07/02/2014

Points to considerThe Strategic importance of Managing HRGaining and sustaining a competitive

advantageA Framework for managing HRPersonalityCurrent Issues

What is HR (Human Resources)Human resources is the set of individuals

who make up the workforce of an organization, business sector, or economy. "Human capital" is sometimes used synonymously with human resources, although human capital typically refers to a more narrow view (i.e., the knowledge the individuals embody and can contribute to an organization). Likewise, other terms sometimes used include "manpower", "talent", "labour", or simply "people".

What is HRM (Human Resource Management)The process of hiring and developing employees so that they become more valuable to the organization.Human resource management (HRM, or simply HR) is the management process of an organization's workforce, or human resources. It is responsible for the attraction, selection, training, assessment, and rewarding of employees, while also overseeing organizational leadership and culture and ensuring compliance with employment and labor laws.

1. The Strategic Importance of Managing Human ResourcesHuman Resources are: - Assets that need to invest on and managed

in line with the organisation’s goals and objectives

- Increasing importance nowadays, where (customer) service has possibly become the most important differentiating advantage between one organisation and another in most industries

Satisfying Multiple StakeholdersAny group of people which is affected by the

actions of the organisation. Even more, any group of people which affects the organisation by its actions:

- Owners / investors - Customers - Society - Other organizations - Employees→ Is any of these groups the most important?

Owners and InvestorsEconomic responsibility of the organisation –

to be profitable and thus provide (increasing) dividends to owners and investors

How does one investor choose one organisation from another?

- Tangible assets: inventory, equipment, real estate

- Intangible assets: employer reputation, employee talent and loyalty, innovation, change

CustomersProviding opportunities for possibly the most

important differentiating advantage between organisations especially in the service sector

Customers want: - New and cheaper products that are at the

same time of bettering quality - Improved service→ Close alignment between the organisation’s

ability and the customers’ perspective / needs

SocietyMilton Friedman believes that the only

responsibility of an organisation to the society is to be profitable and thus pay its investors, employees (who will one way or another circulate more money in the society)

What about the rest? - Legal compliance - Community relations: what is ‘right’ /

‘wrong’

Other organisationsSuppliers: provide raw materials or even

completed parts, e.g. a car company buying its tyres from another

Unions: represent groups of employees - Productivity - Outsourcing - Health and safety - Compensation / benefits

Organisational Members: EmployeesThe only stakeholder group which is inside

the organisationPay and benefits: - Paid well … fairly? (who is the most

appropriate person to judge?) - Health and safety, insurance, sick leave,

vacation time - Balance of work life and private life

Organisational Members: EmployeesQuality of Work Life: - Training and development to improve skills

and knowledge - Working alone vs working in teams - Job designs: job rotation and job

enrichment programs that allow the employees to use

their skills and knowledge in full

Organisational Members: EmployeesEmployability: - Today’s economic crisis, layoffs,

downsizings - More and different skills and knowledge - Employment security is not equated to job

security … what’s the difference?

2. Gaining and Sustaining a Competitive AdvantageThis is when an organisation has something

different / better from other organisations to offer to the customers

A sustainable competitive advantage is when: - This different / better aspect is difficult for

competitors to copy - Especially when it comes to services /

intangible products→ What is the difference between a product

and a service?

CultureIt mostly contributes to organisational

success when it has developed over time and its unique to an organisation’s overall approach when doing business

E.g. Southwest Airlines: - Employees are empowered to make on-the-

spot decisions - Goals and targets for the organisation as a

whole instead of setting separate departmental goals

3. A Framework For Managing Human Resources (p.15)Definition: all the people who currently

contribute to doing the work of the organisation, as well as those people who potentially could contribute in the future, and those who have contributed in the recent past

Activities: - Recruitment - Selection - Compensation - Performance management - Training

A Framework For Managing Human ResourcesExternal environment - Local - National - International level→ It affects all organisations but its effects are

not the same for allOrganisational Environment - Culture - Technology - Strategy

A Framework For Managing Human ResourcesActivities for Managing HR: formal policies

and daily practicesStakeholder objectives: - Owners - Customers - Society - Competitors - Employees

4. The Human Resource TRIADHuman Resource professionals: - Strategic understanding - Personal credibility - HR delivery and technology - Business acumenLine managers: (in small companies) - The founder makes all the decisions - Appraisals occur on the spot, - No formal policies

The Human Resource TRIADThe rest of the employees: - More involved in the day-to-day running of

the organisation (increased responsibilities?)→ Is the role of an HR professional or a line

manager more important than a ‘shop floor’ employee?

5. Looking AheadManaging Teams: the belief that teamwork can

achieve outcomes that cannot be achieved by the same number of individuals who work in isolation

Managing the Multicultural Workforce: - Religion - Sexual orientation - Family status - Age - Immigration patterns - More women working (in important positions)

Looking AheadManaging Globalisation: a process in which

companies in countries around the world are increasingly linked by their activities and the opportunities they provide each other

Managing Ethics: - Doing the right thing - Acting in the best interests of the

organisation and the society in general → who’s to say what’s right (similar to pay

issues)Managing with Metrics: using numbers to

judge how well the organisation is doing

6. Current IssuesManaging Complexity: - Evolving and changing competition - Innovations in products and services - More dynamic political and economic

environments - Technology