Human Resource Management PDF

HUMAN RESOURCE MANAGEMENT 1 Chapter 3 Human Resource Management Strategy and Analysis GARY DESSLER PowerPoint Presentation by Charlie Cook The University of West Alabama Learning outcomes 1. 2. 3. 4. 5. 6. 7. Explain what human resource management is and how it relates to the management proces...

HUMAN RESOURCE MANAGEMENT 1 Chapter 3 Human Resource Management Strategy and Analysis GARY DESSLER PowerPoint Presentation by Charlie Cook The University of West Alabama Learning outcomes 1. 2. 3. 4. 5. 6. 7. Explain what human resource management is and how it relates to the management process. Show with examples why human resource management is important to all managers. Illustrate the human resources responsibilities of line and staff (HR) managers. Briefly discuss and illustrate each of the important trends influencing human resource management. List and briefly describe important trends in human resource management. Define and give an example of evidence-based human resource management. Outline the plan of this book. 2 What are Strategic Plan & Strategic Management? Before understanding Strategic HRM, we need to understand what Strategic Management is Strategic Plan Strategic Management 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 The process of identifying and executing the organization’s strategic plan by matching company’s capabilities with the demands of its environment 3 The Strategic Management Process 4 Types of Strategic Planning 5 Strategic Planning 1. Corporate Level Strategy 2. Business-level/compe titive strategy 3. Functional strategies Types of Strategic Planning 6 1. Corporate-level strategy ► Identifies the portfolio of businesses that, in total, comprise the company and the ways in which these businesses relate to each other. Corporate Level Strategy Diversification Vertical Integration Consolidation Geographic Expansion Types of Strategic Planning 7 1. Corporate Level Strategy (Cont’d) 1A. Diversification strategy implies that the firm will expand by adding new product lines. 1B. Vertical integration strategy means the firm expands by, perhaps, producing its own raw materials, or selling its products direct ( a vertical integration consists of companies that acquire a company that operates either before or after the acquiring company in the production process). 1C. Consolidation strategy reduces the company’s size 1D. Geographic expansion strategy takes the company abroad. Types of Strategic Planning (cont’d) 2. Business-level/competitive ► strategy Identifies how to build and strengthen the business’s long-term competitive position in the marketplace. Business Level Strategy Cost leadership Differentiation Focus 8 Types of Strategic Planning (cont’d) 2. Business-level/competitive strategy (Cont’d) 2A. Cost leadership: the enterprise aims to become the low-cost leader in an industry. 2B. Differentiation: a firm seeks to be unique in its industry along dimensions that are widely valued by buyers. 2C. 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. 9 Types of Strategic Planning (cont’d) 3. Functional strategies ► Identify the basic courses of action that each department will pursue in order to help the business attain its competitive goals. 10 What is Strategic Human Resource Management? Strategic Goals of Org HRM STRATEGIC HRM ► 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 systems—HR policies and activities—that produce the employee competencies and behaviors the company needs to achieve its strategic aims. 11 Linking Corporate and HR Strategies Source: © 2003, Gary Dessler, Ph.D. 12 Figure 3–6 HR’S Strategic Roles ► HR professionals should be part of the firm’s strategic planning executive team. ► Identify the human issues that are vital to business strategy. ► Help establish and execute strategy. ► Provide alternative insights. ► Are centrally involved in creating responsive and market-driven organizations. ► Conceptualize and execute organizational change. 13 HR’s Strategy Execution Role ► The HR department’s strategies, policies, and activities must make sense in terms of the company’s corporate and competitive strategies, and they must support those strategies. 14 HR’s Strategy Formulation Role ► HR helps top management formulate strategy in a variety of ways by. ► Supplying competitive intelligence that may be useful in the strategic planning process. ► Supplying information regarding the company’s internal human strengths and weaknesses. ► Build a persuasive case that shows how—in specific and measurable terms—the firm’s HR activities can and do contribute to creating value for the company. 15 Creating a Strategy-oriented HR System ► Components of the HR process ► HR professionals who have strategic and other skills ► HR policies and activities that comprise the HR system itself ► Employee behaviors and competencies that the company’s strategy requires. 16 The Basic Architecture of HR Source: Adapted from Brian Becker et al., The HR Scorecard: Linking People, Strategy, and Performance (Boston: Harvard Business School Press, 2001), p. 12. 17 Figure 3–8 The High-Performance Work System ► High-performance work system (HPWS) practices. ► High-involvement employee practices (such as job enrichment and team-based organizations), ► High commitment work practices (such as improved employee development, communications, and disciplinary practices) ► Flexible work assignments. ► Other practices include those that foster skilled workforces and expanded opportunities to use those skills. 18 Translating Strategy into HR Policy and Practice 19 Basic Model of How to Align HR Strategy and Actions with Business Strategy Source: Adapted from Garrett Walker and J. Randal MacDonald, “Designing and Implementing an HR Scorecard,” Human Resources Management 40, no. 4 (2001), p. 370. Figure 3–9 The HR Scorecard Approach ► HR scorecard ► ► Measures the HR function’s effectiveness and efficiency in producing employee behaviors needed to achieve the company’s strategic goals. Creating an HR scorecard ► Must know what the company’s strategy is. ► Must understand the causal links between HR activities, employee behaviors, organizational outcomes, and the organization’s performance. ► Must have metrics to measure all the activities and results involved. 20 Strategic HR Relationships HR Activities Emergent Employee Behaviors Strategically Relevant Organizational Outcomes Organizational Performance 21 Achieve Strategic Goals Figure 3–10 The HR Scorecard Approach to Formulating HR Policies, Activities, and Strategies Source: Copyright © Gary Dessler, Ph.D. 22 Figure 3–11 HR Audit ► HR audit is an analysis by which an organization measures where it currently stands and determines what it has to accomplish to improve its HR function. ► It is a process of examining policies, procedures, documentation, systems, and practices with respect to an organization s HR functions. 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. 23