Human Resource
Management
ELEVENTH EDITION
1
GARY DESSLER
Part 1 | Introduction
Chapter 3
Strategic Human Resource Management
and the HR Scorecard
© 2008 Prentice Hall, Inc. PowerPoint Presentation by Charlie Cook
All rights reserved. The University of West Alabama
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.
© 2008 Prentice Hall, Inc. All rights reserved. 3–2
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.
© 2008 Prentice Hall, Inc. All rights reserved. 3–3
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.
© 2008 Prentice Hall, Inc. All rights reserved. 3–4
Types of Strategies
Corporate-Level
Strategies
Vertical Geographic
Diversification Consolidation
Integration Expansion
Strategy Strategy
Strategy Strategy
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• Corporate-level strategy
Identifies the portfolio of businesses that, in
total, comprise the company and the ways in
which these businesses relate to each other.
Diversification strategy implies that the firm will expand by adding
new product lines.
Vertical integration strategy means the firm expands by, perhaps,
producing its own raw materials, or selling its products direct.
Consolidation strategy reduces the company’s size
Geographic expansion strategy takes the company abroad
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Types of Strategies (cont’d)
Business-Level/
Competitive
Strategies
Cost Leadership Differentiation Focus/Niche
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• Business-level/competitive strategy
Identifies how to build and strengthen the
business’s long-term competitive position in the
marketplace.
Cost leadership: the enterprise aims to become the low-cost leader in
an industry.
Differentiation: a firm seeks to be unique in its industry along
dimensions that are widely valued by buyers.
Focus: a firm seeks to carve out a market niche, and compete by
providing a product or service customers can get in no other way.
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Achieving Strategic Fit
• The “Fit” Point of View (Porter)
All of the firm’s activities must be tailored to or fit
the chosen strategy such that the firm’s functional
strategies support its corporate and competitive
strategies.
• Leveraging (Hamel and Prahalad)
“Stretch” in leveraging resources—supplementing
what you have and doing more with what you have—
can be more important than just fitting the strategic
plan to current resources.
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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 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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Linking Corporate and HR Strategies
11
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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
Execution Formulation
Role Role
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HR’S Strategic Roles
• HR professionals should be part of the
firm’s strategic planning executive team.
Identify the human issues that are vital to
business strategy.
Help establish and execute strategy.
Provide alternative insights.
Are centrally involved in creating responsive
and market-driven organizations.
Conceptualize and execute organizational
change.
14
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HR’s Strategy Execution Role
• The HR department’s strategies, policies, and
activities must make sense in terms of the
company’s corporate and competitive
strategies, and they must support those
strategies.
15
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HR’s Strategy Formulation Role
• HR helps top management formulate strategy in
a variety of ways by.
Supplying competitive intelligence that may be useful
in the strategic planning process.
Supplying information regarding the company’s
internal human strengths and weaknesses.
Build a persuasive case that shows how—in specific
and measurable terms—the firm’s HR activities can
and do contribute to creating value for the company.
16
[Link]
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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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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