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Chapter 1
Human Resource
Management: Gaining a
Competitive Advantage

Human Resource Management

Gaining A Competitive Advantage
THIRTEENTH EDITION
Raymond Noe, John Hollenbeck, Barry
Gerhart, Patrick Wright

© 2023 McGraw Hill, LLC. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill, LLC.
 Introduction
Human Resource Management (HRM):
• Plays a role in company’s survival, effectiveness, and
competitiveness.
• Refers to the policies, practices, and systems that
influence employees’ behavior, attitudes, and performance.

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 Figure 1.1 Human Resource Management
Practices

Access the text alternative for slide images.

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 What Responsibilities and Roles Do HR
Departments Perform? 1

High-Impact HR Functions:
• More integrated with the business.
• Skilled at attracting and retaining employees.
• Can adapt quickly.
• Identify and promote talent from within.
• Identify what motivates employees.
• Continuously building talent and skills.

LO 1-1
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 What Responsibilities and Roles Do HR
Departments Perform? 2

HR Department Responsibilities.
• Strategic management of human capital
• Outplacement.
• Labor law compliance.
• Record keeping.
• Testing.
• Some aspects of benefits administration.

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 Table 1.1 Responsibilities of HR
Departments 1

FUNCTION RESPONSIBILITIES
Analysis and design Job analysis, work analysis, job descriptions.
of work.
Recruitment and Recruiting, posting job descriptions, interviewing, testing,
selection. coordinating use of temporary employees.
Training and Orientation, skills training, development programs, career
development. development.
Performance Performance measures, preparation and administration of
management. performance appraisals, feedback and coaching, discipline.
Compensation and Wage and salary administration, incentive pay, insurance,
benefits. vacation, retirement plans, profit sharing, health and
wellness, stock plans.

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 Table 1.1 Responsibilities of HR
Departments 2

FUNCTION RESPONSIBILITIES
Employee Attitude surveys, employee handbooks, labor law
relations/labor relations. compliance, relocation and outplacement services.

Personnel policies. Policy creation, policy communications.

Employee data and Record keeping, HR information systems, workforce
information systems. analytics, social media, intranet and Internet access.

Legal compliance. Policies to ensure lawful behavior; safety inspections,

accessibility accommodations, privacy policies, ethics.

Support for business Human resource planning and forecasting, talent

strategy. management, change management, organization
development.
SOURCES: Bureau of Labor Statistics. 2019. U.S. Department of Labor, Occupational Outlook Handbook, Human
Resources Specialists; SHRM-BNA Survey No. 66. 2001. “Policy and Practice Forum: Human Resource Activities,
Budgets, and Staffs, 2000–2001.” Bulletin to Management, Bureau of National Affairs Policy and Practice Series.
Washington: Bureau of National Affairs.

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 Figure 1.2 HR as a Business with Three
Product Lines

SOURCE: Adapted from Figure 1, “HR Product Lines” in E. E. Lawler, “From Human Resource Management to Organizational Effectiveness,” Human Resource
Management 44 (2005), pp. 165–69.

Access the text alternative for slide images.

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 Strategic Role of the HRM Function 1

HRM Role:
• Time spent on administrative tasks is decreasing.
• Roles as a strategic business partner, change agent, and
employee advocate are increasing.
• Shared service model:
• Central place for administrative and transactional tasks.

• Includes centers of expertise or excellence, service centers,

and business partners.

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 Strategic Role of the HRM Function 2

Role of Technology:
• Reducing HRM role in administrative tasks, maintaining records,
and providing self-service to employees.
• Shift to self-service gives employees access to many HR
functions.
• HR managers have more time to work with managers on
employee issues.

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 Strategic Role of the HRM Function 3

Outsourcing:
• Most commonly outsourced activities:
• Benefits administration.
• Relocation.
• Payroll.
• Most common reasons for outsourcing:
• Cost savings.
• Increased ability to recruit and manage talent.
• Improved HR service quality.
• Protection of the company from potential lawsuits by standardizing
processes such as selection and recruitment.

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 Strategic Role of the HRM Function 5

Demonstrating the Strategic Value of HRM: HR Analytics and

Evidenced-Based HR.
• HR can engage in evidence-based HR.
• Requires use of HR or workforce analytics.

• Big data:
• Information merged from HR databases, corporate financial
statements, employee surveys, and other data sources.

• Results in evidence-based HR decisions.

• Show that HR practices influence the organization’s bottom line,

including profits and costs.

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 Strategic Role of the HRM Function 7

Education and Experience.

Four-year college or graduate HR degree.
• Senior HR role:
• Developing and supporting the company culture.

• Employee recruitment, retention, and engagement.

• Succession planning.

• Designing company’s overall HR strategy.

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 Strategic Role of the HRM Function 8

Education and Experience.

• Junior HR role:
• Handle transactions related to paperwork, benefits, and payroll
administration.
• Answer employee questions.
• Data management.
• Professional certification.

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 Strategic Role of the HRM Function 9

Competencies and Behaviors.

• Most HRM professionals are generalists.

• Lack business acumen.

• Need nine competencies developed by SHRM.
• Primary professional organization for HRM with more than 300,000
members.

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 Strategic Role of the HRM Function 10

Nine Competencies:
1. HR Technical Expertise and Practice.
• Apply principles of HRM to contribute to success of the business.
2. Business Acumen.
• Understand business functions and metrics within the organization
and industry.

3. Critical Evaluation.
• Interpret information to determine return on investment and
organizational impact in making recommendations and business
decisions.

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 Strategic Role of the HRM Function 11

Nine Competencies.
4. Ethical Practice.
• Integrate core values, integrity, and accountability throughout all
organizational and business practices.
5. Global and Cultural Effectiveness.
• Manage HR both within and across boundaries.

6. Communications.
• Effectively exchange and create free flow of information with and
among various stakeholders at all levels of the organization to
produce meaningful outcomes.

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 Strategic Role of the HRM Function 12

Nine Competencies.
7. Organizational Leadership and Navigation.
• Direct initiatives and processes within the organization and gain
buy-in from stakeholders.
8. Consultation.
• Provide guidance to stakeholders such as employees and leaders
seeking expert advice on a variety of circumstances and situations.

9. Relationship Management.
• Manage interactions with and between others with specific goal of
providing service and organizational success.

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 Competitive Challenges Influencing
Human Resource Management 3

Understand and Enhance the Value Placed on Intangible

Assets and Human Capital.
• Three types of assets:

1. Financial assets (cash and securities).

2. Physical assets (property, plant, equipment).
3. Intangible assets (human capital, customer capital,
social capital, intellectual capital).

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 Table 1.6 Examples of Intangible Assets
Human capital.
• Tacit knowledge.
• Education.
• Work-related know-how.
• Work-related competence.
Customer capital.
• Customer relationships.
• Brands.
• Customer loyalty.
• Distribution channels.
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Social capital.
• Corporate culture.
• Management philosophy.
• Management practices.
• Informal networking systems.
• Coaching/mentoring
relationships.
Intellectual capital.
• Patents.
• Copyrights.
• Trade secrets.
• Intellectual property.
20
 Competitive Challenges Influencing
Human Resource Management 4

Understand and Enhance the Value Placed on Intangible

Assets and Human Capital.
• Knowledge workers.
• Contribute specialized knowledge.

• Training Options:
• Upskilling or reskilling current employees.

• Hire and train employees who lack the complete skill set.

• Partner with local, federal and state sponsored and funded

organizations.

• Train hard-to-employ individuals.

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 Competitive Challenges Influencing
Human Resource Management 5

Emphasize Empowerment and Continuous Learning:

• Give employees responsibility and authority.

• Hold them accountable.

• Employees share in the rewards and losses.
• Learning organization.

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 Competitive Challenges Influencing
Human Resource Management 6

Adapt to Change:
• Inevitable.

• Employees expected to take more responsibility for own

careers.
• Challenge is how to build a committed, productive workforce.

• Employees manage change through agility.

• Changes in the employment relationship.

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 Competitive Challenges Influencing
Human Resource Management 7

Maximize Employee Engagement:

• Passionate about their work.

• Committed to the company and its mission.

• Work hard to contribute.
• Measured with attitude or opinion surveys.

• Focus on employee experience.

• Employee value proposition (EVP).

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 Table 1.7 Common Themes of Employee
Engagement
COMMON THEMES OF EMPLOYEE ENGAGEMENT
1. Pride in employer.
2. Satisfaction with employer.
3. Satisfaction with the job.
4. Opportunity to perform challenging work.
5. Recognition and positive feedback.
6. Personal support from manager.
7. Effort above and beyond the minimum.
8. Understand link between one’s job and company’s mission.
9. Prospects for future growth with the company.
10. Intention to stay with the company.

SOURCES: Based on R. Vance, Employee Engagement and Commitment (Alexandria, V A: Society for Human Resource Management, 2006); T.
Lytle, “The Engagement Challenge,” H R Magazine, October 2016, pp. 52–58.

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 Competitive Challenges Influencing
Human Resource Management 8

Manage Talent:
• Acquiring and assessing employees.
• Learning and development.
• Performance management.
• Compensation.

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 Competitive Challenges Influencing
Human Resource Management 10

Provide Flexibility to Help Employees Meet Work and Life

Demands.
• 46% of employees work more than 45 hours per week.
• Both the company and employees can benefit.
• Desire to continue working remotely post-pandemic.
• Companies’ policies on remote work vary.

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 Competitive Challenges Influencing
Human Resource Management 11

Meet the Needs of Stakeholders, Shareholders, Customers,

Employees, and Community.
• Demonstrate performance to stakeholders: the balanced
scorecard.
• Being customer-focused.

• Improving quality.

• Emphasizing teamwork.

• Reducing new product and service development times.

• Managing for the long term.

LO 1-3
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 Table 1.8 The Balanced Scorecard
QUESTIONS EXAMPLES OF CRITICAL
PERSPECTIVE ANSWERED BUSINESS INDICATORS CRITICAL HR INDICATORS
Customer How do customers Time, quality, performance, Employee satisfaction with HR
see us? service, cost department services; Employee
perceptions of the company as
an employer
Internal What must we Processes that influence Training costs per employee,
excel at? customer satisfaction, turnover rates, time to fill open
availability of information on positions
service, and/or manufacturing
processes
Innovation and Can we continue to Improve operating efficiency, Employee/skills competency
learning improve and create launch new products, levels, engagement survey
value? continuous improvement, results, change management
empowering of workforce, capability
employee satisfaction
Financial How do we look to Profitability, growth, Compensation and benefits per
shareholders? shareholder value employee, turnover costs, profit
per employee, revenue per
employee

SOURCES: Based on K. Thompson and N. Mathys, “The Aligned Balanced Scorecard,” Organizational Dynamics 37 (2008), pp. 378–93; B. Becker, M. Huselid,
and D. Ulrich, The HR Scorecard: Linking People, Strategy, and Performance (Boston: Harvard Business School Press, 2001).

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 Competitive Challenges Influencing
Human Resource Management 12

Demonstrate Social Responsibility.

• Helps boost company’s image with customers.
• Helps gain access to new markets.
• Helps attract and retain talented employees.

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 Competitive Challenges Influencing
Human Resource Management 17

Aging of the Workforce:

• Labor force participation of those 55 years and older expected
to grow.
• HRM issues such as career plateauing, retirement planning, and
retraining older workers.

The Multigenerational Workforce:

• Five generations.

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 Table 1.10 Generations in the Workforce

YEAR BORN GENERATION AGES

Traditionalists
1925 to 45 >76
Silent Generation
1946 to 64 Baby Boomers 57 to 75
1965 to 80 Generation X 41 to 56
Millennials
1981 to 95 Generation Y 26 to 40
Echo Boomers
1996 Generation Z <25

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 Competitive Challenges Influencing
Human Resource Management 19

Legal Issues:
• Employment laws and regulations.

• Eliminating discrimination and harassment.

• Health care coverage.
• Data security practices and protecting intellectual property.

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 Competitive Challenges Influencing
Human Resource Management 21

Ethical Issues.
• Ethics are the fundamental principles of right and wrong.

• HR managers must satisfy these standards for their practices to

be considered ethical:
1. HRM practices must result in greatest good for largest number of
people.

2. Employment practices must respect basic human rights of privacy,

due process, consent, and free speech.

3. Managers must treat employees and customers equitably and

fairly.

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 Competitive Challenges Influencing
Human Resource Management 23

Competing through Globalization.

• Entering International Markets.
• Exporting products overseas.

• Building manufacturing facilities or service centers in other

countries.

• Entering into alliances with other companies.

• Engaging in e-commerce.

• Offshoring and reshoring.

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 Competitive Challenges Influencing
Human Resource Management 24

Competing through Technology.

• Artificial intelligence and robotics:
• Provide skills that are difficult to find.

• Perform some job tasks previously completed by employees.

• May eliminate some jobs.

LO 1-5 & 1-6

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 Competitive Challenges Influencing
Human Resource Management 26

Competing through Technology.

• Use HRIS, mobile devices, cloud computing, and HR
dashboards:
• HRIS stores large quantities of employee data.

• Mobile devices increasingly used to provide employees with

anytime, anywhere access to HR applications.

• Cloud computing allows companies to lease software and

hardware.

• HR dashboard provides access to important HR metrics for

workforce analytics.

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© 2023 McGraw Hill, LLC. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill, LLC.