Human Resource Management Strategy And Analysis PDF

Chapter Two HUMAN RESOURCE MANAGEMENT STRATEGY AND ANALYSIS DR Mohanad Mohammed Sufiyan Email [email protected]  The Planning Process ❑ The Planning Process is the same which involves: ♦ setting objectives....

Chapter Two HUMAN RESOURCE MANAGEMENT STRATEGY AND ANALYSIS DR Mohanad Mohammed Sufiyan Email [email protected]  The Planning Process ❑ The Planning Process is the same which involves: ♦ setting objectives. ---- ♦ making basic planning forecasts ♦ reviewing alternative courses of action ♦ evaluating which options are best ♦ and then choosing and implementing your plan. ❑ Planning is always goal-directed ❑ A plan shows the course of action for getting from where you are to where you want to go in other words, to the goal. ❑ The planning process thus traditionally starts with formulating top-level, long-term strategic plans and goals. ❑ THE HIERARCHY OF GOALS: Setting goals start from the top of the firm down to front-line employees as a chain or hierarchy of goals.  The Strategic Management Process Competitive advantage: Any factors that allow an organization to differentiate its product or service from those of its competitors to increase market share. Strategic plan: the company’s plan for how it will match its internal strengths and weaknesses with external opportunities and threats in order to maintain a competitive advantage. Strategy: A course of action the company can pursue to achieve its strategic aims. Strategic management: The process of identifying and executing the organization’s strategic plan, by matching the company’s capabilities with the demands of its environment. The Strategic Management Process  The Strategic Management Process ❑STEP 1: DEFINE THE CURRENT BUSINESS ♦ what products do we sell, where do we sell them, and how do our products or services differ from our competitors. Rolex and Casio both sell watches However, Rolex sells a limited line of expensive watches, Casio sells, a variety of relatively inexpensive but innovative watches. ❑STEP 2: PERFORM EXTERNAL AND INTERNAL AUDITS “Are we heading in the right direction?” ♦ audit both the firms environment, and the firms strengths and weaknesses ♦ Economic Trends(recession, inflation), Competition, Political Trends, Technological Trends…. ♦ Prepare The SWOT Analysis. SWOT Analysis ❑ STEP 3: FORMULATE A NEW DIRECTION ♦ What should our new business be, in terms of what products we will sell, where we will sell them, and how our products or services will differ from competitors products? ♦ Formulate a vision statement ♦ Mission statement Summarizes the answer to the question What business are we in? such as making Quality Job One (Ford). ♦ The basic purpose of the organization as well as its scope of operations. ♦ Vision statement A general statement of the firms intended direction that shows in broad terms, what we want to become. ❑ STEP 4: TRANSLATE THE MISSION INTO STRATEGIC GOALS ♦ Example no more than 1 initial defect per 10,000 cars (Ford). ❑ STEP 5: FORMULATE STRATEGIES TO ACHIEVE THE STRATEGIC GOALS ♦ chooses strategies courses of action that will enable the company to achieve its strategic goals. ♦ open two new high-tech plants, reduce the number of car lines to better focus on just a few, and put in place new more rigorous employee selection, training, and performance appraisal procedures. ❑STEP 6: IMPLEMENT THE STRATEGIES ♦ Translating the strategies into action. ♦ by actually hiring (or firing) people, building (or closing) plants, and adding (or eliminating) products and product lines. ❑STEP 7: EVALUATE PERFORMANCE  Types of Strategies  There is corporate-wide  Functional 01 strategies 03 or (departmental) strategies 02  Business unit or (competitive) strategies  Corporate strategy ❑ How many and what kind of businesses should we be in? - The answer is Corporate strategy ❑ company's corporate-level strategy identifies the portfolio of businesses that, in total, comprise the company and how these businesses relate to each other ❑ a concentration strategy the company offers one product or product line, usu ally in one market ❑ diversification corporate strategy expand by adding new product lines. ❑ vertical integration strategy expands by producing its own raw materials, or ❑ selling its products direct ❑ consolidation strategy, the company reduces its size. ❑ Geographic expansion, the company grows by entering new territorial marke ts Business Strategy(competitive strategy) Focused on how the company will compete against rival firms How to build and strengthen the business’s long-term competitive position in the market place. A low-cost strategy : means keeping your costs low enough so that you can offer an attractive price to customers relative to your competitors. ♦ Cost leadership means becoming the low-cost leader in an industry A Differentiation Strategy: be unique in its industry along dimensions that are widely valued by buyers Apple’s emphasis on innovation and quality. Focus: a firm seeks to carve out a market niche, and compete by providing a product or service customers can get in no other way.  FUNCTIONAL STRATEGY Identify the basic courses of action that each department will pursue in order to help the business attain its competitive goals. STRATEGIC FIT: the “fit” point of view means that all of the firm’s activities must be tailored to or fit its strategy, by ensuring that the firm’s functional strategies support its corporate and competitive strategies.  Management Roles in Strategic Planning Devising a strategic plan is top management’s responsibility The departmental managers’ strategic planning roles involve: ♦ Helping devise the strategic plan ♦ Formulating supporting, functional/departmental strategies ♦ Executing the plans  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. ♦ Formulating and executing HR policies and activities that produce the employee competencies and behaviors the company needs to achieve its strategic aims. Linking Corporate and HR Strategies  Example The strategic goal of improve significantly the level of service This imply certain workforce requirements(the employee skills and behaviors required to achieve the (firms strategic aims) Such as produce the service-oriented employee behaviors Then human resource management formulates HR strategies (policies and practices) to produce the desired workforce skills, competencies and behaviors. having top management personally interview each candidate and selecting only employees who cared for and respected others, training current employees to improve their service behavior…. Strategic Human Resource Management Tools ❑The strategy map provides an overview of how each department’s performance contributes to achieving the company's overall strategic goals. ❑THE HR SCORECARD: assigning financial and nonfinancial goals or metrics to the human resource management related chain of activities required for achieving the company s strategic aims. ♦ quantifying the strategy map ❑A digital dashboard presents the manager with desktop graphs and charts showing a computerized picture of how the company is doing on all the metrics from the HR Scorecard process.  HR METRICS AND BENCHMARKING A good HR manager should be able to prepare and use metrics or measures to are critical to create high performance human resource policies and practices ♦ the measures might include, for instance, hours of training per employee, productivity per employee, employee turnover, and (via customer surveys) customer satisfaction. The measures (or metrics ) may be broad organizational measures (such as return on investment, and profit margins). Benchmarking means using metrics to comparing the practices of high-performing companies to your own, in order to understand what they do that makes them better.  Strategy and Strategy-Based Metrics ❑ Strategy-based metrics are metrics that focus on measuring the activities that contribute to achieving a company s strategic aims. ❑ if our strategy calls for doubling profits by improving customer service to what extent are our new selection and training practices helping to improve customer service?  Example ❑Paris International Hotel decide to make their hotel one of the top 10 hotels in France which will translate into revenues and profits 50% higher than now ❑Achieving those strategic aims requires improving customer service (which measured by guest returns, and guest compliments of employees). ❑What can the hotel s human resource managers do to help achieve this improved customer service? ♦increase training per year per employee from 10 hours to 25, boost incentive pay (tied to guest service ratings) from zero now to 10% of total salaries, 100% testing prior to hiring… ❑HR metrics would include 100% employee testing, 80% guest returns, incentive pay as a percent of total salaries, and sales up 50%.  HR Audit ❑ An analysis by which an organization measures where it currently stands and determines what it has to accomplish to improve its HR function. ❑ The HR audit generally involves ❑ (1) reviewing the functioning of most aspects of the company s human resource function (recruiting, testing, training, and so on), usually using a checklist. ❑ (2) ensuring that the employer is adhering to government regulations and company policies.  HIGH-PERFORMANCE WORK SYSTEMS ❑ A set of human resource management policies and practices that together produce superior employee performance. ❑ A set of human resource management policies and practices that promote organizational effectiveness. Thank you