3. strategic hr

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Copyright 2011 Dorling Kindersley (India) Pvt. Ltd

Authorized adaptation from the United States edition of HumanResource Management, 12/e

Managers Role in Strategic HRM

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Authorized adaptation from the United States edition of HumanResource Management, 12/e32

The Strategic Management Process

Strategic Management

The process of identifying and executing theorganizations 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 externalopportunities and threats to maintain a competitiveadvantage over the long-term.


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Business Vision and Mission

Vision

A general statement of an organizations intended

direction that evokes emotional feelings inorganization members.

Mission Spells out who the company is, what it does, and

where its headed.


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FIGURE 35 The Strategic Management Process


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FIGURE 37 A SWOT Chart

Strengths

Example: Market leadership

Weaknesses

Example: Large inventories

Opportunities

Example: New overseas markets

Threats

Example: Market saturation


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FIGURE 38 Relationships Among Strategies in Multiple-Business Firms


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Copyright 2011 Dorling Kindersley (India) Pvt. LtdAuthorized adaptation from the United States edition of HumanResource Management, 12/e

37

Types of Strategies

DiversificationStrategy

GeographicExpansionStrategy

VerticalIntegration

Strategy

Corporate-LevelStrategies

ConsolidationStrategy


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38

Types of Strategies (continued)

Cost Leadership Focus/Niche

Business-Level/CompetitiveStrategies

Differentiation


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39

Achieving Strategic Fit

The Fit Point of View (Porter) consists of the

idea that each departments strategy needs to fit

the parent businesss competitive aims.


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Strategic Human Resource Management

Strategic Human Resource Management

The linking of HRM with strategic goals andobjectives in order to improve business performanceand develop organizational cultures that fosterinnovation and flexibility.

Involves formulating and executing HR systemsHRpolicies and activitiesthat produce the employeecompetencies and behaviors that the company needsto achieve its strategic aims.


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FIGURE 36 Linking Company-Wide and HR Strategies


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Creating the Strategic Human ResourceManagement System

Human ResourceProfessionals

EmployeeBehaviors andCompetencies

Components of aStrategic HRM System

Human ResourcePolicies and

Practices


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FIGURE 310StrategyMap forSouthwest

Airlines

Source:Adapted from Creating a Strategy Map,Ravi Tangri, [email protected].


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FIGURE 312 Three Important Strategic HR Tools

Source:Adapted from Brian Becker et al., The HR Scorecard: Linking People,

Strategy, and Performance(Boston: Harvard Business School Press, 2001), p. 12.


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Measuring HRs Contribution

The HR Scorecard

Shows the quantitative standards,or metrics the firm uses to

measure HR activities.

Measures the employee behaviorsresulting from these activities.

Measures the strategically relevantorganizational outcomes of those

employee behaviors.


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Creating an HR Scorecard

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3

4

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Outline value chain activities

Define the business strategy

Outline a strategy map

Identify strategically required

outcomes

Identify required workforcecompetencies and behaviors

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Choose HR Scorecardmeasures

Identify required HR policiesand activities

Summarize Scorecardmeasures on digital dashboardand monitor, predict, andevaluate

The 10-Step HR Scorecard Process


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FIGURE 314 Simple Value Chain for The Hotel Paris


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Five Sample HR MetricsHR Metric* How to Calculate It

Absence rate # of days absent in month 100

Average # of employees during month # of workdays

Cost per hire Advertising + agency fees + employee referrals + travel cost ofapplicants and staff + relocation costs + recruiter pay and benefits

Number of hires

HR expensefactor

HR expense

Total operating expense

Time to fill Total days elapsed to fill job requisitions

Number hired

Turnover rate Number of separations during month 100

Average number of employees during monthSources:Robert Grossman, Measuring Up, HR Magazine, January 2000, pp. 2935; Peter V. Le Blanc, Paul Mulvey, and Jude T. Rich, Improving the Return on

Human Capital: New Metrics, Compensation and Benefits Review,January/February 2000, pp. 1320; Thomas E. Murphy and Sourushe Zandvakili,

Data and Metrics-Driven Approach to Human Resource Practices: Using

Customers, Employees, and Financial Metrics, Human Resource Management39, no. 1 (Spring 2000), pp. 93105; [HR Planning, Commerce Clearing House

Incorporated, July 17, 1996;] SHRM/BNA 2000 Cost Per Hire and Staffing MetricsSurvey; www.shrm.org. See also, SHRM Research 2006 Strategic HRManagement Survey Report Society for Human Resource Management

3. strategic hr

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