Human Resource Management 1
TWELFTH EDITION
GARY DESSLER BIJU VARKKEY Part 1 | Introduction
Chapter 3
The Manager’s Role in Strategic Human Resource Management
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After After reading reading this this chapter, chapter, you you should should be be able able to: to: 1. Outline the steps in the strategic management process. 2. Explain and give examples of each type of companywide and competitive strategy. 3. Explain what a strategy-oriented human resource management system is and why it is important. 4. Illustrate and explain each of the eight steps in the HR Scorecard approach to creating human resource management systems.
Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd Authorized adaptation from the United States edition of Human Resource Management, 12/e
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The Strategic Management Process • Strategic Management The process of identifying and executing the
organization’s mission by matching its capabilities with the demands of its environment.
• Strategy A chosen course of action.
• Strategic Plan How an organization intends to balance its internal
strengths and weaknesses with its external opportunities and threats to maintain a competitive advantage over the long-term. Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd Authorized adaptation from the United States edition of Human Resource Management, 12/e
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Business Vision and Mission • Vision A general statement of an organization’s intended
direction that evokes emotional feelings in organization members.
• Mission Spells out who the company is, what it does, and
where it’s headed.
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FIGURE 3–5
The Strategic Management Process
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FIGURE 3–7
A SWOT Chart
Strengths
Weaknesses
Example: Market leadership
Example: Large inventories
Opportunities
Threats
Example: New overseas markets
Example: Market saturation
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FIGURE 3–8
Relationships Among Strategies in Multiple-Business Firms
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Types of Strategies Corporate-Level Strategies
Diversification Strategy
Vertical Integration Strategy
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Consolidation Strategy
Geographic Expansion Strategy
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Types of Strategies (continued) Business-Level/ Competitive Strategies
Cost Leadership
Differentiation
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Focus/Niche
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Achieving Strategic Fit
The “Fit” Point of View (Porter) consists of the idea that each department’s strategy needs to fit the parent business’s competitive aims.
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Strategic Human Resource Management • Strategic Human Resource Management The linking of HRM with strategic goals and objectives
in order to improve business performance and develop organizational cultures that foster innovation and flexibility.
Involves formulating and executing HR systems—HR policies and activities—that produce the employee competencies and behaviors that the company needs to achieve its strategic aims.
Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd Authorized adaptation from the United States edition of Human Resource Management, 12/e
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FIGURE 3–6
Linking Company-Wide and HR Strategies
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Creating the Strategic Human Resource Management System Components of a Strategic HRM System
Human Resource Professionals
Human Resource Policies and Practices
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Employee Behaviors and Competencies
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FIGURE 3–10 Strategy Map for Southwest Airlines
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Source: Adapted from “Creating a Strategy Map,” Ravi Tangri,
[email protected]. 3–14
FIGURE 3–12 Three Important Strategic HR Tools
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Source: Adapted from Brian Becker et al., The HR Scorecard: Linking People, Strategy, and Performance (Boston: Harvard Business School Press, 2001), p. 12. 3–15
Measuring HR’s Contribution • The HR Scorecard Shows the quantitative standards, or
“metrics” the firm uses to measure HR activities. Measures the employee behaviors
resulting from these activities. Measures the strategically relevant
organizational outcomes of those employee behaviors.
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Creating an HR Scorecard The 10-Step HR Scorecard Process 1
Define the business strategy
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Identify required HR policies and activities
2
Outline value chain activities
7
Choose HR Scorecard measures
3
Outline a strategy map
4
Identify strategically required outcomes
5
Identify required workforce competencies and behaviors
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Summarize Scorecard measures on digital dashboard and monitor, predict, and evaluate
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FIGURE 3–14
Simple Value Chain for “The Hotel Paris”
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HR Metric* Absence rate
Five Sample HR Metrics How to Calculate It # of days absent in month
× 100
Average # of employees during month × # of workdays
Cost per hire
Advertising + agency fees + employee referrals + travel cost of applicants and staff + relocation costs + recruiter pay and benefits Number of hires
HR expense factor
HR expense Total operating expense
Time to fill
Total days elapsed to fill job requisitions Number hired
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Turnover rate
Sources: Robert Grossman, “Measuring Up,” HR Magazine, January 2000, pp. 29– 35; Peter V. Le Blanc, Paul Mulvey, and Jude T. Rich, “Improving the Return on Human Capital: New Metrics,” Compensation and Benefits Review, January/February 2000, pp. 13–20; Thomas E. Murphy and Sourushe Zandvakili, “Data and Metrics-Driven Approach to Human Resource Practices: Using Customers, Employees, and Financial Metrics,” Human Resource Management 39, no. 1 (Spring 2000), pp. 93–105; [HR Planning, Commerce Clearing House Incorporated, July 17, 1996;] SHRM/BNA 2000 Cost Per Hire and Staffing Metrics Survey; www.shrm.org. See also, SHRM Research “2006 Strategic HR 3–19 Management Survey Report,” Society for Human Resource Management..
Number of separations during month
× 100
KEY TERMS strategic plan strategic management vision mission SWOT analysis strategy strategic control competitive advantage strategic human resource management HR Scorecard metrics value chain analysis Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd Authorized adaptation from the United States edition of Human Resource Management, 12/e
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