chapter 2 strategic hr management and planning
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CHAPTER 2 Strategic HR Management and Planning. Strategic Planning. Strategy. The proposition an organization follows for how to compete successfully and thereby survive and grow. The process of defining organizational strategy and allocating resources toward its achievement. - PowerPoint PPT PresentationTRANSCRIPT
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PowerPoint Presentation by Charlie CookThe University of West Alabama
SECTION 1 Environment for Human Resource Management
CHAPTER 2Strategic HR Managementand Planning
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Strategy 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.
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FIGURE 2–1
Strategic Planning Process
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Strategy 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.
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2–5
FIGURE 2–2
Traditional HR versus Strategic HR
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Strategic Competencies for HR Professionals
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
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Operationalizing HR Management Strategies
ThinkingStrategical
ly
Understandthe business
Focus on key business
goalsKnow what to measure
Prepare for the future
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FIGURE 2–3
Strategic Human Resource Management
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High-Performance Work PracticesIncentive
Compensation
Training and Development
Employee participation
Selectivity in Hiring
Flexible Work Arrangements
High Performance Organization
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HR Effectiveness and Financial Performance• Effectiveness
The extent to which goals have been met.• Efficiency
The degree to which operations are done in an economical manner.
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SWOT Analysis • Strategic planning tool used to evaluate
strengths, weaknesses, opportunities and threats.
• A SWOT analysis informs the goal-setting process and provides a context for future strategic planning discussions. Strengths and weaknesses are internal to an
organization Opportunities and threats originate from outside the
organization
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FIGURE 2–4 HR Factors in the SWOT Analysis
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FIGURE 2–5 Areas of External Environmental Scan
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A Sample SWOT Analysis Matrix
StrengthsHigh-quality employees.Strong, committed HR staff.Good reputation in the organization.Location (close to our stakeholders).Good rapport with other departments.Work well as a team.Good technical competence and tools.
WeaknessesVagueness of role in our acquisition strategy.Lack of data or measurements.Poor communication.HR partner bandwidth.The volume of HR initiative on the table.Compensation design and benefit program.
OpportunitiesStability in leadership.Expansion of services.Referral centers.Integrate talent management systems.Secure new talent via our merger.Further develop our self-service model.
ThreatsBudgetary constraints.Stagnation/complacency.Turnover/leadership changes.Rising health care costs.Internal conflicts & overworked employees.Marketplace uncertainty.
Positive NegativeIn
tern
alEx
tern
al
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Global Competitiveness and Strategic HR
Global Framework
Global Legal and
Regulatory Factors
Offshoring Operations
Global Staffing
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FIGURE 2–6 Strategic Approaches to International Staffing
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HR Planning in Mergers and Acquisitions• Cultural Compatibility
The extent to which such factors as decision-making styles, levels of teamwork, information-sharing philosophies, and the formality of the two organizations are similar.
• HR’s Role in Mergers and Acquisitions Communicating decisions Revising the organization structure Merging HR activities
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FIGURE 2–7 HR Activities during Mergers and Acquisitions
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Key Factors in Cultural FitDegree of internal
integration
Autonomy
Adaptability
Employee trust
Diversity
Cultural Fitin Mergers
and Acquisitions
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Changing the Organizational Culture
Culture
Define the desired behaviors
Deploy role models
Provide clear and consistent messages
Provide meaningful incentives
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Managing a Talent SurplusReduction in Work
Hours or Compensation
Attrition and Hiring Freezes
Voluntary Separation Programs
Workforce Downsizing
Workforce Reductions
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Legal Considerations for Workforce Reductions
Workforce Adjustmen
ts
Severance benefits
COBRA coverage OWBPA Warn
Act
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Managing 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
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FIGURE 2–8 Managing Talent Supply Imbalances
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Technology Challenges
Effects on Work and Organizations
Effects on Communication
Effects on Work Processes
Effects on HR Activities
Technology
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FIGURE 2–9 Factors Involved in Proper Monitoring of Employee E-Mail
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Measuring Effectiveness of HR Initiatives• HR Metrics
Specific measures tied to HR performance indicators.Development and use of metrics that can better
demonstrate HR’s value and track its performance. Characteristics of good HR metrics:
Are accurate.Are linked to strategic and operational objectives.Have clearly understood calculations.Meet information needs.Can be compared internally and internally.Can be used to drive HR management efforts.
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FIGURE 2–10 Key HR Metrics
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HR and Benchmarking• Benchmarking
Comparing specific measures of performance to an industry standard or best practices in other “best-in-class” organizations.
• Common Benchmarks Total compensation as a percentage of net income
before taxes Percent of management positions filled internally Dollar sales per employee Benefits as a percentage of payroll cost
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HR and the Balanced Scorecard• The Balanced Scorecard
Measurement tool to evaluate organizational strategy; looks at financial, customer, operations, and learning and growth measures; performance measures to align performance efforts with organizational strategy.
Avoids a limited focus on financial measures by focusing on long-term drivers of performance and organizational sustainability.
Requires spending considerable time and effort to identify the appropriate HR measures and how they tie to strategic organizational success.
Address three elements—accountability, validity, and actionable results.
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FIGURE 2–11 Balanced Scorecard Framework
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Human Capital Effectiveness Measures• Return on Investment (ROI)
Shows the value of investments in HR activities.
A = Operating costs for a new or enhance system for the time period
B = One-time cost of acquisition and implementation
C = Value of gains from productivity improvements for the time period
B AC
ROI
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Other Effectiveness MeasuresHuman capital value
added (HCVA)
Human capital return on
investment (HCROI)
Human economic value added (HEVA)
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Assessing HR Effectiveness• HR Audit
A formal research effort that evaluates the current state of HR management in an organization
Audit areas:StaffingCompensationHealth and safetyLegal compliance Administrative processes and recordkeepingEmployee retentionBenefits