Chapter_ 03 Strategic Human Resource Management
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Transcript of Chapter_ 03 Strategic Human Resource Management
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Human Resource
Management TWELFTH EDITION
G A R Y D E S S L E R
B I J U V A R K K E Y
Copyright 2011 Dorling Kindersley (India) Pvt. Ltd
Authorized adaptation from the United States edition of Human
Resource Management, 12/e
The Managers Role in Strategic Human Resource Management
Chapter 3
Part 1 | Introduction
Copyright 2011 Dorling Kindersley (India) Pvt. Ltd
Authorized adaptation from the United States edition of Human
Resource Management, 12/e 32
After reading this chapter, you should be able to:
1. Outline the steps in the strategic management
process.
2. Explain and give examples of each type of
companywide and competitive strategy.
3. Explain what a strategy-oriented human resource
management system is and why it is important.
4. Illustrate and explain each of the eight steps in the HR
Scorecard approach to creating human resource
management systems.
Copyright 2011 Dorling Kindersley (India) Pvt. Ltd
Authorized adaptation from the United States edition of Human
Resource Management, 12/e 33
The Strategic Management Process
Strategic Management
The process of identifying and executing the
organizations 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 external
opportunities and threats to maintain a competitive
advantage over the long-term.
Copyright 2011 Dorling Kindersley (India) Pvt. Ltd
Authorized adaptation from the United States edition of Human
Resource Management, 12/e 34
Business Vision and Mission
Vision
A general statement of an organizations intended direction that evokes emotional feelings in
organization members.
Mission
Spells out who the company is, what it does, and
where its headed.
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Copyright 2011 Dorling Kindersley (India) Pvt. Ltd
Authorized adaptation from the United States edition of Human
Resource Management, 12/e 35
FIGURE 35 The Strategic Management Process
Copyright 2011 Dorling Kindersley (India) Pvt. Ltd
Authorized adaptation from the United States edition of Human
Resource Management, 12/e 36
FIGURE 37 A SWOT Chart
Strengths
Example: Market leadership
Weaknesses
Example: Large inventories
Opportunities
Example: New overseas markets
Threats
Example: Market saturation
Copyright 2011 Dorling Kindersley (India) Pvt. Ltd
Authorized adaptation from the United States edition of Human
Resource Management, 12/e 37
FIGURE 38 Relationships Among Strategies in Multiple-Business Firms
Copyright 2011 Dorling Kindersley (India) Pvt. Ltd
Authorized adaptation from the United States edition of Human
Resource Management, 12/e 38
Types of Strategies
Diversification
Strategy
Geographic
Expansion
Strategy
Vertical
Integration
Strategy
Corporate-Level
Strategies
Consolidation
Strategy
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Copyright 2011 Dorling Kindersley (India) Pvt. Ltd
Authorized adaptation from the United States edition of Human
Resource Management, 12/e 39
Types of Strategies (continued)
Cost Leadership Focus/Niche
Business-Level/
Competitive
Strategies
Differentiation
Copyright 2011 Dorling Kindersley (India) Pvt. Ltd
Authorized adaptation from the United States edition of Human
Resource Management, 12/e 310
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.
Copyright 2011 Dorling Kindersley (India) Pvt. Ltd
Authorized adaptation from the United States edition of Human
Resource Management, 12/e 311
Strategic Human Resource Management
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 systemsHR policies and activitiesthat produce the employee competencies and behaviors that the company needs
to achieve its strategic aims.
Copyright 2011 Dorling Kindersley (India) Pvt. Ltd
Authorized adaptation from the United States edition of Human
Resource Management, 12/e 312
FIGURE 36 Linking Company-Wide and HR Strategies
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Copyright 2011 Dorling Kindersley (India) Pvt. Ltd
Authorized adaptation from the United States edition of Human
Resource Management, 12/e 313
Creating the Strategic Human Resource
Management System
Human Resource
Professionals
Employee
Behaviors and
Competencies
Components of a
Strategic HRM System
Human Resource
Policies and
Practices
Copyright 2011 Dorling Kindersley (India) Pvt. Ltd
Authorized adaptation from the United States edition of Human
Resource Management, 12/e 314
FIGURE 310 Strategy
Map for
Southwest
Airlines
Source: Adapted from Creating a Strategy Map, Ravi Tangri, [email protected].
Copyright 2011 Dorling Kindersley (India) Pvt. Ltd
Authorized adaptation from the United States edition of Human
Resource Management, 12/e 315
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.
Copyright 2011 Dorling Kindersley (India) Pvt. Ltd
Authorized adaptation from the United States edition of Human
Resource Management, 12/e 316
Measuring HRs Contribution
The HR Scorecard
Shows the quantitative standards,
or metrics the firm uses to measure HR activities.
Measures the employee behaviors
resulting from these activities.
Measures the strategically relevant
organizational outcomes of those
employee behaviors.
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Copyright 2011 Dorling Kindersley (India) Pvt. Ltd
Authorized adaptation from the United States edition of Human
Resource Management, 12/e 317
Creating an HR Scorecard
1
2
3
4
5
Outline value chain activities
Define the business strategy
Outline a strategy map
Identify strategically required
outcomes
Identify required workforce
competencies and behaviors
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7
8
Choose HR Scorecard
measures
Identify required HR policies
and activities
Summarize Scorecard
measures on digital dashboard
and monitor, predict, and
evaluate
The 10-Step HR Scorecard Process
Copyright 2011 Dorling Kindersley (India) Pvt. Ltd
Authorized adaptation from the United States edition of Human
Resource Management, 12/e 318
FIGURE 314 Simple Value Chain for The Hotel Paris
Copyright 2011 Dorling Kindersley (India) Pvt. Ltd
Authorized adaptation from the United States edition of Human
Resource Management, 12/e 319
Five Sample HR Metrics HR 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 of
applicants and staff + relocation costs + recruiter pay and benefits
Number of hires
HR expense
factor
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 month Sources: 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 Management 39, no. 1 (Spring 2000), pp. 93105; [HR Planning, Commerce Clearing House Incorporated, July 17, 1996;] SHRM/BNA 2000 Cost Per Hire and Staffing Metrics
Survey; www.shrm.org. See also, SHRM Research 2006 Strategic HR Management Survey Report, Society for Human Resource Management..
Copyright 2011 Dorling Kindersley (India) Pvt. Ltd
Authorized adaptation from the United States edition of Human
Resource Management, 12/e 320
K E Y T E R M S
strategic plan
strategic management
vision
mission
SWOT analysis
strategy
strategic control
competitive advantage
strategic human resource management
HR Scorecard
metrics
value chain analysis