Chapter 1 - Strategic Human Resource Management

What leads to competitive advantage?

- Better technology - Innovative products or services. - Better locations - Lower costs - Outstanding customer service

Influencing what employees should do

- Establishing Organizational Strategy - Developing a Competitive environment - Following Legal requirements

Influencing what employees can do.

- Finding, attracting and hiring the right talent. - Training and development activities.

What effective HRM systems do

- Improve organizational efficiency - Contribute to revenue growth - Increase employees' understanding of their responsibilities and how they relate to the organization's mission, business strategy, and goals. - Develop and enhance employee capabilities and talents to enable strategic execution and goal attainment. - Equitably link rewards to responsibility level and performance. - Promote the efficient and effective utilization of employees' skills and knowledge. - Increase employee engagement, effort, and performance - Increase the organization's ability to manage change - Decrease an organization's legal liability for compliance with employment laws.

Influencing what employees will do

- Setting clear goals aligned with the business strategy - Giving employees feedback on their performance towards those goals - Rewarding them for good performance.

Main functions of HR Management.

- Staffing - Health and Safety - Employee-management relations - Rewards and Benefits - Training and Development - Performance Management

What are three key areas HRM influences organizational performance?

1. Influencing what employees should do. 2. Influencing what employees can do 3. Influencing what employees will do.

Workforce issues can impact a company's revenue and earnings. Managing human resources strategically helps organizations manage four primary types of risk.

1. Strategic risk 2. Operational risk 3. Financial risk 4. Compliance risk

Professional Employer Organizations (PEO)

A company that leases workers to companies that need them for a fee (2 to 7 percent of worker's gross wages). Leasing workers helps companies acquire talent they may not be able to hire on their own, and it increases their flexibility.

Global Mindset

A set of individual attributes that enable you to influence individuals, groups, and organizations from diverse socio/cultural/institutional systems.

Talent Philosophy

A system of beliefs about how its employees should be treated, including: - The value placed on diversity; - Ethics; - Whether the firm would like employees to stay for a limited time or for their entire careers; - Whether employees are viewed as assets to be managed or as investors choosing where to allocate their time and effort.

Indirect financial compensation

AKA Benefits. Any and all financial rewards not considered direct financial compensation, including health insurance, wellness benefits, paid vacations, and free meals.

Performance Management

Aligning an individual employees' goals and behaviors with organizational goals and strategies, appraising and evaluating past and current behaviors and performance, and providing suggestions for improvement.

Training and Development

An important HRM function focused on developing employee capabilities through both formal and informal activities.

In order to a competitive advantage, a company must. . .

Be able to give customers superior value for their money (a combination of quality, service, and acceptable price).

Why is strategic recruitment and staffing activities the cornerstone of organizational effectiveness?

Because an organization's people are central to its development of a competitive advantage and to the execution of its business strategy.

Employee-management relations ultimately determine the employment rights of . . .

Both employees and employers.

One role of HRM is to staff the most qualified and appropriate employees to support the company in meeting its. . .

Business strategy. A company's business strategy should reflect customer needs, firm goals, and a realistic forecast of what the firm can deliver. The staffing process is crucial to how the organization can compete successfully in the marketplace.

What type of competitive strategy does a firm have to determine its place in the market?

Business strategy. A company's business strategy reflects customer needs, firm goals, and a realistic forecast of what the firm can deliver, and also determines how competitive the company will be in its marketplace.

The training and development function is also responsible for. . .

Career planning, organizational development, and often legal compliance as well.

Shared service center.

Centralizes the routine, transaction-based HRM activities, including payroll, benefits administration, and employee exit surveys. A shared service center can prevent redundancies and save money, as well as improve the consistency and efficiency with which these tasks are done.

_______ between HR and employees is extremely important.

Communication and Feedback.

Rewards and Benefits

Compensation and benefits perceived as both adequate and equitable that reward employees for their contributions to organizational goal attainment are important to employee motivation, performance and retention.

Direct Financial Compensation

Compensation received in the form of salary, wages, commissions, stock options, or bonuses.

Which type of risk management involves consideration of legal issues in terms of diversity, health and safety, union relations, whistleblowers, and harassment?

Compliance risk - involves the decisions related to legal matters made by the organization.

Mergers and acquisitions often fail because of. . .

Cultural issues. These issues arise when there is a mismatch between the values and organizational structures of the two merging organizations.

Business Strategy

Defines how the firm will compete in its marketplace. A business strategy should reflect what the organization's customers want, what the firm wants, and what the firm can cost-effectively deliver.

Employee handbooks

Document the organization's HRM policies and procedures, and they are very important in helping employees learn about the company.

Competitive Advantage

Doing something different from the competition that leads to outperformance and success.

How does HRM influence Organizational Performance?

Effective HRM systems increase the organization's ability to meet its goals, enhance the organization's ability to grow and manage change, and increase employee engagement, effort, and performance.

HRM influences organizational performance through its influence on . . .

Efficient systems and processes. With efficient systems and processes in place, HRM is able to improve organizational efficiency, promote the efficient and effective utilization of employees' skills, and increase the organization's ability to manage change.

What is best used to help employees understand the HR policies and procedures?

Employee handbooks.

Compliance Risk:

Every employment-related decision can have legal ramifications, particularly in the areas of diversity, health and safety, union relations, whistleblowers, and harassment.

Which type of risk management is associated with the reduction of costs in hiring employees?

Financial risk - associated with all workforce and productivity costs.

Strategic risk:

HRM initiatives can affect business strategy. These may include the overall talent strategy, company culture, ethics, investments in people, and the implementation of change initiatives.

Financial Risk:

HRM performance affects the organization's workforce costs and productivity directly through compensation, benefits, turnover, overtime, and time-to-hire and indirectly through errors, accidents, delays, and lost production.

Outsourcing

Hiring of an external vendor to do work rather than doing it internally. Payroll processing, time and attendance records, and benefits management are some of the more frequently outsourced HRM tasks.

Talent Philosophy reflects on . . .

How an organization thinks about its employees. For example, some organizations view employees as partners and important stakeholders in the company, whereas others view employees as easily replaceable.

Managing organizational change is the responsibility of which type of manager?

Human Resource Manager (HRM). These professionals are responsible for managing organizational change, including business expansion, restructuring, and downsizing.

Each of the functional areas of HRM must be consistent . . .

In what they reinforce. The functional areas of HRM are designed to maximize the efficiency and Effectiveness of an organization's talent to meet the organizational goals. All functional areas must be consistent in what they reinforce so they do not undermine each other.

Health and Safety

Includes topics ranging from wellness, fire and food safety, ergonomics, injury management, disaster preparedness, industrial hygiene, and even bullying and workplace

HRM professionals

Individuals whose role, along with the HRM function, is to align the talent philosophy and HRM strategy with the business strategy and company values, develop supervisors' skills in managing and using HRM effectively, and serve as a resource for supervisors' questions and ongoing needs.

Human resource strategy

Links the entire human resource function with the firm's business strategy. Strategic human resource management aligns a company's values and goals with with the behaviors, values, and goals of employees including staffing, performance management, training and development, and compensation.

Developing a business strategy involves. . .

Making choices about which products and services to offer and which strategies to pursue to gain a competitive advantage.

What is the ultimate goal of Human Resource Management?

Managing risk and retain great employees, both which are critical to a company's success.

______ and ______ are a way for organizations to achieve growth, expand internationally, and respond to industry deregulation.

Mergers and acquisitions. Mergers and acquisitions are a common way for companies to grow and expand internationally, and acquire the talent needed to execute their business strategy.

Which type of risk management involves the speed and effectiveness of talent acquisition, development of employee skills, and retention of top performers.

Operational risk -encompasses everything to do with talent acquisition and development

What type of feedback reinforces ethical behavior?

Performance. Performance feedback is an important step in performance management wherein an employee is given frequent feedback about what they should be doing and how well they are doing it. reinforcing ethical behaviors is a critical component of this type of feedback.

Staffing influences the effectiveness of a performance management system by. . .

Providing the raw talent that the system will manage.

What are two of the most important management problems businesses face today?

Recruitment and Training. Training is often very expensive and can be a huge waste of resources if companies fail to recruit and hire people who can succeed and contribute to the organizational goals.

Employee-Management Relations

Reflect societal beliefs about the relationship between employees and the capital owners of the organization. Employee-management relations ultimately determine the employment rights of both employers and employees.

Nonfinancial compensation

Rewards and incentives given to employees that are not financial in nature, including intrinsic rewards received from the job itself or from the physical or psychological work environment (eg. feeling successful or appreciated).

Human Resource Management (HRM)

The organizational function responsible for attracting, hiring, developing, rewarding, and retaining talent.

Staffing

The process of planning, acquiring, deploying, and retaining employees that enables the organization to meet its talent needs and execute its business strategy.

Total Rewards

The sum of all of the rewards employees receive in exchange for their time, efforts, and performance. Total rewards are comprised of: - Direct financial compensation - Indirect financial compensation - Nonfinancial compensation.

Operational Risk:

These risks can influence an organization's ability to execute the business strategy. HRM affects the speed and the effectiveness of talent acquisition as well as the development of employees skills and the identification and retention of top-performers. These and other HRM activities can directly influence the organization's success or failure.

True or False: HRM is responsible for people-related issues as well as employment-related legal compliance.

True. Effective HRM is critical to all organizations because it both manages risk and creates the system that acquires, motivates, manages, and retains the talent that determines he organization's success.

Compensation issues are often a contributing factor in . . .

Unethical employee behavior. The bigger the potential reward, the greater the temptation to cheat or break the law.

What is the difference between workplace safety and workplace health?

Workplace safety involves protecting employees from work-related toxins, accidents and injuries. Workplace health refers to employees' physical and mental health.

Which type of risk management encompasses the HRM initiatives to strengthen ethical awareness and company culture?

Strategic risk - involves all aspects of company culture, ethics, investments in people, and the implementation of change.

The staffing process supports movement of . . .

Talent into, through, and out of the organization in a way that enables it to compete successfully in its marketplace.