3
Human Resource Management
Strategy and Analysis
3
3-1
KIA motors case
The Challenges
•
2006 financial crisis
3
•
Sales falling
•
Japanese and Chinese companies
•
Employee turnover (31%)
3-2
Company strategy
Raising the competencies as a global
maker in all areas
1.strengthen basic competitiveness
3
(production costs/final
products)
2.exclude unnecessary elements through
advanced system
3.invest in future business with R&D
3-3
The new human resource management
strategy
Improve
Low employee engagement
tied to poor performance
Poor morale and
communications
3
employee
engagement
improve
performance and
lower turnover
support
company
strategy 1
3-4
How to execute an employee engagement
strategy
1.Measureable objectives
(reduce turnover cost by 10 %,etc.)
3
2.Leadership development program
(rate leadership skills by 360-degree)
3.Employee recognition program
(“Outstanding Awards”, “thank you cards”)
3-5
How to execute an employee engagement
strategy
4.Improve internal communications
(KIA vision, employee forum)
3
5.Employee development
program
(identify and create training plans for each
employee)
6.Compensation and other policies
(new employee handbook and HR
procedures)
3-6
The results
•
Employee engagement and
communications improved based on
survey.
3
•
Turnover fell from 31% to 15%(2007) to
5%(2008) and finally to 2%(2009).
•
Recruitment and turnover costs were
71% less.
3-7
The Strategic
Management Process
Ø The Management Planning Process
• Setting objectives
• Making planning forecasts
3
• Reviewing courses of action
• Evaluation
• Choosing and implementing
p The Hierarchy of Goals
p Policies and Procedures
3-8
What is Strategic Planning?
• Strategic plan vs
Strength
business model
(method for making money)
3
• Strategy
(A course of action)
threat
competitive
advantage
opportunity
• Strategic
management
(identifying and executing the
organization’s strategic plan)
weakness
3-9
The Strategic
Management Process
3
3-10
• Coca-cola : beverages
“What business are we
in?”
• What products do we
sell?
• Where do we sell them?
• How do our products
differ from competitors?
3
• PepsiCo :
beverages/chips/oatmeal
3-11
“Are we in the right business given our strength and
weaknesses?”
• Audit and study. How?
3
Worksheets (for environment scanning)
SWOT : Strengths/ Weaknesses/ Opportunities/ Threats
PEST : Political/ Economic/ Social/ Technological factors
3-12
E
P
3
T
PEST
Political factors
S
Economic factors
Social factors
Technological factors
3-13
“What should our new business be?”
• Vision statement
(general statement of firm’s
direction in
3
broad terms.)
PepsiCo : Performance with purpose
performance
with purpose
• Mission statement
(what the company’s main tasks are
today.)
Ford : Quality is Job#1
3-14
Performance with purpose
From PepsiCo
• Products
Reduce sugar/fat/salt
Access to healthier options
•3 Planet
Positive water impact
Lower carbon emissions
Source sustainably
Reduce waste
• People
Advance respect for human rights
Support diversity
Spur prosperity
3-15
“Translate new direction
into strategic goals”
3
• Ford : Quality is Job#1
à “no more than 1
initial defect per
10,000 cars”
3-16
“Choose strategies that will
enable company to achieve
strategic goals”
• no more than 1 initial 3
defect per 10,000 cars
à
Planning new employee
selection/new training
programs/new high-tech
plants
3-17
“Strategy execution”
Translating strategies into action
• Hiring new people/build new factories/plants
3
“Evaluation”
Things don’t always turn out as planned
• periodically
3-18
Types of Strategies
1.
Corporate
Strategy
2.
Competitive
3
Strategy
3.
Functional
Strategy
3-19
Corporate Strategy
• Identifies the
1. Concentration
portfolio of
2. Diversification
businesses that, in
3
3. Vertical Integration
total, comprise the
4. Consolidation
company and how
5. Geographic
these businesses
expansion
relate to each other
3-20
Competitive Strategy
• A strategy that identifies how to build and
strengthen the business’s long-term
competitive position in the marketplace,
which is also known3 as business-level
competitive strategy.
• Builds around competitive advantages
(1) Cost Leadership
(2) Differentiation
(3) Focusers
3-21
Functional Strategy
• A strategy that identifies the broad
activities that each department will
pursue in order to help the business
accomplish its3 competitive goals.
3-22
What is Strategic
Human Resource Management?
Strategic human
resource management –
means formulating and
executing human
3
resource policies and
practices that produce
the employee
competencies and
behaviors the company
needs to achieve its
strategic aims.
3-23
Strategic Human Resource
Management Tools
3
3-24
Strategy map
• “profitability”
↑
• “more customers”
“fly fewer planes”
↑
• “fast turnaround”
↑
• “motivated crew”
↑
• “high-performance
HR strategy”
3
3-25
HR scorecard
• Process of quantifying strategy
map’s activities
• e.g. Quantifies HR
3
activities/resulting employee
behavior/resulting firm-wide
strategic outcomes
• Balanced scorecard approach
3-26
Digital dashboard
• Picture is worth
thousand words
• Graphs &Charts
3
3-27
HR Metrics,
Benchmarking,
and Data
3
Analytics
Measuring results of HR practices
3-28
Human resource metrics
• The Quantitative gauge of a
human resource management
activity, such as3 employee
turnover, hours of training per
employee, or qualified
applicants per position.
3-29
Benchmarking – SHRM services
3
3-30
Benchmarking
• How are we doing in relation to
e.g. other companies
• SHRM benchmarking
service
3
3-31
Strategy and Strategy-Based
Metrics
• How are we doing in relation to
our strategic goals/aims
3
• Strategy-Based Metrics
(focusing on measuring activities
that contribute to strategic aims)
3-32
What Are HR Audits?
An analysis to determine what
a company has to accomplish
to improve HR function and
where it stands.
• Employee relations
• Mandated benefits
• Group benefits
Usually includes
3•
Payroll
• Roles and headcount
• Documentation
• Compliance with legislation
• Training and development
• Recruitment and selection
• Employee communications
• Compensation
• Termination and transition
3-33
High-Performance Work
Systems(HPWS)
3
3-34
3
3-35