Topic1:StrategicHuman Resou c c c c
rce Management c
COURSEc NOTESc FORc C202
Competency 3020.1.2: Determine the strategic impact of human reso c c c c c c c c
urce management on organizations.
c c c
This chapter covers the following learning objectives:
c c c c c c
▪ Describe the primary Human Resource Management (HRM) f
c c c c c c c
unctions.
▪ Explain why HRM is important to organizational p
c c c c c c c
erformance.
▪ Explain how HRM strategy supports business strategy.
c c c c c c
View the following video lecture for an overview of Chapter 1.
c c c c c c c c c c
To download the PowerPoint slides, click here.
c c c c c c
If you’d like to learn more about the topics in this presentation, check
c c c c c c c c c c c c c
out the following videos and resource: Dual Theory of HRM and Busi
c c c c c c c c c c c
ness Performance, How Southwest Airlines Built Its Culture, Transfo
c c c c c c c c
rm HR Into a Revenue-
c c c c
Impact Function to Increase Your Strategic Impact
c c c c c c
Read Text Transcript c c
Introduction
Effectively managing employees is critical to organizational succes
c c c c c c c
s. If you disagree, then fire all of your current employees, replace the
c c c c c c c c c c c c
m with the next people you see, put them on the job with no training,
c c c c c c c c c c c c c c c
and pay them a low wage. Few successful managers would accept t
c c c c c c c c c c c
his challenge because they know that
c c c c c
,who they hire and how they motivate and treat their employees are
c c c c c c c c c c c c
essential to their performance and survival. A company has a com
c c c c c c c c c c
petitive advantage when it does something differently from
c c c c c c c
its competition that allows it to outperform them and succeed in its indus
c c c c c c c c c c c c
try.
Competitive advantages can come from factors, including better tech c c c c c c c c
nology, more innovative products or services, better locations, lower
c c c c c c c c c
costs, or outstanding customer service, but these advantages don’t
c c c c c c c c c
happen by themselves. It is always the organization’s employees wh
c c c c c c c c c
o create, implement, or sustain a competitive advantage. Research h
c c c c c c c c c
as found that acquiring, nurturing, and retaining the best talent availa
c c c c c c c c c c
ble is essential to firms’ performance and viability, particularly for kno
c c c c c c c c c c
wledge-
based firms.1 As Wade Burgess, VP of Talent Solutions for LinkedIn
c
c
c c c c c c c c c
said, “Traditionally, what separated an average company from a gre
c c c c c c c c c
at company had been technology. We’re in the middle of a transfor
c c c c c c c c c c c
mation. Today, what differentiates an average company from a great
c c c c c c c c c c
company is talent.”2 c c
So how do people make such a difference to an organization’s succe
c c c c c c c c c c c
ss? At companies such as Google, featured in this chapter’s Real Wo
c c c c c c c c c c c
rld Challenge, successful products and services are created and deli
c c c c c c c c c
vered by the company’s talent. Employees at Activision, Apple Com
c c c c c c c c c
puter, and Nike create, manufacture, and sell new and innovative pr
c c c c c c c c c c
oduct lines. Employees are responsible for creating the supply chain
c c c c c c c c c
s and manufacturing systems that produce low-cost, high-
c c c c c c c
quality automobiles at Tata Motors and Hyundai. Finally, the high-
c c c c c c c c c
caliber customer service at L.L. Bean, Marriott Hotels, and Zappos st
c c c c c c c c c c
arts with quality employee-
c c c
customer interactions. None of these companies would be as succes
c c c c c c c c c
sful without the talents and efforts of their employees. By making em
c c c c c c c c c c c
ployees more effective at their jobs and the company better at execut
c c c c c c c c c c c
ing its strategy, HRM can create substantial value within an organizat
c c c c c c c c c c
ion if it is done strategically.3
c c c c c
FromcHumancResourcecManagementc2ndcEdition,cCopyrightc2019.cUsedcbycarrangementcofcChicagocBusi
nesscPress.
,1Crook,cT.cR.,cTodd,cS.cY.,cCombs,cJ.cG.,cWoehr,cD.cJ.,c&c Ketchen,cD.cJ.cJr.c(2011).cDoeschumancca
pitalc matter?c Ac meta-
analysisc ofc thec relationshipc betweenc humanc capitalc andc firmcperformance.cJournalcofcAppliedcPsy
chology,c96,c773–456.
2Audrerie,cJ.cB.c(2016).c20cquotescaboutcdigitalceconomy,ctalents,candcskills.c FuturscTalents,cJa
nuaryc25.cRetrievedcJanuaryc14,c2017,cfromchttp://futurstalents.com/transformation-
cdigitale/intelligence-digitale/20-quotes-about-digital-economy-talents-and-skills/9/
3Saridakis,cG.,cLai,cY.,c&cCooper,cC.cL.c(2017).cExploringcthecrelationshipcbetweencHRMcandcfirmc perfor
mance:cAcmeta-analysiscofclongitudinalcstudies.cHumancResourcecManagementcReview,c27,c 87–96.
MountaincView,cCalifornia,cMayc2,c2017.cGooglecbelievescthatcitsctalentcmanagementciscaccriticalc
partcofcitscsuccess.
Boom Chu’s/Shutterstock c
Internet search and advertising giant Google is known for its unique approach t
c c c c c c c c c c c c
o business, including how it hires, develops, and motivates its talent. Because
c c c c c c c c c c c c
Google’s People Operations team (what Google calls its human resource mana
c c c c c c c c c c
gement team) lives by the mantra “find them, grow them, keep them,” it invests
c c c c c c c c c c c c c
cin staffing, employee development, and maintaining a distinct and inclusive cu
c c c c c c c c c c
lture.4
Google also recognizes the importance of making shareholders aware of ta
c c c c c c c c c c
lent management’s role in the company’s success. Google clearly states th
c c c c c c c c c c
e direct connection between talent management and company success in its
c c c c c c c c c c
cSecurities and Exchange Commission legal filings, stating that, “We belie
c c c c c c c c c
ve that our approach to hiring has significantly contributed to our success t
c c c c c c c c c c c c
o date.”5 It also included this important statement in the “risks” section: “If
c
c
c c c c c c c c c c c
we do not succeed in attracting excellent personnel or retaining or motivati
c c c c c c c c c c c
ng existing personnel, we may be unable to grow effectively.”6 Google un
c c c c c c c c c
c
c
derstands that it is in constant competition with other Internet companies to
c c c c c c c c c c c
cattract and retain the industry’s best technology and software engineering t
c c c c c c c c c c
alent, and that if it does not succeed, the company’s performance will suffe
c c c c c c c c c c c c
r.
Given the importance of human resource management, which it calls “peopl
c c c c c c c c c c
e operations,” to its success and to its stock price, what ideas do you have to
c c c c c c c c c c c c c c c c
help Google most effectively attract, hire, develop, motivate, and retain its e
c c c c c c c c c c c
mployees? After reading this chapter, you should have some good insights.
c c c c c c c c c c
4Google.cPeople.cRetrievedcJanuaryc28,c2017,cfromchttps://careers.google.com/fields-of-
c work/people/
, 5Sullivan,cJ.c(2010,cNovemberc22).cGame-
changing:cFinancialcanalystscbegincassessingctalentc managementceffectiveness.cERE.net.cRetrievedcJan
uaryc5,c2017,
fromc http://www.ere.net/2010/11/22/15900/
6Ibid.
What Is HRM? c c
Human resource management is the organizational function responsi
c c c c c c c
ble for attracting, hiring, developing, rewarding, and retaining talent. H
c c c c c c c c c
RM is responsible for people-related issues as well as employment-
c c c c c c c c c
related legal compliance. Effective HRM is critical to all organizations
c c c c c c c c c c
because it both manages risk and creates the system that acquires, m
c c c c c c c c c c c
otivates, manages, and retains the talent that determines the organiz
c c c c c c c c c
ation’s success. In higher- c c c
cperforming companies, talent issues are a common focus of top lead
c c c c c c c c c c
ership. Because employee costs are one of the largest components o
c c c c c c c c c c
f an organization’s operating budget, it is essential to properly mana
c c c c c c c c c c
ge the investments a company makes in its people. No organization w
c c c c c c c c c c c
ill maximize its effectiveness without the acquisition, development, de
c c c c c c c c
ployment, and retention of the c c c c
right talent.7 c
Thiscphotocshowscthreecwomencstandingconcthecfactorycfloorcatcacplant.cAchumancresourcescmanagercwe
aringcsafetycglassescstandscincthecmiddle,cfacingcancemployeecasctheycspeak.cThecemployeecwearscglovesc
andcleansconcactablecwithcacboxcandcactraycofcmetalcparts.cActhirdcwomancstandscoffctocthe
rce Management c
COURSEc NOTESc FORc C202
Competency 3020.1.2: Determine the strategic impact of human reso c c c c c c c c
urce management on organizations.
c c c
This chapter covers the following learning objectives:
c c c c c c
▪ Describe the primary Human Resource Management (HRM) f
c c c c c c c
unctions.
▪ Explain why HRM is important to organizational p
c c c c c c c
erformance.
▪ Explain how HRM strategy supports business strategy.
c c c c c c
View the following video lecture for an overview of Chapter 1.
c c c c c c c c c c
To download the PowerPoint slides, click here.
c c c c c c
If you’d like to learn more about the topics in this presentation, check
c c c c c c c c c c c c c
out the following videos and resource: Dual Theory of HRM and Busi
c c c c c c c c c c c
ness Performance, How Southwest Airlines Built Its Culture, Transfo
c c c c c c c c
rm HR Into a Revenue-
c c c c
Impact Function to Increase Your Strategic Impact
c c c c c c
Read Text Transcript c c
Introduction
Effectively managing employees is critical to organizational succes
c c c c c c c
s. If you disagree, then fire all of your current employees, replace the
c c c c c c c c c c c c
m with the next people you see, put them on the job with no training,
c c c c c c c c c c c c c c c
and pay them a low wage. Few successful managers would accept t
c c c c c c c c c c c
his challenge because they know that
c c c c c
,who they hire and how they motivate and treat their employees are
c c c c c c c c c c c c
essential to their performance and survival. A company has a com
c c c c c c c c c c
petitive advantage when it does something differently from
c c c c c c c
its competition that allows it to outperform them and succeed in its indus
c c c c c c c c c c c c
try.
Competitive advantages can come from factors, including better tech c c c c c c c c
nology, more innovative products or services, better locations, lower
c c c c c c c c c
costs, or outstanding customer service, but these advantages don’t
c c c c c c c c c
happen by themselves. It is always the organization’s employees wh
c c c c c c c c c
o create, implement, or sustain a competitive advantage. Research h
c c c c c c c c c
as found that acquiring, nurturing, and retaining the best talent availa
c c c c c c c c c c
ble is essential to firms’ performance and viability, particularly for kno
c c c c c c c c c c
wledge-
based firms.1 As Wade Burgess, VP of Talent Solutions for LinkedIn
c
c
c c c c c c c c c
said, “Traditionally, what separated an average company from a gre
c c c c c c c c c
at company had been technology. We’re in the middle of a transfor
c c c c c c c c c c c
mation. Today, what differentiates an average company from a great
c c c c c c c c c c
company is talent.”2 c c
So how do people make such a difference to an organization’s succe
c c c c c c c c c c c
ss? At companies such as Google, featured in this chapter’s Real Wo
c c c c c c c c c c c
rld Challenge, successful products and services are created and deli
c c c c c c c c c
vered by the company’s talent. Employees at Activision, Apple Com
c c c c c c c c c
puter, and Nike create, manufacture, and sell new and innovative pr
c c c c c c c c c c
oduct lines. Employees are responsible for creating the supply chain
c c c c c c c c c
s and manufacturing systems that produce low-cost, high-
c c c c c c c
quality automobiles at Tata Motors and Hyundai. Finally, the high-
c c c c c c c c c
caliber customer service at L.L. Bean, Marriott Hotels, and Zappos st
c c c c c c c c c c
arts with quality employee-
c c c
customer interactions. None of these companies would be as succes
c c c c c c c c c
sful without the talents and efforts of their employees. By making em
c c c c c c c c c c c
ployees more effective at their jobs and the company better at execut
c c c c c c c c c c c
ing its strategy, HRM can create substantial value within an organizat
c c c c c c c c c c
ion if it is done strategically.3
c c c c c
FromcHumancResourcecManagementc2ndcEdition,cCopyrightc2019.cUsedcbycarrangementcofcChicagocBusi
nesscPress.
,1Crook,cT.cR.,cTodd,cS.cY.,cCombs,cJ.cG.,cWoehr,cD.cJ.,c&c Ketchen,cD.cJ.cJr.c(2011).cDoeschumancca
pitalc matter?c Ac meta-
analysisc ofc thec relationshipc betweenc humanc capitalc andc firmcperformance.cJournalcofcAppliedcPsy
chology,c96,c773–456.
2Audrerie,cJ.cB.c(2016).c20cquotescaboutcdigitalceconomy,ctalents,candcskills.c FuturscTalents,cJa
nuaryc25.cRetrievedcJanuaryc14,c2017,cfromchttp://futurstalents.com/transformation-
cdigitale/intelligence-digitale/20-quotes-about-digital-economy-talents-and-skills/9/
3Saridakis,cG.,cLai,cY.,c&cCooper,cC.cL.c(2017).cExploringcthecrelationshipcbetweencHRMcandcfirmc perfor
mance:cAcmeta-analysiscofclongitudinalcstudies.cHumancResourcecManagementcReview,c27,c 87–96.
MountaincView,cCalifornia,cMayc2,c2017.cGooglecbelievescthatcitsctalentcmanagementciscaccriticalc
partcofcitscsuccess.
Boom Chu’s/Shutterstock c
Internet search and advertising giant Google is known for its unique approach t
c c c c c c c c c c c c
o business, including how it hires, develops, and motivates its talent. Because
c c c c c c c c c c c c
Google’s People Operations team (what Google calls its human resource mana
c c c c c c c c c c
gement team) lives by the mantra “find them, grow them, keep them,” it invests
c c c c c c c c c c c c c
cin staffing, employee development, and maintaining a distinct and inclusive cu
c c c c c c c c c c
lture.4
Google also recognizes the importance of making shareholders aware of ta
c c c c c c c c c c
lent management’s role in the company’s success. Google clearly states th
c c c c c c c c c c
e direct connection between talent management and company success in its
c c c c c c c c c c
cSecurities and Exchange Commission legal filings, stating that, “We belie
c c c c c c c c c
ve that our approach to hiring has significantly contributed to our success t
c c c c c c c c c c c c
o date.”5 It also included this important statement in the “risks” section: “If
c
c
c c c c c c c c c c c
we do not succeed in attracting excellent personnel or retaining or motivati
c c c c c c c c c c c
ng existing personnel, we may be unable to grow effectively.”6 Google un
c c c c c c c c c
c
c
derstands that it is in constant competition with other Internet companies to
c c c c c c c c c c c
cattract and retain the industry’s best technology and software engineering t
c c c c c c c c c c
alent, and that if it does not succeed, the company’s performance will suffe
c c c c c c c c c c c c
r.
Given the importance of human resource management, which it calls “peopl
c c c c c c c c c c
e operations,” to its success and to its stock price, what ideas do you have to
c c c c c c c c c c c c c c c c
help Google most effectively attract, hire, develop, motivate, and retain its e
c c c c c c c c c c c
mployees? After reading this chapter, you should have some good insights.
c c c c c c c c c c
4Google.cPeople.cRetrievedcJanuaryc28,c2017,cfromchttps://careers.google.com/fields-of-
c work/people/
, 5Sullivan,cJ.c(2010,cNovemberc22).cGame-
changing:cFinancialcanalystscbegincassessingctalentc managementceffectiveness.cERE.net.cRetrievedcJan
uaryc5,c2017,
fromc http://www.ere.net/2010/11/22/15900/
6Ibid.
What Is HRM? c c
Human resource management is the organizational function responsi
c c c c c c c
ble for attracting, hiring, developing, rewarding, and retaining talent. H
c c c c c c c c c
RM is responsible for people-related issues as well as employment-
c c c c c c c c c
related legal compliance. Effective HRM is critical to all organizations
c c c c c c c c c c
because it both manages risk and creates the system that acquires, m
c c c c c c c c c c c
otivates, manages, and retains the talent that determines the organiz
c c c c c c c c c
ation’s success. In higher- c c c
cperforming companies, talent issues are a common focus of top lead
c c c c c c c c c c
ership. Because employee costs are one of the largest components o
c c c c c c c c c c
f an organization’s operating budget, it is essential to properly mana
c c c c c c c c c c
ge the investments a company makes in its people. No organization w
c c c c c c c c c c c
ill maximize its effectiveness without the acquisition, development, de
c c c c c c c c
ployment, and retention of the c c c c
right talent.7 c
Thiscphotocshowscthreecwomencstandingconcthecfactorycfloorcatcacplant.cAchumancresourcescmanagercwe
aringcsafetycglassescstandscincthecmiddle,cfacingcancemployeecasctheycspeak.cThecemployeecwearscglovesc
andcleansconcactablecwithcacboxcandcactraycofcmetalcparts.cActhirdcwomancstandscoffctocthe
