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Competitive Advantage Through HRM

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HRM and the Environment. Environmental factors influencing HRM include: Dramatic increase in white collar vs. blue collar jobs ... – PowerPoint PPT presentation

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Title: Competitive Advantage Through HRM


1
Competitive Advantage Through HRM
  • Jason D. Shaw

2
What is Strategic HRM?
  • Strategic HRM - how the management of people in
    organizations relates to the ability of
    organizations to compete in the marketplace and,
    beyond this, to provide a sustainable competitive
    advantage

3
Functional HRM
  • Functional HRM studies employees and employment
    practices at the individual level. Unlike
    strategic HRM, the focus is on the individual
    rather than the organization as a whole

4
How is Strategic HRM Different From Other Areas
of HRM?
  • Perspective is on the business and organizational
    level
  • Studies typically involve
  • Examination of the integration or fit among HRM
    practices
  • HRM practices and other features of the
    organization

5
Strategic HRM Differences Continued
  • Most studies in the realm of strategic HRM focus
    on organizational performance

6
Organizational Performance
  • Intermediate dimensions of workforce performance
    such as
  • Accident rates
  • Voluntary and involuntary turnover
  • Productivity
  • Measures of corporate financial performance

7
HRM and the Environment
  • Environmental factors influencing HRM include
  • Dramatic increase in white collar vs. blue collar
    jobs
  • Dramatic shifts in the management of technology
  • The workforce may grow at a rate that meets or
    exceeds prior levels
  • Dramatic change in the way that decision-makers
    manage the size of their workforces

8
Strategic HRM Responses
  • Invest in commitment oriented HRM practices such
    as
  • Internal selection
  • Group incentives
  • Training
  • Team building

9
Strategic HRM Responses Continued
  • Enhance the efficiency of internal communication
    networks through
  • Building trust in management
  • Improving the quality of social climates
  • Creating a shared and meaningful organizational
    language

10
Strategic HRM Responses Continued
  • Organizations can not only minimize, but reverse
    the negative effects of layoffs in terms of
    organizational productivity by continuing
    investments in strategic HRM systems

11
What Research Says About Strategic HRM
  • A system of HRM practices rather than an isolated
    or best-practice approach is necessary for
    sustained advantage

12
What Research Says About Strategic HRM Continued
  • The effects of HRM systems on performance are
    partially indirect through their influence on the
    work force and work force outcomes such as
    turnover and productivity

13
What Research Says About Strategic HRM Continued
  • Organizations that invest in commitment-oriented
    HRM practices had
  • High positive levels of internal social climate
  • Exchanged and combined information more
    effectively
  • Outperformed their competitors on revenue from
    new products and one-year sales growth

14
Examples of Strategic HRM Success
  • Groups of HRM practices related positively to
    financial profitability in a sample of banks
  • The productivity of U.S. production lines equaled
    that of Japanese lines when there was heavy
    investment in strategic HRM practices

15
Guidelines
  • Focus on sets of commitment-enhancing practices
    when work is knowledge-based and when internal
    communication processes are critical for success

16
Guidelines Continued
  • Use the functional HRM literature as a guide in
    developing an effective system of HRM practices
  • Considerable research exists on HRM practices
    that work at the individual level

17
Guidelines Continued
  • Combine practices across domains in logically and
    theoretically consistent ways
  • More research needs to be done on best practices
    for combinations of HRM practices
  • One size doesnt fit all

18
Guidelines Continued
  • Use HRM investment as a signal of future
    investment and an ambiguity reducer when work
    force size fluctuates
  • Investment includes
  • Direct and honest communication
  • Continued HRM investments after layoffs

19
Guidelines Continued
  • Focus on flexibility or agility in the HRM system
    and beyond
  • Agile enterprises require guiding principles that
    encourage the inflow and outflow of talent in
    ways that facilitate and only minimally disrupt
    internal fluidity

20
Conclusion
  • Strategic HRM practices can enhance the
    competitive advantage of businesses
  • Results of the practices are reflected in real
    financial gains for the business
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