lecture 1 - strategic hr

8/16/2019 Lecture 1 - Strategic HR

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Performance & Compensation Management by Shah MSaad Husain 1

Performance & CompensationManagement

Shah M Saad Husain




Performance & CompensationManagementShah M Saad HusainB Engg, MS Engg, PE, MBA, FICS, FIMM

33 years senior management experience withgovernment, Pakistani private sector andmultinational companies.

in Project Management, Engineering Operations,General Management, usiness !evelopment,External "##airs, Marketing, $%, &orporate Planning,&'% and &ustomer %elations.

with P(!&, $a)i) Group, ritish Petroleum, $Pilliton, (ndus Motor, Pak*"ra) %e#inery.

++ years teaching experience at (", &M, P(&, P(M,-(P", /M'. 'u)jects0 $%M, Per#ormance 1&ompensation Management, Marketing Management,'trategic Management, Project Management,(ndustrial Marketing, 2apanese Management, &'%,&ustomer "scendancy.




Performance & Compensation Management –Course Contents

$% and Organiational 'trategy

1 HR in the 21st Century

2, 3 The Strategic Role and Outcome of HRM

4, 5 HR Strategies and Organiational !erformancePer#ormance Management

",# O$%ecti&es of !erformance Management

', ( !erformance Management Systems

1) *m+loyee Training -e&elo+ment

11 Man+o.er !lanning Recruitment

12 Succession !lanning

%eward Management

13 O$%ecti&es of Re.ard Management

14, 15 /o$ *&aluation, 0nternal and *ternal *uity1", 1# Com+ensation

1', 1( rade !ay Systems

2) actors 0nfluencing !ay

21 0m+act of *n&ironment on Re.ard Management

22, 23 Re.ard Model Strategy 0m+lementation

24, 25 Moti&ation, Re.ard Organiational Commitment

2", 2# Re.arding Contri$ution and !erformance

+4 * +5 'tudent Presentations, &ase 'tudies




Course ObjectivesCourse Objectives

Knowledge of P & R Management Theory,

Concepts, Processes and Practices.Identifying Sources of Information and using

them.

Class Interaction, learning from theMaretplace.

Practical !pplication of course, de"elopingStrategies for #rgani$ations.

Performance !ssessment% Students Teacher.





Course RequirementsCourse Requirements

%eadings #rom selected texts, journals

6heory, &oncepts discussed in &lass 'tudent Projects and %eports

%eal i#e &ases

Examinations

Presentations and &lass Evaluations

&lass Participation, uies, $ome "ssignments





ring &ourse 7ile to each class

%ead reading materials )e#ore class

8rite notes as slides are explained and discussed

9eep track o# &ourse &alendar, &lass 6imings,

Grades, etc., on e*group and with &%

Maintain contact with &% and ''$

Meet "ttendance and Punctuality re:uirements

!iscipline is key. "dhere to (" %ules.

Instructions for StudentsInstructions for Students




Performance & Compensation Management by Shah MSaad Husain

Performance & Compensation

Management !rading !rading

Midterms ; + x +< = > ?< 7inal > 3< Project %eport, Presentation > +@

$ome "ssignments, uies > @

"ll uies are open )ook

7or an overall " grade in the course0 " in 7inal " in Project %eport "ctive &lass Participation



Performance & Compensation Management by Shah MSaad Husain !

06 7uis R6 ome Me%ia, -a&id 86 8al9in,

Ro$ert 76 Cardy :2))'; < !rentice Hall

“Managing Human Resources”

ii6 Michael =rmstrong :2))';< >ogan !age

“Employee Reward Management & Practice”

iii6 ?ayne 6 Cascio :2))";< Tata Mcra.@Hill

“Managing Human Resources”

Performance & CompensationManagement ReadingsReadings



1 – HR in the 21st Century

2 – he !trategic Role and "utcome o# HRM

$ % HR !trategies & "rganiational Per#ormance

Per#ormance 1 &ompensation Management



Performance & Compensation Management by Shah MSaad Husain 1"




H#M and the 21st Century

-ue to 0nternet technologies, organiations are undergoing a com+letetransformation6 The 21st century organiation must ada+t itself to management&ia the .e$6

0ntellectual ca+ital .ill $e critical to success6 =d&antage of $ringing ne.technologies to the mar9et .ill $e shorter6 Technologies .ill let com+etitors

match them almost immediately6

0n such times, it .ill $e critical to attract and retain the $est thin9ers6

Retaining and attracting the to+ talent .ill reuire more than %ust +aychec9s6 0t.ill reuire a culture of em+o.ering +eo+le, and a re.ard system that re.ardsthe $est as if they .ere the o.ners of the com+any6

0ntellectual ca+ital .ill $e called on from around the glo$e6 = glo$al cor+orationmight $e $ased in the AS $ut does its soft.are +rogramming in Sri 7an9a,engineering in ermany, its manufacturing in China, and is lin9ed &ia the0nternet to allo. em+loyees to interact and .or9 in real time6




H#M and the 21st Century Corporation

+<th &entury &orporation +Ast &entury &orporation

!redicated itself on sta$ility !redicated itself on constant change

Organied around rigid hierarchies Organied around net.or9s and teams

8uilt on self@sufficiency 8uilt on shifting +artnershi+s andalliances

Organiational chart defined as ashrin9ing +yramid leading to the C*O

Organiational chart more li9ely to $e aflat .e$, intricately .o&en that lin9s+artners, em+loyees, eternalcontractors, su++liers, and customersin &arious colla$orations

Constructed on $ric9s and mortar Constructed on 9no.ledge andtechnological ad&antages6




$ntroduction to H#M

Human Resources Strategy in a firm is a

firmBs deli$erate and +lanned use of human

resources to hel+ it gain a com+etiti&e

ad&antage6

The HRM strategy of a firm is its grand +lan

to ensure that it effecti&ely uses its +eo+le toaccom+lish its mission6




#'

(Scope &Depth)

(MP)#*(R

+rowth in +oods & Ser"ices CustomerSatisfaction Re"enue+eneration Prots Return on (-uityR#(/ (0pansion of'usiness CorporateReputation

(mployer

#12ecti"es+rowth in 3amily & Self Profession Career Security Social Status

(mployee

#12ecti"es Ser"ices

4or

Employee –Employer

Relationship

(mployer5#rgani$ational #12ecti"es #rgani$ational Structure o1 Identication, !nalysis & 6esign

o1 Specication Before Joining/

o1 6escription After Joining/

Tasks, Actiities, Responsi!ilities,Acco"nta!ilities

#o$er (%inancialA'ministratie)

Reporting Str"ct"re Manpower Planning, Recruitment, Induction Training & 6e"elopment

(MP)#*((

Performance

Manageme

nt

Compensation &

Rewards

Salary 'enets 3acilities and Pers !llowances Professional, Career,Societal Recognition Internal 7 (0ternal Mt/

(-uity

Performance ("aluation Increments 'onus Incenti"es Career 6e"elopment 8ltimate Potential

98M!: R(S#8RC( M!:!+(M(:T



Performance & Compensation Management by Shah MSaad Husain 1!



Performance & Compensation Management by Shah MSaad Husain 1%




HRM +ractices ma9e an im+ortant +ractical

difference in three 9ey organiational

outcomes6

16 !roducti&ity

26 Duality of ?or9 7ife

36 !rofit < Total Re&enue minus the Total Cost

utcomes of H#M Practices




= measure of the out+ut of goods and

ser&ices relati&e to the in+ut of la$or, ca+ital,

and eui+ment6Higher producti'ity

7eads to higher .ages .ithout $oosting inflation6

0s not .or9ing harder, it is .or9ing smarter6

0s a$out doing more .ith fe.er +eo+le, less money, lesstime and s+ace, and fe.er resources6

utcomes of H#M Practices'

1( Producti)ity




MOR* !RO-ACT0E* OR=F0G=T0OFS *T MOR* OO-S =F-

S*RE0C*S ROM = 0E*F =MOAFT O 7=8OR, C=!0T=7, *DA0!M*FT6




Re$uild em+loyee loyalty6

*sta$lish a clear lin9 $et.een re.ards and+roduction6

Say no to Duic9 iB a++roach6

*m+hasie on Continuous 0m+ro&ement6


1( Producti)ity $mpro)ement




T.o .ays of loo9ing at Duality of ?or9 7ife

:D?7;

Organiational &onditions and Practices such as+romotion from .ithin, democratic su+er&ision, +artici+ati&e

management, em+loyee in&ol&ement, safe .or9ing

conditions, mutual trust, team .or96

EmployeesB Perceptions that they are res+ected, relati&ely.ell satisfied, and a$le to gro. and de&elo+ as human $eings

and +rofessionals6


2( *ua+ity of ,or- .ife




Management Systems that +roduce profits through people share thefollo.ing dimensions<

A. Employment 'ecurity.

+. 'elective $iring.

3. 'el#*managed teams and decentraliation.

?. $igh &ompensation contingent on organiational per#ormance.

@. Extensive 6raining, !evelopment and Pro#essional grooming.

C. %educed di##erences in status. %espect #or competence and

per#ormance.D. 'haring o# in#ormation, e##ective communication systems.

4. Employee &are and 'atis#action.

5. 6rust.


3( Pro/t




A. 'trategic Partners< .or9 .ith multi+le sta9eholders to achie&e $usiness+lans6

+. (nnovators0 create an en&ironment that su++orts continuous learning andim+ro&ement6

3. &olla)orators0 create [email protected] situations .ith internal and eternalsta9eholders6

?. &hange #acilitators< antici+ate the need for change, thin9, conce+tualie,articulate, eecute and energie organiation to $ring change6


4( #o+es of H# Professiona+s 0oday The greatness of an Organisation is due to the Greatness of its

People ii 0oyoda




H#M and Corporate Strategic oa+s

Human Resource Management is essentialto ad&ance a firmBs strategic goals6

HR

!R=CT0C*S

HR

STR=T*I

HR

T=CT0CS

HR

!7=FSHR

!O70C0*S,

SIST*MS,

SO!s

COR!OR=T*

STR=T*I

COR!OR=T*

STR=T*0C

O=7S

(in)ing Corporate !trategic *oals

withHRM




H#7s Strategic #o+e

Successful firms align their HR strategies and tactics .ith<

16 *n&ironmental O++ortunities and Threats6

26 8usiness Strategies6

36 Organiational Aniue Characteristics6

46 OrganiationBs Com+etence6




P+anning and $mp+ementing Strategic H#

Strategic HR !lanning in&ol&es<

16 ormulation of HR strategies

26 -esigning !rograms and Tactics

36 *ecution

46 Monitoring Results




0he 8ene/ts of H# P+anning

16 *ncouragement of +roacti&e rather than reacti&e $eha&ior

26 *+licit communication of Com+any oals

36 Stimulation of critical thin9ing and ongoing eamination ofassum+tions

46 0dentification of ga+s $et.een Current Situation and utureEision

56 *ncouragement of 7ine ManagerBs !artici+ation

"6 0dentification of HR constraints and o++ortunities

#6 Team.or9 and creation of common $onds




0he Cha++enges of Strategic H# P+anning

16 Maintaining a com+etiti&e ad&antage

26 Reinforcing o&erall $usiness strategy

36 =&oiding ecessi&e concentration on day@to@day +ro$lems

46 -e&elo+ing HR strategies suited to uniue organiational features

56 Co+ing .ith the en&ironment

"6 Securing management commitment

#6 Translating the strategic +lan into action

'6 Com$ining intended and emergent strategies

(6 =ccommodating change




Se+ecting H# Strategies to $ncrease 9irm7sPerformances

HR StrategyBs effect on a firmBs +erformance

de+ends on ho. .ell it fitsB .ith other factors

it refers to the consistency and com+ati$ility

$et.een HR strategies and other im+ortant

as+ects of the organiation




9it :ith rgani;ation Strategies

&orporate 'trategy is referred to as the mi

of $usinesses a cor+oration decides to hold

and the flo. of resources among those

$usinesses6 e6g6, !=RCO

usiness /nit 'trategies are those that are

formulated and im+lemented $y a firm that isrelati&ely autonomous, e&en if it is +art of a

larger cor+oration6 eg6 !=!CO




*ffecti&e HR Strategy ormulation and 0m+lementation

$% 't t i t 7it 6h M j 6 # i 't t i




$% 'trategies to 7it 6hree Major 6ypes o# usiness 'trategies

$% 't t i 6h t 7it 6 M j 6 # i 't t i




$% 'trategies 6hat 7it 6wo Major 6ypes o# usiness 'trategies




9it :ith the n)ironment

HR strategies should hel+ the organiation $etter e+loit

en&ironmental o++ortunities or co+e .ith the uniueen&ironmental forces that affect it

The rele&ant en&ironment can $e measured in terms of fourdimensions<

1+ ,egree o# uncertainty < ho. much accurate information isa&aila$le to ma9e a++ro+riate $usiness decisions

2+ -olatility . ho. often does the en&ironment change

$+ Magnitude o# change< ho. drastic the changes are

/+ Comple0ity < ho. many different elements in the en&ironmentaffect the firm either indi&idually or together

$% 't t

i # 7i ith !i## t E i t l &h t i ti




$% 'trategies #or 7irms with !i##erent Environmental &haracteristics




9it :ith rgani;ationa+Characteristics

A. 6he production process #or converting inputs intooutputs

Routine +roduction +rocess $enefits from HR strategies thatem+hasie control

eam+le< S+ecific %o$ descri+tion and %o$ s+ecific trainings

irms .ith non@routine +roduction +rocesses such asad&ertising firms, custom +rinters, and $iotechnologycom+anies, $enefit from flei$le HR strategies that su++ort

organiational ada+ta$ility, uic9 res+onse to change andcreati&e decision ma9ing

eam+le< 8road %o$ classes, loose .or9 +lanning, and generic training




9it :ith rgani;ationa+Characteristics+. 6he 7irmBs Market Posture

irms that e+erience high sales gro.th and engage in +roduct

inno&ation for a .ide mar9et segment $enefit from HR

Strategies that su++ort gro.th and entre+reneurial acti&ities

eam+le< *ternal recruitment or $uying s9ills, decentralied +ay

decisions, customied a++raisal

irms .ith lo. rates of sales gro.th and limited +roduct

inno&ation for a narro. mar9et segment $enefit from HR

strategies that em+hasie efficiency, control, and firm s+ecific

9no.ledge

eam+le< 0nternal recruitment or ma9ing s9illsB6 On@the@%o$ training, and

high de+endence on su+eriors




9it :ith rgani;ationa+Characteristics3. 6he #irmBs overall managerial philosophy

Com+anies .hose to+ eecuti&es are ris9@a&erse and o+erate

.ith an autocratic leadershi+ style, and are in.ardly focused

use HR strategies that match this outloo9

eam+le< Seniority $ased +ay, formal hiring and socialiing of ne. em+loyees,

selection decisions made $y the HR de+artment and use of [email protected] channels6

Management characteried $y high ris9 ta9ing, +artici+ation,

egalitarianism, and eternal, +roacti&e en&ironmental

orientation use HR strategies that fits this outloo9eam+le< include &aria$le +ay, gi&ing su+er&isors a ma%or role in hiring

decisions, u+@[email protected] communication channels, and multi+le in+uts for

+erformance a++raisals




9it :ith rgani;ationa+Characteristics

?. 6he #irmBs organiational structure

Highly formal organiations that are di&ided into functional

areas li9e mar9eting, finance, +roduction, etc, and

concentrate decision ma9ing on to+< HR strategies for

such organiations include a control em+hasis,centralied +ay decisions, e+licit %o$ descri+tions, and

%o$@$ased +ay6

irms .hose structures are less regimented $enefit from

HR strategies that include informal hiring and socialiingof ne. em+loyees, decentralied +ay decisions, $road %o$

classes and indi&idual@$ased +ay6




9it :ith rgani;ationa+Characteristics@. 6he #irmBs organiational culture

Com+anies that foster an entre+reneurial climate ha&e loose .or9+lanning, informal hiring and socialiing of ne. em+loyees and&aria$le +ay6

irms that discourage entre+reneurshi+ generally +refer a control

em+hasis, detailed .or9 +lanning, formal hiring and socialiing ofne. em+loyees, and fied +ay6

irms .ith em+hasis on moral commitment% the etent to .hich afirm tries to foster a long@term emotional attachment $et.een thefirm and the em+loyees ha&e em+hasis on +re&enti&e &s6 remedial

disci+linary action to handle em+loyee mista9es, and e+licit ethicalcodes to monitor and guide $eha&ior6

irms that are lo. on moral commitment rely on authoritarianrelationshi+ $et.een em+loyee and com+any6




9it :ith rgani;ationa+ Capabi+ities

-istincti&e com+etencies of a firm are its

ca+a$ilities such as technology,management systems, re+utation, etc, thatgi&e it a Com+etiti&e *dge

HR strategies should enhance a firmBs+erformance $y<

16 hel+ing the com+any e+loit its s+ecific ad&antages or strengths

.hile a&oiding .ea9nesses

26 assisting the firm in $etter utiliing its uniue $lend of humanresource s9ills and assets




Choosing consistent and appropriate HRtactics to imp"ement HR strategies

The $est@laid HR strategies may fail .hen s+ecific HR +rograms are+oorly chosen or im+lemented

0n addition to fitting .ith each of the four organiationalcharacteristicsJ organiational strategy, en&ironment, organiational

ca+a$ilities and characteristics, a firmBs HR strategies should $emutually consistent

HR strategies are li9ely to $e successful if they reinforce oneanother rather than .or9 at cross@+ur+oses6

eam+le< ?or9ing in teams, $ut traditional indi&idual $ased

+erformance a++raisals

&hoosing &onsistent and "ppropriate $% 6actics to




&hoosing &onsistent and "ppropriate $% 6actics to

(mplement $% 'trategies

Recitt 'enciser diagram




Recitt 'enciser diagram




'6EP A0 ;P"-=

0ndi&idual !re Study on the 0ndustry .hat are the +ractices of the HR -e+artment6

'6EP +0 ;ME6$O!OOG=

&O-7(%M0

1st collection of the eisting information in the form of secondary -ataof Com+any6

('6E-0 0nter&ie. from the Managers Heads of the com+any6

-e&elo+ment of uestionnaire as9ing the uestionnaire from different le&els of+eo+le from the industry6

OO90

Eisual o$ser&ation of the $eha&ior of +eo+le at the

industry6

6$(-90 8rain Storming .ith the eisting HR +eo+le to come u+ .ith >aien6

!O0

ormulate a =! analysis of the HR lac9ings6 :?hich ha&e $een learnt from +re&ious$rain storming sessions;

'6EP 30 ;&$E&9= =fter doing the =! =nalysis chec9 the organiational ca+a$ilities so that the =!s can $e filled

accordingly6

'6EP ?0 ;"&6(O-=ormulation +ro+osing of the >=0G*F =ction !lan to enhance HR+ractices6

&om

petencies %e:uired o# $% !epartment to ecome a 7ull 'trategic Partner



Performance & Compensation Management by Shah M

&ompetencies %e:uired o# $% !epartment to ecome a 7ull 'trategic Partner

lecture 1 - strategic hr

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