CHAPTER 2 Strategic Human Resource Management 1/7/2022 HRM Chapter 2 - Truong Nu To Giang 1 Chapter Outline • 2.1 Introduction • 2.2 What is Strategic Management • 2.3 Strategy Formulation • 2.4 Strategy Implementation • 2.5 The Role of Human Resources Competitive Advantage 1/7/2022 in Providing Strategic HRM Chapter 2 - Truong Nu To Giang 2 2.1 Introduction • Strategic management includes • Having the goal to deploy and allocate resources for a competitive advantage • Integrally involving the HRM function • Have input in the strategic plan (HR and ability to implement) • Have specific knowledge of strategic goals • Know the requirement of needed skills, behaviors, attitudes • Develop programs to ensure HR have above requirement • Using a business model to create value for customers 1/7/2022 HRM Chapter 2 - Truong Nu To Giang 3 2.2. What Is Strategic Management? • Strategic Management • A process • An approach to addressing the competitive challenges an organization faces • Managing the “pattern or plan that integrates an • organization’s major goals, policies, and action sequences into a cohesive whole.” • Developing strategies for achieving the goals in light of its current environment 1/7/2022 HRM Chapter 2 - Truong Nu To Giang 4 2.2. What Is Strategic Management? • Strategic HRM • “The pattern of planned human resource deployments and activities intended to enable an organization to achieve its goals.” • Strategic management is a process to address the organization’s competitive challenges by integrating goals, policies and action sequences into a cohesive whole. 1/7/2022 HRM Chapter 2 - Truong Nu To Giang 5 2.2. What Is Strategic Management? • Components of the strategic management process • Strategy Formulation • Strategic planning groups decide on strategy • Strategy Implementation • Organization follows through on the strategy 1/7/2022 HRM Chapter 2 - Truong Nu To Giang 6 2.2. What Is Strategic Management? A model of the strategic management process 1/7/2022 HRM Chapter 2 - Truong Nu To Giang 7 2.2. What Is Strategic Management? the strategic • Linkage between HRM and management process • Strategic choice • Where to compete? In what market? • How to compete? On what criterion or differentiating characteristic? • With what will we compete? What resources to beat our competitors? How to acquire, develop and deploy resources? 1/7/2022 HRM Chapter 2 - Truong Nu To Giang 8 2.2. What Is Strategic Management? • Role of HRM in strategy formulation • With what will we compete? • Four levels of integration between HRM and the strategic management function • administrative linkage • one-way linkage • two-way linkage • integrative linkage HRM Chapter 2 – Truong Nu To Giang 1/7/2022 9 2.2. What Is Strategic Management? Linkages of strategic planning and HRM Practical ở DN nhỏ 1/7/2022 Practical ở DN lớn HRM Chapter 2 – Truong Nu To Giang 10 2.3. Strategy Formulation 1/7/2022 HRM Chapter 2 - Truong Nu To Giang 11 2.3. Strategy Formulation 1/7/2022 HRM Chapter 2 - Truong Nu To Giang 12 2.3. Strategy Formulation SWOT Analysis 1/7/2022 Strengths Opportunities Weaknesses Threats HRM Chapter 2 – Truong Nu To Giang 13 2.4. Strategy Implementation 1/7/2022 HRM Chapter 2 – Truong Nu To Giang 14 2.4. Strategy Implementation • Strategic implementation requires that • “An organization has a variety of structural forms and organizational processes to choose from when implementing a given strategy” • Five variables • organizational structure • HRM tasks • task design • selection, training, and development of people • reward systems • types of information and information systems HRM Chapter 2 – Truong Nu To Giang 1/7/2022 15 2.4. Strategy Implementation • Variables to implementation be HRM Chapter 2 – Truong Nu To Giang 1/7/2022 considered in strategy implementation 16 Vertical Alignment • HR practices business. and processes • The link between strategy address the strategic needs of the and HR practices is primarily through people. • Job analysis and design • Selection systems • Performance management systems • Labor relations programs • Recruitment • Reward systems • Training and development programs HRM Chapter 2 – Truong Nu To Giang 1/7/2022 17 2.4. Strategy Implementation 1/7/2022 HRM Chapter 2 – Truong Nu To Giang 18 2.4. Strategy Implementation • Strategic Types • Porter’s Cost and Differentiation • Value can be created by reducing costs. • Value can be created by differentiating a product or service so the company can charge a premium price relative to its competitors 1/7/2022 HRM Chapter 2 – Truong Nu To Giang 19 2.4. Strategy Implementation • Strategic Types • Porter’s Cost and Differentiation • Value can be created by reducing costs. • Value can be created by differentiating a product or service so the company can charge a premium price relative to its competitors 1/7/2022 HRM Chapter 2 – Truong Nu To Giang 20 HR in Action at the Hotel Paris Strategic Human Resource Management Tools • Strategy map • The HR scorecard • Digital dashboards HR Metrics, Benchmarking, and Data Analytics • Human resource metrics – the quantitative gauge of a human resource management activity. • Benchmarking – comparing the practices of high-performing companies’ results to your own. • Data Analytics – using statistical and mathematical analysis to find relationships and make predictions. Benchmarking • Just measuring is rarely enough • “How are we doing?” in relation to something Metrics for the SHRM® 2011–2012 Customized Human Capital Benchmarking Report (1 of 4) Organizational Data • Revenue • Revenue per FTE • Net Income Before Taxes • Net Income Before Taxes per FTE • Positions Included Within the Organization’s Succession Plan Employment Data • Number of Positions Filled • Time-to-Fill • Cost-Per-Hire • Employee Tenure • Annual Overall Turnover Rate • Annual Voluntary Turnover Rate • Annual Involuntary Turnover Rate Metrics for the SHRM® 2011–2012 Customized Human Capital Benchmarking Report (2 of 4) HR Department Data • Total HR Staff • HR-to-Employee Ratio • Percentage of HR Staff in Supervisory Roles • Percentage of HR Staff in Professional/Technical Roles • Percentage of HR Staff in Administrative Support Roles • Reporting Structure for the Head of HR • Types of HR Positions Organizations Expect to Hire in 2011 Expectations for Revenue and Organizational Hiring • Percentage of Organizations Expecting Changes in Revenue in 2011 Compared to 2010 • Percentage of Organizations Expecting Changes in Hiring in • 2011 Compared to 2010 Metrics for the SHRM® 2011–2012 Customized Human Capital Benchmarking Report (3 of 4) HR Expense Data • HR Expenses • HR Expense to Operating Expense Ratio • HR Expense to FTE Ratio Compensation Data • Annual Salary Increase • Salaries as a Percentage of Operating Expense • Target Bonus for Non-Executives • Target Bonus for Executives Metrics for More Profitable Organizations • Total HR Staff • HR-to-Employee Ratio • HR Expenses • HR Expense to Operating Expense Ratio • HR Expense to FTE Ratio • Annual Salary Increase • Target Bonus for Non-Executives Metrics for the SHRM® 2011–2012 Customized Human Capital Benchmarking Report (4 of 4) Tuition/Education Data • Maximum Reimbursement Allowed for Tuition/Education Expenses per Year • Percentage of Employees Participating in Tuition/Education Reimbursement Programs Metrics for More Profitable Organizations • Target Bonus for Executives • Maximum Reimbursement Allowed for Tuition/Education Expenses per year • Percentage of Employees Participating in Tuition/Education Reimbursement Programs • Time-to-Fill • Cost-Per-Hire • Annual Overall Turnover Rate
