Human Recourses Management

Chapter - 2

Strategic Human Resource Management

and the HR Scorecard

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After studying this chapter, you should be able 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 seven steps in the
HR Scorecard approach to creating human resource
management systems.

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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.

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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 3–1 The Strategic Management Process

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FIGURE 3–2 A SWOT Chart

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FIGURE 3–3 Strategies in a Nutshell

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FIGURE 3–4 Relationships Among Strategies in Multiple-Business Firms

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 Types of Strategies

Corporate-Level
Strategies

Vertical Geographic
Diversification Consolidation
Integration Expansion
Strategy Strategy
Strategy Strategy

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 Types of Strategies (cont’d)

Business-Level/
Competitive
Strategies

Cost Leadership Differentiation Focus/Niche

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FIGURE 3–5
The Southwest
Airlines’ Activity
System

Note: Companies like Southwest tailor all of their activities so that they fit and contribute to making their strategies a reality.
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Achieving Strategic Fit
• The “Fit” Point of View (Porter)
All of the firm’s activities must be fit
the chosen strategy such that the firm’s
functional strategies support its
corporate and competitive strategies.

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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 implementing HR systems—HR
policies and activities—that produce the employee
competencies and behaviors that the company needs to
achieve its strategic aims.

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FIGURE 3–6 Linking Company-Wide and HR Strategies

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Strategic Human Resource Challenges

Basic Strategic
Challenges

Corporate Expanded role of

Increased HR
productivity and employees in the
team involvement
performance organization’s
in design of
improvement performance
strategic plans
efforts efforts

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Human Resource Management’s
Strategic Roles

Strategic
Planning
Roles

Strategy Strategy
implementing Formulation
Role Role

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Creating the Strategic Human Resource
Management System

Components of a
Strategic HRM System

Human Resource Employee

Human Resource
Policies and Behaviors and
Professionals
Practices Competencies

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FIGURE 3–8 Three Main Strategic Human Resource System Components

Characteristics of HPWS
• multi-skilled work teams
• empowered front-line
workers
• extensive training
• labor-management
cooperation
• commitment to quality
• customer satisfaction

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FIGURE 3–9
Basic Model of How to
Align HR Strategy and
Actions with Business
Strategy

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FIGURE 3–A1 The Basic HR Scorecard Relationships

HR
Activities

Emergent
Employee
Behaviors

Strategically
Relevant
Organizational
Outcomes

Organizational
Performance

Achieve
Strategic
Goals

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FIGURE 3–A2 The Seven Steps in the HR Scorecard Approach to Formulating
HR Policies, Activities, and Strategies

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Creating an HR Scorecard

The 10-Step HR Scorecard Process

Identify required HR policies

1 Define the business strategy 6
and activities

2 Outline value chain activities 7 Create HR Scorecard

Choose HR Scorecard
3 Outline a strategy map 8
measures
Identify strategically required Summarize Scorecard
4 9
outcomes measures on digital dashboard
Identify required workforce
5 10 Monitor, predict, evaluate
competencies and behaviors

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FIGURE 3–A4
Strategy
Map for
Southwest
Airlines

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 KEY TERMS

strategic plan
strategic management
vision
mission
SWOT analysis
strategy
strategic control
competitive advantage
leveraging
strategic human resource management
HR Scorecard
metrics
value chain analysis

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Next lecture
• What is the difference between each of: -
• Job Enlargement
• Job rotation
• Job Enrichment
• What does dejobbing mean?
• What does each of:
• Flattening the Organization
• Using Self-Managed Work Teams
• Reengineering Business Processes

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`RWE