CHAPTER 1: HUMAN

RESOURCES MANAGEMENT:
GAINING A COMPETITIVE
ADVANTAGE

UNIVERSITY OF ARKANSAS, COLLEGE OF BUSINESS,

D E PA R T M E N T O F M A N A G E M E N T
DR. ELIZABETH MILLER
 WHAT IS HUMAN RESOURCES
MANAGEMENT (HRM)?
 Human Resources Management: The policies, practices, and systems that
influence employees’ behavior, attitudes and performance
 Helps companies achieve competitiveness and effectiveness
 Talent management: attracting, retaining, developing, and motivating highly
skilled employees using a bundle of HRM practices
 Competitiveness: A company’s ability to maintain and gain market share in its
industry
o Related to effectiveness:
 Ability to satisfy needs of stakeholders: people/groups affected by business
practices; workers, the community, customers, stockholders, environment
HIGH IMPACT HR
• Costs more per employee
• Companies employ more HR specialists
• Attracting, building, engaging and retaining
talented employees
• Identify and promote talent within the company
• Identify what motivates workers to help them
grow and develop
• Ensures the company is building the talent and
skills of HR professionals to meet new
competitive challenges
• Saves money by reducing turnover and
increased levels of employee engagement
 • Outplacement
HR DEPARTMENT • Severance packages
• Skills for reemployment
RESPONSIBILITIES • Career transition services
• Labor law compliance
• Record keeping
• Testing
• Compensation
• Unemployment compensation
• Benefits administration
• Areas where HR collaborates with other
departments:
• Employment interviewing
• Performance management and discipline
• Efforts to improve quality and productivity
 • Large companies are more likely to employ HR
specialists; benefits specialists are most prevalent.
Other common specializations: recruitment,
compensation, training and development.
• The role of HR varies by company; various
roles:
• Advising management
• Decision-making about staffing, training,
HR compensation

VARIATION • Some believe HR limits innovation (especially in

tech sector, start-ups)
• These companies automate/outsource many HR
functions
• In smaller companies. the owner often handles HR
functions
• HR benefits even small companies: understanding of
the legal environment, coaching managers on hiring
and retention, talent development, saving owner’s
time, dealing with covid and remote work changes…
 HR: BUSINESS WITHIN THE COMPANY WITH 3
PRODUCT LINES
• Administrative services and transaction: compensation, benefits, hiring, staffing
• The traditional product
• Emphasis on resource efficiency and service quality
• Business partner services: developing effective HR systems and helping implement business plans,
talent management.
• Emphasis on knowing the business and exercising influence—problem solving, designing effective systems to
ensure needed competencies
• Strategic partner: contributing to business strategy based on considerations of human capital,
business capabilities, readiness, and developing HR practices as strategic differentiators
• Emphasis on knowledge of HR and the business, competition, the market, and business strategies
• Most intensive approach to HR in the workplace organization
• Business partner services and strategic partner functions are what top managers want HR to deliver
• HR time spent on administrative tasks decreasing (automation/outsourcing); role as strategic business partner,
change agent and employee advocate are increasing.
SHARED • Shared service model: way to organize HR functions that includes
centers of expertise or excellence, service centers, and business partners

SERVICE • Centers of expertise: HR specialists in areas such as staffing or

training; provide services company-wide

MODEL • Business partners: work with business unit managers on strategic

issues such as new compensation plans or programs to prepare
high-level managers
• Tech is decreasing need for traditional HR functions for HR employees;
now many functions are self-service where employees have access to
the info, such as in apps or Workday
• Outsourcing: an organization’s use of an outside organization for
services
• Many HR functions are now outsourced, especially benefits
administration, relocation, and payroll
• Reduces costs, improves services, helps recruit and manage talent,
legal protection (because these 3rd parties specialize in HR, they
are more familiar with the legal environment around employment
and anti-discrimination law)
• In the past HR was mostly reactive (dealing with problems)—now
more proactive, focusing on talent and performance management
 • Crucial for business success and competitiveness
• One challenge, especially for large, global organizations, is
balancing standardized (Western European/North American)
HR practices in local contexts. Need to be aware of the multiple
WHY cultural contexts and deftly execute cultural competence.
• In some ways, HR practices flatten global culture by importing these
DOES HR standardized norms of professionalism (which Dr. Miller finds very
interesting as a sociologist!)
MATTER? • HR professionals need to understand statistics because they
create, interpret, and communicate data (often for an audience
not trained in statistics and data science). Need to use data to
make a case for solutions/changes, especially when reporting to
the CEO, president, or board of directors.
• Also, HR professionals must be prepared to use people skills
across the organization (vertically and horizontally). This is a
PEOPLE job, first and foremost!
IS HRM PLAYING A
STRATEGIC ROLE IN THE BUSINESS?
1. What is HRM doing to provide value-added services to internal clients?
2. Do the actions of HRM support and align with business priorities?
3. How are you measuring the effectiveness of HRM?
4. How can we reinvest in employees?
5. What HRM strategy will we use to get business from point A to point B?
6. From an HRM perspective, what should we be doing to improve our marketplace position?
7. What’s the best change we can make to prepare for the (uncertain) future?
8. Do we react to business problems or anticipate them in advance?

For HRM to contribute to business goals, data must be used to show investment is worthwhile and
valuable to the business.
HRM PROFESSIONAL
CERTIFICATIONS
o Human Resources Certification Institute or
the Society for Human Resources
Management (HRCI or SHRM)
 Professional in Human Resources certifica
tion (PHR)
 SHRM’s Certified Professional certificate
(SHRM-CP)
 The Senior Professional in Human Resour
ces (SHRM-SCP)
 The University of Arkansas offers training
in SHRM through the Global Campus
WHAT DOES AN HRM JOB
CONSIST OF?
People Paperwor
Law
job k

Accounti Philosoph
Logic
ng y

Psycholo Spiritualit
Sociology
gy y
Research
Tolerance Humility &
Statistics
QUESTIONS HR PROFESSIONALS
MUST CONSIDER:
What is good for the company?

How do we communicate that to employees?

What is good for workers and stakeholders?

How can we help every employee understand what is meant by high

performance?
 COMPETITIVE
CHALLENGES
INFLUENCING
US COMPANIES
 The ability of a company to make
profit without sacrificing the
SUSTAINABILITY resources of its employees,
community, and the environment.
Considers long-term impact of
strategies on stakeholders.
 ESG on
wikipedia

• The triple bottom line

• Environment: use of energy, physical resources like water, gas, coal, waste and pollution generated
• Social: relationship with other businesses and the community
• Governance: relationship to stakeholders
• HR’s part: creating systems to ensure ESG practices are supported/followed
• Avoids litigation, long-term benefits to stakeholders
CLIMATE CHANGE & EMISSIONS
• Just 100 companies responsible for 71% of greenhouse gas emissions
• A Carbon Tracker study in 2015 found that fossil fuel companies risked wasting more
than $2tn of investor money from 2015-2025 by pursuing coal, oil and gas projects that
could be worthless in the face of international action on climate change
• UN Environmental Programme: Roadmap to a Carbon-Free Future
• Tyson Foods Sustainability initiatives and ESG reports by year
• Tyson’s goal to achieve net zero GHG emissions by 2050
• Wal Mart Sustainability: Goal zero GHG emissions by 2040; 100% renewables by 2035
• JB Hunt: reduce carbon emissions by 32% by 2034
• Apple: carbon neutral by 2030
• Google: net zero emissions by 2030
• ArcBest Environmental Sustainability
EMISSIONS OVER TIME
 HR CHALLENGES IN WORKPLACE
ORGANIZATIONS
• Aging workforce
• Slowed population growth (demographic transition)
• Changes in the structure of the economy.
• Growth in professional and service occupations domestically
• Offshoring of manufacturing, just-in-time manufacturing
• Skill demands have changed, newly emerging skills
• Rise in discouraged workers and long-term unemployment,
which is underutilization of labor markets and human capital.
• Globalization: change in work hours and traditional
employment patterns
• Shortage of workers with skills for high-demand jobs
DEMOGRAPHIC TRANSITION MODEL
 COMPANY ASSETS
• Intangible assets: a type of company asset that includes the following:
1. Human capital: tacit knowledge, education, work-related know-how, work-related competence
2. Customer capital: customer relationships, brands, customer loyalty, distribution channels
3. Social capital: corporate culture, management philosophy, management practices, informal
networking systems, coaching/mentoring relationships
4. Intellectual capital: patents, copyrights, trade secrets, intellectual property
• Enhancing value placed on intangible assets and human capital:
• Emphasize empowerment and continuous learning
• Empowerment: giving employees the responsibility and authority to make decisions
• Continuous learning: learning organization: an organization where employees are always trying to
learn new things and apply them
• Other types of assets are financial assets (cash and securities) and physical assets
(property, plants, equipment).
• All of this is directly or indirectly related to HR…
ADAPTING TO
CHANGE
• Encourage employees to identify
problems, make decisions, continuously
experiment, and improve.
• Adapt to change: the adoption of a new
idea or behavior by a company
• Change is due to companies
experiencing VUCA: volatility,
uncertainty, complexity, and
ambiguity
• Changes in employment relationships
• Agility: companies’ and their employees’
ability to anticipate and cause change,
adapt to it, and take specific actions to
support change
EMPLOYEE ENGAGEMENT

• Employee engagement: The degree to

which employees are fully involved in
their work and the strength of their job
and company commitment.
• What does engagement look like?
• Workers passionate about their work
• Committed to the company and its mission
• Works hard to contribute
 Employee engagement can be measured with attitude or opinion
surveys; these usually measure the following 10 common themes:
1. Pride in employer
2. Satisfaction with employer
3. Job satisfaction
4. Opportunity to perform challenging work
5. Recognition and positive feedback for contributions
6. Personal support from manager
7. Effort above and beyond the minimum
8. Understanding link between one’s job and company mission
9. Prospects for future growth within the company
10. Intention to stay with the company
 EMPLOYEE
EXPERIENCE
• Employee experience: everything that
influences an employees’ daily life both inside
and outside of work.
• Influenced by company culture, emotions,
growth opportunities, and physical workspace.
• Factors that contribute to a positive employee
experience: company culture, emotional
experience, growth opportunities, social
connections, open and honest leadership,
flexible schedules, availability of both private
and social workspaces, useful technology, clear
and transparent performance goals, recognition,
fair and inclusive environment.
BALANCED
SCORECARD
• Balanced scorecard: A means of performance
measurement that gives management a
chance to look at the company from the
perspective of internal and external
customers, employees, and shareholders
• Indicators (measurement/variables)
chosen based on company’s business
strategy and competitive demands.
• Used to link HRM practices to
company’s business strategy and evaluate
how HRM practices help company meet
strategic objectives
• Measures of HRM practices relate to
productivity, people, process.
THE BALANCED SCORECARD
TOTAL QUALITY MANAGEMENT (TQM)
• Total Quality Management (TQM): A cooperative form of doing business that relies on the
talents and capabilities of all employees (management and non-management) to continually
improve quality and productivity.
• Core values of TQM:
• Methods and processes designed to meet the needs to internal and external customers
• Every employee is trained in quality
• Quality designed into a product or service to prevent errors (proactive not reactive)
• Promotion of cooperation with vendors, suppliers, and customers to improve quality and hold down costs
• Managers measure progress with feedback based on data (measurement)
• Improving quality:
• Malcom Baldrige National Quality Award
• ISO 9000:2015 – most competitive – for both private and public organizations
 • An international consensus on quality
management practices
ISO 9000 STANDARDS:
• Third-party certified
• Over 1 million organizations worldwide are
certified
• Based on 8 quality management principles:
1. Customer focus
2. Leadership
3. Employee engagement
4. A process approach
5. A systems approach to management
6. Continuous improvement
7. Evidence based decision making
Categories and point
values for the
Malcom Baldrige
National Quality
Award Examination

(given by federal agency

National Institute of
Standards and
Technology (NIST) of the
US Dept of Commerce)
SIX SIGMA
• Six Sigma process: a system of
measuring, analyzing, improving, and
controlling processes once they meet
quality standards.
• Six Sigma training levels
• Goal is to create a total business focus
on serving the customer
• Lean thinking: a way to do more with
less effort, equipment space, and time,
but still provide customers with what
they need and want.
ETHICS

• Ethics: The fundamental principles of right and wrong by which employees and
companies interact.
• Should be considered when making business decisions – subjective & complicated!
• Four principles of ethical companies:

1. Emphasize mutual benefits in customer, vendor, client and community relationships

2. Employees take responsibility for company actions
3. A sense of purpose or vision valued and used by employees in their work
4. Emphasize fairness in treatment of employees, customers, vendors, and clients
SARBANES-OXLEY (SOX) ACT OF 2002
• Sarbanes-Oxley Act of 2002: A congressional act passed in response to illegal and unethical behavior
by managers and executives. Sets stricter rules for business especially related to accounting
practices. Requires more open and consistent disclosure of financial data and CEO’s assurance that
the data are accurate, and provisions that affect the employee-employer relationship.
• CEO and CFO certify corporate financial reports, prohibits personal loans to officers and directors,
prohibits insider trading during pension blackouts, requires document retention relevant to a
government investigation
• Prison terms for noncompliance—criminal penalties for corporate governing and accounting lapses,
including retaliation against whistle-blowers who report violations to the SEC
• Penalties up to $5 million and/or 20 years imprisonment
• Requires disclosure of executive pay and code of ethics
• More demand for HR expertise on corporate boards
 HR’S ROLE IN BUSINESS ETHICS
• HR professionals play a key role in developing code of conduct and clearly defining ethics
and professional responsibilities, training employees on the code of conduct, creating
effective ways to audit and report unethical and ethical behavior and guidelines for
disciplinary action, document employee training to ensure compliance with the law,
monitor executive compensation programs, create policies to protect whistle-blowers from
retaliation.
• New ethical issues will arise with AI especially around social identities, data security and
transparency
• Need to make sure a diverse group of employees provide their input in the development of
AI
• AI and robots will change work in the future – what will happen? How will we coexist with
AI and robots? Remember that the future is always an open question. However, businesses
and organizations need to do their best to anticipate the future, but this is never an exact
science.
 GLOBALIZATION
• Becoming less predictable for a lot of reasons
• Emerging nationalism – changes in trade policy and practices
• Covid is slowing global trade and investment – we will likely begin to see this with the increase in geopolitical
turmoil
• Concerns about national security, especially with technology/IP
• For US, our most significant source of global competitiveness is around semiconductor/chip production/IP
• Even if a company doesn’t operate internationally, it is likely to buy goods produced overseas, hire
workers who are immigrants, and/or compete with foreign-owned companies operating in the US.
• Many companies are involved in international markets by exporting products overseas, building
facilities or service centers in other countries, entering into alliances with companies abroad, and
engaging in e-commerce
• Trade relations with China are central to understanding the US economy
• Big challenges in the US-China trade relationship from the pandemic are ongoing and show no signs of slowing.
• Cultural competence is a big challenge for US managers in charge of overseas operations – cultural
competence training and development are crucial for success
 HIGH-PERFORMANCE
WORK SYSTEMS
• High-performance work systems: work systems that maximize the fit between employees (social
system) and technology (technical system)
• This will become more critical – demand for employees with training in this technology (computer
science, industrial engineering, analysis and design of work, equipment maintenance).
• The challenge workers will face is effective communication, especially between “expert” and
“lay/specific” expertise – this is what my research is about!
• There is often A LOT of conflict around this…
• In high-performance work systems, previously established boundaries between managers/employees,
employees/customers, employees/vendors, and various functions within the company are abandoned.
Everyone ideally collaborates to improve product/service quality and produce new products/services.
• Line employees trained in multiple jobs communicate with suppliers/customers and frequently
interact with engineers/quality experts/employees from other functions.