STRATEGIC HUMAN

RESOURCE MANAGEMENT
1

By- Dr. Safia Farooqui

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 DISCUSSION
2

What is meant by the term “Strategic Human

Resource Management” and how has it been
used to study the employment relationship?

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 HUMAN RESOURCE MANAGEMENT
3

“… human resource management (alternatively,

‘employee relations’ or ‘labor management’) includes
the firm’s work systems and its models of employment.
It embraces both individual and collective aspects of
people management. It is not restricted to any one
style or ideology. It engages the energies of both line
and specialist managers… and typically entails a blend
of messages for a variety of workforce groups.”
Purcell & Boxall (2003) P. 24

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 HUMAN RESOURCE MANAGEMENT
4

“HRM as a subject of study assumes that the interests of

employees and employers will coincide and is preoccupied
with the shared goal of organizational effectiveness that
marginalizes the interests of other stakeholders such as
employees. HRM is also predominantly focused on the
individual and seeks solutions to HR problems within the
firm, with an analytical focus on the motivations and
aspirations of individual employees.”
Bach (2005) P. 4

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 STRATEGY
5

“The determination of the basic long-term goals and

objectives of an enterprise and the adoption of courses
of action and the allocation of resources necessary for
carrying out these goals.”
Alfred Chandler, Strategy and Structure, (MIT Press, 1962), P. 13

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 STRATEGY
6

 At the core, its is the debate between best fit and best
practice
 Used for gaining a competitive advantage
 Innovation
 Offer something new; different from competitors
 Quality Enhancement
 Products and services
 Cost Reduction
 Attempt to be the lowest cost provider
 Optimal strategy depends on the wants and nature of
competitors

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 TYPES OF STRATEGY
7

 Business
 Examines correspondence between each firm’s
competitive strategy and its system of high performance
work practices
 Operations
 An internal approach; connected to the work organization
inside a firm
 Resource View
 Views human resources as sources of sustained
competitive advantage

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 STRATEGIC HRM
8

“(S)trategic HRM is about how the employment

relationships for all employees can be managed in
such a way as to contribute optimally to the
organization’s goal achievement.” Legge (2005) P. 223

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 HR PRACTICES LINKED WITH
COMPETITIVE STRATEGY
9

 Recruitment
 Training
 Career Path
 Promotions
 Socialization
 Openness

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 HIGH PERFORMANCE PRACTICES
10

 Features
 Comprehensive selection/recruitment procedures
 Incentive compensation
 Extensive employee involvement/training

 Expected Results
 Improve knowledge, skills, and abilities of employees
 Increase motivation
 Reduce shirking
 Enhance retention of quality employees (reduce tenure of
non-performers)

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 HIGH COMMITMENT PRACTICES
11

 Unique to the High-Performance Paradigm

 Sophisticated selection and training
 Emphasis on values, human relations skills, and knowledge skills
 Behavior-based appraisal
 Single status policies
 Contingent pay systems

 Traditional Personnel Practices

 Job security
 Above market pay and benefits
 Grievance systems

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 CONCLUSION
12

Model of the Basic Strategic HRM Components

HUMAN CAPITAL POOL: EMPLOYEE RELATIONSHIP BEHAVIORS:
Knowledge, Skill, Ability Psychological Contracts, Citizenship, Discretion

PEOPLE MANAGING PRACTICES:

Staffing, Training, Rewards, Appraisal,
Work Design, Participation, Recognition, Communication

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 CONCLUSION
13

 Effectiveness can be increased by systematically

melding human resource practices with the selected
competitive strategy

 The success or failure of a firm is not likely to turn

entirely on its strategic human resource
management practices, but these practices are likely
to be critical

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 A Strategic Management
Approach to Human Resource
Management

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 A Diagnostic HRM
15 Framework

 Can help operating managers focus on a set of

relevant factors

 Offers a map that aids a person in seeing the whole

picture or parts of the picture

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 Diagnostic Model for Human Resource
Management
16

Diagnos External Internal Diagnos

e Environme Environme e
Prescrib ntal ntal Prescrib
e Influences Influences e
Impleme Human Resource Processes Impleme
nt
Acquiring Human Rewarding Human Developing Maintaining
nt and
Resources Resources Human Resources Protecting Human
Evaluate Evaluate
Resources

Focus of each process is on people and results

Desirable End Results

Socially
Competitive, high Competitive, high
responsible and
quality products quality services
ethical practices
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 How to Take a Diagnostic Approach to HRM
17

1. Diagnosis 2. Prescription

4. Evaluation 3. Implementation

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 External Environmental Influences
18

 Government  Work Sector of the

 requirements Organization
 regulations  private sector
 laws  public sector
 The Union  third sector
 Economic Conditions  Composition and
 domestic Diversity of the Labor
 International Force
 Competitiveness  Geographic Location
of the Organization

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 HRM Activities That Can Enhance and
Sustain Competitive
19 Advantage
1. Employment security
8. Teams and job
2. Selectivity in
recruiting redesign
9. Training as skill
3. High wages
development
4. Incentive pay
10. Cross-utilization and
5. Employee ownership cross training
6. Information sharing 11. Symbolic
7. Participation and egalitarianism
empowerment

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 HRM Activities That Can Enhance and
Sustain Competitive
20 Advantage

12. Wage compression

13. Promotion from
within
14. Long-term
perspective
15. Measurement of
practices
16. Overarching
philosophy

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 Internal Environmental
21 Influences

 Strategy
 Goals
 Organization culture
 Nature of the task
(job)
 Work group
 Leader’s style and
experience

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 Key Factors in the Nature
22 of the Task (Job):
 Degree of knowledge and ability to use information
technology
 Degree of empowerment
 Degree of physical exertion required
 Degree of environmental unpleasantness
 Physical location of work

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 Key Factors in the Nature
23 of the Task (Job):
 Time dimension of work

 Human interaction on the job

 Degree of variety in the task

 Task identity

 Task differences and job design

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 Three Levels of Strategy
24

Strategic
(long term)

Managerial
(medium term)

Operational
(short term)

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 Human Resource Activities by Level of Strategy
LEVEL Employee Rewards Appraisal Development
25
Selection and (Pay and
Placement Benefits)

Strategic Specify the character- Establish reward Determine the Plan development
(long term) istics of people program that will be level type of experiences for staff
needed to run competitive with perform-ance
business over long domestic and inter- crucial for the
term national competitors growth of the firm

Examine labor force Establish reward Develop equitable Plan development

trends system that is linked performance program with flexibil-ity
to strategic goals criteria necessary to adjust to
change

Analyze immigration Link appraisal to

flows into the country accomplishment of
long-term
objectives

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 Human Resource Activities by Level of Strategy
26

LEVEL Employee Rewards Appraisal Development

Selection and (Pay and
Placement Benefits)
Managerial Make longitudinal Set up five-year Validate systems Establish general
(medium validation of selection compensation pro- that relate current management devel-
term) criteria gression plan for conditions and opment program
individuals future needs
Develop recruitment Set up cafeteria- Establish Provide for
marketing plan type benefits menu assessment organiza-tional
centers for development
development
Develop approach to Set up retirement Encourage self-
build labor resource packages development
pool

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 Human Resource Activities by Level of Strategy
27
LEVEL Employee Rewards Appraisal Developmen
Selection and (Pay and t
Placement Benefits)

Operation Prepare staffing plans Administer wage Use annual or Use specific job-
al (short and salary program more frequent skill training
term) appraisal system

Prepare recruitment Administer benefits Use day-to-day Use on-the-job

plans packages performance training
review systems

Review performance Use Web-based

of workers daily training on a 24/7
basis

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 Strategic Challenges Facing HRM
28

Diversity:
Building A
Technology Competitive
Workforce

Organizational
Contingent
Caliber of the Restructuring
Workers
Workforce and
Downsizing

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 Trends of the Technology
29 Revolution

1. Growth in 5. Rapid response

knowledge needs
2. Shift in human 6. Quicker innovation
competencies 7. Quality
3. Global market
improvement
connection
4. Business 8. Industrial
streamlining Revolution

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 People and the HRM 30Diagnostic Framework

Employees’
Abilities of
Attitudes and
Employees
Preferences

Motivation of Personality of
Employees Employees

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 Desirable End Results
31

 Organizational effectiveness is critically influenced

by human resource (HR) management practices
 Changes in staffing, training, and compensation
form an integral part of a coordinated change effort
 HR management systems must be in alignment with
other management systems

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 Summary
32

 A sound HRM program can contribute to

organizational end results
 Before choosing an HRM program, the diagnostic
approach suggests examining:

 the nature of employees

 the external environmental influences
 the internal environmental influences
 organizational factors

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 Summary
33

 HRM has become a strategic area

 now recognized as important in creating and implementing the
overall strategies of a firm
 Organizational factors must be taken into account to
maximize the effectiveness of HRM
 The work sector in which the organization operates
is a key factor on management systems and the HRM
function

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 Mentoring and Leadership
34

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 Are you a leader?
35

 “If your actions inspire others to dream more, learn

more, do more and become more, you are a
leader.”
John Quincy Adams

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 Are you a mentor?
36

 "Before you are a leader, success is all about

growing yourself. When you become a leader
success is all about growing others.”
Jack Welch

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 Mentoring: we are all teachers
37

 “The task of leadership is not to put greatness into

people, but to elicit it, for the greatness is there
already.”
John Buchan

 It matters that we improve

 By changing the nature of our relationships, we will

change our own lives

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 5 Myths about Mentoring
38

1. It only happens on a long term, face to face basis.

2. Mentors need to be older and more experienced.

3. Only the person being mentored benefits.

4. Taking the time to mentor decreases productivity.

5. The public service is too busy reorganizing to have
time for mentorship.

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 The Mentoring Relationship
39

 Three critical elements: respect, trust and listening

skills.

 Establish the boundaries of the relationship.

 What do you bring to the table?

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 Mentoring techniques
40

 Focus on wisdom, not on answers.

 Experiment: coach, do role plays, get experiential

learning, brainstorm, network.

 Mentor yourself.

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 Mentoring and Leadership
41

“A good leader inspires people to have confidence in

the leader. A great leader inspires people to have
confidence in themselves.” Eleanor Roosevelt

If you seek to lead, invest at least 50% of your time in

leading yourself- invest at least 20% leading those
with authority over you and at least 15% leading your
peers.

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 Mentoring options: getting started
42

 Look for formal work such as the one at the Ministry

of Social Development.

 There are Communities of Practice that offer peer

mentoring;

 Partner with someone new to public service,

Aboriginal interns, co-op students, or groups whose
purpose is to improve professional practice.

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 43

Compensation

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 The Importance of Compensation
44

 Impacts an employer’s ability to attract and retain

employees.
 Ensure optimal levels of employee performance in
meeting the organization’s strategic objectives.
 Compensation’s components
 Direct compensation in the form of wages or salary
 Base pay (hourly, weekly, and monthly)
 Incentives (sales bonuses and or commissions)
 Indirect compensation in the form of benefits
 Legally required benefits (e.g., Social Security)
 Optional (e.g., group health benefits)

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 Theory Behind Compensation
45

 Equity Theory
 Comparing inputs and outputs of a similar co-worker

 Perceived inequity affects employee effort

 Expectancy Theory
 People are motivated by intrinsic and extrinsic outcomes they
desire.
 People will only be motivated if outcome is possible.

 People will only be motivated if outcome is contingent.

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 Equity Theory
46

 Internal equity
 Comparison of my input / reward ratio with that of similar
others.
 Employees may seek to address imbalance by changing their
inputs.
 Fairness of pay differentials between different jobs in the
organization can be established by job ranking, job
classification, point systems and factor comparisons.
 External equity
 Fairness of organizational compensation levels relative to
similar jobs in other organizations.

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 “Monkeys Demand Equal Pay”
47

 A recent study shows brown capuchin monkeys refused to play along

when they saw another monkey get a better payoff for performing the
same work.

 The monkeys were trained to trade a granite token for a piece of

cumber. When the reward was the same for both monkeys, they took
the cucumber 95 percent of the time.

 But it was a different story when one monkey was given something
better -- namely, a grape. Then, the other monkey often pitched a fit --
either throwing the token, refusing to eat the cucumber or giving it to
the other monkey.

 Associated Press 2003

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 Equity Theory
48

Fairness about pay differentials among individuals

who hold the same job can be established by using:
 Seniority-based pay systems that reward longevity.
 Merit-based pay systems that reward employee performance.
 Incentive plans that allow employees to receive part of their
compensation based on their job performance.
 Skills-based pay systems.
 Team-based pay plans that encourage cooperation and flexibility
in employees.

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 Types of Base Pay Systems
49

 Job-based
 Pay the job (not the person)

 Market-based (external equity focus)

 Point factor-based (internal equity focus)

 Skills / knowledge-based
 Pay the person (not the job)

 62% of F1000 firms used some type of skill based pay in

1999

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 When to Use a Job-based Pay Policy
50

 A job-based pay work best in situations where:

 Job duties are stable.

 Skills are generic.

 Employees move up through the ranks over time.

 Jobs are fairly standardized within the industry.

 Drawbacks of a job-based pay system

 Discounts individual ability.

 Discourages lateral movement.

 Tends to be bureaucratic, mechanistic, and inflexible.

 Employees’ perceptions of equity are more important than

market or point data.

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 Individual-based Compensation
51

 Individual-based compensation works when:

 The firm has a relatively educated workforce.

 Employees often do different jobs

 Technology changes frequently.

 Employee participation and teamwork are encouraged.

 Opportunities for upward mobility are limited.

 Opportunities to learn new skills are present.

 The costs of employee turnover and absenteeism in terms of

lost production are high.

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 Pricing Jobs
52

 First conduct job analysis

 Qualifications

 KSA’s

 Non-quantitative methods
 Job Ranking (create hierarchy of jobs)

 Job Classification (create groups of similar jobs)

 Quantitative Methods
 Point factor systems

 Compare “compensable factors”

 Market pricing

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 Compensable Factors
53
Characteristics in the job that the organizational
values and that help achieve its objectives

Hay Factors National Position

Evaluation Plan (MAA)
 Know-how
 Problem solving  Skill
 Accountability  Effort
 Responsibility
 Job Conditions

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 Pricing Jobs
54

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 Variable Pay Incentives
55

 Linking performance to pay

 Individual – Bonuses, piece-rates, stock options

 Team – Bonuses and awards

 Plant / Unit / Business – Gainsharing, profit sharing

 Corporation – ESOP’s

 “Line of sight” is the perceived link between

individual behavior and the reward.

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 Pay for Performance Requires
56

1. Definition of performance
 How are we going to measure and compare people?

2. Distribution of performance
 Can we distinguish high and low performers?

3. Decide the increase for each level of performance.

 How large a difference between high and low
performers?

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 Key Strategic Issues in Compensation
57

 Determining compensation relative to the market.

 Striking a balance between fixed and variable
compensation.
 Deciding whether or not to utilize team-based versus
individual pay.
 Creating the appropriate mix of financial and non-
financial compensation.
 Developing a cost-effective compensation program
that results in high performance.

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 New Thinking for the New Millennium
58

 Strategic approaches to may compensation (pay)

systems more responsive:
 Pay the person for individual worth (knowledge, skills and
competencies) rather than for the value of a job they perform.
 Reward excellence through a pay for performance
compensation that establishes a clear relationship between a
significant amount of pay and attainment of organizational
objectives.
 Individualize the pay system to give employees choices in how
they are rewarded and what reward they receive.

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 59

COMPENSATION
AND REWARDS

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 Compensation
60

 Is what employees receive in

exchange for their contribution to
the organization.
 When managed correctly, it helps
the organization achieve its
objectives and obtain, maintain,
and retain a productive workforce.
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 Compensation (Cont’d)
61

 Without adequate compensation,

current employees are likely to
leave and replacements will be
difficult to recruit.
 The outcomes of pay dissatisfaction
harm productivity and affect the
quality of work life.
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 Forms of compensation
62

 Direct Financial Compensation

– pay received in forms of wages, salaries,
bonuses and commissions.
 Indirect Financial Compensation(benefits)
- All financial rewards not included in direct
compensation. For examples workers
compensation, Family & medical leave,
Disability Protection,

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 Forms Of Compensation (Cont’d)
63

 Nonfinancial Compensation
- Satisfaction person receives from psychological & or
physical environment in which person works. For
examples, skills variety, experiences, good working
conditions, flextime

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 Objectives in 64
compensation
management

 To help the organization achieve strategic success

while ensuring internal and external equity.
 Internal equity- ensures that more demanding
positions or better qualified people within the
organization are paid more.
 External equity - assures that jobs are fairly
compensated in comparison with similar jobs in
other firms.

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 Objectives in compensation management
(Cont’d)
65

 Acquire qualified personnel

 Retain current employees
 Ensure equity
 Reward desired behaviour
 Control costs
 Facilitate understanding

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 Acquire qualified personnel

66

 Compensation needs to be high enough to attract

applicants. Pay levels must respond to the supply
and demand of workers in the labour market since
employers compete for workers. Premium wages are
sometimes needed to attract applicants already
working for others.

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 Retain current
67 employees
 Employees may quit when compensation levels are
not competitive, resulting in higher turnover.

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 Ensure68 equity
 Compensation management strives(berjuang) for
internal and external equity. Internal equity requires
that pay be related to the relative worth of a job so
that similar jobs get similar pay. External equity
means paying workers what comparable workers are
paid by other firms in the labor market.

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 Reward desired
69 behaviour
 Pay should reinforce desired behaviours and act as
an incentive for those behaviours to occur in the
future.
 Effective compensation plans reward performance,
loyalty, experience, responsibility, and other
behaviours.

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 70

 A rational compensation system helps the

organization obtain and retain workers at a
reasonable cost.
 Without effective compensation management,
workers could be overpaid or underpaid.
 Comply with legal regulations.
 A wage and salary system considers the legal
challenges imposed by the government and ensures
the employer's compliance.

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 Facilitate understanding

71

 The compensation management system should be

easily understood by human resource specialists,
operating managers, and employees.

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 72

Organization As A Determinant Of Direct

Financial Compensation

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  It is based on Compensation policies
Organizational level Ability to pay

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 Compensation policies
74

 Pay leaders- pay higher wages & salaries

 Pay based on market rate- pay what most employers
pay for same job
 Pay followers- pay below market rate because poor
financial condition or believe do not require highly
capable employees

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 Organizational
75 level

 Upper management often makes decisions to ensure

consistency
 Having problems when pressure to retain top
performers may override desire to maintain
consistency in pay structure

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 Ability to pay

76

 Organization’s assessment of ability to pay is

important factor in determining pay levels.

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 77

Labor Market As Determinant Of

Direct Financial Compensation

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 Employee will be pay based on labor market
conditions:
78

It includes:
1. Compensation surveys- what are other firms
paying?, geographic area of survey.
2. Cost of living- when prices rise over a period of
time.
3. Labor Unions- mandatory collective bargaining
management & unions as wages, hours & other
terms and conditions of employment, cost of living
(COLA) allowance has been disappearing.

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 Employee will be pay based on labor market
conditions (Cont’d):
79

 The economy- cost of living often rises as economy

expands.
 Compensation legislation- states in wages
council Act 1947, government has generally resisted
any suggestions for a minimum wage applicable
throughout industry and region.

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 80

Job as determinant of direct financial

Compensation

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 Job itself continues to be factor.
 Organizations pay for value they attach to certain
duties, responsibilities, and other job related
factors as working conditions.
 E.g, professional positions different level of salary

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 82

Employee as determinant of direct

Financial Compensation

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 Employees may83demands for their
salaries based on:
 Performance
 Competencies
 Skills
 Experiences
 Seniority

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 What is Training?
 Training - a planned effort by a company to facilitate
employees’ learning of job-related competencies.
 Competencies include knowledge, skills or behavior critical for
successful job performance.
 The goal of training is for employees to master the
competencies and apply them to their day-to-day
activities.

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 What is Training? (cont.)
85

 To use training to gain a competitive advantage, a

company should view training broadly as a way to
create intellectual capital.
 Intellectual capital includes basic skills advanced
skills an understanding of the customer or
manufacturing system, and self-motivated creativity.

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 What is Training? (cont.)
 High-leverage training
 Is linked to strategic business goals and objectives.
 Uses an instructional design process to ensure that
training is effective.
 Compares or benchmarks the company's training
programs against training programs in other companies.
 Creates working conditions that encourage continuous
learning.

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 What is Training? (cont.)
 Continuous learning - requires employees to
understand the entire work system, including the
relationships among their jobs, their work units,
and the company.

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 What is Training? (cont.)
 Managers take an active role in:
 Identifying training needs.

 Ensuring that employees use training in their work.

 Facilitating the sharing of knowledge, by using

informational maps.

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 What is Training? (cont.)
 Today, training is being evaluated on how
training addresses business needs related to
learning, behavior change, and performance
improvement.

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 What is Training? (cont.)
 There is a greater emphasis on:
 Providing educational opportunities for all employees.
 Performance improvement as an ongoing process than a
one-time training event.
 Demonstrating to executives, managers, and trainees the
benefits of training.
 Learning as a lifelong event.
 Training being used to help attain strategic business
objectives.

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 Designing Effective Training
91

 Training design process

 A systematic approach for developing training programs.
 Is based on the principles of Instructional System Design
(ISD).
 Is sometimes referred to as the ADDIE model because it
includes analysis, design, development, implementation, and
evaluation.
 Should be systematic yet flexible enough to adapt to business
needs.

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 92
Figure 1.1 - Training Design Process

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 Designing Effective Training (cont.)
93

 Regardless of the specific ISD approach used, all the

steps share the following assumptions:
 Training design is effective only if it helps employees reach
their training objectives.
 Measurable learning objectives should be identified before the
training program begins.
 Evaluation plays an important part in planning and choosing a
training method, monitoring the training program, and
suggesting changes to the training design process.

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 Designing Effective Training (cont.)
94

 Flaws of the ISD model:

 In organizations, the training design process rarely follows the
step by-step approach of the activities.
 Organizations require trainers to provide detailed documents
of each activity found in the model; this adds time and cost to
developing a training program.
 It implies an end point: evaluation.

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 Table 1.1 - Forces Influencing
Working and Learning

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 Forces Influencing Working and
Learning

 Economic cycles
Provide an opportunity for companies to take a closer look
at training and development to identify those activities
that are critical for supporting the business strategy as
well as those mandated by law.

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 Forces Influencing Working and
Learning (cont.)
 Globalization
 Provide training and development opportunities for global
employees.
 Provide cross-cultural training to prepare employees and
their families to understand the culture and norms of the
country to which they are being relocated and assists in
their return to their home country after the assignment.

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 Examples of
Intangible Assets

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 Forces Influencing
99
Working and
Learning (cont.)

The value of intangible assets and human capital has

the following implication:
 Focus on knowledge worker - employees who contribute to
the company not through manual labor but through what they
know, perhaps about customers or a specialized body of
knowledge.

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 Forces Influencing Working and
Learning (cont.)
The value of intangible assets and human
capital has the following implication:
 Employee engagement - the degree to which
employees are fully involved in their work and the
strength of their commitment to their job and the
company.
 Companies measure employees' engagement levels
with attitude or opinion surveys.

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 Forces Influencing Working and
Learning (cont.)
 The value of intangible assets and human capital
has the following implication:
 Change - the adoption of a new idea or behavior by a
company.
 Learning organization - embraces a culture of lifelong
learning, enabling all employees to continually acquire
and share knowledge.

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 How Managing Cultural Diversity can Provide Competitive
Advantage
102

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 Forces Influencing Working and
Learning (cont.)
 Talent management - attracting, retaining,
developing, and motivating highly skilled
employees and managers.
 It is becoming increasingly more important
because of:
 occupational and job changes.
 retirement of baby boomers.
 skill requirements.
 the need to develop leadership skills.

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 Forces Influencing
104
Working and
Learning (cont.)

 Customer service and quality emphasis

 Total Quality Management (TQM) - a companywide effort
to continuously improve the ways people, machines, and
systems accomplish work.

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 Forces Influencing
105
Working and
Learning (cont.)
 Core values of TQM
 Methods and processes are designed to meet the needs of
internal and external customers.
 Every employee in the company receives training in quality,
which is designed into a product or service to prevent errors
from occurring rather than being detected and corrected.

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 Forces Influencing 106
Working and
Learning (cont.)
 Core values of TQM
 The company promotes cooperation with vendors, suppliers,
and customers to improve quality and hold down costs.
 Managers measure progress with feedback based on data.

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 Forces Influencing 107
Working and
Learning (cont.)
 Customer service and quality emphasis
 The Malcolm Baldrige National Quality Award , created
by public law, is the highest level of national recognition for
quality that a U.S. company can receive.
 The ISO 9000 is a family of standards that include
requirements for dealing with how to establish quality
standards and how to document work processes to help
companies understand quality system requirements.

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 Categories and Point Value for the Malcolm
Baldrige National Quality Award Examination

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 Forces Influencing Working and
Learning (cont.)
 Customer service and quality emphasis
 Six Sigma process - a process of measuring, analyzing,
improving, and then controlling processes once they have
been brought within the narrow six sigma quality
tolerances or standards.
 Training can help companies meet the quality challenge by
teaching employees statistical process control and
engaging in “lean” processes.

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 Forces Influencing Working and
Learning (cont.)
 Customer service and quality emphasis
 Lean thinking - involves doing more with less effort,
equipment, space, and time, but providing customers with
what they need and want.
 ISO 10015 - a quality management tool designed to
ensure that training is linked to company needs and
performance.

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 Forces Influencing Working and
Learning (cont.)
 New technology
 Is changing the delivery of training and makes training
more realistic.
 Allows training to occur at any time and any place.

 Reduces travel costs.

 Provides greater accessibility to training and consistent

delivery.

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 Forces Influencing Working and
Learning (cont.)
 Provides the ability to access experts and share learning
with others.
 Provides the possibility of creating a learning environment
with many positive features such as feedback, self-pacing,
and practice exercises.
 Allows companies greater use of alternative work
arrangements.

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 Forces Influencing Working and
Learning (cont.)
 High performance models of work systems
 Work teams - involve employees with various skills who
interact to assemble a product or provide a service.
 Cross training - training employees in a wide range of
skills so they can fill any of the roles needed to be
performed on the team.

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 Forces Influencing Working and
Learning (cont.)
 High performance models of work systems
 Virtual teams - teams that are separated by time,
geographic distance, culture, and/or organizational
boundaries and that rely almost exclusively on technology
to interact and complete their projects.
 Use of new technology and work designs are
supported by human resource management
practices.

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 Snapshot of Training Practices
115

 Key trends in learning initiative investments:

 Direct expenditures, as a percentage of payroll and learning
hours, have remained stable over the last several years.
 There is an increased demand for specialized learning that
includes professional or industry-specific content.
 The use of technology-based learning delivery has
increased from 11 percent in 2001 to 33 percent in 2007.

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 Snapshot of Training Practices (cont.)
116

 Self-paced online learning is the most frequently used type

of technology-based learning.
 Technology-based learning has helped improve learning
efficiency, and has resulted in a larger employee–learning
staff member ratio.
 The percentage of services distributed by external
providers dropped from 29 percent in 2004 to 25 percent
in 2007.

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 Comparison of BEST Award Winners and Benchmark
Companies
117

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 Characteristics of BEST Award Winners
118

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 Snapshot of Training Practices (cont.)
119

 In most companies training and development

activities are provided by trainers, managers, in-
house consultants, and employee experts.
 They can also be outsourced.
 Training and development can be the responsibility
of professionals in human resources, human
resource development, or organizational
development.

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 Snapshot of Training Practices (cont.)
120

 As companies grow and/or recognize the important

role of training for business success, they form an
entire training function, which may include
instructional designers, instructors, technical
training, and experts in instructional technology.
 To be a successful training professional requires
staying up-to-date on current research and training
practices.

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 Implementing Strategies:
Management & Operations Issues

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Ch 7 -121
[email protected] 122
 Strategy Formulation vs. Implementation
123
Strategy Formulation (SF) Strategy Implementation
 Positioning forces (SI)
before the action  Managing forces during
 Focus on effectiveness the action
 Primarily intellectual  Focus on efficiency
 Requires good intuitive  Primarily operational
and analytical skills  Requires special
motivation and
 Requires coordination
leadership skills
among a few people  Requires coordination
among many people

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Nature of Strategy Implementation
SI problems can arise because of the shift in
responsibility, especially if SF decisions come as a
surprise to middle- and lower-level managers.
 Shift in responsibility
Therefore, it is essential to involve divisional and
functional managers in SF.
Divisional or
Functional
Strategists Managers

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Ch 7 -124
 Management Issues Central to Strategy
Implementation
125

 Establish annual objectives  Match managers to strategy

 Devise policies  Develop a strategy-supportive
 Allocate resources culture
 Alter existing  Adapt production/operations
organizational structure processes
 Restructure & reengineer  Develop an effective human
 Revise reward & incentive
resources function
plans  Downsize & furlough as
 Minimize resistance to
needed
change  Link performance & pay to
strategies

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Purpose of Annual Objectives

Basis for resource allocation

Mechanism for management evaluation
Major instrument for monitoring progress toward
achieving long-term objectives
Establishpriorities (organizational, divisional, and
departmental)

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Ch 7 -126
Resource Allocation

Four Types of Resources

1. Financial resources
2. Physical resources
3. Human resources
4. Technological resources

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Ch 7 -127
Managing Conflict
Conflict – a disagreement between two or more parties.
Interdependency of objectives and competition for limited
resources can cause conflict.

 Conflict not always “bad”

 Lack of conflict may signal apathy
 Can energize opposing groups to action
 May help managers identify problems

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Ch 7 -128
MATCHING STRUCTURE WITH STRATEGY
129

 Changes in strategy often require changes in the way an organization is

structured because: (1) structure largely dictates how objectives and
policies will be established (e.g., objectives and policies established
under a geographic organizational structure are couched in geographic
terms) and (2) structure dictates how resources will be allocated (e.g., if
an organization’s structure is based on customer groups, then resources
will be allocated in that manner).
 Structure should be designed to facilitate the strategic pursuit of a firm
and, therefore, follow strategy.
 When a firm changes its strategy, the existing organizational structure
may become ineffective. For example, new strategies to reduce payroll
costs may require a change in span of control.

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[email protected] 130
Basic Forms of Structure

 Functional Structure
 Divisional Structure
 Strategic Business Unit Structure (SBU)
 Matrix Structure

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Ch 7 -131
 Functional Structure
132

 Groups tasks and activities by business

function (e.g., production, finance,
marketing, R&D, HR, IT, etc.).

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 Functional Structure
133

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 Divisional Structure
134

 Can be organized in one of four

ways:
By geographic area
By product or service

By customer

By process

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 Divisional Structure
135

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 Strategic Business Unit Structure (SBU)
136

 Groups similar divisions into

strategic business units and
delegates authority and
responsibility for each unit to a
senior executive who reports
directly to the chief executive
officer.
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 Matrix Structure
137

 The most complex of all structures

because it depends upon both
vertical and horizontal flows of
authority and communication.

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 Creating a Strategy-Supportive Culture
138

1. Formal statements of organizational

philosophy
2. Design of physical spaces
3. Deliberate role modeling, teaching, and
coaching
4. Explicit reward and status system
5. Stories, legends, myths, and parables

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Human Resource Concerns
Assessing staffing needs and costs.
Selection Methods.
Employee Training.
Motivating Employees – Developing
Performance Incentives; Work-Life
Balance Issues; etc.
Selecting Appropriate Leadership Styles.

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Ch 7 -139
 Mergers, Acquisitions, and Strategic
Human Resource Management

3-140
 The Strategic Management Process

The process begins by

developing a strategic
plan that describes how
internal strengths and
weaknesses will be
matched with external
opportunities and threats

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 Steps in Strategic Management

3-142
 Step 1: Define the current business

Begin by asking these questions:

 What products do we sell?
 Where do we sell these products?
 How do our products or services differ from our competitors?

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 Step 2: Perform External and Internal
Situational Audits

 The key to success is adaptation

 Situational audits require SWOT (strengths,
weaknesses, opportunities, and threats) analysis
 Insert Figure 3-2

3-144
 Step 3: Formulate a New Business Direction

 What should our new business be in terms of

product, placement and competitive advantage?
 The vision statement describes the following:
What do we want to become?
 The mission statement explains the following:
Where are we now?

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 Step 4: Translate the Mission into Strategic
Goals

 Operationalize the mission for managers

 What does the mission mean to each department?

 What goals follow implementation?

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 Step 5: Formulate Strategies to Achieve the
Strategic Goals

 What is the game plan?

 Decide on a course of action

 Best strategies are concise

 Easily communicated

3-147
 Step 6: Implement the Strategies

 Get the game plan going

 Do what needs to be done

 Hire or fire people
 Build or close plants
 Adding or eliminating products and product lines

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 Step 7: Evaluate Performance

 Evaluate, evaluate, evaluate

 Ongoing process vis-à-vis strategic control

 Addresses the following questions:

 Are resources being utilized as planned?
 Are discrepancies explained?
 Do changes in our situation suggest change?

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 Types of Strategies

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 Corporate Strategy

 Top-level, company-wide
 Identifies the portfolio of existing business
segments
 Strategic possibilities include the following:
 Diversification or vertical integration
 Consolidation
 Geographic expansion

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 Competitive Strategy

 Identifies how to build upon and strengthen the

business’s long-term
marketplace position
 Identifies and
develops
competitive
advantage

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 Competitive Advantage

 Cost leadership indicates that the enterprise

intends to become the low-cost leader in the
industry
 Differentiation strategies seek to be unique in its
industry along dimensions valued by buyers
 Focusers carve out niche markets and compete by
providing a product/service that customers can get
through no other means

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 Functional Strategies

 Identifies basic courses of action that each

department will pursue to achieve strategic goals
– consider Southwest Airlines

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3-155
 The Importance of Leverage

 Leverage means
supplementing what you
have and doing more
with what you’ve got!
 Human resources can be
a crucial competitive
advantage!

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 HRM Creates Competitive Advantage

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 Four Important Strategic HR Issues

1. HR must understand that employees play a key

role in employers’ performance improvement
efforts
2. HR teams should support corporate productivity
and performance improvement efforts

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Four Important Strategic HR Issues, cont.
3. HR units must be more involved in designing –
not just executing – the strategic plan
4. HR managers must understand how to create
value

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 What Roles Does HR Play?

 Strategy
execution
 Strategy
formulation
 SWOT analysis

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 Specific HRM M&A Roles

 Manage the deal price

 Manage the messages

 Secure top team and key talent

 Prioritize and manage activities

 Define and implement an effective HR service

delivery strategy

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 Specific HRM M&A Roles, cont.

 Develop a workable change management plan

 Design and implement the right staffing model

 Align total rewards

 Measure synergies

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 163

Thank you

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