Procter & Gamble has had long-term success developing talent from within through their "Build from Within" program. This program tracks top managers and ensures there are always internal candidates ready to fill key roles. Less than 5% of non-entry hires come from outside, and rigorous screening gets candidates that fit P&G's culture. The 138,000 employees receive monthly and annual reviews discussing goals and how they develop others. P&G prides itself on being able to fill any opening internally within an hour.

1. Strategic HR
Management and
Planning

2. Developing Talent at
Consumer goods conglomerate Procter and Gamble has had a
long, successful history based on hiring at the entry level and
developing and promoting its managers and executives from
within. The key to this success is the organization’s Build from
Within program, which tracks the performance of every
manager within the organization’s top 50 jobs consistently has
three internal replacement candidates lined up and ready to
assume responsibility. Loyalty of employees is paramount to
ensuring the success of such a program, and P&G’s history of
grooming and training its employees promotes such loyalty.
2–2

3. Developing Talent at
Fewer than 5% of the organization’s non-entry-level hires come
from outside the organization, and its rigorous and competitive
screening process, in which fewer than 5% of applicants are hire,
ensures that P&G hires those best suited for the organization and
its culture.
P&G’s 138,000 employees are tracked via monthly and annual
performance reviews in which managers discuss business goals,
personal goals, and how they’ve trained others to assume
responsibility. The latter is a key factor in the upward mobility
of any manager. P&G prides itself in being able to fill any
opening internally “in an hour.” All executives are required to
teach in the organization’s training programs, and the CEO
assumes direct responsibility for the development of the
organization’s top 150 employees. 2–3

4. Strategic Planning and HR
Planning
0 Strategic Human Resources Management (SHRM)
0 The pattern of human resources deployments and
activities that enable an organization to achieve its
strategic goals
0Strategy formulation—providing input as to what is
possible given the types and numbers of people
available.
0Strategy implementation—making primary resource
allocation decisions about structure, processes, and
human resources. 2–4

5. Linking Strategic Planning and
HRP
0 Strategic Analysis
0 What human resources are needed and what are
available?
0 Strategic Formulation
0 What is required and necessary in support of human
resources?
0 Strategic Implementation
0 How will the human resources be allocated?
2–5
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6. 2–6
Linking Strategic Planning and Human Resources

7. Step One: Mission, Vision, and
Values
0 Mission
0 The basic purpose of the organization as well as its
scope of operations
0 Strategic Vision
0 A statement about where the company is going and
what it can become in the future; clarifies the long-term
direction of the company and its strategic intent
0 Core Values
0 The strong and enduring beliefs and principles that the
company uses as a foundation for its decisions
2–7

8. Since Mission, Vision, and
Values influence HRP…
0 Small Group Discussion
In groups of 4, discuss the Mission and Vision, of…
University of Baguio
Discuss whether or not the university is fulfilling its
obligations according to the stated Mission and
Vision.
To what extent do the employees contribute to
this?
To what extent is the organization committed to
motivate their people to be dedicated in helping
the organization achieve company goals and
objectives?
2–8

9. Step Two: Environmental
Scanning
0 Environmental Scanning
0 The systematic monitoring of the major external
forces influencing the organization.
1. Economic factors: general, regional, and global
conditions
2. Industry and competitive trends: new processes,
services, and innovations
3. Technological changes: robotics and office automation
4. Government and legislative issues: laws and
administrative rulings
5. Social concerns: child care and educational priorities
6. Demographic and labor market trends: age,
composition, literacy, and immigration 2–9

10. The Competitive Environment
0 Assignment (Short bond paper; due: December 7, 2011)
List and discuss the competitive environment of…
ABS-CBN
Who are its competitors?
What distinct advantages does ABS-CBN have over its
competitors?
What can the company do to make sure they have the best
pool of manpower considering the nature of competition in
their industry? 2–10

11. Step Three: Internal Analysis
2–11
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12. Culture: Auditing Values, Beliefs,
and Attitudes
0 Cultural Audits
0 Audits of the culture and quality of work life in an
organization.
0How do employees spend their time?
0How do they interact with each other?
0Are employees empowered?
0What is the predominant leadership style of
managers?
0How do employees advance within the organization?
2–12

13. Capabilities: People as a Strategic
Resource
0 Core Capabilities
0 Integrated knowledge sets within an organization that
distinguish it from its competitors and deliver value to
customers.
0 Sustained competitive advantage through people is
achieved if these human resources:
1. Are valuable.
2. Are rare and unavailable to competitors.
 Your best competitive assets walk out the door every
night.
1. Are difficult to imitate.
2. Are organized for teamwork and cooperation.
2–13

14. Composition: The Human
Capital Architecture
0 Strategic Knowledge Workers
0 Employees who have unique skills that are directly
linked to the company’s strategy.
0Example: R&D scientists
0 Core Employees
0 Employees with skills to perform a predefined job
that are quite valuable to a company, but not
particularly unique or difficult to replace.
0Example: salespeople
2–14

15. Composition: The Human
Capital Architecture (cont’d)
0 Supporting Labor
0 Employees whose skills are of less strategic value and
generally available in the labor market.
0Example: clerical workers
0Alliance Partners
0 Individuals and groups with unique skills, but those
skills are not directly related to a company’s core
strategy.
0Example: consultants
2–15

16. Forecasting: A Critical
Element of Planning
0 Forecasting involves:
a. forecasting the demand for labor
b. forecasting the supply of labor
c. balancing supply and demand considerations.
2–16

17. 2–17
Model of HR Forecasting

18. Forecasting Demand for
Employees
2–18
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19. Quantitative Approach: Trend
Analysis
0 Forecasting labor demand based on an organizational
index such as sales:
1. Select a business factor that best predicts human resources
needs.
2. Plot the business factor in relation to the number of
employees to determine the labor productivity ratio.
3. Compute the productivity ratio for the past five years.
4. Calculate human resources demand by multiplying the
business factor by the productivity ratio.
5. Project human resources demand out to the target year(s).
2–19

20. Qualitative Approaches
0 Management Forecasts
0 The opinions (judgments) of supervisors, department
managers, experts, or others knowledgeable about the
organization’s future employment needs.
0 Delphi Technique
0 An attempt to decrease the subjectivity of forecasts by
soliciting and summarizing the judgments of a
preselected group of individuals.
0 The final forecast represents a composite group
judgment.
2–20

21. Workforce planning requires that HR leaders periodically interview their managers to
gauge future workforce needs. Here are some sample questions to ask.
2–21
HR Planning and Strategy Questions to Ask
Business Managers
• What are your mission, vision, and values?
• What are your current pressing business issues?
• What are our organizational strengths?
• Who are our competitors’ organizational strengths? How do we compare?
• What core capabilities do we need to win in our markets?•
• What are the required knowledge, skills, and abilities we need to execute the winning strategy?
• What are the barriers to optimally achieving the strategy?
• What types of skills and positions will be required or no longer required?
• Which skills should we have internally versus contract with outside providers?
• What actions need to be taken to align our resources with strategy priorities?
• What recognition and rewards are needed to attract, motivate, and retain the employees we need?
• How will we know if we are effectively executing our workforce plan and staying on track?

22. Forecasting the Supply of
Employees:
Internal Labor Supply
0 Staffing Tables
0 Markov Analysis
0 Skill Inventories
0 Replacement Charts
0 Succession Planning
2–22

23. Forecasting Internal Labor
Supply
0 Staffing Tables
0 Graphic representations of all organizational jobs, along
with the numbers of employees currently occupying
those jobs and future (monthly or yearly) employment
requirements.
0 Markov Analysis
0 A method for tracking the pattern of employee
movements through various jobs.
2–23

24. 2–24
Hypothetical Markov Analysis for a Retail Company

25. Internal Demand Forecasting
Tools
0 Skill Inventories
0 Files of personnel education, experience, interests,
skills, etc., that allow managers to quickly match job
openings with employee backgrounds.
0 Replacement Charts
0 Listings of current jobholders and persons who are
potential replacements if an opening occurs.
0 Succession Planning
0 The process of identifying, developing, and tracking key
individuals for executive positions.
2–25

26. 2–26
An Executive Replacement Chart

27. Succession-Planning Checklist
RATE THE SUCCESS OF YOUR
SUCCESSION PLANNING
For each characteristic of a
best-practice succession-planning
and management
program appearing in the left
column below, enter a number
to the right to indicate how well
you believe your organization
manages that characteristic.
Ask other decision makers in
your organization to complete
this form individually, compile
the scores, and compare notes.

28. 2–28
Assessing a Firm’s Human Capital

29. Step Four: Formulating
Strategy
0 Strategy Formulation
0 Moving from simple analysis to devising a coherent
course of action.
0 SWOT analysis
0 A comparison of strengths, weaknesses, opportunities,
and threats for strategy formulation purposes.
0 Use the strengths of the organization to capitalize on
opportunities, counteract threats, and alleviate internal
weaknesses.
2–29

30. Corporate Strategy
2–30
Corporate
Strategy
Strategic Alliances
and Joint Ventures
Strategic Alliances
and Joint Ventures
Growth and
Diversification
Growth and
Diversification
Mergers and
Acquisitions
Mergers and
Acquisitions
Corporate
Strategy

31. Business Strategy
0 Value Creation
0 What the firm adds to a product or service by
virtue of making it; the amount of benefits
provided by the product or service once the costs
of making it are subtracted (value = benefits —
costs).
0 Low-cost strategy: competing on productivity and
efficiency
0 Keeping costs low to offer an attractive price to customers
(relative to competitors).
0 Differentiation strategy: compete on added value
0 Involves providing something unique and distinctive to
customers that they value. 2–31

32. 2–32
Key HR Activities Associated with Merger or Acquisition
Phases

33. 2–33
Key HR Activities Associated with Merger or Acquisition
Phases (cont’d)

34. Business Strategy (cont’d)
0 Functional Strategy: Ensuring Alignment
0 External Fit/Alignment
0Focuses on the connection between the business
objectives and the major initiatives in HR.
0 Internal Fit/Alignment
0Aligning HR practices with one another to establish a
configuration that is mutually reinforcing.
2–34

35. Step Five: Strategy
Implementation
0 Taking Action: Reconciling Supply and Demand
0 Balancing demand and supply considerations
0Forecasting business activities (trends)
0Locating applicants
0 Organizational downsizing, outsourcing, offshoring
0Reducing “headcount”
0 Making layoff decisions
0Seniority or performance?
0Labor agreements
2–35

36. Step Six: Evaluation and
Assessment
0 Evaluation and Assessment Issues
0 Benchmarking: The process of comparing the
organization’s processes and practices with those
of other companies
0 Human capital metrics
0Assess aspects of the workforce
0 HR metrics
0Assess the performance of the HR function itself
2–36

37. 2–37
Ten Measures of Human Capital
1. Your most important issues
2. Human capital value added
3. Human capital ROI
4. Separation cost
5. Voluntary separation rate
6. Total labor-cost/revenue percentage
7. Total compensation/revenue percentage
8. Training investment factor
9. Time to start
10. Revenue factor