Lecture Human resource management: Gaining a competitive advantage (9/e) – Chapter 16: Strategically managing the HRM function

Chapter 16 - Strategically managing the HRM function. After reading this chapter, you should be able to: Describe the roles that HRM plays in firms today and the categories of HRM activities, discuss how the HRM function can define its mission and market, explain the approaches to evaluating the effectiveness of HRM practices, describe the new structures for the HRM function.

Chapter 16 Strategically Managing

the HRM Function

 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.

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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 Employee Services

Figure 16.1

Customer-Oriented Perspective

Figure 16.2

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Basic Process for HR Strategy

Identify

strategic

business

issues

Figure 16.4

Types of Cost–Benefit Analyses

HR Accounting

• capitalization of salary

• net present value of expected

wage payments

• returns on human assets and

human investments

Utility Analysis

• turnover costs

• absenteeism and sick leave costs

• gains from selection and training programs

• impact of positive employee attitudes

Restructuring to Improve HRM

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.

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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 :

Identify

process

to be

reengineered

Reengineering

When Evaluating A Process, Consider:

1 What is the value of the process?

2 Can employees be given more autonomy?

3 Can jobs be combined?

4 Can decision making and control be built into the process by

streamlining it?

5 Are all the steps and tasks in the process necessary?

6 Are data redundancy, unnecessary checks, and controls built into the process?

7 How many special cases and exceptions have to be dealt with?

8 Are the steps in the process arranged in their natural order?

9 Are all of the tasks necessary?

10 What is the desired outcome?

 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