Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 1 Strategic human resource management Chapter 2

Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 2-2 Strategic human resource management (SHRM)  Objectives ÙDescribe the differences between strategy formulation and strategy implementation. ÙList the components of the strategic management process. ÙDiscuss the role of the HR function in strategy formulation. ÙDescribe the linkages between HR and strategy formulation.

Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 2-3 Strategic human resource management (SHRM)  Objectives (continued) ÙDiscuss the more popular typologies of generic strategies and the various HR practices associated with each. ÙDescribe the different HR issues and practices associated with various directional strategies. ÙList the competencies the HR executive needs to become a strategic partner in the company.

Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 2-4 Strategic management  A process or approach to addressing the competitive challenges faced by an organisation.  It can be thought of as managing the ‘pattern or plan that integrates an organisation’s major goals, policies and action sequences into a cohesive whole’ (Quinn, 1980).

Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 2-5 Generic strategies (Porter)  Cost  Differentiation  Focus

Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 2-6 Strategic types (Miles & Snow)  Defender  Analyser  Prospector  Reactor

Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 2-7 Strategic human resource management (SHRM)  A pattern of planned human resource deployments and activities intended to enable an organisation to achieve its goals.

Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 2-8 Components of the strategic management process  Strategy formulation ÙThe process of deciding on a strategic direction by defining a company’s mission and goals, its external opportunities and threats, and its internal strengths and weaknesses.  Strategy implementation ÙThe process of devising structures and allocating resources to enact the strategy chosen by a company.

Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 2-9 Linking HR and the strategic management process  Strategic choice ÙThe organisation’s strategy; the ways an organisation will attempt to fulfill its mission and achieve its long-term goals.

Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 2-10 Strategic choice External analysis Internal analysis HR needs HR capability HR actions Firm performance Strategy formulation Strategy implementation Strategy evaluation Emergent strategies GoalsMission HR practices A model of the strategic management process (see Figure 2.1 for more detail)

Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 2-11

Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 2-12 Figure 2.2 Linkages of strategic planning and HRM Source: Adapted from K. Golden & V. Ramanujam, ‘Between a Dream and a Nightmare: On the Integration of the Human Resource Function and the Strategic Business Planning Process’, Human Resource Management 24, 1985, pp. 429–51.

Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 2-13 Figure 2.3 Strategy formulation Strategic choice External analysis Opportunities Threats GoalsMission Internal analysis Strengths Weaknesses HR Input

Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 2-14 Strategy formulation: four components  Mission: a statement of the organisation’s reason for being.  Goals: What an organisation hopes to achieve in the medium- to long-term future.  SWOT analysis (strengths, weaknesses, opportunities, threats), comprising: ÙExternal analysis: Examining the organisation’s operating environment to identify strategic opportunities and threats. ÙInternal analysis: The process of examining an organisation’s strengths and weaknesses.  HR input: HR executives involved in strategy formulation.

Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 2-15 Figure 2.4 Variables to be considered in strategy implementation

Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 2-16 Strategic choice HR needs HR capability HR actions Firm performance Emergent strategies HR practices Strategy implementation (see Figure 2.5 for more detail)

Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 2-17 Figure 2.5 Strategy implementation

Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 2-18 Menu of HR practice options  Job analysis and design  Recruitment and selection  Employee learning and development  Performance management  Pay structure, incentives and benefits  Industrial relations  See Table 2.4 for more detail

Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 2-19 Directional strategies  Concentration strategies  Internal growth strategies  External growth strategies  Divestment or downsizing strategies

Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 2-20 The role of HR in providing strategic competitive advantage  Emergent strategies  Enhancing firm competitiveness

Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 2-21 Figure 2.6 HR competencies

Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 2-22 Summary  SHRM: to proactively provide a competitive advantage through the company’s human resources.  The HR function needs to be integral to strategy formulation.  HRM has an impact on strategy implementation.  The strategic role of the HR function requires business, professional-technical, change management and integration competencies.