1. © 2010 Cengage Learning. Atomic Dog is a trademark used herein under license. All rights reserved.
Chapter 1
Human Resource Management
and Competitive Advantage

2. © 2010 Cengage Learning. Atomic Dog is a trademark used herein under license. All rights reserved.
1-1 Human Resource Management
• Human resource management: Consists of practices
that help the organization deal effectively with its
people during the various phases of the employment
cycle.
• Three phases of the employment cycle:
 Pre-selection – Planning practices.
 Selection – Recruiting applicants and selecting the
most qualified.
 Post-selection – Practices designed to maximize the
performance and satisfaction levels of employees.

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1-1d HRM Practices Influenced by
External Factors
• Legal and environmental issues:
 Federal, state, and local laws are designed to
guarantee employees’ rights to fair and safe treatment.
 Social, economic, and technological events also
strongly influence HRM practices.
• Workplace justice laws: Addresses the issue of
employee rights.
• Union influences: Regulate many HRM practices
such as discipline, promotion, grievance procedures,
and overtime allocations.

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1-1d HRM Practices Influenced by
External Factors (cont.)
• Safety and health concerns: Institution of accident
prevention programs, wellness programs, and
employee assistance programs to ensure the health
and mental well-being of employees.
• International influences: Development of globally
oriented managers who understand foreign
languages and cultures, as well as the dynamics of
foreign marketplaces.

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1-2 Who Is Responsible for Developing
and Implementing HRM Practices?
• Human resource professionals
 Establish HRM procedures and methods.
 Monitor and evaluate HR practices.
 Advise and assist managers on HRM-related matters.
• Line managers
 Direct employees’ day-to-day tasks.
 Implement HRM practices.
 Provide HR professionals with needed inputs for
developing effective practices.

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1-3 Gaining a Competitive Advantage &
1-3a Competitive Advantage Defined
• Firms gain competitive advantage by effectively
managing their human resources.
• Competitive advantage is a status achieved by a
company when gaining a superior marketplace
position relative to its competition.
• This is accomplished through cost leadership and
product differentiation.

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1-4a Evidence Linking HRM Practices to
Competitive Advantage
• Jeffrey Pfeffer identified 16 HRM practices:
 Employment security
 Selectivity in recruiting
 High wages
 Incentive pay
 Employee ownership
 Information sharing
 Participation and empowerment
 Teams and job redesign

8. © 2010 Cengage Learning. Atomic Dog is a trademark used herein under license. All rights reserved.
1-4a Evidence Linking HRM Practices to
Competitive Advantage (cont.)
• Jeffrey Pfeffer identified 16 HRM practices (cont.):
 Training and skill development
 Cross-utilization and cross-training
 Symbolic egalitarianism
 Wage compression
 Promotion from within
 Long-term perspective
 Measurement of practices
 Overarching philosophy

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Figure 1-4 A Model Linking HRM
Practices to Competitive Advantage