HRM gaining a competitive advantage noe ch002

Human Resource Management:Gaining a Competitive Advantage Chapter 2 Strategic Human Resource Management... What is Strategic Management?Strategic human resource management is the patte

Human Resource Management:

Gaining a Competitive Advantage

Chapter 2 Strategic Human Resource

Management

Learning Objectives

1 Describe the differences between strategy formulation and

strategy implementation.

2 List strategic management process components.

3 Discuss HRM function’s role in strategy formulation.

4 Describe the linkages between HRM and strategy formulation.

5 Discuss typologies of strategies and associated

HRM practices.

6 Describe HR issues and practices associated with various

directional strategies.

Goal of strategic management is to

deploy and allocate resources in a way

that gives an organization competitive

advantage.

HRM function must be integrally

involved in the company’s strategic

management process.

What is Strategic Management?

Strategic human resource management

is the pattern of planned HR activities

and deployments intended to enable an

organization to achieve its goals.

Strategic management is a process to

address the organization’s competitive

challenges.

Strategic Management Process Phases

Strategy Implementation-

process of devising structures and allocatingresources to enact a

company’s chosenstrategy

Strategy

Formulation-process of deciding

company’s strategic

direction by defining its

mission and goals,

external opportunities

and threats, and internal

strengths and weaknesses

Strategy

Formulation-process of deciding

company’s strategic

direction by defining its

mission and goals,

external opportunities

and threats, and internal

strengths and weaknesses

5 Categories of Directional Strategies

5 Strategic Management Process

HRM Practices

• Job Analysis - the process of

getting detailed information

about jobs

• Recruitment - the process

through which the

organization seeks applicants.

• Training - a planned effort to

facilitate learning of

job-related knowledge, skills, and

behavior

• Job design - making decisions

about what tasks should be grouped into a particular job.

• Selection - identifying the

applicants with the appropriate knowledge, skills, and ability.

• Development - the acquisition

of knowledge, skills, and behavior that improves employees' ability to meet the challenges of future jobs

• Performance management - helps ensure that employees’

activities and outcomes are congruent with the

organization’s objectives.

• Pay structure, incentives, and benefits.

• Labor and employee relations.

Strategic Management Process Model

Strategy Formulation Strategy Implementation

•Productivity

•Quality

•Profitability

Human Resource Actions

•Behaviors

•Results

Human Resource Capability

•Skills,

•Abilities

•Knowledge

Human Resource Needs

•Skills

•Behavior

•Culture

Strategic Choice Goals

•Strengths

•Weaknesses

Decisions About Competition

Strategy-Where, how and with what will we

compete?

Where- in what markets?

How – what criteria?

– cost?

– reliability?

– delivery?

With what resources?

- How will we acquire, develop and deploy

resources?

Strategic Planning and HRM

Linkages

Strategy Formulation

External Analysis

•Opportunities

•Threats

Strategic Choice Goals

Internal Analysis

•Strengths

•Weaknesses

Mission

Strategy Formulation

 Mission is a statement of the organization's reasons for

being

 Goals are what the organization hopes to achieve in the

medium-to long-term future

 External analysis examines the organization's operating

environment to identify strategic opportunities and threats

 Internal analysis identifies the organization's strengths and

weaknesses

 Strategic choice is the organization's strategy, which

describes the ways the organization will attempt to fulfill its mission and achieve its long term goals

Strategy Implementation Variables

Reward Systems

Select Train Develop People

Select Train Develop People

Types of Information

Types of Information

Organizational Structure

Organizational Structure

Task Design

Task Design

Performance

•Quality

•Profitability

Human Resource Actions

•Behaviors

•Results

-productivity -absenteeism

Human Resource Capability

•Skills,

•Abilities

•Knowledge

Human Resource Needs

HRM Practices

Job Analysis & Design

Recruitment & Selection

Training & Development

Performance Mgmt.

Job Analysis and Design

Job Design-

defining the way work will be performed and tasks required in a given job.

Recruitment and Selection

Selection-

process by which an organization identifiesapplicants with

necessary knowledgeskills, abilities and characteristics that will help it to achieveits goals

Training and Development

Performance Management

…the means through which managers

ensure that employees’ activities and

outputs are congruent with the

organization’s goals.

HRM Practice Options

 Job Analysis & Design

 Recruitment & Selection

 Training & Development

 Performance Management

 Pay Structure, Incentives & Benefits

 Labor & Employee Relations

Strategic Types

Porter's Strategies

… competitive advantage stems from a

company’s ability to create value in

two ways…

 Cost leadership

 Differentiation

 Cost strategy firms seek efficiency, carefully

define needed employee skills and use worker

participation to seek cost-saving ideas.

 Differentiation firms need creative risk takers.

Internal Growth Strategy

Mergers and Acquisitions

2 Ways HR Provides

Competitive Advantage

1 Emergent Strategies- strategies

that evolve from the grass roots of the organization.

2 Enhancing

Competiveness-developing human capital in a

learning organization

Human resources are the most important asset

and single largest most controllable cost within

the business model

HR professionals must develop business,

professional-technical, change management

and integration competencies

HRM has a profound impact on the strategic plan

implementation by developing and aligning HRM

practices that ensue the company has motivated

employees with necessary skills