fundamentals ofHuman Resource Management 3rd editionby R.A. Noe, J.R. Hollenbeck, B. Gerhart, and P.M. Wright

CHAPTER 2Human Resources StrategiesAnd Planning

HR STRATEGIESDefinition: HR strategies are the integration betweenHR policies and practices with business strategies ofan organization.

Question: HR strategies lead business strategies. It is:a. Rightb. Wrongc. Both right and wrongd. No controversial

Definition: HR strategies are the integration betweenHR policies and practices with business strategies ofan organization.

Question: HR strategies lead business strategies. It is:a. Rightb. Wrongc. Both right and wrongd. No controversial

Business strategy

1. Corporate-level strategy2. Business-level strategy3. Functional-level strategy

1. Corporate-level strategy2. Business-level strategy3. Functional-level strategy

CorporateCorporate--level strategylevel strategyStrengths

Companystatus

Stablity strategyGrowth strategy

Weaknesses

Opportunities Environment status ThreatsEntrenchment strategy

Growth strategyConcentration Strategy:

Only 1 business unitMethods:

Related/ Concentric Diversification: New business units, related to the current one.Methods:

Unrelated/Conglomerate Diversification: New business units, not related to the current one.Methods:

Concentration Strategy: Only 1 business unitMethods:

Related/ Concentric Diversification: New business units, related to the current one.Methods:

Unrelated/Conglomerate Diversification: New business units, not related to the current one.Methods:

Corporate level strategy

Stability strategy Entrenchment strategy

Business-level strategy Cost - leadership strategy Differentiation strategy Focus strategy

Functional strategy Marketing strategies Financial strategies R&D strategies HR strategies .

Marketing strategies Financial strategies R&D strategies HR strategies .

HR STRATEGIES

BUSINESS STRATEGIES HR STRATEGIES1. Self-Growth strategies 2. Growth by M&A strategies

3. Stability strategies .3. Stability strategies .4. Entrenchment strategies5. Cost-leadership strategies

.

6. Differentiation strategies .

HR planning Definition: The process of forecasting labordemand and supply, determining the labor surplusor shortage, and setting up plans in order to dealwith labor surplus or shortage.

Objectives of HR Planning Recruit right persons, right position, and righttime.

Respond quickly to changes in businessenvironment.

Deal with labor surplus or shortage. Cooperate and link to other HR practices.

Recruit right persons, right position, and righttime.

Respond quickly to changes in businessenvironment.

Deal with labor surplus or shortage. Cooperate and link to other HR practices.

Figure 5.1: Overview of the HumanResource Planning Process

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Step 1: Environment scanning External environment Internal environment

Step 2. Forecasting Forecasting: attempts

to determine the supplyand demand for varioustypes of humanresources to predictareas within the

There are three majorsteps to forecasting:

1. Forecasting the demandfor labor

2. Determining laborsupply

resources to predictareas within theorganization wherethere will be laborshortages or surpluses.

2. Determining laborsupply

3. Determining laborsurplus or shortage

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Forecasting the Demand for Labor

Trend Analysis Constructing and

applying statisticalmodels that predictlabor demand for thenext year, given

Leading Indicators Objective measures that

accurately predictfuture labor demand.

applying statisticalmodels that predictlabor demand for thenext year, givenrelatively objectivestatistics from theprevious year.

future labor demand.

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Forecasting the Demand for Labor

1. Judgmentally-based method:

2.Mathematically based methods:

1. Judgmentally-based method:

2.Mathematically based methods:

Step 3. Determining Labor Supply Transitional matrix: a

chart that lists jobcategories held in oneperiod and shows theproportion of employeesin each of those job

It answers two questions:1. Where did people in

each job category go?2. Where did people now

in each job category

categories held in oneperiod and shows theproportion of employeesin each of those jobcategories in a futureperiod.

2. Where did people nowin each job categorycome from?

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Table 5.1: Transitional Matrix - Examplefor an Auto Parts Manufacturer

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Step 3. Determining Labor Supply

Skills inventory Management inventory

Determining Labor Surplus or Shortage

Based on the forecasts for labor demand andsupply, the planner can compare the figures todetermine whether there will be a shortage orsurplus of labor for each job category.

Based on the forecasts for labor demand andsupply, the planner can compare the figures todetermine whether there will be a shortage orsurplus of labor for each job category. Determining expected shortages and surplusesallows the organization to plan how to addressthese challenges.

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Goal Setting and Strategic Planning The purpose of setting specific numerical goalsis to focus attention on the problem andprovide a basis for measuring the organizationssuccess in addressing labor shortages andsurpluses.

The purpose of setting specific numerical goalsis to focus attention on the problem andprovide a basis for measuring the organizationssuccess in addressing labor shortages andsurpluses. The goals should come directly from theanalysis of supply and demand. For each goal, the organization must chooseone or more human resource strategies.

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Discussion1. Options for Reducing a Surplus2. Options for Avoiding a Shortage3. Which of them is the last option that firms may

take?

1. Options for Reducing a Surplus2. Options for Avoiding a Shortage3. Which of them is the last option that firms may

take?

Test Your Knowledge A public accounting firm of 250 employeesrealizes they have a surplus of 15 supportpersonnel (not auditors). What should theydo?

A public accounting firm of 250 employeesrealizes they have a surplus of 15 supportpersonnel (not auditors). What should theydo?

A. Hire temporary workersB. Offer early retirementC. Downsize people in those positionsD. Wait for attrition and implement a hiring freeze

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Implementing and Evaluating the HR Plan

When implementing the HR strategy, theorganization must hold some individual accountablefor achieving the goals.

That person must also have the authority andresources needed to accomplish those goals. That person must also have the authority andresources needed to accomplish those goals. Regular progress reports should be issued. The evaluation of results should not only look at theactual numbers, but should also identify which partsof the planning process contributed to success orfailure.

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