1. HR STRATEGY MANA 3320 Dr. Jeanne Michalski

2. Strategic Planning and Human Resources Strategic Planning Strategic Planning Procedures for making decisions about the organization’s long-term goals and strategies Procedures for making decisions about the organization’s long-term goals and strategies Human Resources Planning (HRP) Human Resources Planning (HRP) Process of anticipating and making provision for the movement (flow) of people into, within, and out of an organization. Process of anticipating and making provision for the movement (flow) of people into, within, and out of an organization.

3. Strategic Planning and HR Planning Strategic Human Resources Management (SHRM) Strategic Human Resources Management (SHRM) The pattern of human resources deployments and activities that enable an organization to achieve its strategic goals The pattern of human resources deployments and activities that enable an organization to achieve its strategic goals Strategy formulation—providing input as to what is possible given the types and numbers of people available. Strategy formulation—providing input as to what is possible given the types and numbers of people available. Strategy implementation—making primary resource allocation decisions about structure, processes, and human resources. Strategy implementation—making primary resource allocation decisions about structure, processes, and human resources.

4. Mission, Vision, and Values Mission Mission The basic purpose of the organization as well as its scope of operations The basic purpose of the organization as well as its scope of operations Strategic Vision Strategic Vision A statement about where the company is going and what it can become in the future; clarifies the long-term direction of the company and its strategic intent A statement about where the company is going and what it can become in the future; clarifies the long-term direction of the company and its strategic intent Core Values Core Values The strong and enduring beliefs and principles that the company uses as a foundation for its decisions The strong and enduring beliefs and principles that the company uses as a foundation for its decisions

5. Changing Views of HR Business strategies require specific skills and behaviors to be successful. Business strategies require specific skills and behaviors to be successful. HR practices can be crafted to develop certain types of skills and encourage behaviors. HR practices can be crafted to develop certain types of skills and encourage behaviors. HR practices should support the “core competencies” and strategy of the organization. HR practices should support the “core competencies” and strategy of the organization.

6. HR Alignment Planning and Job Design Recruiting and Selection Training and Development Performance Management Compensation Employee Relations

7. HR Alignment Planning and Job Design Recruiting and Selection Training and Development Performance Management Compensation Employee Relations INTERNAL FIT

8. HR Alignment Planning and Job Design Recruiting and Selection Training and Development Performance Management Compensation Employee Relations INTERNAL FIT

9. Business Strategy Value Creation Value Creation What the firm adds to a product or service by virtue of making it; the amount of benefits provided by the product or service once the costs of making it are subtracted (value = benefits — costs). What the firm adds to a product or service by virtue of making it; the amount of benefits provided by the product or service once the costs of making it are subtracted (value = benefits — costs). Low-cost strategy: competing on productivity and efficiency Low-cost strategy: competing on productivity and efficiency Keeping costs low to offer an attractive price to customers (relative to competitors). Keeping costs low to offer an attractive price to customers (relative to competitors). Differentiation strategy: compete on added value Differentiation strategy: compete on added value Involves providing something unique and distinctive to customers that they value. Involves providing something unique and distinctive to customers that they value.

10. Business Strategy (cont’d) Functional Strategy: Ensuring Alignment Functional Strategy: Ensuring Alignment External Fit/Alignment External Fit/Alignment Focuses on the connection between the business objectives and the major initiatives in HR. Focuses on the connection between the business objectives and the major initiatives in HR. Internal Fit/Alignment Internal Fit/Alignment Aligning HR practices with one another to establish a configuration that is mutually reinforcing. Aligning HR practices with one another to establish a configuration that is mutually reinforcing.

11. How do they compete? Wal-Mart Wal-Mart Apple Apple McDonald’s McDonald’s Starbucks Starbucks

12. McDonalds’ vs. Starbucks

13. Rapid Growth Starbucks opens three new stores every day. 2006 = 12,440 2005 = 10,241 2004 = 8,337 2003 = 7,225 2002 = 5,886 2001 = 4,709 2000 = 3,501 1990 = 84 120,000 employees worldwide 120,000 employees worldwide The long-term goal is 30,000 around the world, including 15,000 in the U.S. The long-term goal is 30,000 around the world, including 15,000 in the U.S. The company is adding people at the rate of 200 a day. The company is adding people at the rate of 200 a day.

14. Starbucks Strategy Price of a tall latte in the U.S. is around $3.00 Price of a tall latte in the U.S. is around $3.00 High-speed wireless Internet service – now available at Starbucks. High-speed wireless Internet service – now available at Starbucks. October 1, 2007 “Starting tomorrow at certain Starbucks stores, a person with an iPhone or iTunes software loaded onto a laptop can download the songs they hear over the speakers directly onto those devices.” October 1, 2007 “Starting tomorrow at certain Starbucks stores, a person with an iPhone or iTunes software loaded onto a laptop can download the songs they hear over the speakers directly onto those devices.” Rapid growth. Rapid growth.

15. Howard Schultz on Starbuck’s Strategy 1997 Interview w/ Larry King: “So the question is: How could a company create retail stores where coffee was not previously sold,... charge three times more for it than the local doughnut shop, put Italian names on it that no one can pronounce, and then have six million customers a week coming through the stores?”

16. Working at Starbucks The downside: Salaries are low Salaries are low Shift assignments are unpredictable Shift assignments are unpredictable Number of working hours cannot be relied upon. Number of working hours cannot be relied upon. The upside: Flexibility Flexibility Company culture Company culture Employee empowerment Employee empowerment Benefits package Benefits package Fortune magazine #16 best companies to work for in U.S. Fortune magazine #16 best companies to work for in U.S.

17. Partners who work full time or part time (generally 20 hours or more per week) may participate in a variety of programs including: Progressive Compensation Progressive Compensation Healthcare Benefits (Medical, Prescription Drugs, Dental and Vision) Healthcare Benefits (Medical, Prescription Drugs, Dental and Vision) Retirement Savings Plan Retirement Savings Plan Stock Options and Discounted Stock Purchase Plan “Bean Stock” Stock Options and Discounted Stock Purchase Plan “Bean Stock” Income Protection Plan (Life and Disability Coverage) Income Protection Plan (Life and Disability Coverage) Management Bonus Plan Management Bonus Plan Adoption Assistance Plan Adoption Assistance Plan Domestic partner benefits Domestic partner benefits Referral programs and support resources for child and eldercare Referral programs and support resources for child and eldercare Employee involvement Employee involvement A pound of coffee each week A pound of coffee each week http://www.starbucks.com/aboutus/jobcenter_thesbuxexperience.asp http://www.starbucks.com/aboutus/jobcenter_thesbuxexperience.asp Working at Starbucks

18. “To Woo Europeans, McDonald’s Goes Upscale” McDonald’s in London NYT August 25, 2007

19. McDonald’s Goes Upscale Aiming to create a more relaxed experience in a sophisticated atmosphere, McDonald’s is replacing bolted-down plastic yellow-and-white furniture with lime-green designer chairs and dark leather upholstery. Aiming to create a more relaxed experience in a sophisticated atmosphere, McDonald’s is replacing bolted-down plastic yellow-and-white furniture with lime-green designer chairs and dark leather upholstery. The changes are more than cosmetic. McDonald’s is introducing healthier foods and items that cater to regional tastes, like caffè lattes. The changes are more than cosmetic. McDonald’s is introducing healthier foods and items that cater to regional tastes, like caffè lattes. Hoping to attract more young adults and professionals, the chain is also adding amenities like Internet access and rental iPods. Hoping to attract more young adults and professionals, the chain is also adding amenities like Internet access and rental iPods. The original impetus for the makeover was a European sales slump in the late 1990s, brought on by concerns about obesity and annoyance at unappealing décor and grumpy employees. The original impetus for the makeover was a European sales slump in the late 1990s, brought on by concerns about obesity and annoyance at unappealing décor and grumpy employees.

20. Competitive Advantage Technological Capability

21. Competitive Advantage Cap Technological Capability Financial Capability

22. Competitive Advantage M Technological Capability Financial Capability Marketing Capability

23. Competitive Advantage o M Technological Capability Financial Capability Marketing Capability Organizational Capability

24. Capabilities: People as a Strategic Resource Core Capabilities Core Capabilities Integrated knowledge sets within an organization that distinguish it from its competitors and deliver value to customers. Integrated knowledge sets within an organization that distinguish it from its competitors and deliver value to customers. Sustained competitive advantage through people is achieved if these human resources: Sustained competitive advantage through people is achieved if these human resources: 1. Are valuable. 2. Are rare and unavailable to competitors. 3. Are difficult to imitate. 4. Are organized for teamwork and cooperation.

25. Company Vision - Example Provide transportation services that consistently meet customers expectations Provide transportation services that consistently meet customers expectations

26. Strategic Initiatives – Example People People Growth Growth Efficiency Efficiency Ease of Doing Business Ease of Doing Business Service Service

27. Human Resources Vision HR makes it happen for “Company” HR makes it happen for “Company” Great Company…... Great People…… Great People…… Great Leaders….. …….Engaged in delivering extraordinary results

28. People Strategies Drive Performance Ethic Drive Performance Ethic Transform Leaders Transform Leaders Enhance Talent Enhance Talent Engage all Employees Engage all Employees