CH.

3 THE MANAGER’S ROLE IN STRATEGIC HUMAN RESOURCE MANAGEMENT

Why Strategic Planning is Important to All Managers
The Hierarchy of Goals
Fundamentals of Management Planning
The Planning Process:
1. Set an objective
2. Make forecasts
3. Determine what your alternatives are for getting from where you are now to
where you want to be
4. Evaluate your alternatives
5. Implement and evaluate your plan
*There is usually a hierarchical aspect to managerial planning
Business Plan-provides a comprehensive view of the firm’s situation today and of its
company-wide an departmental goals and plans for the next 3 to 5 years
-“long-term”/”strategic” plan
Contents of typical business plan:
1. Description of the business (ownership, products/services)
2. The marketing plan-specifies the nature of the product/service; 4PS: product, price,
promotion, place
3. The financial plan
4. The management and/or personnel/ human resource plan
5. The Production/Operations Plan
How Managers Set Objectives
· Setting SMART Goals (specific, measurable, attainable, relevant, timely)
· How to Set Motivational Goals
Goal-setting studies
1. Assign specific goals
2. Assign measurable goals
3. Assign challenging but doable goals
4. Encourage participation
*But when (as is usually the case) the participatively set goals are more difficult than the
assigned ones, participatively set goals usually produce higher performance
· Using Management by Objectives
Management by Objectives (MBO)-the supervisor and subordinate jointly set goals for
the latter and periodically assess progress toward those goals
-a formal oragnizationwide program in which managers at each organizational level meet
with the subordinates to hammer out goals that make sense in terms of each
department’s assigned goals

5 steps of MBO Process:

1. Set organization goals
2. Set department goals
3. Discuss department goals
4. Set individual goals
 5. Give feedback
· Using the Management Objectives Grid
4 things why use the MBO grid:
1. To list their supporting goals
2. To clarify what your own goals should be
3. What their goals are (for subordinates)
4. To track subordinates’ progress (start and end date)
The Strategic Management Process
Strategic plan-the company’s plan for how it will match its internal strengths and
weaknesses with external opportunities and threats in order to maintain a competitive
advantage
Strategy-a course of action
Strategic management-the process of identifying and executing the organization’s
strategic plan, by matching the company’s capabilities with the demands of its
environment
7 steps in strategic management process
1. Define the Current Business
2. Perform External and Internal Audit
Environmental scanning worksheet-a simple guide for compiling relevant information
about the company’s environment
-includes things like economic competitive, and political trends
SWOT chart
3. Formulate a New Direction
Vision statement-a general statement of the firm’s intended direction and shows, in
broad terms, “what we want to become”
Mission statement-summarizes your answer to the question, “What business are we
in?”
-vertically integrate, product scope, (diversify), geographic coverage, competitive
advantage
4. Translate the Mission into Strategic Goals
5. Formulate Strategies to Achieve the Strategic Goals
6. Implement the Strategies
-strategies into action
7. Evaluate Performance
Improving Productivity Through HRIS: Using Computerized Business Planning Software
Types of Strategies
1. Corporate-wide strategic planning-identifies the portfolio of businesses that, in total,
comprise the company and the ways in which these businesses relate to each other
1. concentration (single) business-the company offers one product or product
line, usually in one market
-market penetration, product development, horizontal integration (which
means acquiring control of competitors in the same or similar markets with
the same or similar products)
2. diversification
 -related diversification-diversifying so that a firm’s lines of businesses still possess
some kind of fit
-conglomerate diversification-diversifying into products or markets not related to the
firm’s current businesses or to one another
3. vertical integration-firm expands by, perhaps, producing its own raw materials, or
selling its product direct
4. consolidation-reducing the company’s size
5. geographic expansion-taking the business abroad
2. Business unit (competitive) strategic planning-identifies how to build and strengthen
the business’s long-term competitive position in the marketplace
Competitive advantage-any factors that allows a company to differentiate its product or
service from those of its competitors to increase market share
1. Cost leadership
2. Differentiation
3. Focuses
3. Functional (departmental) strategic planning-identify the broad activities that each
department will pursue in order to help the business accomplish its competitive goals
Strategic fit- Michael Porter: the idea that each department’s strategy needs to fit the
parent business’s competitive aims
The Top Manager’s Role in Strategic Planning
*devising a strategic plan is top management’s responsibility
*Top management must decide what businesses the company will be in and where, and
on what basis it will compete
Departmental Manager’s Strategic Planning Roles
1. They Help Devise the Strategic Plan
*the heart of strategic planning is gathering information on the company’s strengths,
weakness, opportunities, and threats
Offshoring-the exporting of jobs from developed countries to countries where labor and
other costs are lower
2. They Formulate Supporting, Functional/Departmental Strategies
3. They Execute the Plans
Strategic Human Resource Management
Strategic Human Resource Management-formulating and executing human resource
policies and practices that produce the employee competencies and behaviors the
company needs to achieve its strategic aims
-strategic plan, implies certain workforce requirements, HR strategies (policies,
practices)
*The human resource manager identifies the measures he or she can use to gauge the
extent to which its new policies and practices are actually producing the required
employee skills and behaviors
Strategic HR in Action: Improving Mergers and Acquisitions
1. Using HRM
2. Due Diligence Stage-before finalizing a deal, it is usual for the acquirer (or merger
partners) to perform “due diligence” reviews to assure they know what they’re getting
into
-includes reviewing things like organizational culture and structure, employee
compensation and benefits, labor relations, pending employee litigation human resource
policies and procedures and key employees
3. Integration Stage-include choosing the top management team, ensuring top
management leadership, communicating changes effectively to employees, retaining key
talent, and aligning culture
4. Using HR Consultants
1. Manage the deal costs
2. Manage the messages
3. Secure the top team and key talent
4. Define and implement an effective HR service delivery stage
5. Develop a workable change management plan
6. Design, and implement the right staffing model
7. Aligning total rewards
Strategic Human Resource Management Tools
1. Strategy map
-shows the “big picture” of how each department’s performance contributes to achieving
the company’s overall strategic goals
-helps the manager understand the role his or her department plays in helping to
execute the company’s strategic plan
2. HR scorecard-is not a scorecard
-refers to a process for assigning financial and nonfinancial goals or metrics to the
human resource management-related chain of activities required for achieving the
company’s strategic aims and for monitoring results
Computerized Scorecard process helps quantify the relationship between:
1. The HR activities (mount of testing, training)
2. The resulting employee behaviors (customer service)
3. The resulting firm-wide strategic outcomes and performance (customer
satisfaction, profitability)
3. Digital Dashboard
-presents the manager with desktop graphs and charts, and so a computerized picture of
where the company stands on all those metrics from the HR Scorecard process
Translating Strategy into Human Resource Policies and Practices: Einstein Medical
Example
1. New Strategy
3 important organizational outcomes: initiate, adapt, deliver
2. New Employee Competencies and Behaviors
-dedicated, accountability, apply new knowledge
3. New Human Resource Policies and Practices
New Human Resource Programs:
1. New training program
2. Enriching work
3. Appropriate returns
4. Improved selection, orientation and dismissal procedures
Building Your Own High-Performance Work System
High-Performance Work System (HPWS)-a set of human resource management
policies and practices that promote organizational effectiveness
4 things about high-performing firms’ human resource management systems
1. It helps demonstrate why metrics are important
Human resource metric-the quantitative measure of some human resource
management yardstick such as employee turnover, hours of training per employee or
qualified applicants per position
2. The things human resource systems must do to be high-performance systems
- For example, they hire based on validated selection tests fill more
jobs from within, organize work around self-managing teams and
extensively train employees
3. High-performance practices generally aspire to help workers to manage themselves
- the point of the recruiting, screening, training, and other human
resources practices is to foster a trained, empowered, self-motivate
and flexible workforce
4. The notable differences between high-performance and low-performance companies’
human resource management systems
- For example, high-performing companies have more than 4 times the
number of qualified applicants per job than do low performance
Benchmarking-means comparing and analysing the practices of high-
performing companies to your own in order to understand what they do that
makes them better

Tools for Evidence-Based Human Resource Management

1. Human resource audits
2. Benchmarking
Science-a way of going about doing something/methodology
Ground Rules of Science
1. Objectivity
2. Experimentation
3. Quantification
4. Explanation
5. Prediction
6. Replication
4 steps in experimentation:
1. Setting up a hypothesis
Hypothesis-a tentative explanation of what to expect, usually based on prior theories
and observations
2. Developing a method for testing the hypothesis
3. Gather the data
 Data-actually making the observations and measuring what you find
4. Drawing conclusions based on the findings
Quantification-they measure or assign numerical values to , the phenomenon that
they’re studying
HR audit-an analysis by which an organization measure where it currently stands and
determines what it has to accomplish to improve its HR function
Types of HR Audits:
1. Compliance audits-how well are we complying with relevant laws and regulations?
2. Best practices audits-how do our recruitment practices, hiring practices and so on
compare to those of “best practices” companies?
3. Strategic audits-are our HRM practices helping us to achieve the strategic goals, by
fostering the required employee behaviors
4. Function Specific audits-audits here concentrate on one or more specific human
resource management areas, such as compensation or training and development
The HR Audit Process
1. Decide on the scope of the audit
2. Draft an audit team
3. Compile the checklists and other tools that are available
4. Know your budget
5. Consider the legalities
6. Get top management support
7. Develop the audit checklist
8. Use the questionnaire to collect the data
9. Benchmark the findings
10. Provide feedback
11. Create action plans
3 illustrative sets of HR audit checklist areas and checklist items
1. Personnel Files
2. Wage and hour compliance
3. Headcount
HR Metrics and Benchmarking
Benchmark-compare your results to those of comparable companies
Types of metrics
-sales per employee, absence rate, cost per hire, health care costs per employee
1. Absence Rate
2. Cost per Hire
3. Health Care Costs per Employee
4. HR Expense Factor
5. Human Capital ROI