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C H A P T E R T T h r e e
3
Human Resource
Management Strategy and
Analysis
Strategic Overview
In Brief: This chapter explains how
The Strategic Management Process to design and develop an HR system
Goal-Setting and the Planning Process
that supports the company’s strategic
Strategic Planning
Improving Productivity Through HRIS
goals. It explains the strategic
Types of Strategies management process, how to develop a
The Top Manager’s Role in Strategic strategic plan, and the HR manager’s
Planning role in the process of strategy
Departmental Managers’ Strategic execution and formulation. The
Planning Roles chapter explains why metrics are
Department Managers’ Strategic Planning
essential for identifying and creating
Roles in Action
Strategic Human Resource Management high-performance human resource
Defining Strategic HR Management policies and practices.
Human Resource Strategies and Policies
Strategic Human Resource Management Interesting Issues: The Human
Tools Resource function today continues to
HR Metrics and Benchmarking
play an increasingly visible role in the
Types of Metrics
Improving Productivity Through HRIS
strategic planning and management
Benchmarking in Action process, requiring a new level of skill
Strategy and Strategy-Based Metrics and competency among HR
Workforce/Talent Analytics and Data professionals. HR managers must
Mining develop measureable strategies that
What are HR Audits? convincingly showcase HR’s impact on
Evidence-Based HR and the Scientific Way
business performance. Successful
of Doing Things
What are High-Performance Work Systems?
Human Resource managers have
High-Performance Human Resource adopted a perspective that focuses on
Policies how their departments can play a
and Practices central role in implementing the
organization’s strategy.
ANNOTATED OUTLINE
B. Strategic Planning - A strategic plan is the company’s plan for how it will
match its internal strengths and weaknesses with external opportunities
and threats in order to maintain a competitive advantage. Figure 3-2
sums up the strategic management process in seven steps as follows:
7. Evaluate performance.
C. Strategic HRM Tools - Managers use several tools to help them translate
the company’s broad strategic goals into specific human resource
management policies and activities. Three important tools include the
strategy map, the HR Scorecard, and the digital dashboard.
1. Strategy Map - The strategy map shows the “big picture” of how
each department’s performance contributes to achieving the
company’s overall strategic goals. It helps the manager understand
the role his or her department plays in helping to execute the
company’s strategic plan.
2. HR Scorecard - Many employers quantify and computerize the map’s
activities. The HR Scorecard helps them to do so. The HR Scorecard
is not a scorecard. It refers to a process for assigning financial and
nonfinancial goals or metrics to the human resource management–
related chain of activities required for achieving the
company’s strategic aims and for monitoring results.
3. Digital Dashboards - A digital dashboard presents the manager with
desktop graphics and charts. It is a computerized picture of where
A. Types of Metrics – Figures 3-11 and 3-12 present examples of broad and more
focused measures organizations can use to measure HR effectiveness.
F. What are HR Audits? These audits are a way for an organization to measure its
current policies and practices and identify areas where improvements can be
made based on company goals.
DISCUSSION QUESTIONS
Top management approves a long-tem or strategic plan. Then each department, working
with top management, creates its own budgets and other plans to fit and contribute to the
company’s long-term plan.
2. What is the difference between a strategy, a vision, and a mission? Give one example
of each. (LO 3.2; AACSB: Reflective Thinking Skills; Learning Outcome: Describe the
process and tools of strategic HRM)
A strategy identifies a course of action to get the company from where it is today to where it
wants to be tomorrow. One example of a company’s strategy given in the text is Dell
Computer’s strategy to be a “low cost leader” by using the Internet and phone to sell PCs
directly to end users at prices competitors cannot match.
A vision is a general statement of the company’s intended direction that evokes emotional
feelings in employees. It is a “mental image” of a possible and desirable future state for the
organization that articulates a view of a realistic, credible, and attractive future of the
organization that is better than what now exists. For example, the vision for the California
Energy Commission is “for Californians to have energy choices that are affordable, reliable,
diverse, safe, and environmentally acceptable.”
The mission is a more specific and shorter term statement which lays out what is supposed to
be now and communicates “who we are, what we do, and where we’re headed.” Following
the vision for the California Energy Commission, their mission is to “assess and act through
public/private partnerships to improve energy systems that promote a strong economy and a
healthy environment.”
3. Define and give at least two examples of the cost leadership competitive strategy and
the differentiation competitive strategy. (LO 3.3; AACSB: Communication Skills; Learning
Outcome: Describe the process and tools of strategic HRM)
The cost leadership competitive strategy means that the enterprise aims to become the low-
cost leader in an industry. For example, stores such as Staples and Office Max maintain their
competitive advantage by selling large quantities of office products at low prices. Airlines
such as Southwest offer low fares in addition to quick turnarounds at the gate.
1. With three or four other students, form a strategic management group for your college
or university. Your assignment is to develop the outline of a strategic plan for the
college or university. This should include such things as mission and vision
statements, strategic goals, and corporate, competitive, and functional strategies. In
preparing your plan, make sure to show the main strengths, weaknesses,
opportunities, and threats the college faces, and which prompted you to develop your
particular strategic plans. Look for students to prepare a well-developed mission and
vision statement, making sure that they are clearly differentiated from each other with the
vision being future focused, articulating the desired state, with the mission supporting the
vision, describing “who we are, what we do, and where we are headed.” Use this exercise as
an opportunity to discuss the problems that may be created by not clearly defining the
mission, vision, as well as the strengths, weaknesses, opportunities, and threats. (LO 3.2;
AACSB: Analytic Skills; Learning Outcome: Describe the process and tools of strategic HRM)
2. Using the Internet or library resources, analyze the annual reports of at least five
companies. Bring to class examples of how those companies say they are using their
HR processes to help the company achieve its strategic goals. In class, facilitate a
discussion on how effective the HR processes at each company appear to support strategic
goals. Challenge students to come up with additional ideas for other approaches for using
the HR processes and how they would go about implementing them, noting the specific
difficulties of each. (LO 3.4; AACSB: Use of Information Technology; Learning Outcome:
Describe the process and tools of strategic HRM)
3. Interview an HR manager and write a short report on the topic: “The strategic roles of
the HR manager at XYZ Company.” Instruct students to follow the model outlined in this
chapter for the steps in the strategic management process, and HR’s role in strategy
execution and strategy formulation. (LO 3.4; AACSB: Analytic and Communication Skills;
4. Using the Internet or library resources, bring to class and discuss at least two
examples of how companies are using an HR Scorecard to help create HR systems
that support the company’s strategic aims. Do all managers seem to mean the same
thing when they refer to “HR Scorecards”? How do they differ? For each example, ask
students to comment on how effective they believe the measures that were selected by the
company are in terms of allowing the company to assess HR’s performance objectively and
quantitatively, as well as serving as a tool for the HR manager to build a measurable and
persuasive business case for how HR is contributing to achieving the company’s strategic
financial goals. Challenge students to critique the scorecard and how it could be improved to
measure strategically relevant organizational outcomes, workforce competencies and
behaviors, and HR system policies and activities (LO 3.5; AACSB: Use of Information
Technology; Learning Outcome: Describe the process and tools of strategic HRM.
5. In teams of 4–5 students, choose a company for which you will develop an outline of a
strategic HR plan. What seem to be this company’s main strategic aims? What is the
firm’s competitive strategy? What would the strategic map for this company look like?
How would you summarize your recommended strategic HR policies for this
company? Students answers will vary. (LO 3.2; AACSB: Analytic Skills)
6. The HRCI “Test Specifications” appendix at the end of this book lists the things
someone studying for the HRCI certification exam needs to know in each area of
human resource management (such as in Strategic Management, Workforce Planning,
and Human Resource Development). In groups of 4-5 students, do four things: (1)
review that appendix now; (2) identify the material in this chapter that relates to the
required knoweldge the appendix lists; (3) write four multiple-choice exam questions
on this material that you believe would be suitable for inclusion in the HRCI exam; and
4) if time permits, have someone from your team post your team’s questions in front of
the class, so the students on other teams can take each other’s exam questions.
Material in this chapter that could be covered in the HRCI certification exam include: Under
Strategic Management, the formulation of HR strategies to support the company’s overall
strategic plan; HR’s role in helping companies to build a competitive advantage, strategic HR
management, role in strategy executiion and formulation; high performance work system
concepts and supporting HR systems/practices; the HR Scorecard and all the steps involved
in developing it. (LO 3.1-4; AACSB: Analytic Skills; Learning Outcome: Describe the process
and tools of strategic HRM)
Instructions: Set up groups of three or four students for this exercise. You are probably
already quite familiar with what it’s like to have a cup of coffee or tea in a Starbucks coffee
shop, but if not, spend some time in one prior to this exercise. Meet in groups and develop
an outline for an HR strategy for Starbucks Corp. Your outline should include four basic
elements: a basic business/competitive strategy for Starbucks, workforce requirements (in
terms of employee competencies and behaviors) this strategy requires, specific HR
policies and the activities necessary to produce these workforce requirements, and
suggestions for metrics to measure the success of the HR strategy. (LO 3.3; AACSB:
Analytic Skills; Learning Outcome: Describe the process and tools of strategic HRM)
1. Based on the information in this case, provide examples for Siemens of at least four
strategically required organizational outcomes and four required workforce
competencies and behaviors. (LO 3.2; AACSB: Reflective Thinking and Analytic Skills;
Learning Outcome: Describe the process and tools of strategic HRM)
2. Identify at least four of the strategically relevant HR system policies and activites that
Siemens has instituted in order to help HR contribute to achieving Siemens’ strategic
goals. (LO 3.4; AACSB: Reflective Thinking and Analytic Skills; Learning Outcome: Describe
the process and tools of strategic HRM)
3. Provide a brief illustrative strategy map for Siemens. (LO 3.5; AACSB: Reflective
Thinking and Analytic Skills; Learning Outcome: Describe the process and tools of strategic
HRM)
Student answers will vary but the strategy map should answer the following questions: 1)
What overall goals does Siemens want to achieve? 2) What must Siemens do operationally
to achieve its goals? and 3) What employee attitudes and behaviors will produce these
operational outcomes?
1. Would you recommend that the Carters expand their quality program? If so,
specifically what form should it take? Most students will agree that there are opportunities
to expand the quality program. The employee meeting approach is a good start in terms of
utilizing high-involvement organizational practices. There are opportunities to maximize the
overall quality of their human capital. For example, training seems to be an obvious area to
improve in terms of educating and building awareness about basic standards and
procedures. (LO 3.4; AACSB: Reflective Thinking and Analytic Skills; Learning Outcome:
Describe the process and tools of strategic HRM)
Questions
1. Draw a simple strategy map for the Hotel Paris. Specifically, summarize in your own
words an example of the hierarchy of links among the hotel’s HR practices, necessary
workforce competencies and behaviors, and required organizational outcomes. (LO 3.2;
AACSB: Analytic Skills; Learning Outcome: Describe the process and tools of strategic HRM)
The above strategy map for the Hotel Paris succinctly lays out the hierarchy of main activities
required for the Hotel Paris to succeed. For example, the Hotel Paris could endeavor to improve
workforce competencies and behaviors by instituting an improved recruitment process, and
measure the latter in terms of the number of qualified applicants per position.
2. Using Table 3-1, list at least five specific metrics the Hotel Paris could use to measure
its HR practices. (LO 3.6; AACSB: Reflective Thinking Skills; Learning Outcome: Describe the
process and tools of strategic HRM)
KEY TERMS
strategic plan The company’s plan for how it will match its internal strengths
and weaknesses with external opportunities and threats in order
to maintain a competitive advantage.
mission statement A more specific and shorter term statement which communicates
for a company who they are, what they do, and where they are
headed.
corporate-level strategy Type of strategy that identifies the portfolio of businesses, that, in
total, comprise the company and the ways in which these
businesses relate to each other.
competitive strategy A strategy that identifies how to build and strengthen the
business’s long-term competitive position in the marketplace.
competitive advantage Any factors that allow an organization to differentiate its product
or service from those of its competitors to increase market share.
functional strategies Strategy that identifies the broad activities that each department
will pursue in order to help the business accomplish its
competitive goals.
strategy map A diagram that summarizes the chain of major activities that
contribute to a company’s success.
digital dashboard Presents the manager with desktop graphs and charts, and
provides a computerized picture of where the company stands
on all those metrics from the HR Scorecard process.
strategy-based metrics Metrics that specifically focus on measuring the activities that
contribute to achieving a company’s strategic aims.
high performance work A set of human resource management policies and practices that
system promote organizational effectiveness.
human resource metric The quantitative measure of some human resource management
yardstick such as employee turnover, hours of training per
employee, or qualified applicants per position.
Video 1: Showtime
Showtime Networks operates cable networks and pay-per-view cable
channels across the United States and in several countries abroad. As
this video illustrates, its HR function supports corporate strategy by
helping to determine what kind of employees are needed to keep the
company in peak performance, and then by providing the company and
its employees with the HR activities that these employees need to do
their jobs. For example, you’ll see that Showtime offers many
development and training programs, as well as personal development
types of activities including mentoring programs and career-oriented
development activities. The firm’s performance management process
(which the employees helped develop) focuses specifically on the work
activities and results that help achieve departmental and corporate goals.
In this video, Matthew, the firm’s CEO, emphasizes that it is essential to
use human resources as a strategic partner, and the video then goes on
to provide something of a summary of the basic human resource
management functions.
Video 2: IQ Solutions
IQ Solutions is in the business of providing health-care system services. It
says one of its aims is lessening the inequality that is said to exist in
America’s healthcare system. The company uses its very diverse
employee base to better serve and attract a broad client base.
Employees at IQ Solutions work together in teams to achieve the
company’s goals. As we see in this video, the company itself is indeed
very diverse: for example, employees speak about 18 languages. The
company capitalizes on this diversity in many ways. For example,
employees share their ethnically unique holidays, and the firm provides
special training and other benefits that support diversity.
بيان الرؤية بيان عام لالتجاه المقصود للشركة والذي يوضح ،بعبارات عامة" ،ما
نريد أن نصبح".
بيان المهمة :بيان أكثر تحديًدا وأقصر أجاًل يوضح للشركة من هم وماذا يفعلون
وإلى أين يتجهون.
بطاقة أداء الموارد البشرية نظام قياس موجز يوضح المعايير الكمية أو
"المقاييس" التي تستخدمها الشركة لقياس أنشطة الموارد البشرية،
Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
44
وسلوكيات الموظفين الناتجة عن هذه األنشطة ،والنتائج التنظيمية ذات الصلة
استراتيجًيا لسلوكيات الموظفين تلك.
المقاييس القائمة على اإلستراتيجية المقاييس التي تركز بشكل خاص على
قياس األنشطة التي تساهم في تحقيق األهداف اإلستراتيجية للشركة.
تدقيق الموارد البشرية تحليل تقيس من خالله المنظمة وضعها الحالي وتحدد
ما يتعين عليها إنجازه لتحسين وظيفة الموارد البشرية لديها.