HRM gaining a competitive advantage noe ch016

Categories of HRM Activities Transformational Knowledge Management Cultural Change Strategic Redirection & Renewal Management development Traditional Recruitment and Selection Training

Human Resource Management:

Gaining a Competitive Advantage

Chapter 16

Strategically Managing the

HRM Function

 Describe new structures for HRM function.

 Describe how outsourcing HRM activities can improve

service delivery efficiency and effectiveness.

 Relate how process reengineering is used to review

and redesign HR practices.

 Discuss types of new technologies that can improve

HR efficiency and effectiveness.

 List competencies HRM executive needs to become a

strategic partner in the company.

 HRM 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 &

Renewal Management development

Traditional

Recruitment and Selection

Training Performance Management

Compensation Employee Relations

Transactional

Benefits Administration Record Keeping

Categories of HRM Activities

 Transactional activities - day-to-day transactions

- Low strategic value

 Traditional activities - 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 Activities include

knowledge management, management

development, cultural change and strategic

redirection and renewal

- Greatest strategic value

Strategic Management of HRM

 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

Customer-Oriented Perspective

Customers

Line managers Strategic planners

Employees

H R M

Technology

Staffing Performance Management

Rewards Training & Development

Customers’ Needs

Committed Employees Competent Employees

Basic Process for HR Strategy

Scan

external

environment

Identify strategic business issues

Identify people issues

Develop HR strategy

Communicate

HR strategy

Involving Line Executives

 Involving those in charge of running the business

can increase quality of information from which HR

strategy is created

 Involvement can occur 4 ways:

1 Line executives could provide input

2 Line executives could be members of a team

that develops HR strategy

3 Once strategy is developed, line managers

could receive communications with HR strategy information

4 Line managers could formally approve a

strategy

Measuring HRM Effectiveness

 Marketing the function –

evaluation is a sign that HR cares

about the organization as a whole

and supports operations,

production, marketing and other

functions

 Providing accountability –

evaluation helps determine

whether HRM function is meeting

its objectives and effectively using

its budget

Audit & Analytic Approaches Evaluating

HRM Effectiveness

Audit Approach

program or practice has intended effect

or (2) estimate financial costs and benefits resulting from HR practice.

• More demanding than the audit approach because it requires detailed use

of statistics and finance

Restructuring to Improve HRM

 3 Divisions of HRM:

1 Centers for Expertise - functional specialists

in traditional areas of HR who act as consultants in development of state-of-the-art systems and processes for use in the

organization

2 Field Generalists - HRM generalists assigned

to a business unit

3 Service Center - ensure that transactional

activities are delivered throughout the organization

Outsourcing

 Outsourcing - Contracting with an outside vendor

to provide a product or service to the firm.

 Reengineering is a complete review of critical

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

4 Steps of The Reengineering Process :

Redesign process

Implement process

I mproving 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—Systems designed to help

managers solve problems

 usually include a "what if" feature.

 Expert systems - Computer systems incorporating

decision rules of people deemed to have expertise in a

certain area.

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 – Process for scanning documents,

storing them electronically and retrieving them

 Groupware (or electronic meeting software)

– software application that enables multiple

users to track, share and organize information

and to work on same document simultaneously

Software Applications for HRM

 Improving HRM Effectiveness through New

Technologies–E-HRM – Speed requirements of

e-business force HRM managers to explore how to

leverage technology for delivery of traditional and

transformational HRM activities.

 Recruitment and Selection - Technology monitors

hiring processes to minimize potential for

discriminatory hiring decisions.

 Compensation and Rewards - Leveraging technology

may allow firms to better achive compensation goals

with less effort.

 Training and Development - Technology allows firms

to deliver training and development for some skills or

knowledge faster, more efficiently and possibly more

effectively.

The Future for HR Professionals

 The future for HRM careers brighter than ever

 HR leaders need knowledge of the following:

- business, change processes, integration

competence and people’s role in competitive

advantage

- HR issues, tools, processes and technologies,

policies and programs

- HR practices in areas such as staffing,

development, rewards, communication and

organizational design

 HRM functions must consist of individuals who view

themselves as businesspeople who work in HRM.

 With the opportunity to impact the way organizations

compete through people, comes serious responsibility

and accountability

 Firms need balance attracting, motivating and retaining

the best talent and keeping costs low

 HR leaders need knowledge of the business combined

with knowledge of HR issues, tools, processes and

technology