Strategic HR Management Guide

Strategic HR
Management
Rights Reserved 2013. Chicago Training Institute Centre UAE. Global Professional in Human Reso

Organizations Environments
External Business Environment
Internal Business Environment

Organization Functions
 Production and Operations
 Sales & Marketing
 Research and Development
 Finance and Accounting
 Information Technology
 People / Employees
 Leadership
 Professional Development
 Employee Recognition

Organization Life Cycles
Startup
Growth
Maturity
Decline

 What is strategic planning? Relevance to daily work
scenarios.
 Planning and elements of the planning process.
 Evaluation and Implementation.

Strategic Planning Process
 Where are we now?
 Where do we want to be?
 How will we get there?
 How will we know when we arrived?

 Pre-Planning Stage.
 Environmental Scanning.
 Strategy Formulation.
 Strategy Implementation.
 Budgeting.
 Strategy Evaluation.

Planning to Plan
Process.
Participants.
Time frame.

Environmental Scanning
 Internal and External environments to be
considered.
 Scan the environment and set long term or short
term goals.

Strategy Formulation
 Vision Statement.
 Mission Statement.
 Core competencies.
 Corporate values statement.
 Corporate goals using the S.M.A.R.T. model. (Specific
Measurable Action-oriented Realistic Time-based)

Strategy Implementation
 Short term goals are achieved.
 Tactical goals are developed.
 Action plans.
 Close watch for any changes in the action plan is
needed.
 Alignment to successfully achieved short term goals.

Budgeting
Budgeting development styles:
Historical information
based budgeting.
Zero-based budgeting.

Budgeting
Budgeting approach:
Top-down budgeting.
Bottom-up budgeting.
Parallel budgeting.

Strategy Evaluation
Evaluate if the business model is
effective.
If the strategy is helping the
organization towards the long term
goals.
Monitor progress via a balanced score
card.

Human Capital Management
Plans [HCMP]
 Where are we now?
 Where do we want to be?
 How will we get there?
 How will we know when we arrived?
Evaluate the above from a human capital
requirement perspective.
Align HR goals with the organizational
strategic planning.

Strategic Management
Four basic management functions:
Planning.
Organizing.
Directing.
Controlling.

Organizational Structures
Functional Structure.
Product-based Structure.
Geographic Structure.
Divisional Structure.
Matrix Structure.

Strategic Relationships
Internal Relationships.
External Relationships.
Outsourcing HR functions

Change management
 Reengineering.
 Corporate restructuring.
 Workforce expansion.
 Workforce reduction.
 Mergers and acquisitions.
 Divestitures.
 Off shoring and outsourcing decisions and
management.

•The Phenomenon of Globalization
•The Strategic Process
•The Global Organization
•The Influence of Culture and Law
•Ensuring HR’s Strategic Role

Globalization is the growing interconnectedness and
interdependency of countries people and companies.
It may start with trade in goods and services but it
eventually becomes trade knowledge, beliefs and
values.

Stages of Globalization
 Domestic
 International (may or may not have investment outside their home country)
 Multinational (localization)
 Global (standardization)
 Transnational (think global act local)

Staffing
 Ethnocentric (HCN – all or key positions)
 Polycentric (HCN – key positions)
 Regiocentric (APAC, MENA)
 Geocentric (any location, EEO)

Global Integration
Local Responsiveness

Key themes
 Alignment and fit
 Culture and law
 Standardization vs Localization
 Tactical Implementation of Strategy
 Measurement of results

Value Chain Model
from Michael E. Porter’s Competitive Advantage
Firm Infrastructure (General Management)
Human Resource Management
Technology Development
Procurement
Inbound
Logistics
Ops. Outbound
Logistics
Sales &
Marketing
Service and
Support
PRIMARY ACTIVITIES
SUPPORT
ACTIVITIES
R&D

Value Chain
• Value chain
– coordinated series or sequence of functional
activities necessary to transform inputs into
finished goods or services customers value
and want to buy

Functional Activities vs Value Chain

Environmental Scan: SWOT
Analysis
Analysing a company’s:
• STRENGTHS
• WEAKNESSES
• OPPORTUNITIES
• THREATS
What are our core competencies?

SWOT Analysis is…
… A strategic planning tool
that separates influences
on a business’s future
success into internal and
external factors

SWOT Analysis allows businesses
to…
- Define realistic goals
- Improve capability
- Overcome weaknesses
with strengths
- Identify threats than
can be turned into
opportunities

A strength can be a competitive
advantage like…
- Superior
product quality
- Lowest price
- Best expertise
- Location

A weakness can be a
disadvantage such as…
- A tired brand
- Inferior location
- High overheads
- A lack of R&D

An opportunity can be…
- A regulatory or tax
change
- A high-profile event
(marketing
opportunity)
- An untapped market
- A gap left by a failed
competitor

A threat can be…
- Unfavourable regulation
changes
- A new entrant into the
market
- Problems with the
economy
- Market shrinkage

What Is a Balanced Scorecard?
A Measurement
System?
A Management
System?
A Management
Philosophy?

Translating Vision and Strategy:
Four Perspectives
Vision and
Strategy
Objectives Measures Targets Initiatives
FINANCIAL
“To succeed
financially,
how should
we appear to
our
shareholders?”
LEARNING AND GROWTH
“To achieve
our vision,
how will we
sustain our
ability to
change and
improve?”
CUSTOMER
“To achieve
our vision,
how should
we appear to
our
customers?”
INTERNAL BUSINESS PROCESS
“To satisfy our
shareholders
and
customers,
what business
processes
must we excel
at?”
Leading
Leading
Leading
Laggin

Why the Balanced Scorecard
 Balance between financial and non financial
indicators
 Balance between internal and external constituents in
organization
 Balance between lagging and leading indicators of
performance

Beginnin
g
Balance
Sheet
Draw up
on 1 Jan
Ending
Balance
Sheet
Draw up
on 31 Dec
Start of
Financial
Year
Close of
Financial
Year
Profit & Loss Statement (Gross Profit)
Lagging Indicators
Internal Business Process
Learning and Growth
Leading Indicators
Customer
Cash Flow Statement
Profit & Loss Statement (Net Profit)

Org Structures - Formalization
Vice President
Director
Manager
Officer
Global Manager
Team Leader
Director
Manager
Team Leader
Formal
Informal
Before After
Job Desrciption Template + Roles and Responibility
Matrix* led to a better job analysis drive and aligned Job
Evaluation Scores
Roles and Responsibility Matrix (Before)
Director
Global
Manager Manager Officer Team Leader
Task 1 X X X
Task 2 X X
Task 3 X X
Task 4 X X X
Task 5 X X
Roles and Responsibility Matrix (After)
Director
Global
Manager Manager Officer Team Leader
Task 1 X (60%) X(30%) X(10%)
Task 2 X(30%) X (70%)
Task 3 X(20%) X(80%)
Task 4 X(50%) X(30%) X(20%)
Task 5 X(20%) X(80%)

Org Structures
 Global Org - Ethnocentric (HCN – all or key positions)
Headquarters
Research and
Development
Production Marketing
Information
Tech
HR
Headquarters
Product A Product B Product C
R&D
Manufacturing
Marketing
HR
R&D
Manufacturing
Marketing
HR
R&D
Manufacturing
Marketing
HR
• Global Org - Geocentric (any location, EEO)

Org Structures (Cont)
 Polycentric (HCN – key positions)
 Regiocentric (APAC, MENA)
Headquarters
Europe Asia-Pacific Americas
R&D
Manufacturing
Marketing
HR
R&D
Manufacturing
Marketing
HR
R&D
Manufacturing
Marketing
HR

Hybrid Front-Back
Headquarters
Europe Asia-Pacific Americas
Product A Product B Product C
R&D
Manufacturing
Marketing
HR
R&D
Manufacturing
Marketing
HR
R&D
Manufacturing
Marketing
HR

Matrix
Headquarters
Research and
Development
Production Marketing
Information
Tech
HR
Product A
Product B
Product C

Legislative and Regulatory
Processes
 There are 12 steps in the federal legislative process.
 Any new regulation has to be pass through all the
stages and is then finally declared as a law.

Federal Legislative Process
1. The new idea must be presented to a MOC who
agree to sponsor the bill and presets it to the full
body of the House or the Senate. Here, it gets
assigned to a committee for study.
2. The committee decides if the bill has a likelihood to
be passed a vote. If deemed no, the bill ‘dies’ in
the committee.

3. Bills deemed likely to pass a vote are then studied
by a sub committee who calls upon government
representatives, SME’s and other citizens to
support or oppose the bill.
4. Once the bill has been studied, the subcommittee
may make changes in a process known as marking
up the bill. The subcommittee then votes on
whether to return the bill to the full committee with
a recommendation for further action. A bill that is
not reported back to the committee dies in the
subcommittee.

5. Bills that are returned to the full committee may be
subjected to further study, or the committee may
vote to accept the subcommittee recommendations
and “order the bill reported” to the full body.

6. When the committee votes to report a bill to the
full body, a written report of the findings and
recommendations of the committee is prepared,
including dissenting views of members who voted
against the bill.

7. Bills that are reported out of committee are placed
on the “legislative calendar” and scheduled for a
vote by the full body.
8. Members of the full body are able to present their
views about passage of the bill prior to a vote.
During the debate period, members may offer
amendments that will take effect if the bill is
passed.

9. When debate is completed, a vote is
conducted.
10.If the full body passes the bill, it must go to
the other body and usually begin the
process again; in some cases, the other
body may vote to pass the bill as it was
presented. During the review process, the
second body may vote it down, table it, or
change the bill. Bills that are rejected or
tabled at this stage are considered dead and
will not become laws.

11.If the bill passes the second body, any
major differences between the two bills
are reconciled in a conference committee.
If the conference committee cannot
agree on the form of the bill, it will die
and not become a law. If the committee
recommends a conference report
incorporating the changes, both houses
of Congress must vote to approve the
conference report before the bill is
forwarded to the president for signature.

12.When the president receives the bill,
he has three choices: he may sign it
into law, veto it, or fail to sign it. If
the bill is vetoed, Congress may
override the veto by a two-thirds vote
of a quorum in each house, in which
case the bill will become a law in spite
of the veto.

Important HR terms
 Corporate Governance.
 Organizational Values and Ethics.
 Whistle-Blower Protection.
 Ethics Officers.

Nature of Human Resource
Management
 Human Resource (HR) Management
 The design of formal systems in an organization to
ensure effective and efficient use of human talent to
accomplish organizational goals.
 Who Is an HR Manager?
 In the course carrying out their duties, every operating
manager is, in essence, an HR manager.
 HR specialists design processes and systems that
operating managers help implement.

HR Management
Activities
Source: HR Department Benchmarks
and Analysis Survey 2004
(Washington, DC: Bureau of
National Affairs, 2004), 21. To
purchase this publication and find
out more about other BNA HR
solutions visit
http://hrcenter.bna.com or call 800-
Figure 1–1

HR Activities
 Strategic HR Management
 Equal Employment Opportunity
 Staffing
 HR Development
 Compensation and Benefits
 Health, Safety, and Security
 Employee and Labor Relations

Smaller Organizations and HR
Management
Compliance with
Government
Regulations
Shortage of
Qualified
Workers
Increasing Costs
of Benefits
Rising Taxes
Issues of
Greatest
Concern

Cooperation of HR with Operating Managers
 HR Unit
 Develops legal, effective
interviewing techniques
 Trains managers in
conducting selection
interviews
 Conducts interviews and
testing
 Sends top three applicants to
managers for final review
 Checks references
 Does final interviewing and
hiring for certain job
classifications
 Managers
 Advise HR of job openings
 Decide whether to do own
final interviewing
 Receive interview training
from HR unit
 Do final interviewing and
hiring where appropriate
 Review reference information
 Provide feedback to HR unit
on hiring/rejection decisions

Who Handles Training and Development
Figure 1–2
Note: Length of bars represents prevalence of activity among all surveyed employers.
Source: HR
Department
Benchmarks and
Analysis Survey
2004 (Washington,
DC: Bureau of
National Affairs,
2004), 21. To
purchase this
publication and
find out more about
other BNA HR
solutions visit
http://hrcenter.bna.
com or call 800-372-
1033. Used with
permission.

Typical Division of HR Responsibilities: Training
Figure 1–3

Management of Human Capital
In Organizations
 Human Capital
 The collective value of the capabilities, knowledge,
skills, life experiences, and motivation of an
organizational workforce.
 Also known as intellectual capital.
 How to measure the strategic value of human assets?
 Core Competency
 A unique capability that creates high value and
differentiates an organization from its competition.
 HR competencies: a source of competitive advantage.

HR Management Challenges
 Globalization of Business
 Outsourcing and increased competition
 The threat of terrorism
 Economic and Technological Changes
 Occupational shifts from manufacturing and agriculture
to service industries and telecommunications.
 Pressures of global competition causing firms to adapt
by lowering costs and increasing productivity.
 Technological Shifts and the Internet
 Growth of information technology.

Fastest Growing Jobs to 2010
Figure 1–4
Source: U.S. Bureau of Labor Statistics, www.bls.gov.

 Workforce Availability and Quality Concerns
 Inadequate supply of workers with needed skills for
“knowledge jobs”
 Education of workers in basic skills
 Growth in Contingent Workforce
 Increases in temporary workers, independent
contractors, leased employees, and part-timers caused
by:
 Need for flexibility in staffing levels
 Increased difficulty in firing regular employees.
 Reduced legal liability from contract employees

 Workforce Demographics and Diversity
 Increasing Racial/Ethnic Diversity
 More Women in the Workforce
 Single-parent households
 Dual-career couples
 Domestic partners
 Working mothers and family/childcare
 Significantly Aging Workforce
 Age discrimination

 Organizational Cost Pressures and Restructuring
 Mergers and Acquisitions
 “Right-sizing”—eliminating of layers of management,
closing facilities, merging with other organizations, and
outplacing workers
 Intended results are flatter organizations, increases in
productivity, quality, service and lower costs.
 Costs are “survivor mentality”, loss of employee loyalty, and
turnover of valuable employees.
 HR managers must work toward ensuring cultural
compatibility in mergers.

HR Management Roles
 Administrative Role
 Clerical and administrative support operations (e.g.,
payroll and benefits work)
 Technology is transforming how HR services are delivered.
 Outsourcing HR services to reduce HR staffing costs
 Operational and Employee Advocate Role
 “Champion” for employee concerns
 Employee crisis management
 Responding to employee complaints

Changing Roles of HR Management
Figure 1–5
Note: Example percentages are based on various surveys.

Strategic Role for HR
 Strategic Role
 “Contributing at the Table” to organizational results
 HR becomes a strategic business partner by:
 Focusing on developing HR programs that enhance
organizational performance.
 Involving HR in strategic planning at the onset.
 Participating in decision making on mergers, acquisitions,
and downsizing.
 Redesigning organizations and work processes
 Accounting and documenting the financial results of HR
activities.

Operational to Strategic Transformation of HR
Figure 1–6

New Approaches to HR
Management
 Collaborative HR
 The process of HR professionals from several different
organizations working jointly to address shared business
problems.
 Firms benefit from the expertise of other firms, without
having the time and expense of developing some of their own
HR practices.

HR Technology
 Human Resource Management System (HRMS)
 An integrated system providing information used by HR
management in decision making.
 Purposes (Benefits) of HRMS
 Administrative and operational efficiency in compiling HR
data
 Availability of data for effective HR strategic planning
 Uses of HRMS
 Automation of payroll and benefit activities
 EEO/affirmative action tracking
 HR Workflow: increased access to HR information
 Employee self-service reduces HR costs.

Uses of an HRMS
 HRMS
 Bulletin boards
 What information will be available and what is information
needed?
 Data access
 To what uses will the information be put?
 Employee self-service
 Who will be allowed to access to what information?
 Web-based services and access
 Extended linkage
 When, where, and how often will the information be needed?

Ethics and HR Management
 Firms with High Ethical Standards
 Are more likely to reach strategic goals.
 Are viewed more positively by stakeholders
 Are better able to attract and retain human resources.
 Ethics and Global Differences
 Different legal, political, and cultural factors in other
countries can lead to ethical conflicts for global
managers.
 Foreign Corrupt Practices Act (FCPA)
 Prohibits U.S. firms from engaging in bribery and other
practices in other countries.

HR’s Role in Organizational Ethics
 HR management plays a key role as the “keeper and
voice” of organizational ethics.
 What is Ethical Behavior?
 What “ought” to be done.
 Dimensions of decisions about ethical issues in
management:
 Extended consequences
 Multiple alternatives
 Mixed outcomes
 Uncertain consequences
 Personal effects

Examples of Ethical Misconduct in HR Activities
Figure 1–7

HR’s Role in Organizational Ethics
(cont’d)
 Responses to Ethical Situations
 Are guided by values and personal behavior “codes” that
include:
 Does response meet all applicable laws, regulations, and
government codes?
 Does response comply with all organizational standards of
ethical behavior?
 Does response pass the test of professional standards for
ethical behavior?

Ethical Behavior and Organizational
Culture
 Organizational Culture
 The shared values and beliefs in an organization
 Common forms of unethical conduct:
 Lying to supervisors
 Employee drug use or alcohol abuse
 Falsification of records
 Fostering Ethical Behavior
 A written code of ethics and standards of conduct
 Training on ethical behavior for all employees
 A means for employees to obtain ethical advice
 Confidential reporting systems for ethical misconduct

HR Management Competencies
and Careers
 Important HR Competencies
 Strategic contribution to organizational success
 Business knowledge of organization and its strategies
 Effective and effective delivery of HR services
 Familiarity with HRMS technology
 Personal credibility

HR Management as a Career Field
 HR Generalist
 A person with responsibility for performing a variety of
HR activities.
 HR Specialist
 A person with in-depth knowledge and expertise in a
limited area of HR.

HR Specialists
Figure 1–8
Source: HR Department Benchmarks
and Analysis 2004 (Washington, DC:
Bureau of National Affairs, 2004), 119.
To purchase this publication and find
out more about other BNA HR
solutions visit http://hrcenter.bna.com

HR Certification
Figure 1–9
The Human Resource Certification Institute offers three types of
professional certifications for HR generalists.
Details on these certifications are available from the
Human Resources Certification Institute, www.hrci.org.

GPHR Certification
 Global Professional in Human Resources (GPHR)
certification subject areas:
 Strategic international HR management
 Organizational effectiveness and employee development
 Global staffing
 International assignment management
 Global compensation and benefits
 International employee relations and regulations

Other HR Certifications
 Certified Compensation Professional (CCP), sponsored by the World at Work
Association
 Certified Employee Benefits Specialist (CEBS), sponsored by the International
Foundation of Employee Benefits Plans
 Certified Benefits Professional (CBP), sponsored by the WorldatWork
Association
 Certified Performance Technologist (CPT), co- sponsored by the American
Society for Training & Development and the International Society for Performance
Improvement
 Certified Safety Professional (CSP), sponsored by the Board of Certified Safety
Professionals
 Occupational Health and Safety Technologist (OHST), given by the American
Board of Industrial Hygiene and the Board of Certified Safety Professionals
 Certified Professional Outsourcing, provided by New York University and the
Human Resource Outsourcing Association

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