HUMAN RESOURCE

MANAGEMENT STRATEGY

HUMAN RESOURCE MANAGEMENT

STRATEGY
The Meaning of Strategy
A critical factor that affects Firm Performance
A factor that contributes to Competitive
Advantage in markets
Having a long-term focus
Plans that involve the top executives and/or board
of directors of the firm
A general framework that provides a perspective
for selecting specific policies and procedures

HUMAN RESOURCE MANAGEMENT

STRATEGY
Why is HR critical to firm performance?
85% of all firms in the US are service firms.
Service is delivered by people.
Low quality HR leads to low quality customer
service.
In the 21st century effective knowledge
management translates into competitive
advantage and profits.
Knowledge comes from a firms people.

HUMAN RESOURCE MANAGEMENT

STRATEGY
What is unique about Human Resource
Management?
HR is multidisciplinary: It applies the disciplines
of Economics (wages, markets, resources),
Psychology (motivation, satisfaction), Sociology
(organization structure, culture) and Law (min.
wage, labor contracts, EEOC)
HR is embedded within the work of all managers,
and most individual contributors due to the need
of managing people (subordinates, peers and
superiors) as well as teams to get things done.

HR STRATEGY: STRATEGIC FIT

Corporate Strategy
Business Strategy
HR Strategy
HR System
(Performance Mgmt.)

Training

Rewards

HR STRATEGY: HR SYSTEM
INTERNAL FIT
HR Strategy
Goal Setting
Appeal

Performance
Measurement
Coaching

Rewards

Performance Evaluation

Performance Management System

HR STRATEGY: CONTEXT OF HR
SYSTEM
1.

The Five Factors Influencing the HR System

External Environment
Social: social values, roles, trends, etc.
Political: political forces, changes. Ex. Bush
presidency and its agenda for Social Security.
Legal: laws, court decisions, regulatory rules.
Economic: product, labor, capital, factor markets.

HR STRATEGY: CONTEXT OF HR
SYSTEM
2.

The Workforce

Demographics

HR STRATEGY: CONTEXT OF HR
SYSTEM
3.

Organization Culture

Weak vs. Strong culture

Type of culture

HR STRATEGY: CONTEXT OF HR
SYSTEM
4.

Organization Strategy

What are a firms distinctive competencies?

What is the basis that competitive strategy be
sustained?
What are a firms strategic objectives?
Compare corporate and Business strategies.

HR STRATEGY: CONTEXT OF HR
SYSTEM
5.

Technology of Production & Organization of

Work

Physical layout/employee proximity

Required employee skills
Ease of monitoring employees input

HR STRATEGY: CONTEXT OF HR
SYSTEM
Critical Thinking Questions:
1.
Should a company monitor the HR environment
and imitate Best Practices of HR from
successful firms? What caveats would you want
to apply to applying Best HR Practices?
2.
Give an example of a type of Organizational
Culture that would reinforce strategy: What
type of HR practices would fit with this culture?
3.
What type of HR practices would fit with jobs
with tasks that are highly ambiguous,
uncertain and creative? What about
predictable, routine and certain tasks?

HR STRATEGY: STRATEGIC ROLES

Distribution of Task Outcomes: 3 Possibilities
1.
Foot soldier: low upside, low downside of
performance variance
2.
Guardian: low upside, high downside of
performance variance
3.
Star: high upside, low downside of
performance variance

HR STRATEGY: STRATEGIC ROLES

Critical Thinking Questions:
1.
Which Roles are Strategic? Foot soldier,
guardian or star?
2.
What are the advantages of focusing on foot
soldiers with the company HR policies?
3.
What are the liabilities of stars? When is it
advantageous to cultivate and sustain stars?

HR STRATEGY: CONSISTENCY
Consistency is an important quality related to the
implementation of HR policies. Employees
should receive a clear, undiluted message of what
behaviors are important and desirable. When
there is a fit between HR systems, employees are
likely to receive consistent feedback. The 3 types
of consistency are

1. Single-employee consistency
2. Among-employee consistency
3. Temporal consistency

HR STRATEGY: CONSISTENCY
Critical Thinking Questions
1.
Are there circumstances when it is effective to
have inconsistent HR policies? Give an
example.
2.
Does an emphasis on temporal consistency
create a barrier for change when change is
necessary?
3.
What impact (if any) would consistency have on
the organization culture?