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Learning Objecties Describe why HRM (human resource management) is important to a company’s performance.
goals and objectives.
chapter 1 Strategic Human Resource Management
This work may not be reproduced or distributed in any form or by any means without express written permission of the publisher. DO NOT COPY, POST, OR DISTRIBUTE How Culture Reinforces Business Strategy at Patagonia According to its Chief of Human Resources, outdoor retailer Patagonia’s founder, Yvon Chouinard, wanted to build an “un-company” whose main concern is taking care of employees, customers, and the planet. Patagonia’s mission is “Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.” The company wants to be a steward of planet Earth because, as its Chief of HR Dean Carter said, “There’s no business if there’s no planet.” Since 1985, Patagonia has donated over $89 million to grassroots environ- mental groups and is a certified B Corporation, which is a certification given to employers that add value to employees and the environment in addition to shareholders. Patagonia’s business strategy is responsibly manufacturing and selling high-quality outdoor clothing. The company wants to leverage its human resources function to help it create and sus- tain a culture that reinforces its business strategy and helps it execute its mission. Imagine that the Chief of HR asks you for your ideas. After reading this chapter, you should have some good suggestions for him. Real World Challenge
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Effectively managing employees is critical to organizational success. If you disagree, then fire all of your current employees, replace them with the next people you see, put them on the job with no training, and pay them a low wage. Few successful managers would accept this chal- lenge because they know that who they hire and how they motivate and treat their employees are essential to their performance and survival. A company has a competitive advantage when it does something differently from its competition that allows it to outperform them and succeed in its industry. Competitive advantages can come from a variety of factors, including better technol- in the middle of a transformation. Today, what differentiates an average company from a great Activision, Apple Computer, and Nike create, manufacture, and sell new and innova- tive product lines. Employees are responsible for creating the supply chains and manu- facturing systems that produce low-cost, high-quality automobiles at Tata Motors and Hyundai. Finally, the high-caliber customer service at L.L. Bean, Marriott Hotels, and Zappos starts with quality employee-customer interactions. None of these companies would be as successful without the talents and efforts of their employees. By making employees more effective at their jobs and the company better at executing its strategy, human resource management can create substantial value within an organization if it is done strategically. The first section of this book, The Importance and Context of Human Resource Man- agement, focuses on the important role the management of human resources plays in organizations. This chapter gives an overview of how human resource management (abbreviated HRM throughout the book) influences organizational performance and business strategy execution, as well as how effective HRM can create a competitive advantage. The importance of flexibly applying HRM in different organizations and among different employees (functions, and performance levels) is also discussed. After reading this chapter, you will understand the role HRM plays in a firm and how it adds value. Because HRM policies are created by the company but are executed by manag- discussed. After reading this chapter, you will understand the role HRM plays in a firm and how it adds value. competitive advantage doing something differently from the competition that leads to outperformance and success consider this Because employees create and implement a company's competitive advantage, strategic HRM is a critical part of strategic execution.
This work may not be reproduced or distributed in any form or by any means without express written permission of the publisher. DO NOT COPY, POST, OR DISTRIBUTE CHAPTER 1 Strategic Human Resource Management 5 What Is HRM? It is believed that the first HRM department was created as a department called "Per- sonnel" in 1901 by The National Cash Register Company following a bitter labor strike. payroll, workplace safety, and employee grievances. During the Industrial Revolution, the department evolved to focus on labor relations and union issues. After World War II, the department's role expanded further to include efficiency improvement and took on greater responsibility in the areas of recruiting, hiring, training, and performance manage- ment. Beginning in the 1980s, HRM departments also began managing change, mergers and acquisitions, employee motivation, and organizational culture. The increased use of technology and cloud-based HRM systems since the 1980s has enabled the function to become much more strategic. HRM units are now much less focused on the transactional operations of the function such as processing paychecks (which are now often outsourced its talent capabilities. The field of HRM has probably transformed more during the last 30 years than any other functional area of business. Although the HRM department will never be a revenue generator for an organization, the return on investment through higher perfor- mance, greater organizational capability, and lower turnover derived from effective HRM practices as well as the savings from improved risk management. Human resource management is the organizational function responsible for attract- ing, hiring, developing, rewarding, and retaining talent. HRM is responsible for people- related issues as well as employment-related legal compliance. Effective HRM is critical to all organizations because it both manages risk and creates the system that acquires, cess. In higher-performing companies, talent issues are a common focus of top leadership. Because budget, it is essential to properly manage the investments a company makes in its people. No organization will maximize its effectiveness without the acquisition, development, deploy- ment, and retention of the right talent. HRM is also important to attend to as an employee or as a potential employee. Would you My goal in writing this book is to help you to understand how to effectively use HRM human resource management the organizational function responsible for attracting, hiring, developing, reward- ing, and retaining talent
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