Chapter 1

Human Resource Management:

Gaining a Competitive Advantage

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Market Share
• Market share is a key indicator of a company’s dominance and competitiveness in a
given market or industry in which it operates. When a company increases its market
share, this can improve its profitability.

“The percent of total sales in an industry generated by a particular company.”

• A company’s Market Share =

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Say, for example, the purchasing activity of consumers as a whole is 100 tubes of

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toothpaste (total industry sales) and Colgate sells 60 tubes. It implies that Colgate
holds a 60% market share.

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Competitive advantage
When a firm implements a strategy that its competitors are unable to
duplicate or find too costly to try to imitate.

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Stakeholders
• Competitiveness is related to company effectiveness, which is determined by
whether the company satisfies the needs of stakeholders.
• Companies that do not meet stakeholders’ needs are questionable to have a
competitive advantage over other firms in their industry.

“A person or group who can affect

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or be affected by the actions of a
business.”

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Stakeholders
Internal
• Stockholders, who want a return on their investment.
• The board of directors: Owners are interested in maximizing the profit the business makes.
• Employees, who desire interesting work and reasonable compensation for their services.
External
• Customers, who want a high-quality product or service.
• The community, which wants the company to contribute to activities and projects and
minimize pollution of the environment.

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• The government wants the business to pay taxes, employ more people, follow laws, and
truthfully report its financial conditions.
• Suppliers want the business to continue to purchase from them.

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• Creditors want to be repaid on time and in full. A creditor could be a bank, supplier or
person that has provided money, goods, or services to a company and expects to be paid at
a later date.

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Competitiveness
• Competitiveness refers to a company’s ability to maintain and gain
market share in its industry as well as how effectively it satisfies the
needs of stakeholders.

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Human resource management (HRM)
• Human resource management (HRM) refers to the policies, practices,
and systems that influence employees’ behavior, attitudes, and
performance.

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HRM practices
• Analyzing and designing work
• HR planning: determining human resource needs
• Recruiting: attracting potential employees
• Selection: choosing best fit employees
• Training and development: teaching employees how to perform their
jobs and preparing them for the future.

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• Compensation: rewarding employees
• Performance management: evaluating performance of employees

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• Employee relations: creating a positive work environment

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Responsibilities of HR departments
FUNCTION RESPONSIBILITIES
Analysis and design of work Job analysis, work analysis, job descriptions
Recruiting, posting job descriptions, interviewing, testing, coordination use of temporary
Recruitment and selection
employees
Training and development Orientation, skills training, development programs, career development

Performance management
Compensation and benefits
Employee/Labor relations
Personnel policies
Performance measures, preparation and administration of performance appraisals, feedback
and coaching, discipline
Wage and salary administration, incentive pay, insurance, vacation,
retirement plans, profit sharing, health and wellness, stock plans
Attitude surveys, employee handbooks, labor law compliance,
relocation and outplacement services
Policy creation, policy communications

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Employee data and Record keeping, HR information systems, workforce analytics,
information systems social media, Intranet and Internet access
Policies to ensure lawful behavior; safety inspections, accessibility
Legal compliance

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accommodations, privacy policies, ethics
Support for business Human resource planning and forecasting, talent management,
strategy change management, organization development

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HR as a Business with Three Product
Lines
One way to think about the roles and responsibilities of HR
departments is to consider HR as a business within the company with
three product lines
1. Administrative services and transactions, is the traditional product
that HR has historically provided.
 Compensation, hiring, and staffing

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 Emphasis: Resource efficiency and service quality
2. Business Partner Services:

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 Chapter: 04

The Analysis and Design of Work

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• Strategy formulation is the process by which a company decides how
it will compete in the marketplace; this is often the energizing and
guiding force for everything it does.
• Strategy implementation is the way the strategic plan gets carried out
in activities of organizational members.
• We noted five important components in the strategy implementation

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process, three of which are directly related to the human resource
management function and one of which we will discuss in this

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chapter: the task or job.

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