Strategy and Human Resources Planning - PowerPoint Presentation

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Strategy and HumanResources Planning

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The Challenges of Human Resources ManagementSlide2

Strategic Planning and Human Resources

Strategic PlanningProcedures for making decisions about the organization’s long-term goals and strategiesStrategy

formulation: the process of deciding on a strategic direction by defining an organization’s mission and goals and its SWOTsThe process of devising structures and allocating resources to enact the strategy a company has

chosesStrategy implementation: plans are enacted and put into place Human Resources Planning (HRP)Process of anticipating and making provision for the movement (flow) of people into, within, and out of an organization. Slide3

Why Strategic Planning Is ImportantTo All Managers

The firm’s strategic plan guides much of what is done by all to accomplish organizational goals.

Decisions made by managers depend on the goals set at each organizational level in support of higher level goals. Slide4

Strategic Planning Process

Strategic Human Resources Management (SHRM)The pattern of human resources deployments and activities that enable an organization to achieve its strategic goals

Strategy formulation —providing input as to what is possible given the types and numbers of people available.Strategy implementation —making primary resource allocation decisions about structure, processes, and human resources.

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Step One: Mission, Vision, and Values

MissionThe basic purpose of the organization as well as its scope of operationsStrategic VisionA statement about where the company is going and what it can become in the future; clarifies the long-term direction of the company and its strategic intent

Core ValuesThe strong and enduring beliefs and principles that the company uses as a foundation for its decisions

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Merck & Co.’s Mission and ValuesSlide7

Starbucks’ Corporate Mission StatementSlide8

Strategic Planning Process

Strategic Human Resources Management (SHRM)The pattern of human resources deployments and activities that enable an organization to achieve its strategic goals

Strategy formulation —providing input as to what is possible given the types and numbers of people available.Strategy implementation —making primary resource allocation decisions about structure, processes, and human resources.

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Type

of Strategy at Each Company

LevelSlide10

Environmental Analysis

Environmental ScanningThe systematic monitoring of the major external forces influencing the organization.Economic factors: general, regional, and global conditions

Industry and competitive trends: new processes, services, and innovationsTechnological changes: robotics and office automation

Government and legislative issues: laws and administrative rulings Social concerns: child care and educational priorities Demographic and labor market trends: age, composition, literacy, and immigration1–10Slide11

Worksheet

for Environmental ScanningSlide12

SWOT

Matrix, with Generic ExamplesSlide13

Personal SWOT Analysis

http://homepages.se.edu/cvonbergen/files/2012/11/SWOT-Analysis-for-Individuals_060313.docx

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Types of Corporate Strategies

Concentration

Vertical integration

Diversification

Corporate Strategy Possibilities

Consolidation

Geographic expansionSlide15

Strategic Planning Process

Strategic Human Resources Management (SHRM)The pattern of human resources deployments and activities that enable an organization to achieve its strategic goals

Strategy formulation —providing input as to what is possible given the types and numbers of people available.Strategy implementation —making primary resource allocation decisions about structure, processes, and human resources.

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Linking Strategic Planning and HRP

Strategic Analysis What human resources are needed and what are available?Strategic FormulationWhat is required and necessary in support of human resources?

Strategic ImplementationHow will the human resources be allocated?

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Human Resources PlanningStrategic

PlanningSlide17

Strategic HR ChoicesSlide18

Comparison

of Selected Human Resource Practices in

High-Performance

and

Low- Performance CompaniesSlide19

The Human Resources Planning Process

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10 Things Managers Should Avoid When Supervising Temporary/Contingent Employees

Treat the temporary employee as if the temp agency is in fact his or her employerDO NOTSlide22

Quantitative Approach: Trend Analysis

Forecasting labor demand based on an organizational index such as sales:Select a business factor that best predicts human resources needs.Plot the business factor in relation to the number of employees to determine the labor productivity ratio.

Compute the productivity ratio for the past five years.Calculate human resources demand by multiplying the business factor by the productivity ratio.

Project human resources demand out to the target year(s).1–22Slide23

Forecasting Demand for Employees

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500 Bed Hospital → 1200 Beds

Size of Hospital (Number of Beds)

Number of Registered Nurses200

240300260400470500

500600620700660800

820900860Slide25

Excel Problem: Beds and Nurses

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Forecasting the Supply of Employees: Internal Labor Supply

Staffing TablesMarkov AnalysisSkill Inventories

Replacement ChartsSuccession Planning

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Forecasting the Supply of Employees: Internal Labor Supply

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Internal Demand Forecasting Tools

Skill InventoriesFiles of personnel education, experience, interests, skills, etc., that allow managers to quickly match job openings with employee backgrounds.Replacement Charts

Listings of current jobholders and persons who are potential replacements if an opening occurs.Succession PlanningThe process of identifying, developing, and tracking key individuals for executive positions.

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Skills inventory and HRISSlide30

Internal Demand Forecasting Tools

Skill InventoriesFiles of personnel education, experience, interests, skills, etc., that allow managers to quickly match job openings with employee backgrounds.Replacement Charts

Listings of current jobholders and persons who are potential replacements if an opening occurs.Succession PlanningThe process of identifying, developing, and tracking key individuals for executive positions.

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Calculating employee Turnover

and Absenteeism

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Employee Turnover Rates

Computing Turnover Rates (for a month):The U.S. Department of Labor suggests the following formula for computing turnover rates:

Thus, if there were 25 separations during a month and the total number of employees at mid month was 500, the turnover rate would be:

25/500 X 100 = 5%1–33Slide34

How would you determine annualized turnover?Slide35

Key Terms

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Balanced Scorecard (BSC)

benchmarkingcore capabilitiescore valuescultural audits

environmental scanninghuman capital readinesshuman resources planning (HRP)management forecasts

Markov analysismissionorganizational capabilityreplacement charts

skill inventoriesstaffing tablesstrategic human resources management (SHRM)strategic planningstrategic vision

succession planningSWOT analysis

trend analysisvalue creationSlide36
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Chapter 2 - Learning Outcomes

Learning Outcome

Statements

Related Outcomes from Body of the Text1

Identify the advantages of integrating human resources planning and strategic planning. Why is HR planning integral to a firm’s strategic planning? As an HR professional, what do you think you could do to tie the two functions together?

2Understand how an organization’s competitive environment influences its strategic planning.

What external factors in the environment do you think firms are most likely to overlook when formulating their business strategies? How can an HR manager help its executive team get a fuller picture of the competitive environment in which it operates?3Understand why it is important for an organization to do an internal resource analysis.

Think back to the discussion in Chapter 1 about the auto-parts makers that had to look for new business lines when GM, Ford, ad Chrysler sales plummeted in the last recession. How do you think the auto-parts makers assessed their ability to enter their new markets? Do you think they looked first at new markets and then the capabilities of their employees and external partners or vice versa?

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Describe the basic tools used for human resources forecasting.

If you are currently employed, ask your manager how your

firm goes

about forecasting

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Explain the linkages between competitive strategies and HR.

Think about a firm you enjoy doing business with or one you don’t. What competitive strategy does it pursue? Do you think its employees have the right skills given the strategy? Do you detect any mismatches?

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Understand what is required for a firm to successfully implement a strategy.

Why is it difficult to translate a firm’s strategy into HR deliverables that actually get the job done? What part of this endeavor do you think HR managers struggle with the most?

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Recognize the methods for assessing and measuring the effectiveness of a firm’s strategy.

Why do some organizations rely more on some HR metrics than others? Think about the businesses on or near your campus. Which metrics do you think they are most likely to track?Slide39

Employee Turnover Rates (cont’d)

Computing Turnover Rates (cont’d):Another method of computing the turnover rate is one that reflects only the avoidable separations (S). This rate is computed by subtracting unavoidable separations (US) from all separations. The formula for this method is as follows:

where M represents the total number of employees at mid month. For example, if there were 25 separations during a month, 5 of which were US, and the total number of employees at mid month (M) was 500, the turnover rate would be:

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Employee Absenteeism RatesComputing Absenteeism Rates

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Chapter Objectives

After studying this chapter, you should be able to

Identify the advantages of integrating human resources planning and strategic planning.

Understand how an organization’s competitive environment influences its strategic planning.Understand why it is important for an organization to do an internal resource analysis.Describe the basic tools used for human resources forecasting.Explain the linkages between competitive strategies and HR.Understand what is required for a firm to successfully implement a strategy.

Recognize the methods for assessing and measuring the effectiveness of a firm’s strategy.

LEARNING OUTCOME 1

LEARNING OUTCOME 2LEARNING OUTCOME 3

LEARNING OUTCOME 4

LEARNING OUTCOME 5

LEARNING OUTCOME 6

LEARNING OUTCOME 7Slide43

Measuring a Firm’s Strategic Alignment

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Ensuring Strategic Flexibility for the Future

Organizational CapabilityCapacity of the organization to act and change in pursuit of sustainable competitive advantage.Coordination flexibilityThe ability to rapidly reallocate resources to new or changing needs.

Resource flexibilityHaving human resources who can do many different things in different ways.

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Measuring a Firm’s Strategic Alignment

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Measuring a Firm’s Strategic AlignmentStrategy Mapping and the Balanced Scorecard

Balanced Scorecard (BSC)A measurement framework that helps managers translate strategic goals into operational objectivesfinancialcustomer

processeslearning

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Step Four: Formulating Strategy

Strategy FormulationMoving from simple analysis to devising a coherent course of action.SWOT analysis A comparison of strengths, weaknesses, opportunities, and threats for strategy formulation purposes.

Use the strengths of the organization to capitalize on opportunities, counteract threats, and alleviate internal weaknesses.

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Step Four: Formulating Strategy

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Step Four: Formulating Strategy

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Strategic Alliances

and Joint Ventures

Growth and

DiversificationMergers and

AcquisitionsCorporate StrategySlide50

Business Strategy

Value CreationWhat the firm adds to a product or service by virtue of making it; the amount of benefits provided by the product or service once the costs of making it are subtracted (value = benefits - costs).

Low-cost strategy: competing on productivity and efficiencyKeeping costs low to offer an attractive price to customers (relative to competitors).

Differentiation strategy: compete on added valueInvolves providing something unique and distinctive to customers that they value.1–50Slide51

Business Strategy (cont’d)

Functional Strategy: Ensuring AlignmentExternal Fit/Alignment

Focuses on the connection between the business objectives and the major initiatives in HR.Internal Fit/AlignmentAligning HR practices with one another to establish a configuration that is mutually reinforcing.

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Step Five: Strategy Implementation

Taking Action: Reconciling Supply and DemandBalancing demand and supply considerationsForecasting business activities (trends)

Locating applicantsOrganizational downsizing, outsourcing, offshoring

Reducing “headcount”Making layoff decisionsSeniority or performance?Labor agreements1–52Slide53

Step Five: Strategy Implementation (Cont.)

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Step Six: Evaluation and AssessmentEvaluation and Assessment Issues

Benchmarking: The process of comparing the organization’s processes and practices with those of other companiesHuman capital metricsAssess aspects of the workforce

HR metricsAssess the performance of the HR function itself

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Step Two: Environmental Analysis (Cont.)

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Step Two: Environmental Analysis (Cont.)

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Culture

Composition

Capabilities

Internal AnalysisSlide57

Step Two: Environmental Analysis (Cont.)

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Corporate Culture: Values, Assumptions, Beliefs, and Expectations (VABEs)

Cultural AuditsAudits of the culture and quality of work life in an organization.How do employees spend their time?

How do they interact with each other? Are employees empowered?What is the predominant leadership style

of managers?How do employees advance within the organization?1–58Slide59

Forecasting: A Critical Element of Planning

Forecasting involves:forecasting the demand for laborforecasting the supply of laborbalancing supply and demand considerations.

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Step Six: Evaluation and Assessment

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Step Two: Environmental Analysis (Cont.)

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Step Two: Environmental Analysis (Cont.)

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Culture

Composition

Capabilities

Internal AnalysisSlide63

Step Two: Environmental Analysis (Cont.)

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Corporate Culture: Values, Assumptions, Beliefs, and Expectations (VABEs)

Cultural AuditsAudits of the culture and quality of work life in an organization.How do employees spend their time?

How do they interact with each other? Are employees empowered?What is the predominant leadership style

of managers?How do employees advance within the organization?1–64Slide65

Forecasting: A Critical Element of Planning

Forecasting involves:forecasting the demand for laborforecasting the supply of laborbalancing supply and demand considerations.

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Forecasting Demand for Employees

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Quantitative Methods

Qualitative Methods

Forecasting Demand