The Manager’s Role in Strategic Human Resource Management

中国经济管理大学 MBA公益课堂

（加里·德斯勒）

The Manager’s Role in Strategic Human Resource Management

The Manager’s Role in Strategic Human Resource Management

Lecture Outline

Why Strategic Planning is Important to All Managers

The Hierarchy of Goals

Fundamentals of Management Planning

 The Planning Process

 Putting Together the Business Plan

        How Managers Set Objectives

The Strategic Management Process

       Introduction

       Improving Productivity Through HRIS

       Types of Strategies

       The Top Manager’s Role in Strategic Planning

       Departmental Strategic Planning                               

       Managing the New Workforce

Strategic Human Resource Management

       Human Resource Strategies and Policies

Managing HR in Challenging Times

       Strategic HR in Action

       Strategic Human Resource Management Tools

       Translating Strategy into Human Resource

             Policies and Practices

Building Your Own High-Performance Work System

       What Are High-Performance Work Systems?

       High-Performance Human Resource Policies

       and Practices  

       The Line Manager’s Role in Building a High- 

            Performance Work System         

    In Brief:   This chapter explains how to design and develop an HR system that supports the company’s strategic goals.  It explains the strategic management process, how to develop a strategic plan, and the HR manager’s role in the process of strategy execution and formulation.  The chapter explains why metrics are essential for identifying and creating high-performance human resource policies and practices.

Interesting Issues:  The Human Resource function today continues to play an increasingly visible role in the strategic planning and management process, requiring a new level of skill and competency among HR professionals.  HR managers must develop measureable strategies that convincingly showcase HR’s impact on business performance. Successful Human Resource managers have adopted  a perspective that focuses on how their departments can play a central role in implementing the organization’s strategy.

ANNOTATED OUTLINE

I. Why Strategic Planning is Important to all Managers

A strategic plan is an organization’s plan for how it will match its internal strengths and weaknesses with external opportunities and threats in order to maintain a competitive advantage.  The HR strategy needs to support the organization’s strategic plan.  In formulating their HR strategies, HR managers must address three basic challenges: 1) support organizational productivity and performance improvement efforts; 2) employees play an expanded role in employers’ performance improvement efforts; 3) HR must be more involved in designing – not just executing – the company’s strategic plan.

A. The Hierarchy of Goals

Strategic planning is important because in a well-run organization, the goals from the very top of the organization down should form an unbroken chain or hierarchy of goals.  These goals, in turn, should guide everyone in the organization in what they do.

II. Fundamentals of Management Planning

People make plans every day, often without giving it thought.  We plan our routes to work, what courses to take, and what to do on a Saturday night.  Underlying all those plans, however, is the planning process which entails the following:

a) Set an objective.

b) Develop a forecast.

c) Determine alternatives for getting where you want to be.

d) Evaluate alternatives.

e) Implement your plan.

A. Business Plan

The business plan provides a comprehensive view of the firm’s situation today and of its company-wide and departmental goals and plans for the next three to five years.

B. Marketing Plan

The marketing plan specifies the nature of the product or service the organization provides.  It also shows the approaches the company plans to take with respect to pricing and promoting the product or service.

C. Personnel/Human Resource Plan

Anything the company does, or plans to do, will require managers and other personnel, and therefore a personnel plan.

D. Production/Operations Plan

Implementing the marketing plan will necessitate having productive assets.  For example, it takes factories and machines to assemble Dell’s PC’s.

E. Financial Plan

“What’s the bottom line?” is the first question posed by many managers.  The question underscores a truism about business and management.  At the end of the day, most managers’ plans, goals, and accomplishments end up expressed in financial terms.

III. How Managers Set Objectives

A. SMART Goals

Experienced managers use the acronym “SMART” to signify that goals are specific, measurable, attainable, relevant, and timely.

B. Motivational Goals

Goals are only useful if employees are motivated to achieve them.  Research known as the goal-setting studies suggests the following:  assign specific goals, assign measurable goals, assign challenging goals, and encourage participation.

C. Management by Objectives

With Management by Objectives or commonly called MBO, the supervisor and subordinate jointly set goals for the latter and periodically assess progress toward those goals.

D. Management Objectives Grid

With or without MBO, every manager needs a system for organizing how his or her subordinates’ goals dovetail with those of the company.  In Figure 3-4, the management objectives grid provides an easy way to do this.

IV. The Strategic Management Process

A strategic plan is 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.  Figure 3-5 sums up the strategic management process in seven steps as follows:

     1.  Define the current business and mission.  

     2.  Perform external and internal audits.  

3. Formulate new business and mission statement. 

4. Translate the mission into goals.  

5. Formulate strategies to achieve the strategic goal.

6. Implement the strategy.

7. Evaluate performance. 

V. Improving Productivity through HRIS

Business planning software packages are available to assist the manager in writing strategic and business plans.

A.  Types of Strategies–Managers have three types of strategic planning.

     1. Corporate-level strategy – Identifies the portfolio of businesses that comprise the company and the ways in which these businesses are related to each other.  Diversification, vertical integration, consolidation and geographic expansion are all examples of corporate-level strategies.

     2. Competitive strategy – Managers endeavor to achieve competitive advantages for each of their businesses.  Companies try to achieve competitive advantages for the business they are in, which allow them to differentiate its product or services from those of its competitors to increase market share.  Examples of competitive strategies include cost leadership and differentiation.    

     3. Functional strategies – Identify the basic course of action that each department will pursue in order to help the business attain its competitive goals.

     4. Strategic Fit – Strategic planning experts have different views on fitting capabilities to the opportunities and threats vs. stretching beyond capabilities to take advantage of an opportunity.  The “fit” point of view, as purported by Michael Porter, states that all of the firm’s activities must be tailored to or fit its strategy by ensuring that the firm’s functional strategies support its corporate and competitive strategies. 

VI. The Top Manager’s Role in Strategic Planning

Devising a strategic plan is top management’s responsibility.  Because the consequences of a poor choice can be dire, few top managers would delegate the job of deciding how the company should match its internal strengths and weaknesses with its external opportunities and threats to maintain a competitive advantage.

VII. Departmental Manager’s Strategic Planning Roles

It would be reckless for any top executive to formulate a strategic plan without the input of his or her lower-level manager.  Few people know as much about the firm’s competitive pressures, vendor capabilities, and concerns than do the company’s department managers.

VIII. Strategic Human Resource Management

Every company needs its human resource management policies and activities to make sense in terms of its broad strategic aims. Strategic human resource management means formulating and executing human resource policies and practices that produce the employee competencies and behaviors the company needs to achieve its strategic aims. Figure 3-10 demonstrates the relationship between human resource strategy and the company’s strategic plans.  The following steps demonstrate linking company-wide and HR strategies:

a) Evaluate Company’s Competitive Environment

b) Formulate Business Strategy

c) Identify Workforce Requirements

d) Formulate HR Strategic Policies and Activities

e) Develop Detailed HR Scorecard Measures

A. Human Resources Strategies and Policies

Managers call the specific human resource management policies and practices they use to support their strategic aims human resource strategies. The Shanghai Portman’s human resource strategy was to produce the service-oriented employee behaviors the hotel needed to improve significantly the hotel’s level of service. Its HR policies therefore included installing the Ritz-Carlton Company’s human resource system, having top management personally interview each candidate, and selecting only employees who cared for and respected others.

IX. Strategic HR in Action: Improving Mergers and Acquisitions

When mergers and acquisitions do fail, it’s often not due to financial or technical issues but to personnel-related ones. These may include, for example, employee resistance, mass exits by high-quality employees, and declining morale and productivity.  As one study concluded some years ago, mergers and acquisitions often fail due to a lack of adequate preparation of the personnel involved and a failure to provide training which fosters self-awareness, cultural sensitivity, and a spirit of cooperation. 

A. Using Human Resource Management

Until recently, top executives rarely involved their human resource managers in planning the merger or acquisition. Surveys by consultants Towers Perrin found that prior to 2000, human resource executives played limited roles in merger and acquisition (M&A) planning and due diligence. They tended to get involved only when management began integrating the two companies into one. Today, by contrast close to two thirds of the [survey] participants are involved in M&A due diligence now.

B. 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.  For the human resource teams, due diligence 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.  Employee benefits are one obvious example. For example, do the target firm’s health insurance contracts have termination clauses that could eliminate coverage for all employees if you lay too many off after the merger?

C. Integration Stage 

There are critical human resource issues during the first few months of a merger or acquisition. These include choosing the top management team, ensuring top management leadership, communicating changes effectively to employees, retaining key talent, and aligning cultures.

D. Using HR Consultants

Several global human resource consulting companies, such as Towers Perrin, provide merger-related human resource management services. The services they provide help to illustrate human resource experts’ potential role in facilitating mergers and acquisitions.

X. Strategic HR Management Tools

Managers use several tools to help them translate the company’s broad strategic goals into specific human resource management policies and activities. Three important tools include the strategy map, the HR Scorecard, and the digital dashboard.

A. Strategy Map

The strategy map shows the “big picture” of how each department’s performance contributes to achieving the company’s overall strategic goals. It helps the manager understand the role his or her department plays in helping to execute the company’s strategic plan.

B. HR Scorecard

Many employers quantify and computerize the map’s activities. The HR Scorecard helps them to do so. The HR Scorecard is not a scorecard. It                                                          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.  

C. Digital Dashboards

A digital dashboard presents the manager with desktop graphics and charts. And so it is a computerized picture of where the company stands on all those metrics from the                                             HR Score card process.

XI. Building Your Own High-Performance Work System

A high-performance work system is a set of human resource management policies and practices that promote organizational effectiveness.

A. High-Performance Human Resource Policies and Practices

Studies show that in terms of policies and practices, high-performance work systems do differ from less productive ones.  Table 3-1 illustrates this.  For example, high-performing companies start with more job candidates, use more selection tests, and spend many more hours training employees.

B. The Line Manager’s Role in Building a High-Performance Work System

Every manager can influence the number of job applicants they receive, the testing they do, the quality training they provide, and the kinds of incentives they offer to their employees.

Ø NOTES Educational Materials to Use

DISCUSSION QUESTIONS

1. Give an example of hierarchical planning in an organization.

Top management approves a long-tem or strategic plan.  Then each department, working with top management, creates its own budgets and other plans to fit and to contribute to the company’s long-term plan.

2. What are the main components of a business plan? Describe each briefly. How would you set motivational goals?

There are no rigid rules regarding what such a plan should contain.  However, they usually include, at a minimum, (1) a description of the business including the ownership and products or services, (2) the marketing plan, (3) the financial plan, and (4) the management and/or personnel plan.  The business plan invariably guides every functional department in the firm, from sales and marketing to manufacturing and finance.

Goals are only useful if employees are motivated to achieve them.  Research known as the goal-setting studies provides useful insights into setting motivational goals.  This research suggests that firms should:  assign specific goals, assign measurable goals, assign challenging but doable goals, and encourage participation.

3. What is the difference between a strategy, a vision, and a mission? Give one example of each.

A strategy identifies a course of action to get the company from where it is today to where it wants to be tomorrow.  One example of a company’s strategy given in the text is Dell Computer’s strategy to be a “low cost leader” by using the Internet and phone to sell PCs directly to end users at prices competitors cannot match.   

A vision is a general statement of the company’s intended direction that evokes emotional feelings in employees.  It is a “mental image” of a possible and desirable future state for the organization, and articulates a view of a realistic, credible, attractive future of the organization that is better than what now exists.  For example, the vision for the California Energy Commission is “for Californians to have energy choices that are affordable, reliable, diverse, safe, and environmentally acceptable.”

The mission is a more specific and shorter term statement which lays out what is supposed to be now, communicating “who we are, what we do, and where we’re headed.”  Following the vision for the California Energy Commission, their mission is to “assess and act through public/private partnerships to improve energy systems that promote a strong economy and a healthy environment.”

4. Define and give at least two examples of the cost leadership competitive strategy and the differentiation competitive strategy.

The cost leadership competitive strategy means that the enterprise aims to become the low-cost leader in an industry.  For example, stores such as Staples and Office Max maintain their competitive advantage by selling large quantities of office products at low prices. Airlines such as Southwest offer low fares in addition to quick turnarounds at the gate. 

In a differentiation competitive strategy, firms seek to be unique in its industry along dimensions that are widely valued by buyers.  For example, Ocean Spray Cranberries charges a premium price for their juices, stressing premium high-quality ingredients.  Visa differentiates itself by being accepted as a form of payment universally where other credit cards are not.

5. Explain how human resources management can be instrumental in helping a company create a competitive advantage.

Human Resources is regarded in a growing number of organizations as a source of competitive advantage, through recruiting, selecting, retaining, and developing human capital that enables organizations to compete on a number of different levels to be flexible, capable, and responsive, demonstrating creativity and innovation in order to produce products and services of high quality.

6. What is a high-performance work system? Provide several specific examples of the typical components in a high-performance work system.

High Performance Work Systems are characterized by high involvement organizational practices, (such as job enrichment and team-based organizations), high-commitment work practices (such as improved employee development, communications, and disciplinary practices), and flexible work assignments. The evidence suggests that companies that employ HPWS practices produce better productivity, quality, sales and financial performance.  What makes the HPWS unique is the quality, quantity, and specific features of the HR policies and practices.  Each element is designed to maximize the overall quality of human capital throughout the organization.  Several characteristics of high performance work organizations include multi-skilled work teams; empowered frontline workers; more training; labor management cooperation; commitment to quality; and customer satisfaction.

7. Define what an HR Scorecard is, and briefly explain each of the seven steps in the strategic management process.

The HR Scorecard is a concise measurement system that shows the metrics the firm                                                        uses to measure HR activities, measures the employee behaviors resulting from these activities, and measures the strategically relevant organizational outcomes of those employee behaviors.  It highlights the causal link between the HR activities, and the emergent employee behaviors, and the resulting firm-wide strategic outcomes and performance. 

The ten steps involved in the HR scorecard approach are as follows:

1.  Define the business strategy – In this step, management translates its broad strategic plans into specific actionable goals.

2. Outline the company’s value chain – Here the manager identifies the strategically relevant outcomes and required employee behaviors by identifying the value chain, which identifies the primary activities that create value for customers and the related support activities.  The value chain is a tool for identifying, isolating, visualizing, and analyzing the firm’s strategic activities and strategic costs.  This step allows managers to better understand the activities that drive performance in their company.

3. Outline a Strategy Map – A summary of the chain of major activities that contribute to a company’s success, the strategy map shows the “big picture” of how each department’s performance contributes to the achievement of company goals.

4. Identify the strategically required organizational outcomes – In order to achieve its strategic goals, every company must produce critical, strategically relevant outcomes.  For example, “delivering new services” is an example of an organizational outcome.

5. Identify the required workforce competencies and behaviors – Competencies and behaviors such as personal accountability, working proactively, motivation, courteous behavior, and commitment drive organizational performance by producing strategically relevant organizational outcomes.

6. Identify the required HR system policies and activities – The question in this step is “what HR system policies and activities will enable us to produce those workforce competencies and behaviors?”  The answer might include things like special training programs or changing the compensation plan.  These policies and activities are often referred to as “HR enablers,” which create and make possible the HR “performance drivers” – the workforce competencies and behaviors that produce the strategically relevant organizational outcomes.  Once these enablers are identified, the next question that follows is “what specific form should these policies and activities take?”  How and to what end should systems and processes be changed?  The HR system must be aligned with the company’s specific strategic needs.  At this point, the HR manager must become precise about the actual form and design of the firm’s HR deliverables.

7. Create the HR Scorecard – In this step, the question is how are the organizational outcomes, workforce competencies and behaviors, and HR system policies and activities measured? Just a few sample measures for assessing HR performance drivers could be employee attitude surveys, employee turnover, level of organizational learning, employee productivity, percentage of retention of high performing key employees, number of hours of training employees receive every year, and percentage of the workforce routinely working in a self-managed team.  These types of measures allow the company to assess HR’s performance objectively and quantitatively, and also enable the HR manager to build a measurable and persuasive business case for how HR contributes to achieving the company’s strategic financial goals.

8. Choose HR Scorecard Measures – Find a balance of financial and non-financial goals, with both short and long-term foundations.

9. Summarize the Scorecard Measures in a Digital Dashboard – A digital dashboard usually presents information in a way that grabs management’s attention. It displays a “bird’s eye view” of how the HR function is doing. 

10. Monitor, Predict, Evaluate – The HR Scorecard’s various measures will not always stay the same, and should be evaluated periodically to ensure they are still valid.

INDIVIDUAL AND GROUP ACTIVITIES

1. With three or four other students, form a strategic management group for your college or university.  Your assignment is to develop the outline of a strategic plan for the college or university.  This should include such things as mission and vision statements, strategic goals, and corporate, competitive, and functional strategies.  In preparing your plan, make sure to show the main strengths, weaknesses, opportunities, and threats the college faces, and which prompted you to develop your particular strategic plans.  Look for students to prepare a well-developed mission and vision statement, making sure that they are clearly differentiated from each other with the vision being future focused, articulating the desired state, with the mission supporting the vision, describing “who we are, what we do, and where we are headed.”  Use this exercise as an opportunity to discuss the problems that may be created by not clearly defining the mission, vision, as well as the strengths, weaknesses, opportunities, and threats.

2. Using the Internet or library sources, analyze the annual reports of at least five companies.  Bring to class examples of how those companies say they are using their HR processes to help the company achieve its strategic goals.  In class, facilitate a discussion on how effective students believe the HR processes at each company appear to be at supporting strategic goals.  Challenge students to come up with additional ideas for other approaches for using the HR processes and how they would go about implementing them, noting the specific challenges of each.

3. Interview an HR manager and write a short report on the topic:  “The strategic roles of the HR manager at XYZ Company.”  Instruct students to follow the model outlined in this chapter for the steps in the strategic management process, and HR’s role in strategy execution and strategy formulation.  

4. Using the Internet or library resources, bring to class and discuss at least two examples of how companies are using an HR Scorecard to help create HR systems that support the company’s strategic aims.  Do all managers seem to mean the same thing when they refer to “HR Scorecards”?  How do they differ?   For each example, ask students to comment on how effective they believe the measures that were selected by the company are in terms of allowing the company to assess HR’s performance objectively and quantitatively, as well as serving as a tool for the HR manager to build a measurable and persuasive business case for how HR is contributing to achieving the company’s strategic financial goals.  Challenge students to critique the scorecard and how it could be improved to measure strategically relevant organizational outcomes, workforce competencies and behaviors, and HR system policies and activities.

5. It is probably safe to say that your career plan is one of the most important plans you’ll ever create.  Unfortunately, most people never lay out such a plan, or they don’t realize they need one until it is too late.  Using the concepts and techniques in this chapter, develop an outline of a career plan for yourself, one that has sufficient detail to provide direction for your career decisions over the next five years.  Make sure to include an executive assignment action plan and mesuarble goals and/or milestones. Career planning consists of activities and actions that an individual would undertake to achieve their desired career goals.  An effective career plan should include a self assessment of both the individual’s strengths as well as their weaknesses.  The individual should decide what are their career interests, aspirations, and goals on a timeline of one, three, and five years from the current period and develop an action plan to move their career goals forward.  In developing the plan, special attention should be paid to the type of additional training or education needed to achieve the targeted goal.  If an individual would like to progress within their own organization, then the current supervisor should be involved to help identify on-the-job learning and training opportunities, continued education, and/or avenues for professional development with special focus on developing the above-mentioned weaknesses so they do not present a barrier to career goal success.  Lastly, the action plan should include a timeline to accomplish the desired one-, three-, and five -year goals.  

6. The HRCI “Test Specifications” appendix at the end of this book (pages 699-706) lists the things someone studying for the HRCI certification exam needs to know in each area of human resource management (such as in Strategic Management, Workforce Planning, and Human Resource Development).  In groups of 4-5 students, do four things: (1) review that appendix now; (2) identify the material in this chapter that relates to the required knoweldge the appendix lists; (3) write four multiple-choice exam questions on ths material that you believe would be suitable for inclusion in the HRCI exam; and 4) if time permits, have someone from your team post your team’s questions in front of the class, so the students on other teams can take each other’s exam questions.  Material in this chapter that could be covered in the HRCI certification exam include:  Under Strategic Management, the formulation of HR strategies to support the company’s overall strategic plan; HR’s role in helping companies to build a competitive advantage, strategic HR management, role in strategy executiion and formulation; high performance work system concepts and supporting HR systems/practices; the HR Scorecard and all the steps involved in developing it.

Examples of multiple-choice questions to provide to students follow:

1. Formulating and executing HR systems that produce the employee competencies and behaviors the company needs to achieve its strategic aims is called:

a. The HR Scorecard

b. Strategic human resource management (correct answer)

c. Strategic control

d. Competitve advantage             

2. The HR Scorecard does the following:

a. defines the company’s business and its mission

b. shows the causal link between HR activities, emergent empoyee behaviors, and resulting strategic outcomes and performance (correct answer)

c. identifies how to build and strengthen the business’s long-term competitive position in the marketplace

d. ensures that the firm’s functional strategies support its corporate and competitive strategies

3. Strategic HR Activity Metrics could be:

a. number of grievances per year

b. number of hours of training per employee per year

c. turnover costs

d. all of the above (correct answer)

4. High Performance Work System practices include:

a. structured and hierarchical organizational structure

b. flexible work assignments (correct answer)

c. employees specializing in one job task

d. limited opportunities for training

EXPERIENTIAL EXERCISES & CASES

Experiential Exercise:  Developing an HR Strategy for Starbucks

Purpose:  The purpose of this exercise is to give students experience in developing an HR scorecard.  Students should understand the HR scorecard approach to creating a strategy-oriented HR system, and in particular, the seven steps in the process.

Instructions:  Set up groups of three to four students for this exercise.  Using whatever sources are available, each group should outline an HR scorecard by addressing each of the eight steps in the process, starting with a short definition of the business strategy for the organization.

Ask each group to present their scorecard to the rest of the class.  At the end of each presentation, ask the class to provide feedback on the scorecard, commenting on the following:

a. How effectively does the scorecard measure 1) organizational outcomes, 2) workforce competencies and behaviors, and 3) HR system policies and activities?  

b. Comment on how effective the scorecard is on the following dimensions: 

1) assess HR’s performance objectively and quantitatively  

2) as a tool for the HR manager to build a measurable and persuasive business case for how HR is contributing to achieving the organization’s strategic goals

Application Case:  Siemens Builds a Strategy-Oriented HR System

1. Based on the information in this case, provide examples, for Siemens, of at least four strategically required organizational outcomes, and four required workforce competencies and behaviors.  

Strategically required organizational outcomes would be the following: 1) An employee selection and compensation system that attracts and retains the human talent necessary to support global diversification into high-tech products and services 2) A “learning company” in which employees are able to learn on a continuing basis; 3) A culture of global teamwork which will develop and use all the potential of the firm’s human resources; 4) A climate of mutual respect in a global organization.  Workforce competencies and behaviors could include: 1) openness to learning; 2) teamwork skills; 3) cross-cultural experience; 4) openness, respect, and appreciation for workforce diversity. 

2. Identify at least four of the strategically relevant HR system policies and activites that Siemens has instituted in order to help HR contribute to achieving Siemens’ strategic goals.  

1) Training and development activities to support continuous learning through a system of combined classroom and hands-on apprenticeship training to support technical learning;  2) Continuing education and management development as developing skills necessary for global teamwork and appreciation for cultural diversity;  3) Enhanced internal selection process which includes pre-requisites of cross-border and cross-cultural experiences for career advancement;  4) Organizational development activities aimed at building openness, transparency, fairness, and supporting diversity 

3. Provide a brief illustrative outline of an HR scorecard for Siemens.

Metrics could include things such as:

1. Level of organizational learning:

a. Number of hours of technical training per employee (classroom and hands-on)

b. Number of hours of education management development 

2. Level of cross-cultural team work

a. Number of employees assigned to roles including cross-border and cross-cultural experiences

b. Survey results measuring employee climate on dimensions of teamwork, openness, transparency, fairness, diversity

3. Extent to which the employees can describe the company’s core values

4. Effectiveness of selection process for identifying high-quality candidates – number of qualified candidates per position, turnover and retention statistics.

Continuing Case:  The Carter Cleaning Company

1. Would you recommend that the Carters expand their quality program?  If so, specifically what form should it take? Most students will agree that there are opportunities to expand the quality program.  The employee meeting approach is a good start in terms of utilizing high-involvement organizational practices. There are opportunities to maximize the overall quality of their human capital.  For example, training seems to be an obvious area to focus in terms of educating and building awareness about basic standards and procedures.

2. Assume the Carters want to institute a high performance work system as a test program in one of their stores.  Write a one-page outline summarizing what such a program would consist of.   Students should include some of the following ideas in their outline:  Identify the types of HR practices they would implement to improve quality, productivity, financial performance; methods for job enrichment; strategies for implementing and leveraging a team-based organization; ways to implement and facilitate high commitment work practices; employee development and skill building to foster increased competency and capability in the workforce; a compensation program which provides incentives (for example, profit sharing, pay for performance) for achieving major goals and financial targets.

KEY TERMS

business plan Provides a comprehensive view of the firm’s situation today and of its company-wide and departmental goal and plans for the next 3 to 5 years.

management by objectives Whereby the supervisor and subordinate jointly set goals for the latter and periodically assess progress toward those goals.

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 competitive advantage. 

strategy Specific courses of action the company pursues to achieve its aims. 

strategic management The process of identifying and executing the organization’s mission, by matching the organization’s capabilities with the demands of its environment.  

vision statement A general statement of the firm’s intended direction and shows, in broad terms, “what we want to become.”

mission statement A more specific and shorter term statement which communicates for a company who they are, what they do, and where they are headed.

corporate-level strategy Type of strategy that identifies the portfolio of businesses, that, in total, comprise the company and the ways in which these businesses relate to each other.

competitive strategy A strategy that identifies how to build and strengthen the business’s long-term competitive position in the marketplace.

competitive advantage Any factors that allow an organization to differentiate its product or service from those of its competitors to increase market share.

functional strategies Strategy that identifies the broad activities that each department will pursue in order to help the business accomplish its competitive goals.

offshoring Exporting of jobs from developed countries where labor and costs are lower.

strategic human Formulating and executing HR systems – policies and activities

resource management        – that produce the employee competencies and behaviors the company needs to achieve its strategic aims. 

strategy map A diagram that summarizes the chain of major activities that contribute to a company’s success.

HR scorecard A concise measurement system that shows the quantitative standards, or “metrics” the firm uses to measure HR activities, to measure the employee behaviors resulting from these activities, and to measure the strategically relevant organizational outcomes of those employee behaviors.

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.

high performance work A set of human resource management policies and practices that

system promote organizational effectiveness.

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.

value chain Identifying the primary activities that create value for customers and the related support activities.

HR audit An analysis by which an organization measures where it currently stands and determines what it has to accomplish to improve its HR function.

TRANSLATTING STRATEGY INTO HR POLICIES AND PRACTICES:

THE HOTEL PARIS CASE

Questions

1. Draw a simple strategy map for the Hotel Paris.  Specifically, summarize in your own words an example of the hierarchy of links among the hotel’s HR practices, necessary workforce competencies and behaviors, and required organizational outcomes.

 What overall goals does the Hotel Paris want to achieve?

 What does the Hotel Paris do operationally to achieve its goals?

 What employee attitudes and behaviors will produce the desired operational outcomes?

The above strategy map for the Hotel Paris succinctly lays out the hierarchy of main activities required for the Hotel Paris to succeed.  For example, the Hotel Paris could endeavor to improve workforce competencies and behaviors by instituting an improved recruitment process, and measure the latter in terms of the number of qualified applicants per position.

2. Using Table 3-1 (page 94), list at least five specific metrics the Hotel Paris could use to measure its HR practices.

 Number of qualified applicants per position

 Percentage of jobs filled from within

 Number of hours of training for each employees

 Percentage of the workforce eligible for incentive pay

 Percentage of the workforce routinely working in a self-managed, cross functional, or project team

Chapter 3 Appendix

Tools for Evidence-Based Human Resource Management

Managers should make decisions based on the evidence. We saw that evidence-based human resource management is the use of data, facts, analytics, scientific rigor, critical evaluation, and critically evaluated research/case studies to support human resource management proposals, decisions, practices, and conclusions. 

EVIDENCE-BASED HR AND THE SCIENTIFIC WAY OF DOING THINGS

The Ground Rules of Science. In brief, the ground rules of science include objectivity, experimentation, quantification, explanation, prediction, and replication. In gathering

his or her evidence, the scientist needs to be objective, or there’s no way to trust his or her conclusions.  

 In conducting his or her experiment, the scientist will typically follow four steps.

1) Setting up a hypothesis 

2) Developing a method for testing the hypothesis  

3) Gathering the data  

4) Drawing conclusions based on the findings

Why Should a Manager Be Scientific?

For managers, the key point of being “scientific” is to make sure you maintain a sense of skepticism, by always questioning, and measuring what you hear, read, and do at work. You want to be sure, “What is the cause, and what is the effect?” The problem is that things aren’t always as they appear, and what’s “intuitively obvious” can be misleading.  

CONDUCTING THE HUMAN RESOURCE MANAGEMENT AUDIT

What Are HR Audits? Within the human resource management area, numbers-based

analyses often start with HR managers conducting human resource audits of all or part of their operations.  

Types of HR Audits may include the following:

1) Compliance audits —in particular, how well are we complying with relevant laws and regulations?

2) Best practices audits —in particular, how do our recruitment practices, hiring practices, and so on compare to those of “best practices” companies?

3) Strategic audits —in particular, are our human resource management practices helping us to achieve our 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  

We can summarize the basic audit process as follows: 

1) Decide on the scope of the audit.  

2) Draft an audit team.  

3) Compile the checklists and other tools 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 data.

9) Benchmark findings.

10) Provide feedback about the results to senior management. 

11) Create action plans aimed at improving areas the audit singles out.

HR METRICS AND BENCHMARKING

Whether you are conducting an HR audit or simply gathering evidence to ascertain, say, if your training efforts are paying off, you will probably want to benchmark—compare your results to those of comparable companies.  

Types of Metrics 

Metrics are the fundamental financial and nonfinancial measures you will use to assess your unit’s status and progress. Employment-related metrics range from broad, overall organizational measures down to ones that focus narrowly on specific human resource management functions and activities.

 VIDEO CASE APPENDIX

Video 1: Showtime

Showtime Networks operates cable networks and pay-per-view cable channels across the United States and in several countries abroad. As this video illustrates, its HR function supports corporate strategy by helping to determine what kind of employees are needed to keep the company in peak performance, and then by providing the company and its employees with the HR activities that these employees need to do their jobs. For example, you’ll see that Showtime offers many development and training programs, as well as personal development types of activities including mentoring programs and career-oriented development activities. The firm’s performance management process (which the employees helped develop) focuses specifically on the work activities and results that help achieve departmental and corporate goals. In this video, Matthew, the firm’s CEO, emphasizes that it is essential to use human resources as a strategic partner, and the video then goes on to provide something of a summary of the basic human resource management functions.

Video 2: IQ Solutions

IQ Solutions is in the business of providing health-care system services. It says one of its aims is lessening the inequality that they say exists in America’s healthcare system, and the company uses its very diverse employee base to better serve and attract a broad client base. Employees at IQ Solutions work together in teams to achieve the company’s goals. As we see in this video, the company itself is indeed very diverse: for example, employees speak about 18 languages. The company capitalizes on this diversity in many ways. For example, they let their employees share their ethnically unique holidays, and provide special training and other benefits that support diversity.

For video discussion questions, please visit the Instructor’s Resource Center at: http://www.pearsonhighered.com/dessler

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