1. AEIS: 607 Lecture 2: HRM Strategy And Analysis
Md. Mahbubul Alam, PhD
Associate Professor
12/26/2018
Prepared & Presented by Md. Mahbubul Alam, PhD

2. Intended Learning Outcomes (ILOs)
Explain what a strategy-oriented human resource management system is and why it is important.
Outline the steps in the strategic management process.
Explain and give examples of each type of corporate strategy and competitive strategy.
Describe three important strategic human resource management tools.
12/26/2018
Prepared & Presented by Md. Mahbubul Alam, PhD

3. The Strategic Management Process
The process of identifying and executing the organization’s mission by matching its capabilities with the demands of its environment.
Strategy
A chosen course of action.
Strategic Plan
How an organization intends to balance its internal strengths and weaknesses with its external opportunities and threats to maintain a competitive advantage over the long-term.
“Where are we now, where do we want to be, and how should we get there?”
12/26/2018
Prepared & Presented by Md. Mahbubul Alam, PhD

4. Goal-Setting and the Planning Process
Steps
Setting objectives
Making basic planning forecasts
Reviewing alternative course of action
Evaluating which options are best
Choosing and implementing the plan.
Plan -> course of action for getting from where your are to where you want to go
Planning is always “goal-directed”
12/26/2018
Prepared & Presented by Md. Mahbubul Alam, PhD

5. Hierarchy of Goals: An example
President
“Double sales revenue to $ 20 million in fiscal year 2020”
Vice President of sales
“Double sales in East, West, and South Regions”
Sales Manager, South Region
“Hire 4 new salespeople, add 18 customers”
Sales Manager, East Region
“Triple sales to government agencies”
Sales Manager, West Region
“Move 5 salespeople to California market”
Vice President of Production
“Add one new production line at plant”
Vice President of HR
“Add, train 6 Salespeople”
Recruiting Manager
“Identify and attract 20 good sales candidates”
Training Manger
“Train 6 new salespeople and retrain all others within 4 months”
12/26/2018
Prepared & Presented by Md. Mahbubul Alam, PhD

6. Strategic Management Process: Steps
Q 1. Explain with examples each of the seven steps in the strategic Planning process.
12/26/2018
Prepared & Presented by Md. Mahbubul Alam, PhD

7. Strategic Management Process: Steps (Cont’d)
Activities
1. Define the current business
What products do we sell, where do we sell them
Value proposition, competitive advantages, differentiation, etc.
2. Perform external and internal audits
“Are we heading in the right direction?”
Environmental scanning
SWOT
3. Formulate a new direction
What should our new business be, what products we will sell, where we will sell them, how our products/services will differ.
New mission and vision. (see, next slide)
4. Translate the mission into strategic goals
Maintaining high quality of job and be strict to attain the goals.
5. Formulate strategies to achieve the strategic goals
Course of action
Rigorous employee selection,
Training and development
Performance appraisal procedures
6. Implement the strategies
Translating the strategies into action.
Hiring (firing) people, building (closing) plants, adding (eliminating) products/product lines.
7. Evaluate performance
Monitor and continuously assess strategic decisions.
12/26/2018
Prepared & Presented by Md. Mahbubul Alam, PhD

8. Business Vision and Mission
A general statement of an organization’s intended direction that evokes emotional feelings in organization members.
“What we want to become”.
Mission
Spells out who the company is, what it does, and where it’s headed.
1. Vision statements usually describe in broad terms.
12/26/2018
Prepared & Presented by Md. Mahbubul Alam, PhD

9. Types of Strategies Corporate-Level Strategy
“What business are we in?”
Business unit 1 (competitive) Strategy
“How will we compete?”
Functional Strategy (Business 1: Sales Dept.)
“How do we support the business’s competitive strategy?”
Functional Strategy (Business 1: Production)
Functional Strategy (Business 1: HR Dept.)
Business unit 2 (competitive) Strategy
1. Functional strategy: Strategy that identifies the broad activities that each department will pursue in order to help the business accomplish its competitive goals.
12/26/2018
Prepared & Presented by Md. Mahbubul Alam, PhD

10. Corporate Strategy: Types
Diversification Strategy
Geographic Expansion Strategy
Vertical Integration Strategy
Corporate-Level Strategies
Consolidation Strategy
Identifies the portfolio of businesses
Comprise the company and how these businesses relate to each other.
Concentration (single business)
Diversification (multiple business)
Related vs. conglomerate diversification
Producing own raw materials
Selling its products direct
e.g., Apple
Reducing the size of the business
Company grows by entering new territorial markets
Taking the business abroad.
12/26/2018
Prepared & Presented by Md. Mahbubul Alam, PhD

11. Business Unit Level Strategy: Types
Cost Leadership
Focus/Niche
Business-Level/ Competitive Strategies
Differentiation
12/26/2018
Prepared & Presented by Md. Mahbubul Alam, PhD

12. Prepared & Presented by Md. Mahbubul Alam, PhD
Strategic Fit
The “Fit” Point of View (Porter)
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.
Functional strategy:
Strategy that identifies the broad activities that each department will pursue in order to help the business accomplish its competitive goals.
12/26/2018
Prepared & Presented by Md. Mahbubul Alam, PhD

13. Strategic Human Resource Management (SHRM)
Formulating and executing human resource policies and practices that produce the employee competencies and behaviors the company needs to achieve its strategic aims.
Linking HRM with strategic goals and objectives in order to improve business performance and develop organizational cultures that foster innovation and flexibility.
Basic idea -> produce employee skills and behaviors.
12/26/2018
Prepared & Presented by Md. Mahbubul Alam, PhD

14. Linking HR Strategy and Corporate Strategy
The Practices Behaviors Strategy pyramid
Linking HR Strategy and the company’s strategic plans
12/26/2018
Prepared & Presented by Md. Mahbubul Alam, PhD

15. Creating the Strategic Human Resource Management System
Human Resource Professionals
Employee Behaviors and Competencies
Components of a Strategic HRM System
Human Resource Policies and Practices
12/26/2018
Prepared & Presented by Md. Mahbubul Alam, PhD

16. Strategic Human Resource Management Tools
Strategy Map
Provide an overview (“big picture”) of how each department’s performance contributes to achieving the company’s overall strategic goals.
Helps the manager understand his/her department’s role.
Shows chain of activities that help to achieve company’s strategy goal.
HR scorecard
A process for assigning financial and nonfinancial goals or metrics to the HRM-related chain of activities required for achieving the company’s strategic aims and for monitoring results.
Digital Dashboard
Presents the manager with desktop graphs and charts, and so a computerized picture of where the company stands on all those metrics from the HR Scorecard process.
1. Describe the three important strategic human resource management tools.
12/26/2018
Prepared & Presented by Md. Mahbubul Alam, PhD

17. Prepared & Presented by Md. Mahbubul Alam, PhD
Strategic Map
12/26/2018
Prepared & Presented by Md. Mahbubul Alam, PhD

18. The 10-Step HR Scorecard Process2 3 4 5
Outline value chain activities
Define the business strategy
Outline a strategy map
Identify strategically required outcomes
Identify required workforce competencies and behaviors 6 7 8 9 10
Create HR Scorecard
Identify required HR policies and activities
Choose HR Scorecard measures
Summarize Scorecard measures on digital dashboard
Monitor, predict, evaluate
The 10-Step HR Scorecard Process
12/26/2018
Prepared & Presented by Md. Mahbubul Alam, PhD

19. Relationship between SHRM Tools
12/26/2018
Prepared & Presented by Md. Mahbubul Alam, PhD

20. HR Metrics and Benchmarking
Hours of training per employee
Productivity per employee
Customer satisfaction
Return on investment
Profit margin
HR-to-employee ratio (average 1.12 HR employees per company employee)
12/26/2018
Prepared & Presented by Md. Mahbubul Alam, PhD

21. Prepared & Presented by Md. Mahbubul Alam, PhD
Metrics for the SHRM
12/26/2018
Prepared & Presented by Md. Mahbubul Alam, PhD

22. Prepared & Presented by Md. Mahbubul Alam, PhD
Question Please ?
Acknowledgement:
“Human Resource Management” by Garry Dessler, 13th Edition, Pearson.
12/26/2018
Prepared & Presented by Md. Mahbubul Alam, PhD