PART ONE INTRODUCTION
C H A P T E R T T h r e e
Human Resource
Management Strategy and
Analysis
3
Strategic Overview
The Strategic Management Process
Goal-Setting and the Planning Process
Strategic Planning
Improving Productivity Through HRIS
Types of Strategies
The Top Manager’s Role in Strategic Planning
Departmental Managers’ Strategic Planning
Roles
Department Managers’ Strategic Planning
Roles in Action
Strategic Human Resource Management
Defining Strategic HR Management
Human Resource Strategies and Policies
Strategic Human Resource Management
Tools
HR Metrics and Benchmarking
Types of Metrics
Improving Productivity Through HRIS
Benchmarking in Action
Strategy and Strategy-Based Metrics
Workforce/Talent Analytics and Data Mining
What are HR Audits?
Evidence-Based HR and the Scientific Way of
Doing Things
What are High-Performance Work Systems?
High-Performance Human Resource Policies
and Practices
In Brief: This chapter explains how
to design and develop an HR system
that supports the company’s strategic
goals. It explains the strategic
management process, how to develop a
strategic plan, and the HR manager’s
role in the process of strategy
execution and formulation. The
chapter explains why metrics are
essential for identifying and creating
high-performance human resource
policies and practices.
Interesting Issues: The Human
Resource function today continues to
play an increasingly visible role in the
strategic planning and management
process, requiring a new level of skill
and competency among HR
professionals. HR managers must
develop measureable strategies that
convincingly showcase HR’s impact on
business performance. Successful
Human Resource managers have
adopted a perspective that focuses on
how their departments can play a
central role in implementing the
organization’s strategy.
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LEARNING OUTCOMES
1. Explain why strategic planning is important to all managers.
2. Explain with examples each of the seven steps in the strategic planning process.
3. List with examples the main generic types of corporate strategies and competitive
strategies.
4. Define strategic human resource management and give an example of strategic human
resource management in practice.
5. Briefly describe three important strategic human resource management tools.
6. Explain with examples why metrics are essential for managing human resources.
ANNOTATED OUTLINE
I. The Strategic Management Process
A. Goal-Setting and the Planning Process - Strategic planning is important
because in a well-run organization the goals from the top of the
organization downward should form an unbroken chain, or hierarchy, of
goals. These goals, in turn, should guide everyone in the organization in
what they do.
B. Strategic Planning - A strategic plan is 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. Figure 3-2
sums up the strategic management process in seven steps as follows:
1. Define the current business and mission.
2. Perform external and internal audits.
3. Formulate a new direction.
4. Translate the mission into goals.
5. Formulate strategies to achieve the strategic goal.
6. Implement the strategy.
7. Evaluate performance.
C. Improving Productivity through HRIS: Using Computerized Business
Planning Software − Business planning software packages are available
to assist the manager in writing strategic and business plans.
D. Types of Strategies – Managers develop three types of strategies.
1. Corporate-level strategy – Identifies the portfolio of businesses that
comprise the company and the ways in which these businesses are
related to each other. Concentration, diversification, vertical
integration, consolidation, and geographic expansion are all
examples of corporate-level strategies.
2. Competitive strategy – Managers endeavor to achieve competitive
advantages for each of their businesses. Competitive advantages
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enable a company to differentiate its product or service from those of
its competitors to increase market share. Examples of competitive
strategies include cost leadership, differentiation, and focus.
3. HR as a Competitive Advantage – Human capital is one of the best
competitive advantages because it is hard to duplicate a company’s
personnel.
4. Functional strategies – These strategies identify the basic course of
action that each department will pursue in order to help the business
attain its competitive goals.
5. Strategic Fit – Strategic planning experts have different views on
fitting capabilities to the opportunities and threats vs. stretching
beyond capabilities to take advantage of an opportunity. The “fit”
point of view, as purported by Michael Porter, states 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.
B. The Top Manager’s Role in Strategic Planning - Devising a strategic plan
is top management’s responsibility. Because the consequences of a
poor choice can be dire, few top managers delegate the job of deciding
how the company should match internal strengths and weaknesses with
external opportunities and threats to maintain a competitive advantage.
C. Departmental Manager’s Strategic Planning Roles - It would be reckless
for any top executive to formulate a strategic plan without the input of his
or her lower-level manager. Few people know as much about the firm’s
competitive pressures, vendor capabilities, and concerns than do the
company’s department managers.
D. Departmental Manager’s Strategic Planning Roles in Action: Improving
Mergers and Acquisitions – When mergers and acquisitions fail, it is
usually due to personnel issues. Functional managers help top
management to plan and execute the firm’s strategy. When mergers and
acquisitions do fail, it’s often not due to financial or technical issues but to
personnel-related ones. These may include, for example, employee
resistance, mass exits by high-quality employees, and declining morale
and productivity. As one study concluded some years ago, mergers and
acquisitions often fail due to a lack of adequate preparation of the
personnel involved and a failure to provide training which fosters self-
awareness, cultural sensitivity, and a spirit of cooperation.
1. Due Diligence Stage - Before finalizing a deal, it is usual for the
acquirer (or merger partners) to perform “due diligence” reviews to
assure they know what they’re getting into. For the human resource
teams, due diligence includes reviewing things like organizational
culture and structure, employee compensation and benefits, labor
relations, pending employee litigation, human resource policies and
procedures, and key employees. Employee benefits are one
obvious example. For example, do the target firm’s health insurance
contracts have termination clauses that could eliminate coverage for
all employees if you lay too many off after the merger?
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2. Integration Stage - There are critical human resource issues during
the first few months of a merger or acquisition. These include
choosing the top management team, ensuring top management
leadership, communicating changes effectively to employees,
retaining key talent, and aligning cultures.
II. Strategic Human Resource Management
A. Defining Strategic HRM – Every company needs its human resource
management policies and activities to make sense in terms of its broad
strategic aims. Strategic human resource management means
formulating and executing human resource policies and practices that
produce the employee competencies and behaviors the company needs
to achieve its strategic aims. Figure 3-7 demonstrates the relationship
between human resource strategy and the company’s strategic plans.
The following steps demonstrate linking company-wide and HR
strategies:
1. Evaluate Company’s Competitive Environment
2. Formulate Business Strategy
3. Identify Workforce Requirements
4. Formulate HR Strategic Policies and Activities
5. Develop Detailed HR Scorecard Measures
B. Human Resources Strategies and Policies - Managers call the specific
human resource management policies and practices they use to support
their strategic aims human resource strategies. The Shanghai Portman’s
human resource strategy was to produce the service-oriented employee
behaviors the hotel needed to improve significantly the hotel’s level of
service. Its HR policies therefore included installing the Ritz-Carlton
Company’s human resource system, having top management personally
interview each candidate, and selecting only employees who cared for
and respected others.
C. Strategic HRM Tools - Managers use several tools to help them translate
the company’s broad strategic goals into specific human resource
management policies and activities. Three important tools include the
strategy map, the HR Scorecard, and the digital dashboard.
1. Strategy Map - The strategy map shows the “big picture” of how
each department’s performance contributes to achieving the
company’s overall strategic goals. It helps the manager understand
the role his or her department plays in helping to execute the
company’s strategic plan.
2. HR Scorecard - Many employers quantify and computerize the map’s
activities. The HR Scorecard helps them to do so. The HR Scorecard
is not a scorecard. It refers to a process for assigning financial and
nonfinancial goals or metrics to the human resource management–
related chain of activities required for achieving the
company’s strategic aims and for monitoring results.
3. Digital Dashboards - A digital dashboard presents the manager with
desktop graphics and charts. It is a computerized picture of where
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the company stands on all those metrics from the
HR Scorecard process.
III. HR Metrics and Benchmarking
A. Types of Metrics – Figures 3-11 and 3-12 present examples of broad and more
focused measures organizations can use to measure HR effectiveness.
B. Improving Productivity through HRIS: Tracking Applicant Metrics for Improved
Talent Management – There are a number of metrics that can be used to collect
and assess the quality of different recruitment sources. Many companies choose
to use an applicant tracking system. There are two basic steps in this process: 1)
deciding how to measure performance of new hires and 2) tracking sources that
result in superior hires.
C. Benchmarking in Action - Benchmarking occurs when an organization compares
the practices of high performing organizations with their own in order to
understand what they can do to improve.
D. Strategy and Strategy-Based Metrics – Benchmarking is only part of the process.
HR must also use strategy-based metrics to determine how HR is helping the
organization reach its goals.
E. Workforce/Talent Analytics and Data Mining – Many companies are using
workforce analytics to analyze and track HR data to help improve performance
and increase job satisfaction. Another technique, data mining, involves statistical
analysis to find hidden or new relationships among different variables such as
tracking when and who is more likely to buy a certain product. This can help a
company better manage its marketing money by targeting certain groups of
people with advertising.
F. What are HR Audits? These audits are a way for an organization to measure its
current policies and practices and identify areas where improvements can be
made based on company goals.
G. Evidence-Based HR and the Scientific Way of Doing Things – Evidence-based
HR is the use of data, facts, etc. to support HR proposals, decisions, practices,
and conclusions. This requires managers to be more scientific in making
organizational decisions. This approach requires objectivity, experimentation,
quantification, explanation, prediction, and replication.
IV. What are High-Performance Work Systems?
A high-performance work system (HPWS) is a set of HR policies and practices that
together produce superior employee performance.
A. High-Performance Human Resource Policies and Practices – These policies and
practices illustrate the importance of HR metrics and how they help to assess HR
performance. They also reveal what HR systems must do to be successful, such as
help workers aspire to manage themselves. HR practices also highlight measureable
differences between HR systems in high and low performing companies.
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NOTES Educational Materials to Use
DISCUSSION QUESTIONS
1. Give an example of hierarchical planning in an organization. (LO 3.2; AACSB: Reflective
Thinking Skills; Learning Outcome: Describe the process and tools of strategic HRM)
Top management approves a long-tem or strategic plan. Then each department, working
with top management, creates its own budgets and other plans to fit and contribute to the
company’s long-term plan.
2. What is the difference between a strategy, a vision, and a mission? Give one example
of each. (LO 3.2; AACSB: Reflective Thinking Skills; Learning Outcome: Describe the
process and tools of strategic HRM)
A strategy identifies a course of action to get the company from where it is today to where it
wants to be tomorrow. One example of a company’s strategy given in the text is Dell
Computer’s strategy to be a “low cost leader” by using the Internet and phone to sell PCs
directly to end users at prices competitors cannot match.
A vision is a general statement of the company’s intended direction that evokes emotional
feelings in employees. It is a “mental image” of a possible and desirable future state for the
organization that articulates a view of a realistic, credible, and attractive future of the
organization that is better than what now exists. For example, the vision for the California
Energy Commission is “for Californians to have energy choices that are affordable, reliable,
diverse, safe, and environmentally acceptable.”
The mission is a more specific and shorter term statement which lays out what is supposed to
be now and communicates “who we are, what we do, and where we’re headed.” Following
the vision for the California Energy Commission, their mission is to “assess and act through
public/private partnerships to improve energy systems that promote a strong economy and a
healthy environment.”
3. Define and give at least two examples of the cost leadership competitive strategy and
the differentiation competitive strategy. (LO 3.3; AACSB: Communication Skills; Learning
Outcome: Describe the process and tools of strategic HRM)
The cost leadership competitive strategy means that the enterprise aims to become the low-
cost leader in an industry. For example, stores such as Staples and Office Max maintain their
competitive advantage by selling large quantities of office products at low prices. Airlines
such as Southwest offer low fares in addition to quick turnarounds at the gate.
In a differentiation competitive strategy, a firm seeks to be unique in its industry along
dimensions that are widely valued by buyers. For example, Ocean Spray Cranberries
charges a premium price for its juices, stressing premium high-quality ingredients. Visa
differentiates itself by being accepted as a form of payment universally where other credit
cards are not.
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4. Explain how human resources management can be instrumental in helping a company
create a competitive advantage. (LO 3.1; AACSB: Communication Skills; Learning
Outcome: Describe the process and tools of strategic HRM)
Human Resources is regarded in a growing number of organizations as a source of
competitive advantage, through recruiting, selecting, retaining, and developing human capital
that enables organizations to compete on a number of different levels to be flexible, capable,
and responsive, demonstrating creativity and innovation in order to produce products and
services of high quality.
5. What is a high-performance work system? Provide several specific examples of the
typical components in a high-performance work system. (LO 3.5; AACSB: Reflective
Thinking Skills; Learning Outcome: Describe the process and tools of strategic HRM)
High Performance Work Systems are characterized by high involvement organizational
practices, (such as job enrichment and team-based organizations), high-commitment work
practices (such as improved employee development, communications, and disciplinary
practices), and flexible work assignments. The evidence suggests that companies that
employ HPWS practices experience improved productivity, quality, sales, and financial
performance. What makes the HPWS unique is the quality, quantity, and specific features of
the HR policies and practices. Each element is designed to maximize the overall quality of
human capital throughout the organization. Several characteristics of high performance work
organizations include multi-skilled work teams; empowered frontline workers; more training;
labor management cooperation; commitment to quality; and customer satisfaction.
INDIVIDUAL AND GROUP ACTIVITIES
1. With three or four other students, form a strategic management group for your college
or university. Your assignment is to develop the outline of a strategic plan for the
college or university. This should include such things as mission and vision
statements, strategic goals, and corporate, competitive, and functional strategies. In
preparing your plan, make sure to show the main strengths, weaknesses,
opportunities, and threats the college faces, and which prompted you to develop your
particular strategic plans. Look for students to prepare a well-developed mission and
vision statement, making sure that they are clearly differentiated from each other with the
vision being future focused, articulating the desired state, with the mission supporting the
vision, describing “who we are, what we do, and where we are headed.” Use this exercise as
an opportunity to discuss the problems that may be created by not clearly defining the
mission, vision, as well as the strengths, weaknesses, opportunities, and threats. (LO 3.2;
AACSB: Analytic Skills; Learning Outcome: Describe the process and tools of strategic HRM)
2. Using the Internet or library resources, analyze the annual reports of at least five
companies. Bring to class examples of how those companies say they are using their
HR processes to help the company achieve its strategic goals. In class, facilitate a
discussion on how effective the HR processes at each company appear to support strategic
goals. Challenge students to come up with additional ideas for other approaches for using
the HR processes and how they would go about implementing them, noting the specific
difficulties of each. (LO 3.4; AACSB: Use of Information Technology; Learning Outcome:
Describe the process and tools of strategic HRM)
3. Interview an HR manager and write a short report on the topic: “The strategic roles of
the HR manager at XYZ Company.” Instruct students to follow the model outlined in this
chapter for the steps in the strategic management process, and HR’s role in strategy
execution and strategy formulation. (LO 3.4; AACSB: Analytic and Communication Skills;
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Learning Outcome: Describe the process and tools of strategic HRM)
4. Using the Internet or library resources, bring to class and discuss at least two
examples of how companies are using an HR Scorecard to help create HR systems
that support the company’s strategic aims. Do all managers seem to mean the same
thing when they refer to “HR Scorecards”? How do they differ? For each example, ask
students to comment on how effective they believe the measures that were selected by the
company are in terms of allowing the company to assess HR’s performance objectively and
quantitatively, as well as serving as a tool for the HR manager to build a measurable and
persuasive business case for how HR is contributing to achieving the company’s strategic
financial goals. Challenge students to critique the scorecard and how it could be improved to
measure strategically relevant organizational outcomes, workforce competencies and
behaviors, and HR system policies and activities (LO 3.5; AACSB: Use of Information
Technology; Learning Outcome: Describe the process and tools of strategic HRM.
5. In teams of 4–5 students, choose a company for which you will develop an outline of a
strategic HR plan. What seem to be this company’s main strategic aims? What is the
firm’s competitive strategy? What would the strategic map for this company look like?
How would you summarize your recommended strategic HR policies for this
company? Students answers will vary. (LO 3.2; AACSB: Analytic Skills)
6. The HRCI “Test Specifications” appendix at the end of this book lists the things
someone studying for the HRCI certification exam needs to know in each area of
human resource management (such as in Strategic Management, Workforce Planning,
and Human Resource Development). In groups of 4-5 students, do four things: (1)
review that appendix now; (2) identify the material in this chapter that relates to the
required knoweldge the appendix lists; (3) write four multiple-choice exam questions
on this material that you believe would be suitable for inclusion in the HRCI exam; and
4) if time permits, have someone from your team post your team’s questions in front of
the class, so the students on other teams can take each other’s exam questions.
Material in this chapter that could be covered in the HRCI certification exam include: Under
Strategic Management, the formulation of HR strategies to support the company’s overall
strategic plan; HR’s role in helping companies to build a competitive advantage, strategic HR
management, role in strategy executiion and formulation; high performance work system
concepts and supporting HR systems/practices; the HR Scorecard and all the steps involved
in developing it. (LO 3.1-4; AACSB: Analytic Skills; Learning Outcome: Describe the process
and tools of strategic HRM)
EXPERIENTIAL EXERCISES & CASES
Experiential Exercise: Developing an HR Strategy for Starbucks
Purpose: The purpose of this exercise is to give students experience in developing an HR
strategy, in this case, by developing one for Starbucks. Students should be familiar with
the material in this chapter.
Instructions: Set up groups of three or four students for this exercise. You are probably
already quite familiar with what it’s like to have a cup of coffee or tea in a Starbucks coffee
shop, but if not, spend some time in one prior to this exercise. Meet in groups and develop
an outline for an HR strategy for Starbucks Corp. Your outline should include four basic
elements: a basic business/competitive strategy for Starbucks, workforce requirements (in
terms of employee competencies and behaviors) this strategy requires, specific HR
policies and the activities necessary to produce these workforce requirements, and
suggestions for metrics to measure the success of the HR strategy. (LO 3.3; AACSB:
Analytic Skills; Learning Outcome: Describe the process and tools of strategic HRM)
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Ask each group to present their strategy to the rest of the class. At the end of each presentation,
ask the class to provide feedback on the strategy, commenting on how effectively the strategy
highlights the following: 1) their basic business/competitive strategy for Starbucks, 2) the
workforce requirements (in terms of employee competencies and behaviors) this strategy
requires, 3) the specific HR policies and activities necessary to produce these workforce
requirements, and 4) any suggestions for metrics to measure the success of the HR strategy.
Application Case: Siemens Builds a Strategy-Oriented HR System
1. Based on the information in this case, provide examples for Siemens of at least four
strategically required organizational outcomes and four required workforce
competencies and behaviors. (LO 3.2; AACSB: Reflective Thinking and Analytic Skills;
Learning Outcome: Describe the process and tools of strategic HRM)
Strategically required organizational outcomes would be the following: 1) An employee
selection and compensation system that attracts and retains the human talent necessary to
support global diversification into high-tech products and services; 2) A “learning company” in
which employees are able to learn on a continuing basis; 3) A culture of global teamwork
which will develop and use all the potential of the firm’s human resources; 4) A climate of
mutual respect in a global organization. Workforce competencies and behaviors could
include: 1) openness to learning; 2) teamwork skills; 3) cross-cultural experience; 4)
openness, respect, and appreciation for workforce diversity.
2. Identify at least four of the strategically relevant HR system policies and activites that
Siemens has instituted in order to help HR contribute to achieving Siemens’ strategic
goals. (LO 3.4; AACSB: Reflective Thinking and Analytic Skills; Learning Outcome: Describe
the process and tools of strategic HRM)
1) Training and development activities to support continuous learning through a system of
combined classroom and hands-on apprenticeship training to support technical learning; 2)
Continuing education and management development to develop skills necessary for global
teamwork and appreciation for cultural diversity; 3) Enhanced internal selection process
which includes pre-requisites of cross-border and cross-cultural experiences for career
advancement; 4) Organizational development activities aimed at building openness,
transparency, fairness, and diversity support.
3. Provide a brief illustrative strategy map for Siemens. (LO 3.5; AACSB: Reflective
Thinking and Analytic Skills; Learning Outcome: Describe the process and tools of strategic
HRM)
Student answers will vary but the strategy map should answer the following questions: 1)
What overall goals does Siemens want to achieve? 2) What must Siemens do operationally
to achieve its goals? and 3) What employee attitudes and behaviors will produce these
operational outcomes?
Continuing Case: The Carter Cleaning Company
1. Would you recommend that the Carters expand their quality program? If so,
specifically what form should it take? Most students will agree that there are opportunities
to expand the quality program. The employee meeting approach is a good start in terms of
utilizing high-involvement organizational practices. There are opportunities to maximize the
overall quality of their human capital. For example, training seems to be an obvious area to
improve in terms of educating and building awareness about basic standards and
procedures. (LO 3.4; AACSB: Reflective Thinking and Analytic Skills; Learning Outcome:
Describe the process and tools of strategic HRM)
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2. Assume the Carters want to institute a high performance work system as a test
program in one of their stores. Write a one-page outline summarizing important HR
practices you think they should focus on. Students should include some of the following
ideas in their outline: The types of HR practices they would implement to improve quality,
productivity, financial performance; methods for job enrichment; strategies for implementing
and leveraging a team-based organization; ways to implement and facilitate high commitment
work practices; employee development and skill building activities to foster increased
competency and capability in the workforce; a compensation program which provides
incentives (for example, profit sharing, pay for performance) for achieving major goals and
financial targets. (LO 3.4; AACSB: Reflective Thinking and Analytic Skills; Learning Outcome:
Describe the process and tools of strategic HRM)
TRANSLATING STRATEGY INTO HR POLICIES AND PRACTICES:
THE HOTEL PARIS CASE
Questions
1. Draw a simple strategy map for the Hotel Paris. Specifically, summarize in your own
words an example of the hierarchy of links among the hotel’s HR practices, necessary
workforce competencies and behaviors, and required organizational outcomes. (LO 3.2;
AACSB: Analytic Skills; Learning Outcome: Describe the process and tools of strategic HRM)
 What overall goals does the Hotel Paris want to achieve?
 What does the Hotel Paris do operationally to achieve its goals?
 What employee attitudes and behaviors will produce the desired operational outcomes?
The above strategy map for the Hotel Paris succinctly lays out the hierarchy of main activities
required for the Hotel Paris to succeed. For example, the Hotel Paris could endeavor to improve
workforce competencies and behaviors by instituting an improved recruitment process, and
measure the latter in terms of the number of qualified applicants per position.
2. Using Table 3-1, list at least five specific metrics the Hotel Paris could use to measure
its HR practices. (LO 3.6; AACSB: Reflective Thinking Skills; Learning Outcome: Describe the
process and tools of strategic HRM)
 Number of qualified applicants per position
 Percentage of jobs filled from within
 Number of hours of training for each employees
 Percentage of the workforce eligible for incentive pay
 Percentage of the workforce routinely working in a self-managed, cross functional, or
project team
KEY TERMS
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 Specific courses of action the company pursues to achieve its
aims.
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strategic management The process of identifying and executing the organization’s
mission, by matching the organization’s capabilities with the
demands of its environment.
vision statement A general statement of the firm’s intended direction that shows,
in broad terms, “what we want to become.”
mission statement A more specific and shorter term statement which communicates
for a company who they are, what they do, and where they are
headed.
corporate-level strategy Type of strategy that identifies the portfolio of businesses, that, in
total, comprise the company and the ways in which these
businesses relate to each other.
competitive strategy A strategy that identifies how to build and strengthen the
business’s long-term competitive position in the marketplace.
competitive advantage Any factors that allow an organization to differentiate its product
or service from those of its competitors to increase market share.
functional strategies Strategy that identifies the broad activities that each department
will pursue in order to help the business accomplish its
competitive goals.
strategic human Formulating and executing HR systems – policies and activities
resource management – that produce the employee competencies and behaviors the
company needs to achieve its strategic aims.
strategy map A diagram that summarizes the chain of major activities that
contribute to a company’s success.
HR scorecard A concise measurement system that shows the quantitative
standards or “metrics” the firm uses to measure HR activities, the
employee behaviors resulting from these activities, and the
strategically relevant organizational outcomes of those employee
behaviors.
digital dashboard Presents the manager with desktop graphs and charts, and
provides a computerized picture of where the company stands
on all those metrics from the HR Scorecard process.
strategy-based metrics Metrics that specifically focus on measuring the activities that
contribute to achieving a company’s strategic aims.
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.
high performance work A set of human resource management policies and practices that
system promote organizational effectiveness.
human resource metric The quantitative measure of some human resource management
yardstick such as employee turnover, hours of training per
employee, or qualified applicants per position.
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VIDEO CASE APPENDIX
Video 1: Showtime
Showtime Networks operates cable networks and pay-per-view cable
channels across the United States and in several countries abroad. As
this video illustrates, its HR function supports corporate strategy by
helping to determine what kind of employees are needed to keep the
company in peak performance, and then by providing the company and
its employees with the HR activities that these employees need to do
their jobs. For example, you’ll see that Showtime offers many
development and training programs, as well as personal development
types of activities including mentoring programs and career-oriented
development activities. The firm’s performance management process
(which the employees helped develop) focuses specifically on the work
activities and results that help achieve departmental and corporate goals.
In this video, Matthew, the firm’s CEO, emphasizes that it is essential to
use human resources as a strategic partner, and the video then goes on
to provide something of a summary of the basic human resource
management functions.
Video 2: IQ Solutions
IQ Solutions is in the business of providing health-care system services. It
says one of its aims is lessening the inequality that is said to exist in
America’s healthcare system. The company uses its very diverse
employee base to better serve and attract a broad client base.
Employees at IQ Solutions work together in teams to achieve the
company’s goals. As we see in this video, the company itself is indeed
very diverse: for example, employees speak about 18 languages. The
company capitalizes on this diversity in many ways. For example,
employees share their ethnically unique holidays, and the firm provides
special training and other benefits that support diversity.
For video answers to video discussion questions along with additional
activities, please visit the Instructor’s Resource Center at:
http://www.pearsonhighered.com/dessler
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‫الفرص‬ ‫مع‬ ‫لديها‬ ‫الداخلية‬ ‫والضعف‬ ‫القوة‬ ‫نقاط‬ ‫مطابقة‬ ‫لكيفية‬ ‫الشركة‬ ‫خطة‬ ‫اإلستراتيجية‬ ‫الخطة‬
.‫التنافسية‬ ‫الميزة‬ ‫على‬ ‫الحفاظ‬ ‫أجل‬ ‫من‬ ‫الخارجية‬ ‫والتهديدات‬
.‫أهدافها‬ ‫لتحقيق‬ ‫الشركة‬ ‫تتبعها‬ ‫التي‬ ‫المحددة‬ ‫العمل‬ ‫مسارات‬ ‫اإلستراتيجية‬
ِ
‫مع‬ ‫المنظمة‬ ‫قدرات‬ ‫مطابقة‬ ‫خالل‬ ‫من‬ ،‫وتنفيذها‬ ‫المنظمة‬ ‫رسالة‬ ‫تحديد‬ ‫عملية‬ ‫اإلستراتيجية‬ ‫اإلدارة‬
.‫بيئتها‬ ‫متطلبات‬
."‫نصبح‬ ‫أن‬ ‫نريد‬ ‫"ما‬ ،‫عامة‬ ‫بعبارات‬ ،‫يوضح‬ ‫والذي‬ ‫للشركة‬ ‫المقصود‬ ‫لالتجاه‬ ‫عام‬ ‫بيان‬ ‫الرؤية‬ ‫بيان‬
.‫يتجهون‬ ‫أين‬ ‫وإلى‬ ‫يفعلون‬ ‫وماذا‬ ‫هم‬ ‫من‬ ‫للشركة‬ ‫يوضح‬ ‫اًل‬‫ج‬‫أ‬ ‫وأقصر‬ ‫ًا‬
‫د‬‫تحدي‬ ‫أكثر‬ ‫بيان‬ :‫المهمة‬ ‫بيان‬
،‫المجمل‬ ‫في‬ ،‫والتي‬ ،‫األعمال‬ ‫محفظة‬ ‫تحدد‬ ‫التي‬ ‫اإلستراتيجية‬ ‫نوع‬ ‫الشركة‬ ‫مستوى‬ ‫على‬ ‫اإلستراتيجية‬
.‫البعض‬ ‫بعضها‬ ‫مع‬ ‫األعمال‬ ‫هذه‬ ‫بها‬ ‫ترتبط‬ ‫التي‬ ‫والطرق‬ ‫الشركة‬ ‫تشمل‬
‫المدى‬ ‫طويل‬ ‫التنافسي‬ ‫الوضع‬ ‫وتعزيز‬ ‫بناء‬ ‫كيفية‬ ‫تحدد‬ ‫التي‬ ‫اإلستراتيجية‬ ‫هي‬ ‫التنافسية‬ ‫اإلستراتيجية‬
.‫السوق‬ ‫في‬ ‫للشركة‬
‫منافسوها‬ ‫يقدمها‬ ‫التي‬ ‫تلك‬ ‫عن‬ ‫خدمتها‬ ‫أو‬ ‫منتجها‬ ‫بتمييز‬ ‫للمؤسسة‬ ‫تسمح‬ ‫عوامل‬ ‫أي‬ ‫التنافسية‬ ‫الميزة‬
.‫السوق‬ ‫في‬ ‫حصتها‬ ‫لزيادة‬
‫أجل‬ ‫من‬ ‫قسم‬ ‫كل‬ ‫سيتبعها‬ ‫التي‬ ‫الواسعة‬ ‫األنشطة‬ ‫تحدد‬ ‫التي‬ ‫اإلستراتيجية‬ ‫هي‬ ‫الوظيفية‬ ‫االستراتيجيات‬
.‫التنافسية‬ ‫أهدافها‬ ‫تحقيق‬ ‫على‬ ‫األعمال‬ ‫مساعدة‬
‫واألنشطة‬ ‫السياسات‬ - ‫البشرية‬ ‫الموارد‬ ‫أنظمة‬ ‫وتنفيذ‬ ‫صياغة‬ ‫االستراتيجي‬ ‫اإلنسان‬
Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
44
‫أهدافها‬ ‫لتحقيق‬ ‫الشركة‬ ‫تحتاجها‬ ‫التي‬ ‫وسلوكياتهم‬ ‫الموظفين‬ ‫كفاءات‬ ‫تنتج‬ ‫التي‬ – ‫الموارد‬ ‫إدارة‬
.‫اإلستراتيجية‬
.‫الشركة‬ ‫نجاح‬ ‫في‬ ‫تساهم‬ ‫التي‬ ‫الرئيسية‬ ‫األنشطة‬ ‫سلسلة‬ ‫يلخص‬ ‫تخطيطي‬ ‫رسم‬ ‫اإلستراتيجية‬ ‫الخريطة‬
‫تستخدمها‬ ‫التي‬ "‫"المقاييس‬ ‫أو‬ ‫الكمية‬ ‫المعايير‬ ‫يوضح‬ ‫موجز‬ ‫قياس‬ ‫نظام‬ ‫البشرية‬ ‫الموارد‬ ‫أداء‬ ‫بطاقة‬
‫والنتائج‬ ،‫األنشطة‬ ‫هذه‬ ‫عن‬ ‫الناتجة‬ ‫الموظفين‬ ‫وسلوكيات‬ ،‫البشرية‬ ‫الموارد‬ ‫أنشطة‬ ‫لقياس‬ ‫الشركة‬
.‫تلك‬ ‫الموظفين‬ ‫لسلوكيات‬ ‫ا‬ً
‫ي‬‫استراتيج‬ ‫الصلة‬ ‫ذات‬ ‫التنظيمية‬
‫محوسبة‬ ‫صورة‬ ‫وتوفر‬ ،‫المكتب‬ ‫سطح‬ ‫ومخططات‬ ‫بيانية‬ ‫ا‬ً
‫م‬‫رسو‬ ‫للمدير‬ ‫تقدم‬ ‫الرقمية‬ ‫المعلومات‬ ‫لوحة‬
.‫البشرية‬ ‫الموارد‬ ‫أداء‬ ‫بطاقة‬ ‫عملية‬ ‫من‬ ‫المقاييس‬ ‫تلك‬ ‫كل‬ ‫من‬ ‫الشركة‬ ‫موقف‬ ‫عن‬
‫تساهم‬ ‫التي‬ ‫األنشطة‬ ‫قياس‬ ‫على‬ ‫خاص‬ ‫بشكل‬ ‫تركز‬ ‫التي‬ ‫المقاييس‬ ‫اإلستراتيجية‬ ‫على‬ ‫القائمة‬ ‫المقاييس‬
.‫للشركة‬ ‫اإلستراتيجية‬ ‫األهداف‬ ‫تحقيق‬ ‫في‬
‫إنجازه‬ ‫عليها‬ ‫يتعين‬ ‫ما‬ ‫وتحدد‬ ‫الحالي‬ ‫وضعها‬ ‫المنظمة‬ ‫خالله‬ ‫من‬ ‫تقيس‬ ‫تحليل‬ ‫البشرية‬ ‫الموارد‬ ‫تدقيق‬
.‫لديها‬ ‫البشرية‬ ‫الموارد‬ ‫وظيفة‬ ‫لتحسين‬
‫التي‬ ‫البشرية‬ ‫الموارد‬ ‫إدارة‬ ‫وممارسات‬ ‫سياسات‬ ‫من‬ ‫مجموعة‬ ‫األداء‬ ‫عالي‬ ‫العمل‬
.‫التنظيمية‬ ‫الفعالية‬ ‫تعزيز‬ ‫نظام‬
‫دوران‬ ‫معدل‬ ‫مثل‬ ‫البشرية‬ ‫الموارد‬ ‫إدارة‬ ‫مقاييس‬ ‫لبعض‬ ‫الكمي‬ ‫المقياس‬ ‫هو‬ ‫البشرية‬ ‫الموارد‬ ‫مقياس‬
.‫منصب‬ ‫لكل‬ ‫المؤهلين‬ ‫المتقدمين‬ ‫أو‬ ،‫موظف‬ ‫لكل‬ ‫التدريب‬ ‫ساعات‬ ‫أو‬ ،‫الموظفين‬
Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
45

dessler_hrm13_im_03.111111111111111111111

  • 1.
    PART ONE INTRODUCTION CH A P T E R T T h r e e Human Resource Management Strategy and Analysis 3 Strategic Overview The Strategic Management Process Goal-Setting and the Planning Process Strategic Planning Improving Productivity Through HRIS Types of Strategies The Top Manager’s Role in Strategic Planning Departmental Managers’ Strategic Planning Roles Department Managers’ Strategic Planning Roles in Action Strategic Human Resource Management Defining Strategic HR Management Human Resource Strategies and Policies Strategic Human Resource Management Tools HR Metrics and Benchmarking Types of Metrics Improving Productivity Through HRIS Benchmarking in Action Strategy and Strategy-Based Metrics Workforce/Talent Analytics and Data Mining What are HR Audits? Evidence-Based HR and the Scientific Way of Doing Things What are High-Performance Work Systems? High-Performance Human Resource Policies and Practices In Brief: This chapter explains how to design and develop an HR system that supports the company’s strategic goals. It explains the strategic management process, how to develop a strategic plan, and the HR manager’s role in the process of strategy execution and formulation. The chapter explains why metrics are essential for identifying and creating high-performance human resource policies and practices. Interesting Issues: The Human Resource function today continues to play an increasingly visible role in the strategic planning and management process, requiring a new level of skill and competency among HR professionals. HR managers must develop measureable strategies that convincingly showcase HR’s impact on business performance. Successful Human Resource managers have adopted a perspective that focuses on how their departments can play a central role in implementing the organization’s strategy. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 32
  • 2.
    LEARNING OUTCOMES 1. Explainwhy strategic planning is important to all managers. 2. Explain with examples each of the seven steps in the strategic planning process. 3. List with examples the main generic types of corporate strategies and competitive strategies. 4. Define strategic human resource management and give an example of strategic human resource management in practice. 5. Briefly describe three important strategic human resource management tools. 6. Explain with examples why metrics are essential for managing human resources. ANNOTATED OUTLINE I. The Strategic Management Process A. Goal-Setting and the Planning Process - Strategic planning is important because in a well-run organization the goals from the top of the organization downward should form an unbroken chain, or hierarchy, of goals. These goals, in turn, should guide everyone in the organization in what they do. B. Strategic Planning - A strategic plan is 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. Figure 3-2 sums up the strategic management process in seven steps as follows: 1. Define the current business and mission. 2. Perform external and internal audits. 3. Formulate a new direction. 4. Translate the mission into goals. 5. Formulate strategies to achieve the strategic goal. 6. Implement the strategy. 7. Evaluate performance. C. Improving Productivity through HRIS: Using Computerized Business Planning Software − Business planning software packages are available to assist the manager in writing strategic and business plans. D. Types of Strategies – Managers develop three types of strategies. 1. Corporate-level strategy – Identifies the portfolio of businesses that comprise the company and the ways in which these businesses are related to each other. Concentration, diversification, vertical integration, consolidation, and geographic expansion are all examples of corporate-level strategies. 2. Competitive strategy – Managers endeavor to achieve competitive advantages for each of their businesses. Competitive advantages Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 33
  • 3.
    enable a companyto differentiate its product or service from those of its competitors to increase market share. Examples of competitive strategies include cost leadership, differentiation, and focus. 3. HR as a Competitive Advantage – Human capital is one of the best competitive advantages because it is hard to duplicate a company’s personnel. 4. Functional strategies – These strategies identify the basic course of action that each department will pursue in order to help the business attain its competitive goals. 5. Strategic Fit – Strategic planning experts have different views on fitting capabilities to the opportunities and threats vs. stretching beyond capabilities to take advantage of an opportunity. The “fit” point of view, as purported by Michael Porter, states 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. B. The Top Manager’s Role in Strategic Planning - Devising a strategic plan is top management’s responsibility. Because the consequences of a poor choice can be dire, few top managers delegate the job of deciding how the company should match internal strengths and weaknesses with external opportunities and threats to maintain a competitive advantage. C. Departmental Manager’s Strategic Planning Roles - It would be reckless for any top executive to formulate a strategic plan without the input of his or her lower-level manager. Few people know as much about the firm’s competitive pressures, vendor capabilities, and concerns than do the company’s department managers. D. Departmental Manager’s Strategic Planning Roles in Action: Improving Mergers and Acquisitions – When mergers and acquisitions fail, it is usually due to personnel issues. Functional managers help top management to plan and execute the firm’s strategy. When mergers and acquisitions do fail, it’s often not due to financial or technical issues but to personnel-related ones. These may include, for example, employee resistance, mass exits by high-quality employees, and declining morale and productivity. As one study concluded some years ago, mergers and acquisitions often fail due to a lack of adequate preparation of the personnel involved and a failure to provide training which fosters self- awareness, cultural sensitivity, and a spirit of cooperation. 1. Due Diligence Stage - Before finalizing a deal, it is usual for the acquirer (or merger partners) to perform “due diligence” reviews to assure they know what they’re getting into. For the human resource teams, due diligence includes reviewing things like organizational culture and structure, employee compensation and benefits, labor relations, pending employee litigation, human resource policies and procedures, and key employees. Employee benefits are one obvious example. For example, do the target firm’s health insurance contracts have termination clauses that could eliminate coverage for all employees if you lay too many off after the merger? Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 34
  • 4.
    2. Integration Stage- There are critical human resource issues during the first few months of a merger or acquisition. These include choosing the top management team, ensuring top management leadership, communicating changes effectively to employees, retaining key talent, and aligning cultures. II. Strategic Human Resource Management A. Defining Strategic HRM – Every company needs its human resource management policies and activities to make sense in terms of its broad strategic aims. Strategic human resource management means formulating and executing human resource policies and practices that produce the employee competencies and behaviors the company needs to achieve its strategic aims. Figure 3-7 demonstrates the relationship between human resource strategy and the company’s strategic plans. The following steps demonstrate linking company-wide and HR strategies: 1. Evaluate Company’s Competitive Environment 2. Formulate Business Strategy 3. Identify Workforce Requirements 4. Formulate HR Strategic Policies and Activities 5. Develop Detailed HR Scorecard Measures B. Human Resources Strategies and Policies - Managers call the specific human resource management policies and practices they use to support their strategic aims human resource strategies. The Shanghai Portman’s human resource strategy was to produce the service-oriented employee behaviors the hotel needed to improve significantly the hotel’s level of service. Its HR policies therefore included installing the Ritz-Carlton Company’s human resource system, having top management personally interview each candidate, and selecting only employees who cared for and respected others. C. Strategic HRM Tools - Managers use several tools to help them translate the company’s broad strategic goals into specific human resource management policies and activities. Three important tools include the strategy map, the HR Scorecard, and the digital dashboard. 1. Strategy Map - The strategy map shows the “big picture” of how each department’s performance contributes to achieving the company’s overall strategic goals. It helps the manager understand the role his or her department plays in helping to execute the company’s strategic plan. 2. HR Scorecard - Many employers quantify and computerize the map’s activities. The HR Scorecard helps them to do so. The HR Scorecard is not a scorecard. It refers to a process for assigning financial and nonfinancial goals or metrics to the human resource management– related chain of activities required for achieving the company’s strategic aims and for monitoring results. 3. Digital Dashboards - A digital dashboard presents the manager with desktop graphics and charts. It is a computerized picture of where Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 35
  • 5.
    the company standson all those metrics from the HR Scorecard process. III. HR Metrics and Benchmarking A. Types of Metrics – Figures 3-11 and 3-12 present examples of broad and more focused measures organizations can use to measure HR effectiveness. B. Improving Productivity through HRIS: Tracking Applicant Metrics for Improved Talent Management – There are a number of metrics that can be used to collect and assess the quality of different recruitment sources. Many companies choose to use an applicant tracking system. There are two basic steps in this process: 1) deciding how to measure performance of new hires and 2) tracking sources that result in superior hires. C. Benchmarking in Action - Benchmarking occurs when an organization compares the practices of high performing organizations with their own in order to understand what they can do to improve. D. Strategy and Strategy-Based Metrics – Benchmarking is only part of the process. HR must also use strategy-based metrics to determine how HR is helping the organization reach its goals. E. Workforce/Talent Analytics and Data Mining – Many companies are using workforce analytics to analyze and track HR data to help improve performance and increase job satisfaction. Another technique, data mining, involves statistical analysis to find hidden or new relationships among different variables such as tracking when and who is more likely to buy a certain product. This can help a company better manage its marketing money by targeting certain groups of people with advertising. F. What are HR Audits? These audits are a way for an organization to measure its current policies and practices and identify areas where improvements can be made based on company goals. G. Evidence-Based HR and the Scientific Way of Doing Things – Evidence-based HR is the use of data, facts, etc. to support HR proposals, decisions, practices, and conclusions. This requires managers to be more scientific in making organizational decisions. This approach requires objectivity, experimentation, quantification, explanation, prediction, and replication. IV. What are High-Performance Work Systems? A high-performance work system (HPWS) is a set of HR policies and practices that together produce superior employee performance. A. High-Performance Human Resource Policies and Practices – These policies and practices illustrate the importance of HR metrics and how they help to assess HR performance. They also reveal what HR systems must do to be successful, such as help workers aspire to manage themselves. HR practices also highlight measureable differences between HR systems in high and low performing companies. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 36
  • 6.
    NOTES Educational Materialsto Use DISCUSSION QUESTIONS 1. Give an example of hierarchical planning in an organization. (LO 3.2; AACSB: Reflective Thinking Skills; Learning Outcome: Describe the process and tools of strategic HRM) Top management approves a long-tem or strategic plan. Then each department, working with top management, creates its own budgets and other plans to fit and contribute to the company’s long-term plan. 2. What is the difference between a strategy, a vision, and a mission? Give one example of each. (LO 3.2; AACSB: Reflective Thinking Skills; Learning Outcome: Describe the process and tools of strategic HRM) A strategy identifies a course of action to get the company from where it is today to where it wants to be tomorrow. One example of a company’s strategy given in the text is Dell Computer’s strategy to be a “low cost leader” by using the Internet and phone to sell PCs directly to end users at prices competitors cannot match. A vision is a general statement of the company’s intended direction that evokes emotional feelings in employees. It is a “mental image” of a possible and desirable future state for the organization that articulates a view of a realistic, credible, and attractive future of the organization that is better than what now exists. For example, the vision for the California Energy Commission is “for Californians to have energy choices that are affordable, reliable, diverse, safe, and environmentally acceptable.” The mission is a more specific and shorter term statement which lays out what is supposed to be now and communicates “who we are, what we do, and where we’re headed.” Following the vision for the California Energy Commission, their mission is to “assess and act through public/private partnerships to improve energy systems that promote a strong economy and a healthy environment.” 3. Define and give at least two examples of the cost leadership competitive strategy and the differentiation competitive strategy. (LO 3.3; AACSB: Communication Skills; Learning Outcome: Describe the process and tools of strategic HRM) The cost leadership competitive strategy means that the enterprise aims to become the low- cost leader in an industry. For example, stores such as Staples and Office Max maintain their competitive advantage by selling large quantities of office products at low prices. Airlines such as Southwest offer low fares in addition to quick turnarounds at the gate. In a differentiation competitive strategy, a firm seeks to be unique in its industry along dimensions that are widely valued by buyers. For example, Ocean Spray Cranberries charges a premium price for its juices, stressing premium high-quality ingredients. Visa differentiates itself by being accepted as a form of payment universally where other credit cards are not. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 37
  • 7.
    4. Explain howhuman resources management can be instrumental in helping a company create a competitive advantage. (LO 3.1; AACSB: Communication Skills; Learning Outcome: Describe the process and tools of strategic HRM) Human Resources is regarded in a growing number of organizations as a source of competitive advantage, through recruiting, selecting, retaining, and developing human capital that enables organizations to compete on a number of different levels to be flexible, capable, and responsive, demonstrating creativity and innovation in order to produce products and services of high quality. 5. What is a high-performance work system? Provide several specific examples of the typical components in a high-performance work system. (LO 3.5; AACSB: Reflective Thinking Skills; Learning Outcome: Describe the process and tools of strategic HRM) High Performance Work Systems are characterized by high involvement organizational practices, (such as job enrichment and team-based organizations), high-commitment work practices (such as improved employee development, communications, and disciplinary practices), and flexible work assignments. The evidence suggests that companies that employ HPWS practices experience improved productivity, quality, sales, and financial performance. What makes the HPWS unique is the quality, quantity, and specific features of the HR policies and practices. Each element is designed to maximize the overall quality of human capital throughout the organization. Several characteristics of high performance work organizations include multi-skilled work teams; empowered frontline workers; more training; labor management cooperation; commitment to quality; and customer satisfaction. INDIVIDUAL AND GROUP ACTIVITIES 1. With three or four other students, form a strategic management group for your college or university. Your assignment is to develop the outline of a strategic plan for the college or university. This should include such things as mission and vision statements, strategic goals, and corporate, competitive, and functional strategies. In preparing your plan, make sure to show the main strengths, weaknesses, opportunities, and threats the college faces, and which prompted you to develop your particular strategic plans. Look for students to prepare a well-developed mission and vision statement, making sure that they are clearly differentiated from each other with the vision being future focused, articulating the desired state, with the mission supporting the vision, describing “who we are, what we do, and where we are headed.” Use this exercise as an opportunity to discuss the problems that may be created by not clearly defining the mission, vision, as well as the strengths, weaknesses, opportunities, and threats. (LO 3.2; AACSB: Analytic Skills; Learning Outcome: Describe the process and tools of strategic HRM) 2. Using the Internet or library resources, analyze the annual reports of at least five companies. Bring to class examples of how those companies say they are using their HR processes to help the company achieve its strategic goals. In class, facilitate a discussion on how effective the HR processes at each company appear to support strategic goals. Challenge students to come up with additional ideas for other approaches for using the HR processes and how they would go about implementing them, noting the specific difficulties of each. (LO 3.4; AACSB: Use of Information Technology; Learning Outcome: Describe the process and tools of strategic HRM) 3. Interview an HR manager and write a short report on the topic: “The strategic roles of the HR manager at XYZ Company.” Instruct students to follow the model outlined in this chapter for the steps in the strategic management process, and HR’s role in strategy execution and strategy formulation. (LO 3.4; AACSB: Analytic and Communication Skills; Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 38
  • 8.
    Learning Outcome: Describethe process and tools of strategic HRM) 4. Using the Internet or library resources, bring to class and discuss at least two examples of how companies are using an HR Scorecard to help create HR systems that support the company’s strategic aims. Do all managers seem to mean the same thing when they refer to “HR Scorecards”? How do they differ? For each example, ask students to comment on how effective they believe the measures that were selected by the company are in terms of allowing the company to assess HR’s performance objectively and quantitatively, as well as serving as a tool for the HR manager to build a measurable and persuasive business case for how HR is contributing to achieving the company’s strategic financial goals. Challenge students to critique the scorecard and how it could be improved to measure strategically relevant organizational outcomes, workforce competencies and behaviors, and HR system policies and activities (LO 3.5; AACSB: Use of Information Technology; Learning Outcome: Describe the process and tools of strategic HRM. 5. In teams of 4–5 students, choose a company for which you will develop an outline of a strategic HR plan. What seem to be this company’s main strategic aims? What is the firm’s competitive strategy? What would the strategic map for this company look like? How would you summarize your recommended strategic HR policies for this company? Students answers will vary. (LO 3.2; AACSB: Analytic Skills) 6. The HRCI “Test Specifications” appendix at the end of this book lists the things someone studying for the HRCI certification exam needs to know in each area of human resource management (such as in Strategic Management, Workforce Planning, and Human Resource Development). In groups of 4-5 students, do four things: (1) review that appendix now; (2) identify the material in this chapter that relates to the required knoweldge the appendix lists; (3) write four multiple-choice exam questions on this material that you believe would be suitable for inclusion in the HRCI exam; and 4) if time permits, have someone from your team post your team’s questions in front of the class, so the students on other teams can take each other’s exam questions. Material in this chapter that could be covered in the HRCI certification exam include: Under Strategic Management, the formulation of HR strategies to support the company’s overall strategic plan; HR’s role in helping companies to build a competitive advantage, strategic HR management, role in strategy executiion and formulation; high performance work system concepts and supporting HR systems/practices; the HR Scorecard and all the steps involved in developing it. (LO 3.1-4; AACSB: Analytic Skills; Learning Outcome: Describe the process and tools of strategic HRM) EXPERIENTIAL EXERCISES & CASES Experiential Exercise: Developing an HR Strategy for Starbucks Purpose: The purpose of this exercise is to give students experience in developing an HR strategy, in this case, by developing one for Starbucks. Students should be familiar with the material in this chapter. Instructions: Set up groups of three or four students for this exercise. You are probably already quite familiar with what it’s like to have a cup of coffee or tea in a Starbucks coffee shop, but if not, spend some time in one prior to this exercise. Meet in groups and develop an outline for an HR strategy for Starbucks Corp. Your outline should include four basic elements: a basic business/competitive strategy for Starbucks, workforce requirements (in terms of employee competencies and behaviors) this strategy requires, specific HR policies and the activities necessary to produce these workforce requirements, and suggestions for metrics to measure the success of the HR strategy. (LO 3.3; AACSB: Analytic Skills; Learning Outcome: Describe the process and tools of strategic HRM) Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 39
  • 9.
    Ask each groupto present their strategy to the rest of the class. At the end of each presentation, ask the class to provide feedback on the strategy, commenting on how effectively the strategy highlights the following: 1) their basic business/competitive strategy for Starbucks, 2) the workforce requirements (in terms of employee competencies and behaviors) this strategy requires, 3) the specific HR policies and activities necessary to produce these workforce requirements, and 4) any suggestions for metrics to measure the success of the HR strategy. Application Case: Siemens Builds a Strategy-Oriented HR System 1. Based on the information in this case, provide examples for Siemens of at least four strategically required organizational outcomes and four required workforce competencies and behaviors. (LO 3.2; AACSB: Reflective Thinking and Analytic Skills; Learning Outcome: Describe the process and tools of strategic HRM) Strategically required organizational outcomes would be the following: 1) An employee selection and compensation system that attracts and retains the human talent necessary to support global diversification into high-tech products and services; 2) A “learning company” in which employees are able to learn on a continuing basis; 3) A culture of global teamwork which will develop and use all the potential of the firm’s human resources; 4) A climate of mutual respect in a global organization. Workforce competencies and behaviors could include: 1) openness to learning; 2) teamwork skills; 3) cross-cultural experience; 4) openness, respect, and appreciation for workforce diversity. 2. Identify at least four of the strategically relevant HR system policies and activites that Siemens has instituted in order to help HR contribute to achieving Siemens’ strategic goals. (LO 3.4; AACSB: Reflective Thinking and Analytic Skills; Learning Outcome: Describe the process and tools of strategic HRM) 1) Training and development activities to support continuous learning through a system of combined classroom and hands-on apprenticeship training to support technical learning; 2) Continuing education and management development to develop skills necessary for global teamwork and appreciation for cultural diversity; 3) Enhanced internal selection process which includes pre-requisites of cross-border and cross-cultural experiences for career advancement; 4) Organizational development activities aimed at building openness, transparency, fairness, and diversity support. 3. Provide a brief illustrative strategy map for Siemens. (LO 3.5; AACSB: Reflective Thinking and Analytic Skills; Learning Outcome: Describe the process and tools of strategic HRM) Student answers will vary but the strategy map should answer the following questions: 1) What overall goals does Siemens want to achieve? 2) What must Siemens do operationally to achieve its goals? and 3) What employee attitudes and behaviors will produce these operational outcomes? Continuing Case: The Carter Cleaning Company 1. Would you recommend that the Carters expand their quality program? If so, specifically what form should it take? Most students will agree that there are opportunities to expand the quality program. The employee meeting approach is a good start in terms of utilizing high-involvement organizational practices. There are opportunities to maximize the overall quality of their human capital. For example, training seems to be an obvious area to improve in terms of educating and building awareness about basic standards and procedures. (LO 3.4; AACSB: Reflective Thinking and Analytic Skills; Learning Outcome: Describe the process and tools of strategic HRM) Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 40
  • 10.
    2. Assume theCarters want to institute a high performance work system as a test program in one of their stores. Write a one-page outline summarizing important HR practices you think they should focus on. Students should include some of the following ideas in their outline: The types of HR practices they would implement to improve quality, productivity, financial performance; methods for job enrichment; strategies for implementing and leveraging a team-based organization; ways to implement and facilitate high commitment work practices; employee development and skill building activities to foster increased competency and capability in the workforce; a compensation program which provides incentives (for example, profit sharing, pay for performance) for achieving major goals and financial targets. (LO 3.4; AACSB: Reflective Thinking and Analytic Skills; Learning Outcome: Describe the process and tools of strategic HRM) TRANSLATING STRATEGY INTO HR POLICIES AND PRACTICES: THE HOTEL PARIS CASE Questions 1. Draw a simple strategy map for the Hotel Paris. Specifically, summarize in your own words an example of the hierarchy of links among the hotel’s HR practices, necessary workforce competencies and behaviors, and required organizational outcomes. (LO 3.2; AACSB: Analytic Skills; Learning Outcome: Describe the process and tools of strategic HRM)  What overall goals does the Hotel Paris want to achieve?  What does the Hotel Paris do operationally to achieve its goals?  What employee attitudes and behaviors will produce the desired operational outcomes? The above strategy map for the Hotel Paris succinctly lays out the hierarchy of main activities required for the Hotel Paris to succeed. For example, the Hotel Paris could endeavor to improve workforce competencies and behaviors by instituting an improved recruitment process, and measure the latter in terms of the number of qualified applicants per position. 2. Using Table 3-1, list at least five specific metrics the Hotel Paris could use to measure its HR practices. (LO 3.6; AACSB: Reflective Thinking Skills; Learning Outcome: Describe the process and tools of strategic HRM)  Number of qualified applicants per position  Percentage of jobs filled from within  Number of hours of training for each employees  Percentage of the workforce eligible for incentive pay  Percentage of the workforce routinely working in a self-managed, cross functional, or project team KEY TERMS 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 Specific courses of action the company pursues to achieve its aims. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 41
  • 11.
    strategic management Theprocess of identifying and executing the organization’s mission, by matching the organization’s capabilities with the demands of its environment. vision statement A general statement of the firm’s intended direction that shows, in broad terms, “what we want to become.” mission statement A more specific and shorter term statement which communicates for a company who they are, what they do, and where they are headed. corporate-level strategy Type of strategy that identifies the portfolio of businesses, that, in total, comprise the company and the ways in which these businesses relate to each other. competitive strategy A strategy that identifies how to build and strengthen the business’s long-term competitive position in the marketplace. competitive advantage Any factors that allow an organization to differentiate its product or service from those of its competitors to increase market share. functional strategies Strategy that identifies the broad activities that each department will pursue in order to help the business accomplish its competitive goals. strategic human Formulating and executing HR systems – policies and activities resource management – that produce the employee competencies and behaviors the company needs to achieve its strategic aims. strategy map A diagram that summarizes the chain of major activities that contribute to a company’s success. HR scorecard A concise measurement system that shows the quantitative standards or “metrics” the firm uses to measure HR activities, the employee behaviors resulting from these activities, and the strategically relevant organizational outcomes of those employee behaviors. digital dashboard Presents the manager with desktop graphs and charts, and provides a computerized picture of where the company stands on all those metrics from the HR Scorecard process. strategy-based metrics Metrics that specifically focus on measuring the activities that contribute to achieving a company’s strategic aims. 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. high performance work A set of human resource management policies and practices that system promote organizational effectiveness. human resource metric The quantitative measure of some human resource management yardstick such as employee turnover, hours of training per employee, or qualified applicants per position. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 42
  • 12.
    VIDEO CASE APPENDIX Video1: Showtime Showtime Networks operates cable networks and pay-per-view cable channels across the United States and in several countries abroad. As this video illustrates, its HR function supports corporate strategy by helping to determine what kind of employees are needed to keep the company in peak performance, and then by providing the company and its employees with the HR activities that these employees need to do their jobs. For example, you’ll see that Showtime offers many development and training programs, as well as personal development types of activities including mentoring programs and career-oriented development activities. The firm’s performance management process (which the employees helped develop) focuses specifically on the work activities and results that help achieve departmental and corporate goals. In this video, Matthew, the firm’s CEO, emphasizes that it is essential to use human resources as a strategic partner, and the video then goes on to provide something of a summary of the basic human resource management functions. Video 2: IQ Solutions IQ Solutions is in the business of providing health-care system services. It says one of its aims is lessening the inequality that is said to exist in America’s healthcare system. The company uses its very diverse employee base to better serve and attract a broad client base. Employees at IQ Solutions work together in teams to achieve the company’s goals. As we see in this video, the company itself is indeed very diverse: for example, employees speak about 18 languages. The company capitalizes on this diversity in many ways. For example, employees share their ethnically unique holidays, and the firm provides special training and other benefits that support diversity. For video answers to video discussion questions along with additional activities, please visit the Instructor’s Resource Center at: http://www.pearsonhighered.com/dessler Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 43
  • 13.
    ‫الفرص‬ ‫مع‬ ‫لديها‬‫الداخلية‬ ‫والضعف‬ ‫القوة‬ ‫نقاط‬ ‫مطابقة‬ ‫لكيفية‬ ‫الشركة‬ ‫خطة‬ ‫اإلستراتيجية‬ ‫الخطة‬ .‫التنافسية‬ ‫الميزة‬ ‫على‬ ‫الحفاظ‬ ‫أجل‬ ‫من‬ ‫الخارجية‬ ‫والتهديدات‬ .‫أهدافها‬ ‫لتحقيق‬ ‫الشركة‬ ‫تتبعها‬ ‫التي‬ ‫المحددة‬ ‫العمل‬ ‫مسارات‬ ‫اإلستراتيجية‬ ِ ‫مع‬ ‫المنظمة‬ ‫قدرات‬ ‫مطابقة‬ ‫خالل‬ ‫من‬ ،‫وتنفيذها‬ ‫المنظمة‬ ‫رسالة‬ ‫تحديد‬ ‫عملية‬ ‫اإلستراتيجية‬ ‫اإلدارة‬ .‫بيئتها‬ ‫متطلبات‬ ."‫نصبح‬ ‫أن‬ ‫نريد‬ ‫"ما‬ ،‫عامة‬ ‫بعبارات‬ ،‫يوضح‬ ‫والذي‬ ‫للشركة‬ ‫المقصود‬ ‫لالتجاه‬ ‫عام‬ ‫بيان‬ ‫الرؤية‬ ‫بيان‬ .‫يتجهون‬ ‫أين‬ ‫وإلى‬ ‫يفعلون‬ ‫وماذا‬ ‫هم‬ ‫من‬ ‫للشركة‬ ‫يوضح‬ ‫اًل‬‫ج‬‫أ‬ ‫وأقصر‬ ‫ًا‬ ‫د‬‫تحدي‬ ‫أكثر‬ ‫بيان‬ :‫المهمة‬ ‫بيان‬ ،‫المجمل‬ ‫في‬ ،‫والتي‬ ،‫األعمال‬ ‫محفظة‬ ‫تحدد‬ ‫التي‬ ‫اإلستراتيجية‬ ‫نوع‬ ‫الشركة‬ ‫مستوى‬ ‫على‬ ‫اإلستراتيجية‬ .‫البعض‬ ‫بعضها‬ ‫مع‬ ‫األعمال‬ ‫هذه‬ ‫بها‬ ‫ترتبط‬ ‫التي‬ ‫والطرق‬ ‫الشركة‬ ‫تشمل‬ ‫المدى‬ ‫طويل‬ ‫التنافسي‬ ‫الوضع‬ ‫وتعزيز‬ ‫بناء‬ ‫كيفية‬ ‫تحدد‬ ‫التي‬ ‫اإلستراتيجية‬ ‫هي‬ ‫التنافسية‬ ‫اإلستراتيجية‬ .‫السوق‬ ‫في‬ ‫للشركة‬ ‫منافسوها‬ ‫يقدمها‬ ‫التي‬ ‫تلك‬ ‫عن‬ ‫خدمتها‬ ‫أو‬ ‫منتجها‬ ‫بتمييز‬ ‫للمؤسسة‬ ‫تسمح‬ ‫عوامل‬ ‫أي‬ ‫التنافسية‬ ‫الميزة‬ .‫السوق‬ ‫في‬ ‫حصتها‬ ‫لزيادة‬ ‫أجل‬ ‫من‬ ‫قسم‬ ‫كل‬ ‫سيتبعها‬ ‫التي‬ ‫الواسعة‬ ‫األنشطة‬ ‫تحدد‬ ‫التي‬ ‫اإلستراتيجية‬ ‫هي‬ ‫الوظيفية‬ ‫االستراتيجيات‬ .‫التنافسية‬ ‫أهدافها‬ ‫تحقيق‬ ‫على‬ ‫األعمال‬ ‫مساعدة‬ ‫واألنشطة‬ ‫السياسات‬ - ‫البشرية‬ ‫الموارد‬ ‫أنظمة‬ ‫وتنفيذ‬ ‫صياغة‬ ‫االستراتيجي‬ ‫اإلنسان‬ Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 44
  • 14.
    ‫أهدافها‬ ‫لتحقيق‬ ‫الشركة‬‫تحتاجها‬ ‫التي‬ ‫وسلوكياتهم‬ ‫الموظفين‬ ‫كفاءات‬ ‫تنتج‬ ‫التي‬ – ‫الموارد‬ ‫إدارة‬ .‫اإلستراتيجية‬ .‫الشركة‬ ‫نجاح‬ ‫في‬ ‫تساهم‬ ‫التي‬ ‫الرئيسية‬ ‫األنشطة‬ ‫سلسلة‬ ‫يلخص‬ ‫تخطيطي‬ ‫رسم‬ ‫اإلستراتيجية‬ ‫الخريطة‬ ‫تستخدمها‬ ‫التي‬ "‫"المقاييس‬ ‫أو‬ ‫الكمية‬ ‫المعايير‬ ‫يوضح‬ ‫موجز‬ ‫قياس‬ ‫نظام‬ ‫البشرية‬ ‫الموارد‬ ‫أداء‬ ‫بطاقة‬ ‫والنتائج‬ ،‫األنشطة‬ ‫هذه‬ ‫عن‬ ‫الناتجة‬ ‫الموظفين‬ ‫وسلوكيات‬ ،‫البشرية‬ ‫الموارد‬ ‫أنشطة‬ ‫لقياس‬ ‫الشركة‬ .‫تلك‬ ‫الموظفين‬ ‫لسلوكيات‬ ‫ا‬ً ‫ي‬‫استراتيج‬ ‫الصلة‬ ‫ذات‬ ‫التنظيمية‬ ‫محوسبة‬ ‫صورة‬ ‫وتوفر‬ ،‫المكتب‬ ‫سطح‬ ‫ومخططات‬ ‫بيانية‬ ‫ا‬ً ‫م‬‫رسو‬ ‫للمدير‬ ‫تقدم‬ ‫الرقمية‬ ‫المعلومات‬ ‫لوحة‬ .‫البشرية‬ ‫الموارد‬ ‫أداء‬ ‫بطاقة‬ ‫عملية‬ ‫من‬ ‫المقاييس‬ ‫تلك‬ ‫كل‬ ‫من‬ ‫الشركة‬ ‫موقف‬ ‫عن‬ ‫تساهم‬ ‫التي‬ ‫األنشطة‬ ‫قياس‬ ‫على‬ ‫خاص‬ ‫بشكل‬ ‫تركز‬ ‫التي‬ ‫المقاييس‬ ‫اإلستراتيجية‬ ‫على‬ ‫القائمة‬ ‫المقاييس‬ .‫للشركة‬ ‫اإلستراتيجية‬ ‫األهداف‬ ‫تحقيق‬ ‫في‬ ‫إنجازه‬ ‫عليها‬ ‫يتعين‬ ‫ما‬ ‫وتحدد‬ ‫الحالي‬ ‫وضعها‬ ‫المنظمة‬ ‫خالله‬ ‫من‬ ‫تقيس‬ ‫تحليل‬ ‫البشرية‬ ‫الموارد‬ ‫تدقيق‬ .‫لديها‬ ‫البشرية‬ ‫الموارد‬ ‫وظيفة‬ ‫لتحسين‬ ‫التي‬ ‫البشرية‬ ‫الموارد‬ ‫إدارة‬ ‫وممارسات‬ ‫سياسات‬ ‫من‬ ‫مجموعة‬ ‫األداء‬ ‫عالي‬ ‫العمل‬ .‫التنظيمية‬ ‫الفعالية‬ ‫تعزيز‬ ‫نظام‬ ‫دوران‬ ‫معدل‬ ‫مثل‬ ‫البشرية‬ ‫الموارد‬ ‫إدارة‬ ‫مقاييس‬ ‫لبعض‬ ‫الكمي‬ ‫المقياس‬ ‫هو‬ ‫البشرية‬ ‫الموارد‬ ‫مقياس‬ .‫منصب‬ ‫لكل‬ ‫المؤهلين‬ ‫المتقدمين‬ ‫أو‬ ،‫موظف‬ ‫لكل‬ ‫التدريب‬ ‫ساعات‬ ‫أو‬ ،‫الموظفين‬ Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 45