Human Resource Management
1
TWELFTH EDITION
GARY DESSLER BIJU VARKKEY
Part 1 | Introduction
Chapter 3
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The Managers Role in Strategic Human Resource Management
After reading this chapter, you should be able to: After reading 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 eight 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
organizations 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 organizations intended
direction that evokes emotional feelings in organization members.
Mission
Spells out who the company is, what it does, and
where its headed.
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FIGURE 35
The Strategic Management Process
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FIGURE 37
A SWOT Chart
Strengths
Example: Market leadership
Weaknesses
Example: Large inventories
Opportunities
Example: New overseas markets
Threats
Example: Market saturation
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FIGURE 38
Relationships Among Strategies in Multiple-Business Firms
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Types of Strategies
Corporate-Level Strategies
Diversification Strategy
Vertical Integration Strategy
Consolidation Strategy
Geographic Expansion Strategy
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Types of Strategies (continued)
Business-Level/ Competitive Strategies
Cost Leadership
Differentiation
Focus/Niche
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Achieving Strategic Fit
The Fit Point of View (Porter) consists of the idea that each departments strategy needs to fit the parent businesss 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 systemsHR policies and activitiesthat produce the employee competencies and behaviors that the company needs to achieve its strategic aims.
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FIGURE 36
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
Employee Behaviors and Competencies
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FIGURE 310 Strategy Map for Southwest Airlines
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Source: Adapted from Creating a Strategy Map, Ravi Tangri, Team@[Link]. 314
FIGURE 312 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. 315
Measuring HRs 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 2 3 4 5 Define the business strategy Outline value chain activities Outline a strategy map Identify strategically required outcomes Identify required workforce competencies and behaviors 6 7 8 Identify required HR policies and activities Choose HR Scorecard measures Summarize Scorecard measures on digital dashboard and monitor, predict, and evaluate
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FIGURE 314
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 Average # of employees during month # of workdays 100
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
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. 1320; 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. 93105; [HR Planning, Commerce Clearing House Incorporated, July 17, 1996;] SHRM/BNA 2000 Cost Per Hire and Staffing Metrics Survey; [Link]. See also, SHRM Research 2006 Strategic HR 319 Management Survey Report, Society for Human Resource Management..
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Turnover rate
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
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