Chapter 2 - Strategy and HR Planning (1).pdf

Strategy and HR Planning COM502 Topic Outline Strategic Planning and HR Planning Linking Strategic Planning and Human Resources - Mission, Vision, Core Values - External Analysis - Internal Analysis - Strategy Formulation - Strategy Execution - Eva...

Strategy and HR Planning COM502 Topic Outline Strategic Planning and HR Planning Linking Strategic Planning and Human Resources - Mission, Vision, Core Values - External Analysis - Internal Analysis - Strategy Formulation - Strategy Execution - Evaluation Strategic Planning and Human Resources Planning Strategic planning – Procedures for making decisions about the organization’s long -term goals and strategies Human resources planning (HRP) – The process of anticipat ing and providing for the movement of people into, within, and out of an organization Strategic human resources management – The pattern of human resources deployment s and activities that enable an organizat ion to achieve its strategic goals  Linking Strategic Planning and Human Resources Mission – The basic purpose of the organization as well as its scope of operations Step One: Strategic vision – A statement Mission, about where the company is going and what it can become in the future Vision, and Values Core values – The strong and enduring beliefs and principles that guide a firm’s decisions and are the foundation of its corporate culture Developing a Mission Statement W h a t i s m y o r g a n i z a t i o n’s r e a s o n f o r b e i n g ? What need does the organization need to fulfill t h a t i s n’ t a l r e a d y b e i n g m e t b y a n o t h e r f i r m o r could be better met? Fo r w h o m w i l l t h e f i r m f u l f i l l t h e n e e d ? W h o a r e its customers? W h e r e i s t h e f i r m’s m a r k e t a n d c u s t o m e r s ? W i l l t h e f i r m o p e ra t e l o c a l l y, g e o g ra p h i c a l l y, o r globally? W h a t c o r e va l u e s d o t h e p e o p l e i n t h e f i r m s h a r e a s p a r t o f t h e o r g a n i z a t i o n’s m i s s i o n ? H o w d o t h e s e va l u e s d i f f e r e n t i a t e t h e organization from other companies? HR’s Role in Establishing and Reinforcing a Firm’s Mission, Vision, and Values HR managers embody the f irm’s mission, vision, and values by: Communicating them informally and formally, via verbal and written communications Recruiting and hiring employees whose values are consistent with the organization Translating the mission, vision, and values into job descriptions and behaviors Step Two: External Analysis S WOT a n a l y s i s – A c o m p a r is o n o f s t r e n g t h s , w e a k n e s s es , o p p o r tu nitie s , a n d th r e a ts f o r s tra te g y f o r m u latio n Su m m a r izes th e m a j o r f a cts a n d f o r e ca s ts f r o m e xte r n a l a n d i n te rn al a n a l y s es E nv i r o n men ta l s ca n n i n g – Sy s te m a tic m o n i torin g o f th e m a j o r e xter nal f or ces i n f lu en cing th e o r g a n iz ation In cl u d es f o r ce s i n th e b u s i n es s a n d co m p e titive e nv i r onments Bu s i n e s s e nv i ro n men t – Fa cto r s i n th e e xte r n a l e nv i r on men t th a t a f i r m ca n n o t d i r e ctly co n tr o l b u t a f f e ct s trateg y a n d p e r f o rm an ce The Five Forces Framework Step Three: Internal Analysis In addition to an external analysis, organizations must also analyze their own strengths and weaknesses.  Core Capabilities Core capabilities – Integrated knowledge that distinguishes a f irm from competitors and delivers value Value creation –The benef its added to a product or ser vice when making it, af ter subtracting costs: A combination of three resources: Processes: Routines for how work is done and how to accomplish results System s: information system s, databases , proprietar y technologies People: the knowledge, skills, and abilities of employees who execute the plan to create the most custom er value and whose skills are dif f icult to replicate Sustaining a Competitive Advantage Through People Organizations can achieve a sustained competitive advantage through resources—particularly people. Resources must be: Valuable Rare Difficult to imitate Organized Mapping Human Capital Strategic Knowledge Workers: unique skills directly linked to the company ’s strategy and are dif f icult to replace Core Employees: valuable to a company but not par ticularly unique or dif f icult to replace Suppor ting Workers: skills less central to creating customer value and generally available in the labor market Complementar y (External) Par tners: unique and specialized skills that are not directly related to a company ’s core strategy Corporate Culture Cultural audits – Audits of the culture and quality of work life in an organizat ion To examine : Values Attitudes Beliefs Expectations Conducti ng a Cultural Audit Sur vey employee s about issues: How is business conducted? How do people communicate with one another? How are conf lict s and crises resolved? Model of HR Forecasting  Forecasting Forecasti ng a Firm’s Demand for Employees 1. Quantitati ve Approaches Trend analysis: forecast s labor demand based on a factor like sales Sophist icated planning methods: modeling or multiple predict ive techniques. 2. Qualitati ve Approaches Management forecasts: The opinions of super visors, managers, and exper ts about future employment needs Delphi techniq ue: soliciting and summarizing the judgments of a preselected group Forecasting Fo r eca s ti n g t h e S u p p l y o f E m p l oyees S t a f f i n g Ta bl e s a n d Ma r kov An a l y s es S t a f f i n g t a b l e : s h o w s a f i r m’s j o b s , n u m b e rs o f e m p l oyee s , a n d f u tu r e n e e d s Ma r kov a n a l y s i s : tra ck s th e p a tte r n o f e m p l oyee m ove m en ts th r o u g h a f i r m Quality of fill: measures how well new hires p e r f o rm S k i l l Inve n tori es a n d Ma n a g e m en t Inve n tori es S k i l l i nve n t ori es: p e r s o n n el e d uc a tion , e xp e r i en ce, i n te re s ts , a n d s k i l ls f i l es to m a tch j o b o p e n i ng s w i th e m p l oyee b ack gr ou n ds. M a n a g e me nt i nve ntor ies – D a ta g a th e r ed o n m a n a g e rs Forecasting Fo r e c a s ti n g t h e S u p p l y o f E m p l oye e s ( c o n t ’d ) Re p l a c e me n t C h a r t s a n d S u c c e s s i o n P l a n n i n g Re p l a c e me n t c h a r t s – cu r r e n t j o b h o ld er s a n d p e o p le w h o a r e p o t e n t ia l r e p l a c em en ts i f a n o p e n in g o c c u rs S u c c e s s i o n p l a n n i n g – Th e p r o ce s s o f i d e n tifyin g , d e ve lo pin g, a n d t ra c k in g key in divid ua ls f o r e xe c u t i ve p o s i t ion s S u c c e s s i o n p lan nin g a n d r e p l a c e men t c h a r t s d e ve lo pe d w ith t a l e n t r e v i e ws – Ta l e n t r e v i e ws: S tra te g i c me e ti n g s to s e e i f a f i r m has the necessary human resources An Executive Replacement Chart Step Four: Formulating a Strategy Strategy formulation builds on a SWOT analysis. A SWOT analysis can help a company move from formulating a strategy, to devising a plan, to capitalizing on oppor tunit ies , to counteracting on threats, to alleviating internal weaknesses. Corporate Strategy A firm’s corporate strategy includes the markets in which it will compete, against whom, and how. Growth and diversification Mergers and acquisitions Strategic alliances Joint ventures Business Strategy Business strategy is focused on how the company will compete against rival firms to create value for customers. Companies can increase customer value by: o Decreasing the costs of their goods and services (low -cost strategy) o Increasing the benefits their products provide (differentiation strategy). Step Five: Executing a Firm’s Strategy Execution is the process of combining the elements of human capital (alignment and ability) and organizational capital (agility and architecture). T h e 4 A s F ra m e w o r k o f E x e cu t i o n C a p a b i l i t y  HR’s Role in Strategy Execution Remaining Agile HR agility can be achieved in two ways: Coordination agility: The ability to reallocate resources to new needs Resource agility –Using resources in different ways-- people performing different functions Reconciling Supply and Demand: demand for products with supply of employees Demand: based on forecasted trends in business activity Supply: determined by finding candidates with the qualifications to fill vacancies  Step Six: Evaluation To evaluate per formance, f irms need “desired” objectives and metrics to monitor how well they delivered on those objectives. The objectives can include achieving a cer tain level of: product ion revenue, prof it market share market penetration custom er satisfact ion Evaluating a Firm’s Strategic Alignment H R p ol i cies a nd p ra cti ces n e e d tw o ty p e s o f f i t: Ve r t i ca l f i t / a l i g n m en t : Fo cu s o n th e co n n e ctio n b e tw e e n th e b u s i n es s ’s o b j e ctives a nd the m a j or i ni tiatives u n d e r take n b y H R H o r i zo n t a l f i t / a l i g n m en t: H R p ra cti ces a l i gn ed w i th o n e a n o th e r i n a co n f i gu ratio n th a t i s m u tu a lly r e i n f or cing Ba l a n ce d s co r e ca rd ( BS C ) – A m e a s u r e men t f ra m e w o rk th a t h e l p s m a n a g e rs tra n s l a te s tra te gic g o a l s i n to o p e ra tion al o b j e ctive s