Strategic human resource management ch03

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Strategic Human Resource Management
Chapter# 3


Management Planning Fundamentals
The Planning Process
 Set objectives
 Make forecasts
 Determine your alternatives
 Evaluate alternatives
 Implement and evaluate plan

Business Plan
Comprehensive view of the firms situation today and company
wide and departmental plan for the next 3 to 5 years.
Marketing Plan, Financial Plan, HR Plan, Production Operation
Plan


Management Planning Fundamentals cont.
Setting objectives
 SMART
 MBO

Using MBO
 set organizational goals






set departmental goals
discuss departmental goals
set individual goals
give feedback


The Strategic Management Process
• Strategy
 A chosen course of action.

• Strategic Management
 Policies and procedures that deal with the long range

performance of an organization
 The process of identifying and executing the organization’s

mission by matching its capabilities with the demands of its
environment.


FIGURE 3–1

The Strategic Management Process


Strategic Management
• Vision
 A general statement of an organization’s intended direction that

evokes emotional feelings in organization members.

• Mission
 Spells out who the company is, what it does, and where it’s

headed.


FIGURE 3–2

A SWOT Chart


FIGURE 3–3

Strategies in a Nutshell


FIGURE 3–4

Relationships Among Strategies in Multiple-Business Firms


Types of Strategies
CorporateLevel
Strategies

Concentratio
n

Strategy

Vertical
Integration
Strategy

Diversificatio
n Strategy

Geographic
Expansion
Strategy

Consolidatio
n
Strategy


Types of Strategies (cont’d)
Business-Level/
Competitive
Strategies

Cost Leadership

Differentiation

Focus/Niche

FIGURE 3–5
The Southwest
Airlines’ Activity
System

Note: Companies like Southwest tailor all of their activities so that they fit and contribute to making their strategies a reality.


Achieving Strategic Fit
The “Fit” Point of View
 All of the firm’s activities must be tailored to or fit the chosen

strategy such that the firm’s functional strategies support its
corporate and competitive strategies.

Leveraging
 “Stretch” in leveraging resources—supplementing what you

have and doing more with what you have—can be more
important than just fitting the strategic plan to current
resources.

Competitive Advantage


Strategic Human Resource Management
• Strategic Human Resource Management
 The linking of HRM with strategic goals and objectives in order

to improve business performance and develop organizational

cultures that foster innovation and flexibility.


Involves formulating and executing HR systems—HR
policies and activities—that produce the employee
competencies and behaviors that the company needs
to achieve its strategic aims.


Three Main Strategic Human Resource System Components

Characteristics of HPWS
• multi-skilled work teams
• empowered front-line
workers
• extensive training
• labor-management
cooperation
• commitment to quality
• customer satisfaction


Linking Company-Wide and HR Strategies


Basic Model of How to
Align HR Strategy and
Actions with Business
Strategy

“


Strategic HR in Action improving Mergers and
Acquisitions
Due Diligence Stage(before finalizing the deal)
Reviewing organizational culture, employee compensation,
labor relations, pending employee litigations, HR policies and
procedures

Integration Stage(first few months)
Choosing top management, communicating
changes, aliening cultures, ensuring top
management leadership
Using HR consultants


Percent of Successful Mergers in Which HR Manager Was Involved


FIGURE 3–A1

The Basic HR Scorecard Relationships

HR
Activities

Emergent
Employee
Behaviors

Strategically
Relevant
Organizational
Outcomes
Organizational
Performance

Achieve
Strategic
Goals


Creating an HR Scorecard
The 10-Step HR Scorecard Process
1

Define the business strategy

6

Identify required HR policies
and activities

2

Outline value chain activities

7

Create HR Scorecard

3

Outline a strategy map

8

Choose HR Scorecard
measures

4

Identify strategically required
outcomes

9

Summarize Scorecard
measures on digital dashboard

5

Identify required workforce
competencies and behaviors

10

Monitor, predict, evaluate

Step 1: Define the business strategy
• Medical company: have a strategy of becoming
a comprehensive healthcare network.
• By the end of this step, management translates
its broad strategic plans into specific, actionable
strategic goals.


Step 2: Outline the company’s value chain
• Value chain: identifies the primary activities that
create value for customers and related support
activities.
• It is a tool for identifying, isolating, visualizing
and analyzing the firm’s most important
activities and strategic costs.
• Outlining and analyzing the company’s value
chain help the HR manager formulate the
policies and practices that make sense in terms
of firm’s strategy.


FIGURE 3–A3

Simple Value Chain for “The Hotel Paris”


Step 3: Outline a strategy map
• It is a diagram that summarizes the chain of
major interrelated activities that contribute to a
company’s success.

• It shows a “big picture” of how each
department/team performance contributes to
achieving the company’s overall strategic goal.