Strategic Human Resource Management LAM Yee ling (s0218671)

Chapter 1:
The importance of HRM
HR practices are important because they partly determine how well a company satisfies the concerns
of its multiple stakeholders. (p14) These activities are determined by various forces of in the external
environment and by several organizational factors.
Gaining and sustaining a competitive advantage.
HRM needs to be implemented successfully into the business strategy of a firm if it wants to gain
sustainable competitive advantage over their competitors.

- Employees are a source of added value. HRM can maximize this value added, regardless the
specific job of any employee, by efficiently allocating the right employees to the right job, at
the right time and place, and under the right conditions.
- In order for a comparative advantage to be sustainable, a firms HR must be rare. If
competitors have employees with similar talent, then the firms talent provide no advantage
over competitors.
- A culture that cant be copied. It is not only crucial for a firm to be able to attract its talented
employees, but more importantly is the ability to keep them in their business. Therefore a
firm must provide a culture that keeps its employees happy and productive. This culture
should not be easily copied by competitors. Just like business practices, company cultures
that can easily be copied by competitors are not sources of sustained competitive advantage.
- Examples of businesses with unique company cultures: Southwest Airlines, FedEx.

An integrative framework for managing HR
Defining HR : all of the people who currently contribute to doing the work of the organization, as well
as those people who potentially could contribute in the future, and those who have contributed in the
recent past. as current employees, future employees and recent employees are all responsible for
the creation and realization of the organizations vision, mission, goals, and objectives.

Managing HR effectively using an integrative framework. In this framework special attention is drawn
to the importance of the External Environment and the Organizational Environment.

The external environment (economic globalization, political landscape, labor markets, country
cultures, laws and regulations, unions) affects all organizations but not all to the same extent or the
same way.

Characteristics of the organizational environment influence the way a company manages its people.
These organizational characteristics include technologies, company culture and business strategy.
They often explains why companies in the same industry treat their employees differently.

Activities for managing HR include the formal HR policies developed by the company as well as the
actual ways these policies are implemented in the daily practices of supervisors and managers. The
more the formal policies and actual practices are aligned the more systematic companies are in
creating HR practices to fit the organization and its environment, the more effective the organization
is likely to be. But this doesnt always happen in companies. Only when an organization
Strategic Human Resource Management LAM Yee ling (s0218671)
systematically understands, creates, coordinates, aligns, and integrates all of their policies and
practices, it creates a human resource management (HRM) system.

The HR Triad
The chosen HR policies by a company can have powerful effects. To Ensure these effects are positive,
the three key players (HR professionals, line managers and all of the other employees who are
affected by HR policies and practices) referred to as the HR Triad, are required.

Since no department, by itself, can manage a companys human resources, there is need for
cooperation between the three players in managing people.

Line managers always have been responsible. In small businesses the founder is mostly the one in
charge for the hiring and pay decisions. As a company grows the owner may outsource some of the
administrative aspects related to managing people to one or more specialists. Whether in small
businesses or bigger companies, the hiring and pay decisions responsibility for the work , however,
always remains with the company managers.

Human resource professionals are people with substantial specialized and technical knowledge of HR
issues, laws, policies, and practices. They should have some key competencies on the one hand.
These are generally assessed and certified by the Human Resource Certification Institute (HRCI). On
the other hand, HR professionals must regard the obligation to implement public objectives and
protect the public interest as more important than blind loyalty to an employer's preferences. They
are obliged to live according the HR profession's code of ethics which provides guidelines for ethical
HR behavior.

All other employees of the organization who are affected by HR policies and practices also share
responsibility. They share their part of responsibility in many ways: some employees write their own
job descriptions and even design their own jobs, others give feedback by expressing their level of
satisfaction towards the organizations approach to managing people, etc. All employees need to
position themselves within the organization and learning about how effective organizations are
managing HR is essential for getting into position.

The Five special themes in HRM

1. Managing teams. An important matter in HRM practices is the ability to manage teams
efficiently. HRM practices can help in successfully managing teams by selecting, appraising,
compensating, training the team members in ways that reflect the unique relationships that
develops between employees who work together.
2. Managing the multicultural workforce. Increasing diversity of the workforce, combined with
changes in attitude within society, brings both challenges and opportunities for organizations
and their employees. HRM practices can leverage employee multiculturalism and create
competitive advantage.
3. Managing globalization. Globalization refers to a process in which companies around the
world are increasingly linked by their activities and the opportunities they provide each
other. Developing an HRM system that works at home as well abroad is considered as one of
the biggest challenges of globalization. A firms decisions about which HR practices will be
used universally and which will be adapted to reflect local conditions may ultimately
determine its success or failure.
Strategic Human Resource Management LAM Yee ling (s0218671)
4. Managing ethics and CSR. The code of ethics for HR professionals serves as guide for HR
professional regarding their own behavior and their interaction with others in the
organization. HR professionals may assist in the efforts of other organizational members to
develop and enforce a code of ethics. Nowadays CSR has become a very important theme for
HR professionals in some companies.
5. Managing with metrics. Metrics are essential in measuring how well a company is performing.
For the same reason metrics are also important to HR professionals because they also must
measure their success and show their contribution to the organization.

Current issues in HRM

Social media has infiltrated into personal lives and the work environment. Today employees of all
ages are using social media. In response, many companies are trying to monitor and control how
employees use these tools. On the other hand, some companies use social media at their advantage,
e.g. as a recruitment tool.

Managing complexity and uncertainty are another two challenges managers have to face. The
constant evolving competition from around the world adds on the complexity to the challenge of
making the right decisions because so much information is available to process and so many factors
influence the organizations performance. HR professionals can make a positive difference by
managing HR as efficient and effective as possible, but can also contribute by designing management
development programs that brings managers together to share their experiences and learn how to
address the problems of complexity.
Along with increased complexity, comes greater uncertainty about the future economic situation.
Employers are uncertain about the governments actions regarding new regulations and employees
are uncertain about the future success of the company they work for and their jobs.