1. Strategic Human Resource Management Chapter# 3

2. 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

3. Management Planning Fundamentals cont.
Setting objectives
SMART
MBO
Using MBO
set organizational goals
set departmental goals
discuss departmental goals
set individual goals
give feedback

4. 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.

5. FIGURE 3–1 The Strategic Management Process

6. Strategic Management Vision Mission
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.

7. FIGURE 3–2 A SWOT Chart

8. FIGURE 3–3 Strategies in a Nutshell

9. FIGURE 3–4 Relationships Among Strategies in Multiple-Business Firms

10. Types of Strategies Corporate-Level Strategies Concentration Strategy
Geographic Expansion Strategy
Vertical Integration Strategy
Corporate-Level Strategies
Diversification Strategy
Consolidation Strategy

11. Types of Strategies (cont’d)
Cost Leadership
Focus/Niche
Business-Level/ Competitive Strategies
Differentiation

12. 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.

13. 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

14. 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.

15. 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

16. Linking Company-Wide and HR Strategies

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

18. 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

19. Percent of Successful Mergers in Which HR Manager Was Involved

20. FIGURE 3–A1 The Basic HR Scorecard Relationships
HR Activities
Organizational Performance
Emergent Employee Behaviors
Strategically Relevant Organizational Outcomes
Achieve Strategic Goals

21. Creating an HR Scorecard
The 10-Step HR Scorecard Process 1 6 3 2 8
Define the business strategy 7
Identify required HR policies and activities 4 9
Outline value chain activities
Create HR Scorecard 5 10
Outline a strategy map
Choose HR Scorecard measures
Identify strategically required outcomes
Summarize Scorecard measures on digital dashboard
Identify required workforce competencies and behaviors
Monitor, predict, evaluate

22. 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.

23. 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.

24. FIGURE 3–A3 Simple Value Chain for “The Hotel Paris”

25. 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.

26. FIGURE 3–A4 Strategy Map for Southwest Airlines

27. Step 4: Identify strategically required organizational outcomes
Dell: receiving quick, competent and courteous technical advice by phone is one such outcome.
This step identifies and specifies firm’s strategically relevant outcomes.

28. Step 5: Identify the required workforce competencies and behaviors
Medical company: employees have to take personal accountability for the results, willing to work proactively (be “generative”) to find new and novel solutions.

29. Step 6: Identify the required HR system, policies and activities
Medical company: new training and pay plans
In this step one should be specific
We need new training programs
Exactly what sort of new training programs do we need

30. Step 7: Choose HR scorecard measures
How to measure HR policies and activities.
Improve company's disciplinary system
How to manage such improvements
Solution: Number of grievances
HR score card contains a balance of financial and non financial, short and long-term, external and internal goals.
Example:
Southwest might measure turnaround time in terms of “ improve turnaround time from an average of 30-mins per plane to 26-mins per plane and then measure customer satisfaction with periodic year.

31. Step 8: Summarize the scorecard measure in a digital dashboard
“A picture is worth thousand words”
It presents HRM function, core measures from HR scorecard Via a PC desktop screen.
Example: A manager’s dashboard for Southwest Airline might display daily trends for activities such as fast turnaround, attracting and keeping customers, on time flights and employee morale.
Gives manager time to take corrective actions.