Human Resource Management

Fifteenth Edition

Chapter 3
Human Resource
Management
Strategy and
Analysis

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 Learning Objectives (1 of 2)
3-1. Explain with examples each of the seven steps
in the strategic management process.
3-2. List with examples the main types of
strategies.

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 Learning Objectives (2 of 2)
3-3. Define strategic human resource
management and give an example of strategic
human resource management in practice.
3-4. Give at least five examples of HR metrics.
3-5. Give five examples of what employers can do to
have high-performance systems.
3-6. Describe how you would execute a program to
improve employee engagement.

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 I.
Explain with examples each of
the seven steps in the strategic
management process.

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 The Strategic Management Process (1 of 2)

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 The Management Planning Process
• The Hierarchy of Goals
• Policies and Procedures

Figure 3-1 Sample Hierarchy of Goals Diagram for a Company

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 What is Strategic Planning?

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 The Strategic Management Process (2 of 2)

Figure 3-2 The Strategic Management Process

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 II.
List with examples the main
types of strategies.

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 Types of Strategies
1. Corporate Strategy
2. Competitive Strategy
3. Functional Strategy

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 Corporate Strategy
• Identifies the portfolio of businesses that, in total,
comprise the company and how these businesses
relate to each other

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 Corporate-level Strategies
1. Concentration
2. Diversification
3. Vertical Integration
4. Consolidation
5. Geographic expansion

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 Competitive Strategy
• A strategy that identifies how to build and
strengthen the business’s long-term competitive
position in the marketplace, which is also known
as business-level competitive strategy.

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 The Three Standard Competitive
Strategies
1. Cost Leadership
2. Differentiation
3. Focus

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 1. Cost leadership – this competitive strategy means becoming the low-cost
leader in an industry.

Walmart is an example.

2. Differentiation – for this competitive strategy, the firm seeks to be unique in its
industry along the dimensions that are widely valued by buyers.

Volvo and Papa John’s are examples. Volvo stresses the safety of its cars, and
Papa John’s stresses fresh ingredients.

3. Focusers – for this competitive strategy, the company carves out a market
niche.

Bugatti cars is an example. They offer a product or service that their customers
cannot get from generalist competitors, such as Toyota.

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 Functional Strategy
• A strategy that identifies the broad activities that
each department will pursue in order to help the
business accomplish its competitive goals.

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 Manager’s Role in Strategic Planning

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 III.
Define strategic human resource
management and give an example
of strategic human resource
management in practice.

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 Strategic Human Resource
Management

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 What is Strategic Human Resource
Management?
Strategic human resource management –
means formulating and executing human resource
policies and practices that produce the employee
competencies and behaviors the company needs
to achieve its strategic aims.

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 IMPROVING PERFORMANCE: The
Strategic Context

The Shanghai Ritz-Carlton

Portman Hotel

Let’s talk about it…

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 Sustainability and Strategic Human
Resource Management

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 Strategic Human Resource
Management Tools
• Strategy map
• The HR scorecard
• Digital dashboards

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 • Managers use several tools to translate the company’s strategic goals into human
resource management policies and practices. These tools include the strategy map, the
HR scorecard, and the digital dashboard.

• Strategy map – this shows the “big picture” of how each department’s performance
contributes to achieving the company’s overall strategic goals. It also summarizes how
each department’s performance contributes to achieving the company’s overall strategic
goals. It helps the manager and each employee visualize and understand the role his or
her department plays in achieving the company’s strategic plan.

• The HR Scorecard – is not a scorecard. It does however refers to a process for

assigning financial and nonfinancial goals or metrics to important human resource
management–related chain of activities. That chain is required in order to achieve the
company’s strategic aims and for monitoring results. Many employers quantify and
computerize the strategy map’s activities by utilizing the HR Scorecard.

• Digital Dashboard – presents the manager with desktop graphics and charts, showing a
computerized picture of how the company is doing on all the metrics from the HR
Scorecard process.

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 IV.
Give at least five examples of
HR metrics.

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 HR Metrics, Benchmarking, and
Data Analytics

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 IMPROVING PERFORMANCE Through HRIS:
Tracking Applicant Metrics for Improved Talent
Management

Let’s talk about it

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 Benchmarking

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 Metrics for the SHRM® 2011–2012 Customized
Human Capital Benchmarking Report (1 of 4)
Organizational Data Employment Data
• Revenue • Number of Positions Filled
• Revenue per FTE • Time-to-Fill
• Net Income Before Taxes • Cost-Per-Hire
• Net Income Before Taxes • Employee Tenure
per FTE • Annual Overall Turnover
• Positions Included Within Rate
the Organization's • Annual Voluntary Turnover
Succession Plan Rate
• Annual Involuntary Turnover
Rate

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 Metrics for the SHRM® 2011–2012 Customized
Human Capital Benchmarking Report (2 of 4)
HR Department Data Expectations for Revenue
• Total HR Staff and Organizational Hiring
• HR-to-Employee Ratio • Percentage of Organizations
• Percentage of HR Staff in Expecting Changes in
Supervisory Roles Revenue in 2011 Compared
to 2010
• Percentage of HR Staff in
Professional/Technical Roles • Percentage of Organizations
Expecting Changes in Hiring
• Percentage of HR Staff in
in
Administrative Support Roles
• 2011 Compared to 2010
• Reporting Structure for the Head
of HR
• Types of HR Positions
Organizations Expect to Hire in
2011
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 Metrics for the SHRM® 2011–2012 Customized
Human Capital Benchmarking Report (3 of 4)
HR Expense Data Metrics for More Profitable
• HR Expenses Organizations
• HR Expense to Operating • Total HR Staff
Expense Ratio • HR-to-Employee Ratio
• HR Expense to FTE Ratio • HR Expenses
Compensation Data • HR Expense to Operating
Expense Ratio
• Annual Salary Increase
• HR Expense to FTE Ratio
• Salaries as a Percentage of
• Annual Salary Increase
Operating Expense
• Target Bonus for Non-Executives
• Target Bonus for Non-Executives
• Target Bonus for Executives

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 Metrics for the SHRM® 2011–2012 Customized
Human Capital Benchmarking Report (4 of 4)
Tuition/Education Data Metrics for More Profitable
Organizations
• Maximum Reimbursement
Allowed for Tuition/Education • Target Bonus for Executives
Expenses per Year • Maximum Reimbursement
• Percentage of Employees Allowed for Tuition/Education
Participating in Expenses per year
Tuition/Education • Percentage of Employees
Reimbursement Programs Participating in Tuition/Education
Reimbursement Programs
• Time-to-Fill
• Cost-Per-Hire
• Annual Overall Turnover Rate

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 Strategy and Strategy-Based
Metrics

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 What Are HR Audits?

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 Trends Shaping HR: Digital and
Social Media

Data Analytics

Let’s take a look…

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 Trends Shaping HR: Science In Talent
Management

Evidence-Based HR and the Scientific Way of

Doing Things

Let’s talk about it…

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 V.
Give five examples of what
employers can do to have high-
performance systems.

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 High-Performance Work Systems (1 of 2)

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 High-Performance Work Systems (2 of 2)
• Policies and Practices
• HR measures
• Aspire to encourage employee involvement and
self management

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 VI.
Describe how you would
execute a program to improve
employee engagement.

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 Employee Engagement Guide for
Managers: Employee Engagement
and Performance

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 The Employee Engagement
Problem

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 What Can Managers Do to Improve
Employee Engagement? (1 of 2)
1. Provide supportive supervision
2. Ensure employees understand how their
departments contribute.
3. See how their efforts contribute to achieving the
company’s goal.

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 What Can Managers Do to Improve
Employee Engagement? (2 of 2)
4. Ensure employees get a sense of
accomplishment from working at the firm.
5. Ensure employees are highly involved.
6. Employers should hold managers responsible for
employee engagement.

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 Chapter 3 Review

What you should now know….

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 Copyright

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