1. Strategic Human Resource Management
Management Principles
Strategic Human Resource Management
Craig W. Fontaine, Ph.D.

2. History of HRM’s Organizational Role
Formerly (HRM):
Administration
Employee relations
Benefits
Now:
Business Partner
Gaining Strategic Advantage

3. Models of Strategy Industrial Organization (O/I) Model
External environment is primary determinant of organizational strategy
Environment presents threats & opportunities
All competing organizations control or have equal access to resources
Resources are highly mobile between firms
Organizational success is achieved by
Offering goods & services at lower costs than competitors
Differentiating products to bring premium prices

4. Models of Strategy Resource-Based View
An organization’s resources & capabilities, create competitive advantage
Organizations can identify, locate & acquire key valuable resources
Resources are not highly mobile across organizations & once acquired are retained
Valuable resources are costly to imitate & non-substitutable

5. Both are Right…! Research provides support for both positions
Acquire resources to support strategy
Determine strategy based on resources
Strategy Human Resource Management
addressed both approaches

6. Strategic HR Management
Strategic Human Resource Management
Aligning initiatives and practices involving how people are managed so that they support the organizational mission and business strategy

7. Core competencies should drive business strategy….
A Core Competency is a deep proficiency that enables a company to deliver unique value to customers.
It embodies an organization’s collective knowledge.
Its creates sustainable competitive advantage for a company and helps it branch into a wide variety of related markets.
It’s hard for competitors to copy or procure.
Understanding Core Competencies allows companies to invest in the strengths that differentiate them and set strategies that unify their entire organization.

8. Example of Core Competencies
Walt Disney World Parks and Resorts
Animatronics and Show Design
Story Creation and Themed Attractions
Efficient operation of theme parks

9. Strategic HRM Approach
Facilitates development of high-quality workforce through focus on types of people & skills needed
Facilitates cost-effective utilization of labor, particularly in service industries where labor is generally greatest cost
Facilitates planning & assessment of environmental uncertainty & adaptation of organization to external forces

10. Distinctive Human Resources
How can HRM practices specific to an organization create a competitive advantage?

11. Examples of HRM Practices
HRM practices can allow and motivate individuals to support an organization’s strategic objectives
Hiring Practices
Who do we hire
Where do we look for workers
Performance Management Practices
On what criteria are workers assessed
Compensation and Reward Practices
What behaviors/actions are rewarded

12. HRM Practices - Exercise
Two Watch Companies
Hiring Practices
Who do we hire
Where do we look for workers
Performance Management Practices
On what criteria are workers assessed
Compensation and Reward Practices
What behaviors/actions are rewarded
Rolex
Very expensive
Hand Made
Timex
Inexpensive
Mass Produced

13. Simple Concepts… People are the essential capital of all organizations
Humans create organizational innovations and accomplishments
Organizational success depends upon careful attention to human capital
But harder than you think…

14. Challenges: Economic Global Trade Challenge
Jobs and prosperity depend upon international trade
Job migration to South East Asia and China
Challenge of Productivity Improvement
Productivity = outputs/inputs ratios
Essential for long-term success
Requires strategic thinking and creative responses
Understanding motivation

15. Challenges: Technological
Computerization
Impacts virtually all aspects of work and life
Provide large amounts of data at great speed to managers
Flexibility e.g. telecommuting
Automation
Potential benefits include speed, better customer service, predictability and production quality
Use robots for hazardous or boring jobs

16. Challenges: Cultural Work related attitudes Ethnic diversity
Changing attitudes toward work and leisure
Demand for ethical conduct of business
Ethnic diversity
Cultural mosaic
Attitudes toward governments:
Divided population

17. Challenges: Demographic Trends
Increasing number of women in the workforce
Shift toward knowledge workers
Educational attainment of workers (Bi-modal)
Employment of older workers
More part-time, contract and contingent workers

18. Objectives of SHRM: Organizational
Contribute to organizational effectiveness
Means of helping the organization to achieve its primary objectives
Provide level of service appropriate to the organization

19. Objectives of SHCM: Employee
Assist employees in achieving their personal goals
Employee performance may decline or employees may leave the organization if personal objectives are not considered

20. Objectives of HRM: Societal
Respond to the needs and challenges of society
Minimize negative impacts on the organization
Reflect society’s concerns e.g. ecological

21. Goals of Strategic HCM Attract, retain, and motivate employees
Direct employee efforts toward goals of organization
Assist in the development of the strategic direction of the organization
Provide the organization a source of competitive advantage
Example: Watch Industry

22. Review & Evaluation of HCM Strategies
Steps in Strategic HRM
Environmental
Analysis
Organizational
Mission &
Goals
Analysis
Analysis of
Organizational
Strengths &
Culture
Analysis of
Organizational
Strategies
Choice &
Implementation
Of HCM
Strategies
Review & Evaluation of HCM Strategies

23. Activities in Human Resource Management
HC strategy formulation
Recruitment and selection (staffing)
Performance appraisal
Training and development
Compensation and benefits
Employee rights
Labor/management relations (if union)

24. Today’s Workforce Realities:
Decade of boom & bust leaves working families with:
Stagnant, declining incomes
Increased inequality
Longer working hours
Less retirement savings; fewer health care benefits
Broader job insecurity
Loss of worker voice in society
Current government policies producing:
Further cuts in services & jobs
Tax policies that further increase inequality
Deep divisions over war policies
Direct attacks on workers, unions, and core values

25. Job Satisfaction – Declining!
The U.S. has seen a trend of increasingly high job dissatisfaction.
Only 45 percent of Americans were satisfied with their jobs.
A decrease from a 61 percent satisfaction rate in 1987
Job dissatisfaction is highly correlated with a negative impact on organizational effectiveness
Management must respond