Strategically Managing the HRM Function McGraw-Hill/Irwin ©2012 The McGraw-Hill Companies, All...

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Strategically Managing the HRM Function McGraw-Hill/Irwin ©2012 The McGraw-Hill Companies, All Rights Reserved

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Page 1: Strategically Managing the HRM Function McGraw-Hill/Irwin ©2012 The McGraw-Hill Companies, All Rights Reserved.

Strategically Managing the HRM Function

McGraw-Hill/Irwin ©2012 The McGraw-Hill Companies, All Rights Reserved

Page 2: Strategically Managing the HRM Function McGraw-Hill/Irwin ©2012 The McGraw-Hill Companies, All Rights Reserved.

Introduction

HRM practices can help companies gain a competitive advantage.

Virtually every HR function in top companies is going through a transformation process to create a function that can play this new strategic role while fulfilling its other roles.

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Categories of HRM Activities

Transformational Knowledge Management

Cultural ChangeStrategic Redirection &

RenewalManagement Development

TraditionalRecruitment and Selection

TrainingPerformance Management

CompensationEmployee Relations

TransactionalBenefits Administration

Record KeepingEmployee Services

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Categories of HRM Activities

Transactional activities - day-to-day transactions- Low strategic value

Traditional activities - nuts and bolts of HR such as performance management, training, recruiting, selection, compensation and employee relations - Moderate strategic value

Transformational activities create long-term capability and adaptability. Activities include knowledge management, management development, cultural change and strategic redirection and renewal. - Greatest strategic value

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Page 5: Strategically Managing the HRM Function McGraw-Hill/Irwin ©2012 The McGraw-Hill Companies, All Rights Reserved.

Strategic Management of HRMFor HR to become truly strategic in its

orientation, it must view itself as a separate business entity.

Customer orientation is one of the most important changes in HR's attempt to become strategic.

Products of HR must be identified.

Technologies through which HR meets customer needs vary depending on the need being satisfied.

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Customer-Oriented Perspective

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Basic Process for HR Strategy

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Involving Line Executives

Involving those in charge of running the business can increase quality of information from which HR strategy is created.

Involvement occurs 4 ways:1. Line executives could provide input.

2. Line executives could be members of a team that develops HR strategy.

3. Once strategy is developed, line managers could receive communications with HR strategy information.

4. Line managers could formally approve a strategy.16-8

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Characterizing HR Strategies

HR-Focused

People-Linked

Business-Linked

Business-Driven

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Measuring HRM Effectiveness

Marketing the function – evaluation is a sign that HR cares about the organization as a whole and supports operations, production, marketing and other functions.

Providing accountability – evaluation helps determine whether HRM function is meeting its objectives and effectively using its budget.

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Audit & Analytic Approaches Evaluating HRM Effectiveness

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Restructuring to Improve HRM

3 Divisions of HRM:1. Centers for Expertise - functional

specialists in traditional areas of HR who act as consultants in development of state-of-the-art systems and processes for use in the organization.

2. Field Generalists - HRM generalists assigned to a business unit.

3. Service Center - ensure that transactional activities are delivered throughout the organization.

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Outsourcing

Outsourcing - Contracting with an outside vendor to provide a product or service to the firm.

2 Reasons to Outsource: Outsourcing partner can provide the service

more cheaply. Outsourcing partner can provide it more

effectively.Firms primarily outsource transactional

activities and services of HR such as payroll, pension and benefits administration.

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Reengineering

Reengineering is a complete review of critical work processes and redesign to make them more efficient and able to deliver higher quality

4 Steps of The Reengineering Process :

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Improving HRM Effectiveness through New Technologies

New technologies - Applications of knowledge, procedures, and equipment that have not previously been used. Transaction Processing—Computations and

calculations used to review and document HRM decisions and practices. These include documenting employee relocation, payroll expenses and training course enrollments.

Decision Support Systems—Systems designed to help managers solve problems. usually include a "what if" feature.

Expert systems - Computer systems incorporating decision rules of people deemed to have expertise in a certain area.

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Network and Client Server Architecture

A Network is a combination of desktop computers, computer terminals and mainframes or minicomputers that share access to databases and a means to transmit information throughout the system.

Client-server architecture is a common form of network that provides the means of consolidating data and applications into a single system.

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Relational Database, Imaging and Groupware

Relational database – Information is stored in separate files that look like tables and can be linked by common elements such as name.

Imaging – Process for scanning documents, storing them electronically and retrieving them.

Groupware (or electronic meeting software) – software application that enables multiple users to track, share and organize information and to work on same document simultaneously.

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Software Applications for HRM Improving HRM Effectiveness through New

Technologies–E-HRM – Speed requirements of e-business force HRM managers to explore how to leverage technology for delivery of traditional and transformational HRM activities.

Recruitment and Selection - Technology monitors hiring processes to minimize potential for discriminatory hiring decisions.

Compensation and Rewards - Leveraging technology may allow firms to better achieve compensation goals with less effort.

Training and Development - Technology allows firms to deliver training and development for some skills or knowledge faster, more efficiently and possibly more effectively.

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The Future for HR Professionals

The future for HRM careers brighter than ever.

HR leaders need knowledge of the following:

- business, change processes, integration competence and people’s role in competitive advantage

- HR issues, tools, processes and technologies, policies and programs

- HR practices in areas such as staffing, development, rewards, communication and organizational design

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Page 20: Strategically Managing the HRM Function McGraw-Hill/Irwin ©2012 The McGraw-Hill Companies, All Rights Reserved.

Summary

HRM functions must consist of individuals who view themselves as businesspeople who work in HRM.

With the opportunity to impact the way organizations compete through people comes serious responsibility and accountability.

Firms need balance attracting, motivating and retaining the best talent and keeping costs low.

HR leaders need knowledge of the business combined with knowledge of HR issues, tools, processes and technology.

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