Human Resource as a source of competitive advantage in IT sector

1. Human Resource as a source
of competitive advantage in IT
sector
Presented by
Manorama Yadav
Research Scholar-UTU, Dehradun
Human Resource as a source of competitive advantage in IT
sector

2. Human Resource as a source of competitive advantage in IT
sector
Objectives
1. Identify how firms gain competitive advantage
through people.
2. Explain how globalization is influencing human
resources management.
3. Describe the impact of information technology on
managing people.
4. Identify the importance of change management.
5. State HR’s role in developing intellectual capital.
6. Differentiate how TQM and reengineering influence
HR systems.

3. Human Resource as a source of competitive advantage in IT
sector
Objectives (cont’d)
7. Discuss the impact of cost pressures on HR policies.
8. Discuss the primary demographic and employee
concerns pertaining to HRM.
9. Provide examples of the roles and competencies of
today’s HR managers.

4. Human Resource as a source of competitive advantage in IT
sector
Competitive Advantage through People
• Human Resource Management
A set of inter-related policies, practices, and programs
whose goal is to attract, socialize, motivate, maintain,
and retain an organization’s employees
• Core Competencies
Integrated knowledge sets within an organization that
distinguish it from its competitors and deliver value to
customers.

5. Human Resource as a source of competitive advantage in IT
sector
Competitive Advantage through People
• Competitive advantage through people is
achieved if these human resources:
Have value.
Are rare and unavailable to competitors.
Are difficult to imitate.
Are organized for synergy.

6. Human Resource as a source of competitive advantage in IT
sector
Overall Framework for
Human Resource Management
COMPETITIVECOMPETITIVE
CHALLENGESCHALLENGES
• GlobalizationGlobalization
• TechnologyTechnology
• Managing changeManaging change
• Human capitalHuman capital
• ResponsivenessResponsiveness
• Cost containmentCost containment
COMPETITIVECOMPETITIVE
CHALLENGESCHALLENGES
• GlobalizationGlobalization
• TechnologyTechnology
• Managing changeManaging change
• Human capitalHuman capital
• ResponsivenessResponsiveness
• Cost containmentCost containment
HUMANHUMAN
RESOURCESRESOURCES
• PlanningPlanning
• RecruitmentRecruitment
• StaffingStaffing
• Job designJob design
•Training/developmentTraining/development
• AppraisalAppraisal
• CommunicationsCommunications
• CompensationCompensation
• BenefitsBenefits
• Labour relationsLabour relations
HUMANHUMAN
RESOURCESRESOURCES
• PlanningPlanning
• RecruitmentRecruitment
• StaffingStaffing
• Job designJob design
•Training/developmentTraining/development
• AppraisalAppraisal
• CommunicationsCommunications
• CompensationCompensation
• BenefitsBenefits
• Labour relationsLabour relations
EMPLOYEEEMPLOYEE
CONCERNSCONCERNS
• Background diversityBackground diversity
• Age distributionAge distribution
• Gender issuesGender issues
• Educational levelsEducational levels
• Employee rightsEmployee rights
• Privacy issuesPrivacy issues
• Work attitudesWork attitudes
• Family concernsFamily concerns
EMPLOYEEEMPLOYEE
CONCERNSCONCERNS
• Background diversityBackground diversity
• Age distributionAge distribution
• Gender issuesGender issues
• Educational levelsEducational levels
• Employee rightsEmployee rights
• Privacy issuesPrivacy issues
• Work attitudesWork attitudes
• Family concernsFamily concerns

7. Human Resource as a source of competitive advantage in IT
sector
Competitive Challenges and Human
Resources Management
• The most pressing competitive issues facing
firms:
Going global
Embracing technology
Managing change
Developing human capital
Responding to the market
Containing costs

8. Human Resource as a source of competitive advantage in IT
sector
Going Global
• Globalization
The trend toward opening up foreign markets to
international trade and investment.
• Impact of Globalization
Partnerships with foreign firms
“Anything, anywhere, anytime” markets
Lower trade and tariff barriers

9. Human Resource as a source of competitive advantage in IT
sector
Going Global (cont’d)
• Impact on HRM
Different geographies, cultures, laws, and
business practices
Issues:
 Identifying capable expatriate managers.
 Developing foreign culture and work
practice training programs.
 Adjusting compensation plans for
overseas work.

10. Human Resource as a source of competitive advantage in IT
sector
Embracing New Technology
• Knowledge Workers
 Workers whose
responsibilities extend
beyond the physical
execution of work to include
planning, decision making,
and problem solving.

11. Human Resource as a source of competitive advantage in IT
sector
Influence of Technology in HRM
• Human Resources Information System (HRIS)
Computerized system that provides current and
accurate data for purposes of control and decision
making.
Benefits:
 Store and retrieve of large quantities of data.
 Combine and reconfigure data to create new
information.
 Institutionalization of organizational knowledge.
 Easier communications.
 Lower administrative costs, increase productivity,
and response times.

12. Human Resource as a source of competitive advantage in IT
sector
Impact of IT on HRM
TransformationalTransformational
ImpactImpact
TransformationalTransformational
ImpactImpact
OperationalOperational
ImpactImpact
OperationalOperational
ImpactImpact
RelationalRelational
ImpactImpact
RelationalRelational
ImpactImpact
HRMHRMHRMHRM

13. Human Resource as a source of competitive advantage in IT
sector
HRM IT Investment Factors
• Initial costs and annual maintenance costs
• Ability to upgrade, increased efficiency and time savings
• Compatibility with current systems
• User-friendliness
• Availability of technical support
• Time required to implement
• Training time required for HR and payroll

14. Human Resource as a source of competitive advantage in IT
sector
Managing Change
• Types of Change
Reactive change
 Change that occurs after external forces have already
affected performance
Proactive change
 Change initiated to take advantage of targeted
opportunities
• Formal change management programs help to
keep employees focused on the success of the
business.

15. Human Resource as a source of competitive advantage in IT
sector
Managing Change through HR
• Why Change Efforts Fail:
1. Not establishing a sense of urgency.
2. Not creating a powerful coalition to guide the effort.
3. Lacking leaders who have a vision.
4. Lacking leaders who communicate the vision.
5. Not removing obstacles to the new vision.
6. Not systematically planning for and creating short-
term “wins.”
7. Declaring victory too soon.
8. Not anchoring changes in the corporate culture.

16. Human Resource as a source of competitive advantage in IT
sector
Developing Human Capital
• Human Capital
The knowledge, skills, and capabilities of individuals
that have economic value to an organization.

17. Human Resource as a source of competitive advantage in IT
sector
Human Capital and HRM
• Creation of knowledge
• Utilization of knowledge
• Application of
knowledge

18. Human Resource as a source of competitive advantage in IT
sector
Responding to the Market
• Total Quality Management (TQM)
A set of principles and practices whose core ideas
include understanding customer needs, doing things
right the first time, and striving for continuous
improvement.
• Six Sigma
A process used to translate customer needs into a set
of optimal tasks that are performed in concert with
one another.

19. Human Resource as a source of competitive advantage in IT
sector
Responding to the Market
• Reengineering
Fundamental rethinking and radical redesign of
business processes to achieve dramatic
improvements in cost, quality, service, and speed.
 Requires that managers create an environment for
change.
 Depends on effective leadership and
communication processes.
 Requires that administrative systems be reviewed
and modified.

20. Human Resource as a source of competitive advantage in IT
sector
Containing Costs
• Downsizing
 The planned elimination
of jobs (“head count”).

21. Human Resource as a source of competitive advantage in IT
sector
Containing Costs (cont’d)
• Hidden Costs of Layoff
Severance and rehiring costs
Accrued vacation and sick day payouts
Pension and benefit payoffs
Potential lawsuits from aggrieved workers
Loss of institutional memory and trust in management
Lack of staffers when the economy rebounds
Survivors who are risk-averse, paranoid, and political

22. Human Resource as a source of competitive advantage in IT
sector
Containing Costs (cont’d)
• Benefits of a No-Layoff Policy
A fiercely loyal,more productive workforce
Higher customer satisfaction
Readiness to snap back with the economy
A recruiting edge
Workers who aren’t afraid to innovate, knowing their
jobs are safe.

23. Human Resource as a source of competitive advantage in IT
sector
Containing Costs
• Outsourcing
Contracting outside the organization to have work
done that formerly was done by internal employees.
• Employee Leasing
The process of dismissing employees who are then
hired by a leasing company (which handles all HR-
related activities) and contracting with that company
to lease back the employees.

24. Human Resource as a source of competitive advantage in IT
sector
Productivity Enhancements
MOTIVATIONMOTIVATION
• Job enrichmentJob enrichment
• PromotionsPromotions
• CoachingCoaching
• FeedbackFeedback
• RewardsRewards
MOTIVATIONMOTIVATION
• Job enrichmentJob enrichment
• PromotionsPromotions
• CoachingCoaching
• FeedbackFeedback
• RewardsRewards
ENVIRONMENTENVIRONMENT
• EmpowermentEmpowerment
• TeamsTeams
• Leader supportLeader support
• CultureCulture
ENVIRONMENTENVIRONMENT
• EmpowermentEmpowerment
• TeamsTeams
• Leader supportLeader support
• CultureCulture
ABILITYABILITY
• RecruitmentRecruitment
• SelectionSelection
• TrainingTraining
• DevelopmentDevelopment
ABILITYABILITY
• RecruitmentRecruitment
• SelectionSelection
• TrainingTraining
• DevelopmentDevelopment
Perf =Perf = ff (A,M,E)(A,M,E)Perf =Perf = ff (A,M,E)(A,M,E)

25. Human Resource as a source of competitive advantage in IT
sector
Demographic and Employee Concerns
• The Diversity Challenge

26. Human Resource as a source of competitive advantage in IT
sector
Age Distribution

27. Human Resource as a source of competitive advantage in IT
sector
Gender Distribution

28. Human Resource as a source of competitive advantage in IT
sector
Rising levels of education

29. Human Resource as a source of competitive advantage in IT
sector
Cultural Changes
• Employee Rights

30. Human Resource as a source of competitive advantage in IT
sector
Cultural Changes
• Concern for Privacy
• Changing Attitudes Towards Work
• Balancing Work and Family

31. Human Resource as a source of competitive advantage in IT
sector
Partnerships: Line Managers and Human
Resources Managers
• Responsibilities of HR
Advice and counsel
Service
Policy formulation and
implementation
Employee advocacy

32. Human Resource as a source of competitive advantage in IT
sector
Strategic Human Resources Management
• Strategy
The formulation of an organization’s missions, goals,
and objective as well as the action plans to execute
the strategy.
Corporate Strategy
Business Strategy

33. Human Resource as a source of competitive advantage in IT
sector
Strategic Human Resources Management
• Strategic HRM
A set of interrelated
practices, policies, and
philosophies whose
goal is to enable the
achievement of the
corporate or business
strategy.

34. Human Resource as a source of competitive advantage in IT
sector
Human Resource Competency Model
BusinessBusiness
MasteryMastery
• Business acumenBusiness acumen
• Customer orientationCustomer orientation
• External RelationsExternal Relations
BusinessBusiness
MasteryMastery
• Business acumenBusiness acumen
• Customer orientationCustomer orientation
• External RelationsExternal Relations
HRHR
MasteryMastery
• StaffingStaffing
• Performance appraisalPerformance appraisal
• Rewards systemRewards system
• CommunicationCommunication
• Organization designOrganization design
HRHR
MasteryMastery
• StaffingStaffing
• Performance appraisalPerformance appraisal
• Rewards systemRewards system
• CommunicationCommunication
• Organization designOrganization design
ChangeChange
MasteryMastery
• Interpersonal skillsInterpersonal skills
and influenceand influence
• Problem-solving skillsProblem-solving skills
• Rewards systemRewards system
• Innovation and creativityInnovation and creativity
ChangeChange
MasteryMastery
• Interpersonal skillsInterpersonal skills
and influenceand influence
• Problem-solving skillsProblem-solving skills
• Rewards systemRewards system
• Innovation and creativityInnovation and creativity
PersonalPersonal
CredibilityCredibility
• TrustTrust
• PersonalPersonal
relationshipsrelationships
• Lived valuesLived values
• CourageCourage

35. Thanks
Human Resource as a source of competitive advantage in IT
sector