1-1

Module 01

The Strategic Role of Human Resource Development

Outline

Strategic Planning and Strategic TrendsThe Basics of Strategic PlanningThe Strategic Planning ProcessBasic Strategic TrendsManagerial Consequences of the Basic Trends

Outline

HR’s Strategic RoleHR’s Evolving RoleStrategic Human Resource ManagementHR’s Role as a Strategic PartnerHR and TechnologyHR and Employee Performance and CommitmentResearch Insight

After Studying This Chapter, You Should Be Able To:

Utilize your understanding of Human Resources Management to better understand human resources development.Explain what human resource development is and how it relates to Human Resources Management.Explain how human resources development relates to the management process.Give at least eight examples of how HR management concepts and techniques can be of use to all managers.Illustrate the HR management responsibilities of line managers and staff (HR) managers.

The Management Process

PlanningOrganizingStaffingLeadingControlling

Management Process

PlanningGoals and standardsRules and proceduresPlans and forecasting.

OrganizingTasksDepartmentsDelegating Authority and communicationCoordinating

Management Process

StaffingHiringRecruiting Selecting Performance standardsCompensationEvaluating performanceCounseling Training and developing

Management Process

LeadingGetting the job doneMoraleMotivation

ControllingSetting standards Comparing actual performance to standardsCorrective action

HRM Function

Human Resource Management is the process of acquiring, training, appraising, and compensating employees and attending to their labor relations, health and safety, and fairness concerns.

HRM People Functions Include:

Job analysesLabor needsRecruitSelect candidatesOrient and trainWages and salariesIncentives and benefits

PerformanceCommunicateTrain and developEmployee commitmentEqual opportunityHealth and safetyGrievances/labor relations

HRM is Important to all Managers. Don’t Let These Happen to You!

The wrong personHigh turnoverPoor resultsUseless interviewsCourt actionsSafety citationsSalaries appear unfairPoor trainingUnfair labor practices

HR – It’s All About Results

“For many years it has been said that capital is the bottleneck for a developing industry. I don’t think this any longer holds true. I think it’s the work force and a company’s inability to recruit train and maintain a good work force that does constitute the bottleneck….” F. K. Foulkes

Line and Staff Aspects of HR

AuthorityMaking decisions Directing workGiving orders

Line Managers Accomplishing goals

Staff Managers Assisting and advising line managers

Line Manager’s HR Jobs

The right person OrientationTrainingPerformanceCreativityWorking relationships

Policies and proceduresLabor costsDevelopmentMoraleProtecting

Staff Manager’s HR Jobs

Line authorityImplied authorityFunctional controlEmployee advocacy

HR Department Organizational

Chart

Strategic Planning and Trends

Strategy is the company’s long-term plan for how it will balance its internal strengths and weaknesses with its external opportunities and threats to maintain a competitive advantage.

Recall Strategic Planning

There are three levels of strategic planning as shown below

CorporateStrategy

BusinessStrategy

BusinessStrategy

BusinessStrategy

BusinessStrategy

FunctionalStrategies

The Strategic Planning Process

SWOT analysis - Strengths, Weaknesses, Opportunities, and ThreatsBest strategic plans balance a company’s Strengths and Weaknesses with the Opportunities and Threats the firm facesBasic strategic trends

GlobalizationTechnological advancesThe nature of workThe workforce

Recall Importance of Globalization

010

20304050

607080

1920 1950 1970 2000

% fortune 500 with aglobal presence

Technological Advances and the Nature of Work

Technology mandates and enables companies to be more competitiveKnowledge intensive jobs in industries such as aerospace, computers, telecommunications, and biotechnology are replacing factory jobs in steel, auto, rubber and textiles

Carrier

The Workforce Itself is Diverse

AsianBlackHispanicMenWomen

US Department of Labor website

Consequences of these basic trends

Technology

Global expansion

Strengths and Weaknesses

Uncertainty, Turbulence, Rapid Change, Changing power bases

Companies must be Fast,Responsive, andCost- effective

Improved competition

HR’s evolving role

Protector and Screener

Strategic Partner

Change Agent

Strategic HRM

Strategic human resource management: linking HRM with strategic goals and objectives to improve business performance and develop organizational cultures fostering innovation and flexibility.

Clarify the businessstrategy

Realign the HR functions and keypeople practices

Create needed competenciesand behaviors

Realization of businessstrategies and results

Evaluate and refine

HR’s evolving role as strategic partner

HR operations

Corporate strategy

Corporate strategy

HR programsCorporate strategy

HR programsFedEx

How HR helps strategy execution

Functional strategies should support competitive strategiesValue chain analysisOutsourcingStrategy Formulation

How HR helps form strategy

Formation of a company’s strategy = identifying, analyzing and balancing external opportunities and threats with internal strengths and weaknessesEnvironmental scanning

The Value Chain Approach

HR and technology- End User Technology can be the Human Resources engine of change

Basic HR systems demand paperwork

70% of HR’s employees time = paperwork

Off the shelf forms from Office Depot/Office max

Online forms

Human Resource Information Systems (HRIS)

HR on the Internet

* Thinking now of your most recent contact with the federal government, what was the method of contact?** Thinking about two years from now, what do you think will be your main method of contact with

governments? (June, 2002)

Trends: Increased Use of Internet54%

48%

42%

34%

16%

22%27%

33%

18% 18%21%

16%

9% 10% 9% 8%

0%

60%

Telephone Internet Mail In-person

Sep/Oct 00* Sep/Oct 01* Jun 02* Two years from now**

HR portals

Employees can answer their own questions

HR moves from reactive to proactive

Training and Development translates into performance

Can HR have a measurable impact on a company’s bottom line?Better HR Training translates into improved employee attitudes and motivation (e.g., working at home)Well run HR training programs drive employee commitment

TOYOTA

Factors affecting the training structure:

Management PhilosophyOrganizational StrategyOrganizational StructureSizeTechnology RequirementsIndustry demands

Role of Training in Organizations

Regardless of where training lies in an organization, its role is to improve the organization’s effectiveness by:

Providing employees w/ necessary KSAsProvide personal enrichmentIncrease competitive advantageRespond to specific organizational needsIncrease organizational strategic capabilityImprove qualityWhile staying within the budget!

Implications of Business Strategy for TrainingImplications of Business Strategy for Training

StrategyHow

Achieved Key IssuesTraining

ImplicationsConcentration - improve

quality- current skills- developwork force

- team building- cross-training- people skills- on-the-job

Implications of Business Strategy for TrainingImplications of Business Strategy for Training

StrategyHow

Achieved Key IssuesTraining

ImplicationsConcentration

Internal Growth

- improvequality

- current skills- developwork force

- team building- cross-training- people skills- on-the-job

- globalexpansion

- new products- joint ventures

- innovation- creating new

jobs & tasks

- cultural training- creativity training- communication- technical skills- conflict resolution

Implications of Business Strategy for TrainingImplications of Business Strategy for Training

StrategyHow

Achieved Key IssuesTraining

ImplicationsConcentration

Internal Growth

External Growth(acquisition)

- improvequality

- current skills- developwork force

- team building- cross-training- people skills- on-the-job

- globalexpansion

- new products- joint ventures

- innovation- creating new

jobs & tasks

- cultural training- creativity training- communication- technical skills- conflict resolution

- acquire firms - integration- redundancy- restructuring

- integrate trainingsystems

- team building- identify capabilities

Implications of Business Strategy for TrainingImplications of Business Strategy for Training

StrategyHow

Achieved Key IssuesTraining

ImplicationsConcentration

Internal Growth

External Growth(acquisition)

Disinvestment

- improvequality

- current skills- developwork force

- team building- cross-training- people skills- on-the-job

- globalexpansion

- new products- joint ventures

- innovation- creating new

jobs & tasks

- cultural training- creativity training- communication- technical skills- conflict resolution

- acquire firms - integration- redundancy- restructuring

- integrate trainingsystems

- team building- identify capabilities

- cost reduction- redefine goals- sell assets

- efficiency - stress management- time management- cross-training- outplacement

Key Training Roles

ResearcherNeeds AnalystEvaluatorProgram DesignerMaterials DeveloperManagerMarketerCounselorChange AgentInstructorCommunicator

TRAINING COMPETENCIES

Computer and data analysis skillResearch skillsUnderstanding of Adult LearningOral and Written Communication SkillsGoal settingUnderstanding how careers developAbility to coach and give feedbackCost/benefit analysisProject Management/Records ManagementDelegation skillsLogisticsStrategic PlanningNegotiationGeneral business and industry understanding

A Training Process Model

Utilizing Input-Process-Output ModelNeeds Analysis/AssessmentDesignDevelopmentImplementationEvaluationFollow-up

Ultimate Goal of Training:

To provide and facilitate effective and efficient organizational learning that improves organizational performance

KSAs….

Knowledge - Info. we acquire & place into memory, how it’s organized into our structure & to our understanding of how/when it’s usedSkills - Capacities needed to perform a set of tasks developed from a training experienceAttitudes - Reflections of employee beliefs/opinions that support/inhibit behaviorAbilities - General capacities related to performing a set of tasks developed over time as a result of heredity and experience

A Case Study

Dell’s dual HR roles

Deals with staff- benefits- compensation- call center

Deals with management- education- recruitment- planning- training- personnel needs

OPERATIONS MANAGEMENT

Is There a “One Best HR Way”?

Follow a company’s operating and strategic initiativesAll companies can benefit from

Profit sharing programsResults oriented appraisalsEmployment securityFoster informal relationships- promote worldwide communicationsDevelop global executives

Societal Trends, Work Place Changes, and Human Resource Challenges

Societal trends• Rapid Change• Globalization• Rise of Internet

• Legislation• Hyper competitiveness• Rise of the service sector

Work place changes• Competitive Position: Cost,

Quality, Distinctive Capabilities• Decentralization• Downsizing• Organizational Restructuring

• Self-Managed Work Teams• Small Businesses• Organizational Culture• Technology• Outsourcing

Human Resource Challenges• Ethical Dilemmas and Social Responsibility• Staffing, Development, and Productivity• Job Design and Empowerment• Brain Drain and Talent Shortage• Safety Net and Job Insecurity

Human Resource Challenges in HK and China

Hong KongDeclining growth, a stagnant economyPrimarily service economyInflux of talents from mainlandUnclear competitive edge in global market

Chinese mainlandRapidly growth, especially private sectorCompetitive skilled & professional labor marketsEvolving business and labor lawsWTO and increasing competitivenessBusiness ethics

A Hong Kong Company: Computime

28 years old30% annual sales growth in past 3 years 5% profit marginProduction plant in ShenzhenAdministrative and HQ offices in HK7 divisions – 4 functions and 3 business unitsAbout 500 staff employees and 3000 production workersISO objective but defective products due to rush

Vision

To become a global leader in electronics supply chain services through establishing long-term partnerships based on integrity and ethical business practices.

Mission

We act as one responsive, flexible and innovative team with full commitment and dedication to exceed our customers’ expectations in quality, cost, delivery and service.

Value

Customer First

Zero Defect

Innovations

One Team

Business Ethics

Social Responsibility

Computime (VMV)

Discussion Questions

What are the HR challenges facing Computime?What information do we need to identify the HRM challenges of Computime? How can Computime use HRM to stay competitive and sustain its rapid growth?

An HRM Framework for analyzing HRM challenges of a company

BusinessStrategies

BusinessStrategies

OrganizationalCharacteristics

OrganizationalCharacteristics

OrganizationalCapabilities

OrganizationalCapabilities

EnvironmentEnvironment

HR Strategies And choices

Consistency

Consistency

Con

sist

ency

Consistency

ImprovedFirm

Performance

ImprovedFirm

Performance

FitFit

FitFit

FitFit

FitFit

Influence of Business Strategies on HRM

BusinessStrategy

Common OrganizationalCharacteristics HR Strategies

Overallcostleadership

• Sustained capital investment

• Tight cost control • Low-cost distribution

system• Structured organization

and responsibilities

• Explicit job descriptions• Detailed work planning• Emphasis on technical

qualifications and skills• Emphasis on job-specific

training• Emphasis on job-based pay

• Product engineering• Strong capability in basic research

• Reputation for quality or technological leadership

• Broad job classes• Loose work planning• External recruitment• Individual-based pay• performance appraisal as

development tool

Differ-entiation

Focus • Combination of HR strategies above.

• Combination of business strategies above.

The Importance of Organizational Characteristics on HRM

Overall management philosophyStructureCulture

Influence of Environment on HRM

Degree ofUncertainty

Volatility

• Detailed work planning• Job-specific training• Fixed pay• High dependence on

superior

• Control emphasis • Efficient production• Job-specific training• Fixed pay

• Loose work planning• Generic training• Variable pay• Multiple inputs for

appraisals

• Flexibility• Innovation• Generic training• Variable pay

EnvironmentalDimension Low High

Influence Environment on HRM (cont.)

Magnitudeof Change

Complexity

• Broad job classes• Informal hiring and

socialization of new employees

• “buy” skills• Customized appraisals

• Flexibility• External recruitment• Decentralized pay

decisions• Multiple inputs for

appraisals

EnvironmentalDimension

• Explicit job descriptions• Formal hiring and

socialization of new employees

• “make” skills• Uniform appraisal

procedures• Control emphasis• Internal recruitment• Centralized pay

decisions• High dependence on

superior

Low High

Importance of Organizational Capabilities on HRM

Leadership – at all levelsTechnology – process and productManagement Systems – information and controlQuality – reliability and timelinessDistinctive competences?

Human Resource Strategies and Choices

1. Determining HR needs– HR planning and job analysis (chapter 2)2. Importing HR – recruiting and selection (chapter 5)3. Preparing HR – socialization and training (chapter 8)4. Compensating HR – setting compensation (chapter 10)5. Evaluating HR – appraising and managing performance (chapter 7, 14)6. Incentives HR – rewarding performance (chapter 11)7. Appreciating HR differences – managing diversity (chapter 4)8. Developing HR – career development (chapter 9)9. Protecting HR – designing and administering benefits (12)10. Positive HR relations – developing employee relations (chapter 13)11. HR in global companies – international HRM (chapter 17)12. Exporting HR – separation, downsizing and outplacement (chapter 6)

Questions to consider

1. How much responsibility does an organization have to shield its employees from the effects of rapid changes in the environment?

2. Does an employer have an ethical responsibility to train employees who lack basic literary and numerical skills? Why yes or why no?

3. In today’s increasing chaotic business and economic environment, does an employer have a responsibility to help employees prepare for these changes that may affect their jobs and careers?

4. All civil servants in HK will face a pay reduction of 1 to 5% this October. Is this fair to the employees? Why yes or why no?

5. Some European countries have laws barring organizations form using computer technology that invades employee privacy. Do you believe that similar laws should be developed in Hong Kong? Why yes or no?

HRM and the Bottom Line

Research has shown consistently a clear link between progressive HR practices (e.g., High involvement HR systems) and

SalesProductivityRetention

An Exceptional Company: Southwest Airline

31 years oldPost 9/11, SWA had no layoff, posted profits and

did not reduce flights

What account for the success of SWA? Can or how can SWA sustain its success?Can other companies imitate SWA’s approach to HRM? If not, why not? What can Computime learn from SWA?

Continuum of Resources Sustainability

Low(Easy to Imitate)

Level of Resource Sustainability

Slow-CycleResources

Standard-CycleResources

Fast-CycleResources

Strongly shielded

Patents, brand name

Gillette: Sensor razor

•

•

•

Easily duplicated

Idea driven

Sony: Walkman

•

•

•

Standardized massproduction

Economies of scaleComplicated processes

Chrysler: Mini-van

•

•

•

Source:

Suggested by J. R. Wiliams, “How Sustainable Is Your Competitive Advantage?”

California Management Review

(Spring 1992), p. 33.

Typical Value Chain for a Manufactured Product

ProductProducerFabrication Distributor RetailerRaw

MaterialsPrimary

Manufacturing

Source:

Suggested by J. R. Galbraith, “Strategy and Organization Planning,”

in The Strategy Process: Concepts, Contexts, Cases, 2nd ed., edited by H. Mintzberg and J. B. Quinn (Englewood Cliffs, N.J.: Prentice Hall, 1991), p. 316.

Corporate Value Chain

SupportActivities

Primary Activities

ProfitMargin

Firm Infrastructure(general management, accounting, finance, strategic planning)

Human Resource Management(recruiting, training, development)

Technology Development(R&D, product and process improvement)

Procurement(purchasing of raw materials, machines, supplies)

InboundLogistics(rawmaterialshandling andwarehousing)

Operations(machining,assembling,testing)

OutboundLogistics(warehousinganddistributionof finishedproduct)

Marketingand Sales(advertising,promotion,pricing,channelrelations)

Service(installation,repair, parts)

Source:

Adapted/repri

nted with the permission of the The Free Press, an imprint of Simon & Schuster, from Competitive Advantage: Creating and Sustaining Superior Performance

by Michael E. Porter, p. 37. Copyright ©

1985 by Michael E. Porter.

Basic Structures of Corporations: Simple and Functional

I. Simple Structure

II. Functional Structure

Owner-Manager

Workers

Top Management

Manufacturing Sales Finance Personnel

Basic Structures of Corporations: Divisional

III. Divisional Structure*

Manufacturing Finance Manufacturing Finance

Top Management

Product Division A Product Division B

*Conglomerate structure is a variant of the division structure.

Sales Personnel Sales Personnel

Engineering Perspective on QualityEngineering Perspective on Quality

IdeaGeneration

PreliminaryDesign

PrototypeDevelopment

Final Definition

ProductDesign &

EvaluationImplemen-

tation

Product Design Life Cycle

PrototypeIterations

Operations Perspective on QualityOperations Perspective on Quality

The Systems View of Operation Management

Planning Organizing

Controlling

Inputs Conversion Process Outputs Customers

Feedback

Operations Perspective on QualityOperations Perspective on Quality

An Operations Management Competence Model The Sand Cone Model

Quality

Dependability

Cost Efficiency

Speed

Strategic Management Perspective on Strategic Management Perspective on QualityQuality

A Generic Strategic Planning ProcessFirm Mission

and Goals

Strategic Options

Conflict Politicsand Change

Strategic AlignmentBetween

Structure and Goals

Org. RewardSystems

OrganizationalDesign

InternalAnalysis

ExternalAnalysis

Business Level Strategy

Corporate Level Strategy

Operational Subplans

OrganizationOrganization

Marketing Perspective on QualityMarketing Perspective on Quality

A Marketing System

IntermediaryIntermediary

CustomerCustomer

PaymentOffering

Offering

Offering

Payment

Payment

Financial Perspective on QualityFinancial Perspective on Quality

The Deming Value Chain

ImproveQuality

ProductivityImproves

Capturethe

Market

Provide Jobsand More Jobs

Stay inBusiness

Cost decrease because of lessrework, fewer mistakes, fewer

delays, snags; better use ofmachine-time and materials

Financial Perspective on QualityFinancial Perspective on Quality

Basic Economic Quality Level Model

Quality

Cost

Costs of Improving Quality

Losses due to poor quality

Total Quality Costs = Sum of Losses and Gains

Minimum Cost

Optimum Quality Level

The Three Spheres of QualityThe Three Spheres of Quality

Quality Management

Quality Assurance

Quality Control