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Human Resource Management:

Gaining a Competitive Advantage

This chapter discusses the role of Human Resource Management (HRM) in gaining a competitive advantage. It provides a foundation for the rest of the chapters by describing the role HRM plays within organizations and the skills HRM practitioners need for any company to be competitive.Within this chapter are the competitive challenges that U.S. companies currently face, which influence their ability to meet the needs of shareholders, customers, employees, and other stakeholders and support as to how these competitive challenges are influencing HRM.

At the end of this chapter, instructors should ensure students understand HRM and its role within organizations (LO1-1, LO1-7). Further, students should be able to discuss the different HRM practices (LO1-8), which are outlined towards the end of the chapter. Accomplishing both tasks will help support students in subsequent chapters; however, it can be a difficult task given the perceptions of HRM and HR departments, as well as the potential for students who lack exposure to such ideas and practices.

The instructor may wish to ensure (and continue to revisit throughout the course) the student continually focuses on how they are the ones making the decisions (i.e. managers). However, their own experiences such as being interviewed can lend to great course discussion and reflection.Instructors may also find students, especially those with little interest in HRM or within other majors, experiencing difficulty in recognizing the importance of this topic and practice. Instructors may wish to emphasize that although HRM is a separate practice, much of what will be studied directly applies to the business acumen of managers and leaders in all facets of business management.

Once the above is considered, instructors may then wish to discuss the remainder of the LOs. If students have had a previous Introduction to Business/ Management or similar course, then discussion of these LOs from the perspective of strategic management and internal/external analysis (i.e. SWOT analysis) may help students connect the concepts. Specifically, if a general understanding of strategic management exists, then instructors may discuss how HRM practices can contribute to the strategic advantage of organizations, and how HR departments and professionals hold a specific role and may contribute to this process. It would be helpful to draw students’ attention to Table 1.15, which shows the outline of the textbook. These topics can help further demonstrate the different areas within HRM, and what students may expect from the remainder of the course.

Learning Objectives

LO 1-1: Discuss the roles and activities of a company’s human resource management function.

LO 1-2: Discuss the implications of the economy, the makeup of the labor force, and ethics for company sustainability.

LO 1-3: Discuss how human resource management affects a company’s balanced scorecard.

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LO 1-4: Discuss what companies should do to compete in the global marketplace.

LO 1-5: Identify how social networking, artificial intelligence, and robotics is influencing human resource management.

LO 1-6: Describe how automation using artificial intelligence and robotics has the potential to change jobs.

LO 1-7: Discuss human resource management practices that support high-performance work systems.

LO 1-8: Provide a brief description of human resource management practices.

Society for Human Resource Management Body of Competency & Knowledge

This chapter contains content which may be identified within the following content areas identified

in HR Expertise:

• HR Strategic Planning • Talent Acquisition • Employee Engagement & Retention • Learning & Development • Total Rewards • Structure of the HR Function • Organizational Effectiveness & Development • Workforce Management • Employee & Labor Relations • Technology Management • HR in the Global Context • Diversity & Inclusion • Risk Management • Corporate Social Responsibility • U.S. Employment Law & Regulations

Human Resource Certification Institute’s A Guide to the HR Body of Knowledge

This chapter contains content which may be identified within the following content areas: • Business Management & Strategy • Workforce Planning and Employment • Human Resource Development • Compensation and Benefits • Employee and Labor Relations • Risk Management

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Human Resource Management: Gaining a Competitive Advantage, 13e Instructor’s Manual

1-3 © McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.Guidance to Discussion Questions and End of Chapter Sections

Discussion Question 1: Traditionally, human resource management practices were developed and administered by the company’s human resource department. Some companies are abandoning or don’t have HR departments. Why is this occurring? Is it a good idea for companies not to have an HR department or HR professionals? Explain your position.Discussion will most likely focus on associated costs as companies outsource administrative functions normally housed within HR departments. Instructors may need to emphasize that as long as the strategically necessary functions are still emphasized and managed well, then HR departments may not be necessary. The caveat is that sometimes without the department, they do not get the necessary emphasis. However, HR professionals may not necessarily reside within HR departments and can be within other departments (Training and Learning departments separate from the traditional HR department, for example) that focus on a specific function. It may also be important to emphasize that HR professionals can practice from multiple areas and backgrounds (Industrial/Organizational Psychology). Thus, HR practitioners and professionals become an important part of organizations, with or without departments. Further support may be found in Tables 1.1 (Responsibilities of HR Departments) and 1.2 (Questions to Ask: Is HRM Playing a Strategic Role in the Business?).

Discussion Question 2: Staffing, training, compensation, and performance management are important HRM functions. How can each of these functions help companies succeed in meeting the environmental, social, and governance challenge, the global challenge, and the technology challenge?• Staffing: Ensuring organizations predict the appropriate number of employees and competencies necessary to meet strategic objectives, domestically and globally, and then acquire them within the necessary timeframe. Example would be leadership identification and selection with global understanding and the ability to foresee issues within organizational operations/logistics to ensure sustainability.• Training: Ensuring employees of organizations have the support to obtain and improve upon the competencies as necessary to meet the strategy. This would also include leadership development. Example could be sales training, development of customer service competencies, and a fluency to use corporate technology and its continual adoption of new technology to service customers.• Compensation: Identifying appropriate compensation and benefits strategies that align behind organizational strategy while meeting identified imperatives such as attraction and retention of key talent. Global challenge of compensation that meets regulation and demographic needs in multiple cultural and geographically dispersed areas. Technological challenge of risk and security management of employee data from theft, as well as meeting regulatory needs of multiple countries and economic zones.• Performance Management: Ensuring employee performance is measured for improvement and other used for organizational decisions. Global challenge of developing leaders with global business acumen may also be discussed.

Discussion Question 3: How has the pandemic influenced the workplace and HRM practices? What changes in HRM practices as a result of the pandemic will continue after it is over? Explain your rationale.The global pandemic caused by COVID-19 caused the creation of a “new normal.” The “new normal” meant businesses had to quickly adapt their business models, supply chains, and ways to engage consumers or risk going out of business. Many companies retooled to provide products and 3 / 4

Human Resource Management: Gaining a Competitive Advantage, 13e Instructor’s Manual

1-4 © McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.services needed during the pandemic. For example, Dyson started to build ventilators and medical equipment and LVMH transformed its perfume production to produce hand sanitizer. Home became the place where we worked, studied, and ordered food, groceries, and other products and services we needed. Video conferencing technology such as Zoom became the way we interacted for work, school, and to socialize with friends and family. Curfews, stay-at-home orders, wearing masks, washing our hands, and social distancing became the norm. The wide availability of the vaccine has led to new challenges for HR related to implementing vaccine policy. For the HR professional adaptability has been critical in the fluid pandemic environment.

Discussion Question 4: What are intangible assets? How are they influenced by HRM practices?See Table 1.6. Here, intangible assets would be employees and the skills/competencies/knowledge they bring to the organization. HRM practices impact the attitudes, behaviors, and performance of employees within the organization (recalling the definition presented within textbook).

Discussion Question 5: What is evidence-based HR? Why might an HR department resist becoming evidence based?Evidence-based HR is defined as “demonstrating that HR practices have a positive influence on the company’s bottom line or key stakeholders.” HR may resist due to a) lack of understanding, knowledge skill sets necessary, b) a feeling of de-personalization of the HR function (i.e. data and cold decisions versus people and warm decisions) c) fear of data-driven decisions resulting in downsizing of workforce and HR, especially connected to previous mentioned reasons.

Discussion Question 6: What types of big data would you collect and analyze to understand why an employer was experiencing a high turnover rate?Big data is defined as “Information merged from a variety of sources, including HR databases, corporate financial statements, and employee surveys.” Further responses may include competitor compensation surveys, performance evaluation results (maybe mention 360 degree assessments and potential perceptions of management), length of tenure at specific positions, number of promotions by position/demographic, etc.

Discussion Question 7: What is digital literacy and how is it related to upskilling and reskilling?Digital literacy refers to the skills needed to interpret, create, and strategically use digital information. Digital literacy will be required of most jobs even those not considered as technology jobs. For example, it used to be sufficient for auto mechanics to know how to fix an out of tune engine. The technology used in the car requires mechanics to integrate digital skills into their traditional job functions to tune the cars of today.

Discussion Question 8: Which HR practices can benefit by the use of social collaboration tools like Twitter and Facebook? Identify the HR practices and explain the benefits gained.In general, social networking facilitates communication, decentralized decision making, and collaboration. Social networking can be useful for connecting to customers. It is also valuable for busy employees to share knowledge and ideas and receive feedback, recognition, mentoring, and coaching from their peers and managers with whom they may not have much time to interact face- to-face on a daily basis. Companies can also use social networking for identifying and connecting with potential job candidates.

Discussion Question 9: Do you agree with the statement “Employee engagement is something companies should be concerned about only if they are making money”? Explain.No; as employee engagement can save costs and thus help take company from the red and into the black.

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