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STRATEGY & HUMAN RESOURCESPLANNING
By
Group: 2 (FA3)
Chandni Mahajan
Deepraksha
Muntazir Ali Submitted to:
Sanchith Bhadauria Prof. Mita Singh
Sri Harsha Koneru
G.Saravana Mani
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STRATEGIC PLANNING & HR
STRATEGIC PLANNING:
Procedures for making decisions aboutthe organization’s long-term goals and
strategies
HUMAN RESOURCE PLANNING:
The process of anticipating andproviding for the movement of people into,within and out of an organization
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STRATEGIC PLANNING AND HR PLANNING
Strategic Human Resources Management(SHRM)
The pattern of human resources deployments and
activities that enable an organization to achieve itsstrategic goals
Strategy formulation—providing input as to what is possiblegiven the types and numbers of people available.
Strategy implementation—making primary resourceallocation decisions about structure, processes, and humanresources.
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HRP AND STRATEGIC PLANNING
Strategic Analysis
What human resources are needed and what areavailable?
Strategic Formulation
What is required and necessary in support of humanresources?
Strategic Implementation
How will the human resources be allocated?
Human Resources
Planning
Strategic
Planning
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LINKING STRATEGIC PLANNING AND HUMAN
RESOURCES
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STEP ONE: MISSION, VISION, AND VALUES
Mission The basic purpose of the organization as well as its
scope of operations
Strategic Vision A statement about where the company is going and
what it can become in the future; clarifies the long-term direction of the company and its strategic intent
Core Values The strong and enduring beliefs and principles that
the company uses as a foundation for its decisions
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STEP TWO: ENVIRONMENTAL SCANNING
Environmental Scanning
The systematic monitoring of the major externalforces influencing the organization.
1. Economic factors: general and regional conditions
2. Competitive trends: new processes, services, andinnovations
3. Technological changes: robotics and office automation
4. Political and legislative issues: laws and administrativerulings
5. Social concerns: child care and educational priorities
6. Demographic trends: age, composition, and literacy
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FIVE FORCES FRAMEWORK
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STEP THREE: INTERNAL ANALYSIS
Composition
Culture Competencies
InternalAnalysis
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SCANNING THE INTERNAL ENVIRONMENT
Cultural Audits
Audits of the culture and quality of work life in anorganization.
How do employees spend their time?
How do they interact with each other?
Are employees empowered?
What is the predominant leadership style ofmanagers?
How do employees advance within the organization?
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COMPETITIVE ADVANTAGE THROUGH PEOPLE
Core Competencies Integrated knowledge sets within an organization
that distinguish it from its competitors and delivervalue to customers.
Sustained competitive advantage throughpeople is achieved if these human resources:1. Are valuable.
2. Are rare and unavailable to competitors.3. Are difficult to imitate.
4. Are organized for synergy.
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COMPOSITION: THE HUMAN CAPITAL
ARCHITECTURE
Core knowledge workers
Employees who have firm-specific skills that aredirectly linked to the company’s strategy.
Example: Senior software programmer
Traditional job-based employees
Employees with skills to perform a predefined jobthat are quite valuable to a company, but not unique.
Example: Security guard
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COMPOSITION: THE HUMAN CAPITAL
ARCHITECTURE (CONT’D)
Contract labor
Employees whose skills are of less strategic valueand generally available to all firms.
Example: General electrician
Alliance/partners
Individuals and groups with unique skills, but those
skills are not directly related to a company’s corestrategy.
Example: Independent product label designer
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MAPPING HUMAN CAPITAL
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FORECASTING: A CRITICAL ELEMENT OF PLANNING
Forecasting involves:
a. forecasting the demand for labor
b. forecasting the supply of labor
c. balancing supply and demand considerations.
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MODEL OF HR FORECASTING
FORECASTING DEMAND
Considerations
• Product/service demand
• Technology
• Financial resources
• Absenteeism/turnover• Organizational growth
• Management philosophy
Techniques
• Trend analysis
• Managerial estimates
• Delphi technique
Techniques
• Staffing tables
• Markov analysis
• Skills inventories
• Management inventories
• Replacement charts
• Succession planning
External Considerations
• Demographic changes
• Education of the workforce
• Labor mobility
• Government policies
• Unemployment rate
FORECASTING SUPPLY
BALANCINGSUPPLY AND DEMAND
(Shortage)
Recruitment• Full-time
• Part-time
• Recalls
(Surplus)
Reductions• Layoffs
• Terminations
• Demotions
• Retirements
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FORECASTING DEMAND FOR EMPLOYEES
Quantitative Methods
Qualitative Methods
Forecasting Demand
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QUANTITATIVE APPROACH: TREND ANALYSIS
Forecasting labor demand based on anorganizational index such as sales:
1. Select a business factor that best predicts humanresources needs.
2. Plot the business factor in relation to the number ofemployees to determine the labor productivity ratio.
3. Compute the productivity ratio for the past five years.
4. Calculate human resources demand by multiplyingthe business factor by the productivity ratio.
5. Project human resources demand out to the targetyear(s).
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EXAMPLE OF TREND ANALYSIS OF HR DEMAND
2000 $2,351 14.33 164
2001 $2,613 11.12 2352002 $2,935 8.34 352
2003 $3,306 10.02 330
2004 $3,613 11.12 325
2005 $3,748 11.12 337
2006 $3,880 12.52 310
2007* $4,095 12.52 327
2008* $4,283 12.52 342
2009* $4,446 12.52 355
BUSINESS LABOR = HUMAN RESOURCES
FACTOR PRODUCTIVITY DEMANDYEAR (SALES IN THOUSANDS) (SALES/EMPLOYEE) (NUMBER OF EMPLOYEES)
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QUALITATIVE APPROACHES
Management Forecasts
The opinions (judgments) of supervisors, departmentmanagers, experts, or others knowledgeable about
the organization’s future employment needs. Delphi Technique
An attempt to decrease the subjectivity of forecastsby soliciting and summarizing the judgments of a
preselected group of individuals.
The final forecast represents a composite group judgment.
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FORECASTING THE SUPPLY OF EMPLOYEES: INTERNAL LABOR
SUPPLY
Staffing Tables
Markov Analysis
Skill InventoriesReplacement Charts
Succession Planning
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FORECASTING INTERNAL LABOR SUPPLY
Staffing Tables
Graphic representations of all organizational jobs, along with the numbers of employees
currently occupying those jobs and future(monthly or yearly) employment requirements.
Markov Analysis
A method for tracking the pattern of employeemovements through various jobs.
HYPOTHETICAL MARKOV ANALYSIS FOR A
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HYPOTHETICAL MARKOV ANALYSIS FOR A
RETAIL COMPANY
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INTERNAL DEMAND FORECASTING TOOLS
Skill Inventories Files of personnel education, experience, interests,
skills, etc., that allow managers to quickly match jobopenings with employee backgrounds.
Replacement Charts Listings of current jobholders and persons who are
potential replacements if an opening occurs.
Succession Planning The process of identifying, developing, and tracking
key individuals for executive positions.
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AN EXECUTIVE REPLACEMENT CHART
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STEP FOUR: FORMULATING STRATEGY
Strategy FormulationMoving from simple analysis to devising a
coherent course of action.
SWOT analysisA comparison of strengths , weaknesses ,opportunities , and threats for strategyformulation purposes.
Use the strengths of the organization tocapitalize on opportunities, counteract threats,and alleviate internal weaknesses.
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CORPORATE STRATEGY
Strategic Alliancesand Joint Ventures
Growth andDiversification
Mergers andAcquisitions
CorporateStrategy
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BUSINESS STRATEGY
Value Creation What the firm adds to a product or service by virtue
of making it; the amount of benefits provided by theproduct or service once the costs of making it are
subtracted. Low-cost strategy: competing on productivity and
efficiencyKeeping costs low to offer an attractive price to customers
(relative to competitors).
Differentiation strategy: compete on added value Involves providing something unique and distinctive to
customers that they value.
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FUNCTIONAL STRATEGY: ENSURING ALIGNMENT
External Fit (or External Alignment)
Focuses on the connection between thebusiness objectives and the major initiatives in
HR. Internal Fit (or Internal Alignment)
Aligning HR practices with one another to
establish a configuration that is mutuallyreinforcing.
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THE 7-S MODEL
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STEP FIVE: STRATEGY IMPLEMENTATION
Taking Action: Reconciling Supply andDemand
Balancing demand and supply considerations
Forecasting business activities (trends)
Locating applicants
Organizational downsizing
Reducing “headcount” Making layoff decisions
Seniority or performance?
Labor agreements
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STEP SIX: EVALUATION AND ASSESSMENT
Evaluation and Assessment Issues
Benchmarking: The process of comparing theorganization’s processes and practices with
those of other companiesHuman capital metrics
Assess aspects of the workforce
HR metricsAssess the performance of the HR function itself
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MEASURING STRATEGIC ALIGNMENT
Strategy Mapping and the BalancedScorecard
Balanced Scorecard (BSC)
A measurement framework that helps managerstranslate strategic goals into operational objectives
financial
customer
processes
learning
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BALANCED SCORECARD
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ASSESSING INTERNAL FIT
ENSURING STRATEGIC FLEXIBILITY FOR THE
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ENSURING STRATEGIC FLEXIBILITY FOR THE
FUTURE
Organizational Capability
Capacity of the organization to act and change inpursuit of sustainable competitive advantage.
Coordination flexibility
The ability to rapidly reallocate resources to new orchanging needs.
Resource flexibilityHaving human resources who can do many different
things in different ways.
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