1. Many people still believe that companies care little about human resource management compared to other revenue-generating departments. Explain why companies have this perception. Describe how you would convince the company’s leadership of the value of HRM. (Points: 30)


Human resource management practices are helping support the company’s business strategy and provide services the customer values. Effective HRM has been shown to enhance company performance by contributing to employee and customer satisfaction, innovation, productivity, and development of a favorable reputation in the firm’s community. Traditionally, the HRM department was primarily an administrative expert and employee advocate. The department took care of employee problems, made sure employees were paid correctly, administered labor contracts, and avoided legal problems. The HRM department ensured that employee-related issues did not interfere with the manufacturing or sales of products or services. Human resource management was primarily reactive; that is, human resource issues were a concern only if they directly affected the business. Although that still remains the case in many companies that have yet to recognize the competitive value of human resource management, other companies believe that HRM is important for business success and therefore have expanded the role of HRM as a change agent and strategic partner. HRM practices have not traditionally been seen as providing economic value to the company. Economic value is usually associated with equipment, technology, and facilities. However, HRM practices have been shown to be valuable. Compensation, staffing, training and development, performance management, and other HRM practices are investments that directly affect employees’ motivation and ability to provide products and services that are valued by customers. Research has shown that companies that attempt to increase their competitiveness by investing in new technology and becoming involved in the quality movement also invest in state-of-the-art staffing, training, and compensation practices

                                          Human resource management practices that help companies deal with the three challenges. For example, to meet the sustainability challenge, companies need to identify through their selection processes whether prospective employees value customer relations and have the levels of interpersonal skills necessary to work with fellow employees in teams. To meet all three challenges, companies need to capitalize on the diversity of values, abilities, and perspectives that employees bring to the workplace. HRM practices that help companies deal with the competitive challenges can be grouped into the four dimensions. These dimensions include the human resource environment, acquiring and preparing human resources, assessment and development of human resources, and compensating human resources. In addition, some companies have special issues related to labor–management relations, international human resource management, and managing the human resource function.

Creating a positive environment for human resources involves

  • Linking HRM practices to the company’s business objectives—that is, strategic human resource management.
  • Ensuring that HRM practices comply with federal, state, and local laws.
  • Designing work that motivates and satisfies the employee as well as maximizes customer service, quality, and productivity.

Contributing to Company Competitiveness

  • Identifying human resource requirements—that is, human resource planning, recruiting employees, and selecting employees.
  • Training employees to have the skills needed to perform their jobs

Assessment and Development of Human Resources

  • Measuring employees’ performance.
  • Preparing employees for future work roles and identifying employees’ work interests, goals, values, and other career issues.
  • Creating an employment relationship and work environment that benefits both the company and the employee.

Compensating Human Resources

  • Creating pay systems.
  • Rewarding employee contributions.
  • Providing employees with benefits.

References: Noe, Hollenbeck, Gerhart, and Wright. (2013). Human Resource Management: Gaining a Competitive Advantage. 8th Edition. McGraw-Hill Irwin – pp 58-59. a

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