Human Resource Management

Week 2 – 2018 II
HUMAN RESOURCE STRATEGY
AND ANALYSIS
CONTENTS

Basic Management Planning Process

Human Resource Management Process

HRM TOOLS

High Performance Work Systems

LEARNING OBJECTIVES
1. Explain with examples each of the steps in the
strategic management process.
2. Define strategic human resource management and
give an example of strategic human resource
management in practice
3. Explain with examples why metrics are important for
managing human resources
4. Answer the question, “What are high-performance
work systems? And give examples of how they differ
from non-high-performance ones.
5. Answer the question, “Why is employee engagement
important?
6. Describe how you would execute a program to
improve employee engagement.
Why Strategic Planning Is Important To All Managers
q The organization strategic plan guides much of what is done by all employees to accomplish
objectives.
q Decisions made by managers depend on the objectives set at each organizational level in
support of higher level goals.
You may not realize it, but
your company’s strategic plan
is guiding much of what you
do.
THE STRATEGIC PLANNING PROCESS
https://www.youtube.com/watch?v=o0U0gwvnhek
Worst Company Disasters: https://www.youtube.com/watch?v=T0Z73Zbtlyg
 THE STRATEGIC MANAGEMENT PROCESS
• The logical place to start is by defining one’s current business. What products do we
Define the current business mission sell and where? How do our products or services differ from our competitors?

• The next step is to ask, “Are we heading in the right

Perform external and internal audits
direction?”

• The question now is, what should our new business be?
Formulate a new direction

Translate the mission into goals. • Next, translate the mission into strategic objective s

Formulate strategies to achieve the • Next, the manager chooses courses of action that will enable
strategic goal the company to achieve its strategic goals.

• Strategy execution means translating the strategies into action

Implement the strategy and trying them out.

• Things don’t always turn out as planned. At this point, the strategies are tested
Evaluate performance against reality. If changes are needed, the entire process may be repeated from an
earlier step
 TYPES OF STRATEGIES
Business unit Functional
Corporate-wide
(competitive) (departmental)
strategic planning
strategic planning strategic planning

Corporate-level Functional strategies

identify the basic course of
strategy identifies Competitive action that each
the portfolio of advantages
businesses that department will pursue in
enable a company order to help the business
comprise the
to differentiate its attain its competitive goals.
company and the
ways in which these product or service
businesses are from those of its
related to each competitors. Such
other. Managers differentiation Human capital is one of
endeavor to achieve allows a company the best competitive
competitive to increase its advantages because it is
advantages for each hard to duplicate a
market share. company’s personnel.
of their businesses.
CORPORATE STRATEGIES

• Concentration
• Diversification
• Vertical integration
• Consolidation
• Geographic
COMPETITIVE STRATEGY

• Cost leadership
• Differentiation
• Focus
 FUNCTIONAL STRATEGY

Each individual business is composed of departments, such as manufacturing, sales, and human
resource management. Functional strategies identify the basic course of action that each department
will pursue in order to help the business attain its competitive goals. The firm’s functional strategies
should make sense in terms of its business/competitive strategy.
 STRATEGIC HR 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.
• Involves formulating and executing HR
systems—HR policies and activities—that
produce the employee competencies and
behaviors that the company needs to
achieve its strategic aims.
THE HR STRATEGY MODEL
The Shanghai Portman’s Example

Strategic Goal: Improve the hotel’s level

of service.

Human resource strategy: Produce the

service-oriented employee behaviors
needed to improve the hotel’s level of
service.

HR policies: Installing the Ritz-Carlton Company’s

human resource system. Having top management
personally interview each candidate. Selecting
only employees who cared for and respected
others
STRATEGIC HR MANAGEMENT -
STARBUCKS
• Starbucks believes that employees,
who they call “partners” are a key to
the business success.
• Partners have to know about coffee,
product expertise and to have
excellent customer service.
• Starbucks treats it’s partners with
dignity and respect.
• Offers health benefits that exceeds by
any other retailers.
 STRATEGIC HR MANAGEMENT - TOYOTA
In 2010 there were several mechanical failures in Toyota
automobiles that led the auto maker famous for quality to recall
nearly nine million cars worldwide. This situation damaged the
automaker’s brand reputation and caused sales to decline to their
lowest point in more than a decade.

How HR Caused Toyota to Crash

In any situation where employees fail to perform as expected,
investigators must determine if the human error could have been
caused by factors beyond the employee’s control. Such external
factors might include actions by senior management, lack of
adequate information or job training, faulty inputs to the process,
or rewards that incent actions not in line with documented goals.

https://www.ere.net/a-think-piece-how-hr-caused-toyota-to-crash/
STRATEGIC HRM TOOLS
Managers use several tools to translate the company’s strategic goals into HRM
policies and practices.
STRATEGIC HRM TOOLS
STRATEGIC MAP

Helps each
department
understand
what it needs
to do
HR SCORECARD

The scorecard process helps the manager quantify the relationships between:
1. The HR Activities
2. The resulting employee behaviors
3. The resulting strategic outcomes and performance
DIGITAL DASHBOARD
 HR METRICS AND BENCHMARKING
Being able to measure what you are doing is an integral part of the HR strategy process.

Benchmarking means comparing the practices of high-performing companies to

your own, in order to understand what they do that makes them better.

HR manager HR manager picks

Requirements are measures by which to
Management formulates
put in terms of determine whether his
translates its supportive HR
measurable worker or her new policies and
strategic plan into strategies, policies,
competencies and practices are producing
workforce and practices such as the required employee
behaviors (such as
requirements. new training competencies and
outstanding service).
programs. behaviors.
 Why Metrics are Essential for Managing HR
Strategy and Strategy-Based Metrics

• Workforce/talent analytics
• Data mining
• HR audits
• Evidence-based HR

HR must also use strategy-based metrics to determine how HR is

helping the organization reach its goals.
WHAT IS ANALYTICS / DATA MINING
https://www.youtube.com/watch?v=7R2ebocENms

Recommended video: Recommended video:

Introduction to Business Analytics An Introduction to Workforce Analytics
https://www.youtube.com/watch?v=9IIgH0hNtgk https://www.youtube.com/watch?v=btxMlgIQWpo
DATA MINING
https://www.youtube.com/watch?v=R-sGvh6tI04

https://www.youtube.com/watch?v=gg-thwGAS1E
HIGH PERFORMANCE WORK SYSTEMS
High-Performance Work System (HPWS)
A set of human resource management policies and practices
that promote organizational effectiveness.

High-Performance Human Resource Policies and

Practices
ü Emphasize the use of relevant HR metrics.
ü Set out the things that HR systems must do to become an
HPWS.
ü Foster practices that encourage employee self-
management.
ü Practice benchmarking to set goals and measure the notable
performance differences required of an HPWS.
 HIGH PERFORMANCE COMPANIES
Selection: More employees
Recruitment: Higher number Training: More hours of
hired based on a selection
of qualified applicants training for employees
process

Compensation: More employees Have autonomous work teams Company shares information with
paid of variable pay employees
 HR strategy: 3 essential ingredients
It's tempting to say that HR strategy is simply recruiting and hiring strong performers to help
further the organization's goals. However, there is so much more that goes into
implementing an effective plan.

Performance is how the organization produces

Engagement is all about
employees' commitment to
the organization. Engagement
-focused organizations
understand the value of
loyalty. They appreciate
customer loyalty because it
contributes to the bottom-
line. It's the same with
employees. The way
companies get employee
loyalty is through employee
engagement.
Engagement
their product or service. HR professionals play
a huge role in the design of work. The way the
company plans to bring their product or
service to market also drives how work will be
designed. It even influences the candidates HR
Performance identifies as ideal for those jobs.
Learning focuses on the processes where employees
HR learn about the company, products/services and
Strategy customers. Granted, HR doesn't always directly conduct
these learning sessions but they do have influence over
developing managers and supervisors who will transfer
knowledge and skills to their teams.
Learning
EMPLOYEE ENGAGEMENT
https://www.youtube.com/watch?v=y4nwoZ02AJM

https://www.youtube.com/watch?v=dSfDROxCuxI
BARRIERS TO STRATEGIC HR