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Chapter 1 Human Resource Management and Competitive Advantage
Human Resource Management, 2/E, Lawrence S. Kleiman 2000 by South-Western College Publishing
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Personnel Management
Background
In the 60s: Personnel Management mainly concerned with people as hired hands First Job Analysis / Job Evaluation Second Staffing requirements Then Recruitment, Section & Placement After Hiring
Training (OJT) Performance Appraisal TNA Promotion / Demotion Discipline Termination
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Resources of an Organization
Land
Capital
Equipment
Labor
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The Employment Cycle

Pre-Selection Phase
Selection Phase
Post-Selection Phase
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Pre-Selection Phase
Human Resource Planning
Job Analysis
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Human Resource Planning

Demand Forecasting
Strategic Plan
Number of Employees Types of Employees
Supply Forecasting
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Job Analysis
Gathering job information

Analyzing job information Documenting job information
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Job Analysis
Productivity Improvement Programs Job Qualifications
Pay Rates
Uses of Job Analysis
Selection Techniques
Performance Appraisal
Training Programs
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Selection Phase
Recruitment
Selection
1-9
Recruitment Goals
Suitable pool of applicants Timely Cost efficient Legal
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Selection Goals
Accurate hiring Cost efficient Legal
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Post-Selection Phase
Training and development Performance appraisal Compensation Productivity improvement programs
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Training and Development
Training
current jobs
Development
future jobs
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Training and Development Goals

Improve organizational performance Enhance knowledge and skill levels of employees
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Performance Appraisal
Job performance measurement

Communication
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Performance Appraisal Goals

Continue appropriate behaviors. Correct inappropriate behaviors. Make HRM-related decisions.
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Compensation
Pay
Wages Salaries
Benefits
Health insurance Employee discounts Other
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Compensation Goals
Establish competent and loyal workforce. Maintain competent and loyal workforce. Control costs.
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Productivity Improvement Programs

Tie job behaviors to rewards Rewards
financial non-financial
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Productivity Improvement Program Goals

Motivate employees. Improve productivity.
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External Influences on HRM

Legal & Environmental
Workplace Justice
Unions HRM
International
Safety & Health

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Social, Economic, and Technological Influences on HRM Practices

Cultural diversity Work and family Part-time/ temporary employees Quality Teamwork Mergers and takeovers Downsizing and layoffs Technology Continuous quality improvement Illiteracy
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Who is Responsible for HRM?
HR Professionals
Line Managers
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HR Professionals Responsibilities
Establish HRM procedures Develop/choose HRM methods Monitor/evaluate HRM practices Advise/assist managers on HRMrelated activities
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Line Managers Responsibilities

Implement HRM practices Provide input for HRM practices
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HRM Conducted by Line Managers

Interview job applicants Provide orientation, coaching, & OJT Evaluate job performance Recommend pay increases Discipline employees Investigate accidents Settle grievance issues
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Competitive Advantage
Superior marketplace position relative to competition
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How Can You Gain Competitive Advantage?

Cost leadership
Product differentiation
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Cost Leadership
Provide same services or products as competitors but at a lower cost.
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Cost Leadership
# of units produced total cost of production
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Five Strategies to Improve Productivity

Increase output faster than inputs. Increase output while holding input stable. Decrease inputs faster than output. Maintain output with reduced inputs. Increase output with reduced inputs.
Source: Personnel/Human Resource Management: A Diagnostic Approach (4th ed.) by G. T. Milkovich & W. F. Glueck (1985): BPI. Human Resource Management, 2/E, Lawrence S. Kleiman 2000 by South-Western College Publishing
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Product Differentiation
Produce a product or service that is preferred by buyers.
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Four Ways to Achieve Product Differentiation

Create a better quality product/service.
Provide innovative products/services.

Choose a superior location. Promote uniqueness of product/service.
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HRM Practices and Competitive Advantage

Direct path
(x------>z) immediate impact on competitive advantage
Indirect path
(x------>y------>z) causes certain outcomes which create competitive advantage
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Restaurant A:
help wanted ads cost = $75/hire employee referral cost = $10/hire
Restaurant B:
Restaurant
Sales/Day
Price/Unit
Cost/Unit
Total Revenue
$1000
$1.00
$ .75
$250
$1000
$1.00
$ .50
$500
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Indirect Impact of HRM on Competitive Advantage

HRM Practices Employee-Centered Outcomes
Organization-Centered Outcomes
Competitive Advantage
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Employee-Centered Outcomes
Competence
knowledge, skills, and abilities
Motivation
willingness to exert effort
Work-related attitudes
job satisfaction organizational commitment organizational citizenship
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Job Satisfaction
Favorableness of employee attitudes toward their job
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Organizational Commitment
Relative strength of an individuals identification with and involvement in a particular organization
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Organizational Citizenship
Willingness of employees to engage in behaviors that help the organization achieve its goals
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HRM Practices that Affect Employee Competence

Recruitment Selection Training Performance Appraisal Compensation Employee Competence
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HRM Practices that Affect Employee Motivation

Selection
Employee Motivation Productivity Improvement Programs

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Organization-Centered Outcomes
Output Retention Legal Compliance Company Reputation
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How Employee Outcomes Affect Organization Outcomes

Leads to organizations with: quantity quality turnover HRM-related lawsuits Company reputation
Employees with positive job attitudes who are competent who are motivated
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Why HRM is a Sustainable Competitive Advantage

less visible --- more difficult to imitate
harder to imitate an HRM system than a single practice
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HRM and Competitive Advantage

HR Planning Job Analysis
Recruitment Selection Competence Motivation Work Attitudes Output Retention Legal Compliance Company Image Cost Leadership Product Differentiation
Training/Develop. Performance App. Compensation Productivity Imp.
Workplace Justice Unions Safety & Health International

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Chapter 1 Human Resource Management and Competitive Advantage

The Employment Cycle

Human Resource Planning

Human Resource Planning

Number of Employees Types of Employees

Gathering job information

Uses of Job Analysis

Training and Development

Training and Development Goals

Job performance measurement

Performance Appraisal Goals

Productivity Improvement Programs

Productivity Improvement Program Goals

External Influences on HRM

Safety & Health

Social, Economic, and Technological Influences on HRM Practices

Who is Responsible for HRM?

Line Managers Responsibilities

HRM Conducted by Line Managers

How Can You Gain Competitive Advantage?

# of units produced total cost of production

Five Strategies to Improve Productivity

Four Ways to Achieve Product Differentiation

Provide innovative products/services.

HRM Practices and Competitive Advantage

help wanted ads cost = $75/hire employee referral cost = $10/hire

Indirect Impact of HRM on Competitive Advantage

HRM Practices that Affect Employee Competence

HRM Practices that Affect Employee Motivation

Employee Motivation Productivity Improvement Programs

How Employee Outcomes Affect Organization Outcomes

Why HRM is a Sustainable Competitive Advantage

HRM and Competitive Advantage

Training/Develop. Performance App. Compensation Productivity Imp.

Workplace Justice Unions Safety & Health International

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