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The Manager’s Role in Strategic The Manager’s Role in Strategic Human Resource ManagementHuman Resource Management

Chapter 3Chapter 3

•• After reading this chapter, you After reading this chapter, you should be able to:should be able to:

Outline the steps in the strategic Outline the steps in the strategic management process.management process.

Explain and give examples of each type Explain and give examples of each type of companywide and competitive of companywide and competitive strategy.strategy.

Explain what a strategy-oriented human Explain what a strategy-oriented human resource management system is and resource management system is and why it is important.why it is important.

Illustrate and explain each of the eight Illustrate and explain each of the eight steps in the HR Scorecard approach to steps in the HR Scorecard approach to creating human resource management creating human resource management systems.systems.

•• The Strategic Management The Strategic Management ProcessProcess

•• Strategic ManagementStrategic Management

The process of identifying and The process of identifying and executing the organization’s mission executing the organization’s mission by matching its capabilities with the by matching its capabilities with the demands of its environment.demands of its environment.

•• StrategyStrategy A chosen course of action.A chosen course of action.

•• Strategic PlanStrategic Plan How an organization intends to How an organization intends to

balance its internal strengths and balance its internal strengths and weaknesses with its external weaknesses with its external opportunities and threats to maintain aopportunities and threats to maintain a competitive advantage over the long-competitive advantage over the long-term.term.

•• Business Vision and MissionBusiness Vision and Mission•• VisionVision

A general statement of an A general statement of an organization’s intended direction that organization’s intended direction that evokes emotional feelings in evokes emotional feelings in organization members.organization members.

•• MissionMission Spells out who the company is, what itSpells out who the company is, what it

does, and where it’s headed.does, and where it’s headed.

•• FIGURE 3–5FIGURE 3–5 The Strategic Management The Strategic Management ProcessProcess

••

••

•• Types of StrategiesTypes of Strategies

•• Types of Strategies (continued)Types of Strategies (continued)•• Achieving Strategic FitAchieving Strategic Fit

The “Fit” Point of View (Porter) The “Fit” Point of View (Porter) consists of the idea that each consists of the idea that each department’s strategy needs to fit thedepartment’s strategy needs to fit the parent business’s competitive aims.parent business’s competitive aims.•• Strategic Human Resource Strategic Human Resource

ManagementManagement•• Strategic Human Resource Strategic Human Resource

ManagementManagement The linking of HRM with strategic The linking of HRM with strategic

goals and objectives in order to goals and objectives in order to improve business performance and improve business performance and develop organizational cultures that develop organizational cultures that foster innovation and flexibility.foster innovation and flexibility. Involves formulating and executing HR Involves formulating and executing HR

systems—HR policies and activities—that systems—HR policies and activities—that produce the employee competencies and produce the employee competencies and behaviors that the company needs to behaviors that the company needs to achieve its strategic aims.achieve its strategic aims.

•• FIGURE 3–6FIGURE 3–6 Linking Company-Wide and HR Linking Company-Wide and HR StrategiesStrategies

•• Creating the Strategic HumanCreating the Strategic Human ResourceResource

Management SystemManagement System•• FIGURE 3–10FIGURE 3–10

Strategy Strategy Map for Southwest AirlinesMap for Southwest Airlines

•••• FIGURE 3–12FIGURE 3–12 Three Important Strategic HR Three Important Strategic HR

ToolsTools

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•• Measuring HR’s ContributionMeasuring HR’s Contribution•• The HR ScorecardThe HR Scorecard

Shows the quantitative standards, or Shows the quantitative standards, or “metrics” the firm uses to measure HR“metrics” the firm uses to measure HR activities.activities.

Measures the employee behaviors Measures the employee behaviors resulting from these activities.resulting from these activities.

Measures the strategically relevant Measures the strategically relevant organizational outcomes of those organizational outcomes of those employee behaviors.employee behaviors.

•• Creating an HR ScorecardCreating an HR Scorecard•• FIGURE 3–14FIGURE 3–14 Simple Value Chain for “The Hotel Paris”Simple Value Chain for “The Hotel Paris”•• Five Sample HR MetricsFive Sample HR Metrics

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•• K E Y T E R M SK E Y T E R M Sstrategic planstrategic planstrategic managementstrategic managementvisionvisionmissionmissionSWOT analysisSWOT analysisstrategystrategystrategic controlstrategic controlcompetitive advantagecompetitive advantagestrategic human resource managementstrategic human resource managementHR ScorecardHR Scorecardmetricsmetricsvalue chain analysisvalue chain analysis