Human Resource Management
Fifteenth Edition
Chapter 2
Diversity Management,
Strategic HRM
Organizations and HR as
distinct competitive
advantages.
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Learning Objectives
2.1 Describe the concept of diversity and diversity
management.
2.2Explain the various elements of a diverse workforce.
2.3 Define strategic human resource management, and
give an example of strategic human resource management
in practice
2.4. Give examples of each of the seven steps in the
strategic management process.
2.5 Organizations and HR as distinct competitive
advantages.
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Defining Diversity
•
Diversity is having a workforce comprising of two or more
groups of employees with various racial, ethnic, gender,
cultural, national origin, handicap, age, and religious
backgrounds.
•
Diversity refers to any actual or perceived difference
among people in terms of age, race, religion, profession,
sexual orientation, gender identity, geographic origin,
lifestyle, term with the organization.
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Managing Diversity
•
The challenge for managers is to recognize that people with
characteristics that are common, but are different from
those in the mainstream, may often think, act, learn, and
communicate quite differently. Because every person,
culture, and business situation is unique, there are no
simple rules for managing diversity, but employers need to
develop patience, open-mindedness, acceptance, and
cultural awareness.
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Diversity Management
•
Diversity management refers to organizational actions that
aim to promote greater addition of employees from different
backgrounds into an organization's structure. This means
pursuing an broad culture in which newcomers feel
welcome, and creating a supportive culture in which all
employees can be effective.
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Elements of the Diverse Workforce (1 of 4)
• Single parents and working mothers
• Women in business
• Mothers returning to the workforce
• Dual-career families
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Strategic Planning
• Strategic planning is the process by which top
management determines overall organizational purposes
and objectives and how they are achieved. A strategic plan
is the company’s plan for how it will match its internal
strengths and weaknesses with its external opportunities
and threats in order to maintain a competitive position.
• Four steps:
– Determination of the organizational mission
– Assessment of the organization and its environment
– Setting of specific objectives or direction
– Determination of strategies to accomplish those
objectives
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Strategic HRM
Human resources are increasingly viewed as a critical, if not
the source of, competitive advantage for the business. Thus
attention needs to be paid, at a strategic level, to the nature
of this resource and its management, as this will impact on
the performance of the organisation, however defined’.
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Strategic Human Resource Management
• Strategic Human Resource management is basically
formulating and executing human resource policies
and practices that produce the employee
competencies and behaviors the company needs to
achieve its strategic aims.
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The HR Strategy Model
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THE HR Strategy Model
• First, management formulates the strategic plans
and goals. In turn, executing these plans and
achieving these goals depends on having the right
mix of employee competencies and behaviors.
Finally, to produce these required employee
competencies and behaviors, the human resource
manager must put in place the right mix of
recruitment, selection, training, and other HR
strategies, policies, and practices.
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Building High-Performance Work Systems
• High-Performance Work System
• High Performance Work Practices
– Paid more
– Trained more
– Refined and advanced recruitment Process
– More self-managed work teams
• Human Resource Metrics are the quantitative
measure of a human resource management
activity such as hours of training per employee, or
qualified applicants per position
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Employee Engagement
• Why is employee engagement important?
• The employee engagement problem
• What can managers do to improve employee
engagement?
• How to measure employee engagement
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The New HRM Strategy for Kia
Six Steps for Improving Employee Engagement
1. Set measurable objectives
2. Provide leadership development
3. Employee recognition programs
4. Improve internal communications
5. Employee development program
6. Examine compensation and other policies
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The New HRM Strategy for Kia
• 1. set measurable objectives for the program;
• 2. provide leadership development, for example, send all managers for
training to improve their management skills;
• 3. institute new employee recognition programs, for instance, giving
“Outstanding Awards” to selected employees quarterly;
• 4. develop improved internal communications, for instance, begin
quarterly employee briefings;
• 5. institute a new employee development program, for instance, using
the company’s appraisal process to identify employees’ training
needs and to create training plans for each employee; and
• 6. change the compensation and other policies.
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The Strategic Management Process
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Worksheet for Environmental Scanning
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SWOT Matrix, with Generic Example
Potential Strengths Potential Opportunities
• Market leadership • New overseas markets
• Strong research and development • Failing trade barriers
• High-quality products • Competitors failing
• Cost advantages • Diversification
• Patents • Economy rebounding
Potential Weaknesses Potential Threats
• Large inventories • Market saturation
• Excess capacity for market • Threat of takeover
• Management turnover • Low-cost foreign competition
• Weak market image • Slower market growth
• Lack of management depth • Growing government regulation
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Organizations and HR as distinct
competitive advantages.
An organization’s success depends on how it manages its
resources, including human resources. Human resource
management helps organizations deal effectively with the
phases of the employment cycle: preselection, selection, and
postelection.
The preselection phase involves planning for types of future
job openings and the qualifications necessary to perform
these jobs.
The selection phase includes recruiting applicants,
assessing their qualifications, and selecting the most
qualified.
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Organizations and HR as distinct
competitive advantages.
During the post selection phase, the HRM personnel
attempts to maximize the performance and satisfaction
levels of employees by providing them with the necessary
knowledge, skills, and working conditions to achieve
organizational goals.
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Organizations and HR as distinct
competitive advantages.
• Gaining a Competitive Advantage:
• It is common practice for a firm to seek and maintain a
competitive advantage in order to maintain its position in
the marketplace. Firms can accomplish this by effectively
managing their human resources.
• A) Competitive Advantage Defined:
• To succeed, an organization must gain and maintain an
edge over its competitors—that is, develop an advantage
or superior position in the marketplace.
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Organizations and HR as distinct
competitive advantages.
• B) Cost Leadership:
• One way to develop a competitive advantage is through practicing cost
leadership. Here a firm provides the same services or products as its
competitors, but produces them at a lower cost. By doing so, a firm
can earn a better return on its investment or sell at lower prices.
• C) Product Differentiation:
• Firms use product differentiation to gain a competitive advantage by
producing a product or service that buyers prefer over competitors.
Typically, this is accomplished by creating better quality, providing
innovation that competitors’ lack, choosing a superior location, or by
promoting and packaging products to create a perception of higher
quality. A competitive advantage occurs when customers are willing to
pay enough to cover any extra production costs.
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Organizations and HR as distinct
competitive advantages.
• Relying on your human resource department to recruit the
best employees, design appropriate and effective training
programs and institute successful retention programs can
give your company a competitive advantage. While
competitors struggle with maintaining an experienced and
motivated workforce, your company can focus more on
productivity and increased sales when your HR
department plays an integral role in your workforce
development.
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How HR Can Be Used as a Competitive
Advantage
• 1. HR can use data to analyze turnover rates and determine where
problems may lie, thus allowing the company to more quickly find
issues and get them resolved.
• 2. HR can help managers source the right talent to get the skills
the company needs to grow and be competitive. HR expertise can
allow the organization to know where to look for specialized talent
when needed.
• 3. HR can analyze which employees are high performers and alert
the management about who should be fast-tracked for promotions
and new projects.
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Summary
1. Strategic planning is important to all managers
2. Each function or department needs its own
functional strategy
3. The manager will want to gather and analyze
data prior to making decisions
4. High-performance work system is a set of HRM
policies
5. Employee engagement is important
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Copyright
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