• HR Managers should be trained to identify the competitive issues faced by the

organization.
 • Strategic human resource management is the pattern of planned human
resource deployments and activities intended to enable an organization to
achieve its goals.

Components of the Strategic Management Process

• Strategy Formulation
• Strategy Implementation
(Strategic Management has two distinct yet independent components:

Strategy Formulation: Strategic planning groups decide on a strategic direction by

defining the company’s mission and goals, its external opportunities and threats, and its
internal strengths and weaknesses.

Strategy Implementation: The organization follows through on the strategy that has
been chosen. This includes structuring the organization, allocating resources, ensuring
that the firm has skilled employees in place, and developing reward systems that align
employee behavior with the strategic goals
Strategy Formulation
• Five components of the strategic management process:
– A mission is a statement of the organization's reasons for being.
– Goals are what the organization hopes to achieve in the medium-to long-
term future
– External analysis consists of examining the organization's operating
environment to identify strategic opportunities and threats.
– Internal analysis attempts to identify the organization's strengths and
weaknesses.
– Strategic choice is the organization's strategy, which describes the ways
the organization will attempt to fulfill its mission and achieve its long term
goals.

• HRM Practices
• Job Analysis - the process of getting detailed information about jobs.

• Recruitment - the process through which the organization seeks applicants.

• Training - a planned effort to facilitate learning of job-related knowledge, skills,

and behavior.

• Job design - making decisions about what tasks should be grouped into a
particular job.
 • Selection - identifying the applicants with the appropriate knowledge, skills, and
ability.

• Development - the acquisition of knowledge, skills, and behavior that improves

employees' ability to meet the challenges of future jobs.

• Performance management - helps ensure that employees’ activities and

outcomes are congruent with the organization’s objectives.

• Pay structure, incentives, and benefits.

• Labor and employee relations.

• (HRM function can be thought of as having six menus of HRM practices, from
which companies can choose the ones most appropriate for implementing their
strategy. Each of these menus refers to a particular functional area of HRM: job
analysis/design, recruitment/selection, training and development, performance
management, pay structure, incentives, and benefits, and labor-employee
relations.)

HRM Needs in Strategic Types

• Different strategies require different types of employees.
• Role Behaviors:
– Cost strategy firms seek efficiency and therefore carefully define the skills
they need in employees and use worker participation to seek cost-saving
ideas.
– Differentiation firms need creative risk takers.
• Role Behaviors are the behaviors required of an individual in his or her role as a
jobholder in a social work environment.

Directional Strategies
(Companies have used five possible categories of directional strategies to meet
objectives: external growth, concentration, internal growth, mergers and
acquisitions, and downsizing.)

The Role of HR in Providing a Competitive Advantage

• Emergent Strategies - Those that evolve from the grass roots of the organization.
• Enhancing Firm Competitiveness
• Different strategies require different types of employees.
• Cost strategy firms seek efficiency and therefore carefully define the skills they
need in employees and use worker participation to seek cost-saving ideas.
 • Differentiation firms need creative risk takers.

(HR can provide a strategic competitive advantage in two additional ways:

• Emergent Strategies - Those that evolve from the grass roots of the
organization.

• What actually is done versus what is planned.

• HR plays an important role in facilitating the communication of emergent

strategies between levels in the hierarchy.

• Enhancing Firm Competitiveness

• By developing a rich pool of talent, HR can assure the company's ability to adapt
to a dynamic environment.)

Chapter 4
The Analysis and Design of Work

Work-flow Analysis
Work-flow analysis are useful in:
providing a means for the managers to understand all the tasks required to produce a
high-quality product
providing the skills necessary to perform those tasks
Work flow analysis includes:
analyzing work outputs
analyzing work processes
analyzing work inputs

Developing a Workflow Analysis

Organizational Structure
Organization structure provides a cross-sectional overview of the static relationship
between individuals and units that create the outputs.
Two important dimensions of structure are:
1. Centralization
2. Departmentalization
Structural Configuration
Functional
functional departmentalization
high level of centralization
high efficiency
inflexible
insensitive to subtle differences across products, regions, and clients
Divisional
workflow departmentalization
low level of centralization
semi-autonomous
flexible and innovative
sensitive to subtle differences across products, regions, and clients
low efficiency
A functional structure employs a functional departmentation scheme with high levels
of centralization. Functional structures are very efficient. However, they tend to be
inflexible and insensitive to subtle differences across products, regions, or clients
A divisional structure employs a workflow departmentation and low levels of
centralization. Because of their workflow focus, their semi-autonomous nature, and
their proximity to a homogenous consumer base, divisional structures tend to be more
flexible and innovative. However, they are not very efficient

The Importance of Job

Analysis to HR Managers
1. Job analysis has been called the building block of everything that the personnel
department does.
2. Some of the human resource activities that use job-analysis information includes
selection, performance appraisal, training and development, job evaluation, career
planning, work redesign, and human resource planning.

The Importance of Job

Analysis to Line Managers
 Managers must have detailed information about all the jobs in their work group
to understand the work-flow process.
 Managers need to understand the job requirements to make intelligent hiring
decisions.
 Managers must clearly understand the tasks required in every job.

Job Analysis Information

 Job Description is a list of tasks, duties, and responsibilities (TDRs)
 Job Specification is a list of knowledge, skills, abilities, and other characteristics
(KSAOs)

Sample Job Description

Job Title: Maintenance Mechanic
General Description of Job: General maintenance and repair of all equipment used in
the operations of a particular district. Includes the servicing of company used vehicles,
shop equipment, and machinery used on job sites.
1. Essential duty (40%) Maintenance of Equipment
2. Essential duty (40%) Repair of Equipment
3. Essential duty (10%) Testing and Approval
4. Essential duty (10%) Maintain Stock
Nonessential functions: Other duties assigned
Job Analysis Methods
 Position Analysis Questionnaire (PAQ)
 Fleishman Job Analysis System (FJAS)
 Occupational Information Network (O*NET)

Job Dimensions and Job Tasks of a University Professor

 teaching
 research
 service
 consulting
 advising.

Job Design
 Job design
 Job redesign
Four approaches used in job design are:
 mechanistic approach
 motivational approach
 biological approach
 perceptual-motor approach

Mechanistic Approach
 Has its roots in classical industrial engineering.
Focuses on designing jobs around the concepts of:
1. task specialization
2. skill simplification
3. repetition
Scientific management
 is one of the earliest mechanistic approaches
 sought to identify the one best way to perform the job through the use of time-
and-motion studies

Motivational Approach
The motivational approach to job design focuses on the job characteristics that affects
1. the psychological meaning
2. motivational potential of job design.
A focus on increasing job complexity through:
1. job enlargement
 2. job enrichment
3. the construction of jobs around sociotechnical systems.

Job Characteristics Model

A model of how job design affects employee reaction is the “Job Characteristics Model”.
a. According to this model, jobs can be described in terms of five characteristics:
skill variety, task identity, task significance, autonomy, and feedback.
b. These five job characteristics determine the motivating potential of a job by
affecting three psychological states: experienced meaningfulness, responsibility, and
knowledge of results.
c. When the core job characteristics are high, individuals will have a high level of
internal work motivation, higher quantity and quality of work, and higher levels of job
satisfaction.

Biological Approach
Comes primarily from the sciences of biomechanics, or the study of body movements
Ergonomics
The goal of this approach is to minimize the physical strain on the worker.
Focuses on outcomes such as:
1. physical fatigue
2. aches and pains
3. health complaints

Perceptual-Motor Approach
Has its roots in the human-factors literature.
Focuses on human mental capabilities and limitations.
The goal is to design jobs that do not exceed people's mental capabilities.
Tries to improve reliability, safety, and user reactions by designing jobs in a way that
reduces the information processing requirements of the job.
Trade-Offs among Different Approaches to Job Design
1. One research study found job incumbents expressed higher satisfaction with jobs
scoring highly on motivational approach. However, the motivational and mechanistic
approaches were negatively related, suggesting that designing jobs to maximize
efficiency is likely to result in a lower motivational component to those jobs.
2. Jobs redesigned to increase the motivating potential result in higher costs in
terms of ability requirements, training, and compensation.
3. In designing jobs, it is important to understand the trade-offs inherent in
focusing on one particular approach to job design.

Chapter 5 Human Resource Planning

and Recruiting

Stages in Human Resource Planning

1. Forecasting
2. Goal Setting and Strategic Planning
3. Program Implementation and Evaluation
Forecasting Stage of Human Resource Planning
 Determining Labor Demand
derived from product/service demanded
external in nature
 Determining Labor Supply
internal movements caused by transfers, promotions, turnover, retirements, etc.
transitional matrices identify employee movements over time
useful for AA / EEO purposes
  Determining Labor Surplus or Shortage
Strategies for Reducing an Expected Labor Surplus
Options for reducing an expected labor surplus are:
1. Downsizing
2. Pay reductions
3. Demotions
4. Transfers
5. Work sharing
6. Hiring freeze
7. Natural attrition
8. Early retirement
9. Retraining

Strategies for Reducing an Expected Labor Surplus

Options for avoiding an expected labor shortage:
1. Overtime
2. Temporary employees
3. Outsourcing
4. Retrained workers
5. Turnover reductions
6. New external hires
7. Technological innovation

Downsizing
Downsizing is the planned elimination of large numbers of personnel designed to
enhance organizational competitiveness.
Reasons for downsizing include:
- need to reduce labor costs
- technological changes reduce need for labor
- mergers and acquisitions reduce bureaucratic overhead
- organizations choose to change the location of where they do business
Effects of Downsizing
Studies show that firms that announce a downsizing campaign show worse, rather than
better financial performance.
Reasons include:
- The long-term effects of an improperly managed downsizing effort can be
negative.
- Many downsizing campaigns let go of people who turn out to be irreplaceable
assets.
 - Employees who survive the staff purges often become narrow-minded, self-
absorbed, and risk-averse.
Early Retirement Programs
The average age of the U.S. workforce is increasing.
Baby boomers are not retiring early for several reasons:
- improved health of older people
- a fear that Social Security will be cut
- mandatory retirement is outlawed
Many employers try to induce voluntary attrition among older workers through early
retirement incentive programs.
Employing Temporary Workers
- Hiring temporary workers helps eliminate a labor shortage.
- Temporary employment affords firms the flexibility needed to operate efficiently
in the face of swings in demand.
Other advantages include:
- temporary workers free a firm from many administrative tasks and financial
burdens
- temporary workers are often times tested by a temporary agency
- many temporary agencies train employees before sending them to employees

Outsourcing and Offshoring

Outsourcing is an organization’s use of an outside organization for a broad set of
services.
Offshoring is a special case of outsourcing where the jobs that move actually leave one
country and go to another.
To help ensure the success of outsourcing:
- Choose an outsourcing vendor that is large and established.
- Jobs that are proprietary or require tight security should not be outsourced.
- It is a good idea to start small and monitor constantly

Affirmative Action Planning

- It is important to plan for various subgroups within a labor force.
- A comparison of the proportion of workers in protected subgroups with the
proportion that each subgroup represents is called a workforce utilization review.
- The steps required to execute an affirmative action plan are identical to the steps
in the generic planning process discussed earlier

The Human Resource Recruitment Process

Personnel Policies
Characteristics of the vacancy are more important than recruiters or recruiting sources.
Personnel Policies vary:
1. Internal versus External recruiting
2. Extrinsic versus Intrinsic rewards
3. Employment-at-will policies
4. Image advertising

Recruitment Sources
Since recruitment sources are unlimited, an organization must decide how to reach the
best sources of potential employees.
1. Internal versus External Sources—Relying on internal sources is useful since
employees are well known and are knowledgeable about the organization and
jobs. However, there may not be enough internal recruits
2. Direct Applicants and Referrals
a. Direct applicants are people who apply for a vacancy without prompting from
an organization.
b. Referrals are people who are prompted to apply for a vacancy by someone
within the organization.
3. Advertisements in newspapers and periodicals – typically are less effective than direct
applicants or referrals and is more expensive.
4. Electronic Recruiting – The growth of the information highway as opened up new
vistas for organizations trying to recruit talent.
5. Public and Private Employment Agencies—Agencies will search their computerized
inventory of individuals searching for work for an organization at no charge.
6. Colleges and universities may be an important source for entry level professionals. To
increase effectiveness, organizations employ internship programs to get early access to
potential applicants and to assess their capabilities directly.

Recruiters
Functional Area
 - HR- versus operating area-specialist
Traits
- warm and informative
Realism
- realistic job preview, honesty
Steps to Enhance Recruiter Impact

Goodluck & God Bless!