Hr ppt chp 2 (1)

© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.

© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.

PowerPoint Presentation by Charlie CookThe University of West Alabama

PowerPoint Presentation by Charlie CookThe University of West Alabama

SECTION 1 Environment for Human Resource Management

CHAPTERCHAPTER 22

Strategic HR ManagementStrategic HR Management

and Planningand Planning

CHAPTERCHAPTER 22

Strategic HR ManagementStrategic HR Management

and Planningand Planning

© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part. 2–2

Chapter ObjectivesChapter Objectives

• Summarize the strategic planning process and how it drives Summarize the strategic planning process and how it drives the organizational activities.the organizational activities.

• Outline how strategic HR management is linked Outline how strategic HR management is linked to the organizational strategies.to the organizational strategies.

• Discuss how internal and external environmental factors Discuss how internal and external environmental factors affect HR strategies.affect HR strategies.

• List HR strategic challenges faced by modern organizations.List HR strategic challenges faced by modern organizations.

• Explain how technology is affecting HR management Explain how technology is affecting HR management practices and employees.practices and employees.

• Identify how organizations can measure and assess Identify how organizations can measure and assess the effectiveness of HR management practices.the effectiveness of HR management practices.

After you have read this chapter, you should be able to:After you have read this chapter, you should be able to:


Strategy and Strategic PlanningStrategy and Strategic Planning

Strategy

The proposition an organization follows for

how to compete successfully and thereby

survive and grow.

Strategic Planning

The process of defining organizational strategy

and allocating resources toward its achievement.


FIGURE 2–1

Strategic Planning Process


Strategy FormulationStrategy Formulation

Organizational Mission

The guiding force and core reason for the existence of the organization and what

makes it unique.

Strategic HR Management

The use of employees to gain or keep a competitive

advantage, resulting in greater organizational

effectiveness.


FIGURE 2–2

Traditional HR versus Strategic HR


Strategic Competencies for HR Strategic Competencies for HR ProfessionalsProfessionals

Credible Activist

Talent Manager/Org Designer

Operational Executor

Culture and Change Steward

Strategy Architect

Business Ally

Challenges assumptions and offers a point of view

Shapes the organizational culture, makes changes happen

Acquires and deploys talent, embeds

capabilities into the organizational structure

Recognizes trends, forecasts obstacles to business success, and builds overall strategy

Efficiently and effectively

carries out tactical HR activities

Understands the business value chain, and

establishes internal partnerships with line

managers


Operationalizing HR Management Operationalizing HR Management StrategiesStrategies

ThinkingStrategical

ly

Understandthe business

Focus on key business

goals

Know what to measure

Prepare for the future


FIGURE 2–3

Strategic Human Resource Management


HR As Organizational ContributorHR As Organizational Contributor

HR Contributions to Organization Effectiveness

Organization productivity

Customer service and

quality

Financial contributions


High-Performance Work PracticesHigh-Performance Work Practices

Incentive Compensation

Training and Development

Employee participation

Selectivity in Hiring

Flexible Work Arrangements

High Performance Organization


HR Effectiveness and Financial HR Effectiveness and Financial PerformancePerformance• EffectivenessEffectiveness

The extent to which goals have been met.The extent to which goals have been met.

• EfficiencyEfficiency The degree to which operations are done The degree to which operations are done

in an economical manner.in an economical manner.


Environmental AnalysisEnvironmental Analysis• Environmental ScanningEnvironmental Scanning

The assessment of internal and external The assessment of internal and external environmental conditions that affect the organizationenvironmental conditions that affect the organization

HR Planning

Legislative/Political Influences

Economic Conditions

Geographic and Competitive

Concerns

Demographic Changes


FIGURE 2–4 HR Factors in the SWOT Analysis


Internal Environmental AnalysisInternal Environmental Analysis• Succession PlanningSuccession Planning

The process of identifying a plan for the orderly The process of identifying a plan for the orderly replacement of key employees.replacement of key employees.


FIGURE 2–5 Areas of External Environmental Scan


Global Competitiveness and Strategic Global Competitiveness and Strategic HRHR

Global Framework

Global Legal and

Regulatory Factors

Offshoring Operations

Global Staffing


FIGURE 2–6 Strategic Approaches to International Staffing


HR Planning in Mergers and HR Planning in Mergers and AcquisitionsAcquisitions• Cultural CompatibilityCultural Compatibility

The extent to which such factors as decision-making The extent to which such factors as decision-making styles, levels of teamwork, information-sharing styles, levels of teamwork, information-sharing philosophies, and the formality of the two philosophies, and the formality of the two organizations are similar.organizations are similar.

• HR’s Role in Mergers and AcquisitionsHR’s Role in Mergers and Acquisitions Communicating decisionsCommunicating decisions Revising the organization structureRevising the organization structure Merging HR activitiesMerging HR activities


FIGURE 2–7 HR Activities during Mergers and Acquisitions


Key Factors in Cultural FitKey Factors in Cultural Fit

Degree of internal integration

Autonomy

Adaptability

Employee trust

Diversity

Cultural Fitin Mergers

and Acquisitions


Changing the Organizational CultureChanging the Organizational Culture

Culture

Define the desired behaviors

Deploy role models

Provide clear and consistent messages

Provide meaningful incentives


Managing a Talent SurplusManaging a Talent Surplus

Reduction in Work Hours or

Compensation

Attrition and Hiring Freezes

Voluntary Separation Programs

Workforce Downsizing

Workforce Reductions


Legal Considerations Legal Considerations for Workforce Reductionsfor Workforce Reductions

Workforce Adjustmen

ts

Severance benefits

COBRA coverage

OWBPAWarn

Act


Managing a Talent ShortageManaging a Talent Shortage

Use overtime

Implement alternative

work arrangements

Outsource work

Bring back recent retirees

Use contingent

workers

Reduce turnover

Tactics to Reduce a Talent Shortage


FIGURE 2–8 Managing Talent Supply Imbalances


Technology ChallengesTechnology Challenges

Effects on Work and Organizations

Effects on Communication

Effects on Work Processes

Effects on HR Activities

Technology


FIGURE 2–9 Factors Involved in Proper Monitoring of Employee E-Mail


Measuring Effectiveness of HR Measuring Effectiveness of HR InitiativesInitiatives• HR MetricsHR Metrics

Specific measures tied to HR performance indicators.Specific measures tied to HR performance indicators.Development and use of metrics that can better Development and use of metrics that can better

demonstrate HR’s value and track its performance.demonstrate HR’s value and track its performance. Characteristics of good HR metrics:Characteristics of good HR metrics:

Are accurate.Are accurate.Are linked to strategic and operational objectives.Are linked to strategic and operational objectives.Have clearly understood calculations.Have clearly understood calculations.Meet information needs.Meet information needs.Can be compared internally and internally.Can be compared internally and internally.Can be used to drive HR management efforts.Can be used to drive HR management efforts.


FIGURE 2–10 Key HR Metrics


HR and BenchmarkingHR and Benchmarking• BenchmarkingBenchmarking

Comparing specific measures of performance to an Comparing specific measures of performance to an industry standard or best practices in other “best-in-industry standard or best practices in other “best-in-class” organizations.class” organizations.

• Common BenchmarksCommon Benchmarks Total compensation as a percentage of net income Total compensation as a percentage of net income

before taxesbefore taxes Percent of management positions filled internallyPercent of management positions filled internally Dollar sales per employeeDollar sales per employee Benefits as a percentage of payroll costBenefits as a percentage of payroll cost


HR and the Balanced ScorecardHR and the Balanced Scorecard• The Balanced ScorecardThe Balanced Scorecard

Uses a diverse set of performance measures to align Uses a diverse set of performance measures to align performance efforts with organizational strategy.performance efforts with organizational strategy.

Avoids a limited focus on financial measures by Avoids a limited focus on financial measures by focusing on long-term drivers of performance and focusing on long-term drivers of performance and organizational sustainability.organizational sustainability.

Requires spending considerable time and effort to Requires spending considerable time and effort to identify the appropriate HR measures and how they identify the appropriate HR measures and how they tie to strategic organizational success.tie to strategic organizational success.

Address three elements—accountability, validity, and Address three elements—accountability, validity, and actionable results.actionable results.


FIGURE 2–11 Balanced Scorecard Framework


Human Capital Effectiveness Human Capital Effectiveness MeasuresMeasures• Return on Investment (ROI)Return on Investment (ROI)

Shows the value of investments in HR activities.Shows the value of investments in HR activities.

AA = Operating costs for a new or enhance system for the time period = Operating costs for a new or enhance system for the time period

BB = One-time cost of acquisition and implementation = One-time cost of acquisition and implementation

CC = Value of gains from productivity improvements for the time period = Value of gains from productivity improvements for the time period

B A

C

ROI


Other Effectiveness MeasuresOther Effectiveness Measures

Human capital value added (HCVA)

Human capital return on

investment (HCROI)

Human economic value added (HEVA)


Assessing HR EffectivenessAssessing HR Effectiveness• HR AuditHR Audit

A formal research effort that evaluates the current A formal research effort that evaluates the current state of HR management in an organizationstate of HR management in an organization

Audit areas:Audit areas:StaffingStaffingCompensationCompensationHealth and safetyHealth and safetyLegal compliance Legal compliance Administrative processes and recordkeepingAdministrative processes and recordkeepingEmployee retentionEmployee retentionBenefitsBenefits

Hr ppt chp 2 (1)

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