Bohlander • Snell 14 th edition
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All rights reserved.
PowerPoint Presentation by Charlie Cook
The University of West Alabama

After studying this chapter, you should be able to:
1.
Identify the advantages of integrating human resources planning and strategic planning.
2.
Understand how an organization’s competitive environment influences strategic planning.
3.
Recognize the importance of internal resource analysis.
4.
Describe the basic tools for human resources forecasting.
5.
Explain the linkages between competitive strategies and HR.
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(cont’d)
After studying this chapter, you should be able to:
6.
Understand the requirements of strategy implementation.
7.
Recognize the methods for assessing and measuring the effectiveness of strategy.
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• Strategic Planning
 Procedures for making decisions about the organization’s long-term goals and strategies
• Human Resources Planning (HRP)
 Process of anticipating and making provision for the movement (flow) of people into, within, and out of an organization.
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• Strategic Human Resources Management
(SHRM)
 The pattern of human resources deployments and activities that enable an organization to achieve its strategic goals
 Strategy formulation —providing input as to what is possible given the types and numbers of people available.
 Strategy implementation —making primary resource allocation decisions about structure, processes, and human resources.
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• Strategic Analysis
 What human resources are needed and what are available?
• Strategic Formulation
 What is required and necessary in support of human resources?
• Strategic Implementation
 How will the human resources be allocated?
Human Resources
Planning
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Strategic
Planning
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Figure 2–1
Linking Strategic Planning and Human Resources
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• Mission
 The basic purpose of the organization as well as its scope of operations
• Strategic Vision
 A statement about where the company is going and what it can become in the future; clarifies the longterm direction of the company and its strategic intent
• Core Values
 The strong and enduring beliefs and principles that the company uses as a foundation for its decisions
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• Studio67 is a great place to eat, combining an intriguing atmosphere with excellent, interesting food that is also very good for the people who eat there. We want fair profit for the owners, and a rewarding place to work for the employees.
• As the popularity of the Internet continues to grow at an exponential rate, easy and affordable access is quickly becoming a necessity of life. JavaNet provides communities with the ability to access the Internet, enjoy a cup of coffee, and share Internet experiences in a comfortable environment. People of all ages and backgrounds will come to enjoy the unique, upscale, educational, and innovative environment that JavaNet provides
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• “I have a dream that one day this nation will rise up and live out the true meaning of it’s creed:
We hold these truths to be self-evident: that men are created equal.”
Martin Luther King, Jr.
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• Our purpose is to inspire public trust in County government by safeguarding the County's financial integrity and ensuring compliance with fiduciary responsibilities and professional mandates.
• As a partner to County agencies we:
• Lead by example.
• Maintain credible public records that inspire public trust.
• Encourage and support the efficiency and effectiveness of County programs.
• Share knowledge of policies, procedures and practices by training County departments.
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•
OUR VALUES
• We will adhere to the highest standards of conduct relying on the character, ability, strength, and integrity of our employees. To this end, we will fulfill our responsibilities and provide service to our customers by:
• Providing guidance and vision that encourages adherence to the highest standard of conduct in financial operations and reporting.
• Performing our duties in a manner that exhibits independence and objectivity in fact and appearance.
• Consistently exhibiting the highest moral principles in all decisions and activities.
•
Inspiring confidence, understanding, and acceptance for Auditor-Controller policies, procedures, and financial and administrative control standards.
•
Protecting, representing, and advocating the public's interest in all aspects of our operations and in all areas of influence.
•
Advocating and modeling personal and organizational accountability at all times.
• Achieving desired results through the influence, strength, and unity of our employees.
• Continuously seeking opportunities to improve the effectiveness of our services and providing service in a courteous and responsive manner.
• Celebrating the strength and richness that diversity provides; and standing ready to meet the challenges and needs of the County's diverse employees and citizenry.
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• Environmental Scanning
 The systematic monitoring of the major external forces influencing the organization.
1.
Economic factors: general and regional conditions
2.
Competitive trends: new processes, services, and innovations
3.
Technological changes: robotics and office automation
4.
Political and legislative issues: laws and administrative rulings
5.
Social concerns: child care and educational priorities
6.
Demographic trends: age, composition,and literacy
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Figure 2–2
Five Forces Framework
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Culture
Competencies
Internal
Analysis
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Composition
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• Cultural Audits
 Audits of the culture and quality of work life in an organization.
How do employees spend their time?
How do they interact with each other?
Are employees empowered?
What is the predominant leadership style of managers?
How do employees advance within the organization?
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• Core Competencies
 Integrated knowledge sets within an organization that distinguish it from its competitors and deliver value to customers.
• Sustained competitive advantage through people is achieved if these human resources:
1.
Are valuable.
2.
Are rare and unavailable to competitors.
3.
Are difficult to imitate.
4.
Are organized for synergy.
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Figure 2–3
Mapping Human Capital
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• Forecasting involves: a.
forecasting the demand for labor b.
forecasting the supply of labor c.
balancing supply and demand considerations.
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Figure 2–4
Model of HR Forecasting
FORECASTING DEMAND
Considerations
• Product/service demand
• Technology
• Financial resources
• Absenteeism/turnover
• Organizational growth
• Management philosophy
Techniques
• Trend analysis
• Managerial estimates
• Delphi technique
Techniques
• Staffing tables
• Markov analysis
• Skills inventories
• Management inventories
• Replacement charts
• Succession planning
External Considerations
• Demographic changes
• Education of the workforce
• Labor mobility
• Government policies
• Unemployment rate
FORECASTING SUPPLY
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BALANCING
SUPPLY AND
DEMAND
(Shortage)
Recruitment
• Full-time
• Part-time
• Recalls
(Surplus)
Reductions
• Layoffs
• Terminations
• Demotions
• Retirements
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Quantitative Methods
Qualitative Methods
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• Forecasting labor demand based on an organizational index such as sales:
1.
Select a business factor that best predicts human resources needs.
2.
Plot the business factor in relation to the number of employees to determine the labor productivity ratio.
3.
Compute the productivity ratio for the past five years.
4.
Calculate human resources demand by multiplying the business factor by the productivity ratio.
5.
Project human resources demand out to the target year(s).
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Figure 2–5
Example of Trend Analysis of HR Demand
BUSINESS
FACTOR
(SALES IN THOUSANDS)

YEAR
2000
2001
2002
2003
2004
2005
2006
2007*
2008*
2009*
*Projected figures
$2,351
$2,613
$2,935
$3,306
$3,613
$3,748
$3,880
$4,095
$4,283
$4,446
LABOR
=
HUMAN RESOURCES
PRODUCTIVITY
(SALES/EMPLOYEE)
DEMAND
(NUMBER OF EMPLOYEES)
14.33
11.12
8.34
10.02
11.12
11.12
12.52
12.52
12.52
12.52
325
337
310
327
342
164
235
352
330
355
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• Management Forecasts
 The opinions (judgments) of supervisors, department managers, experts, or others knowledgeable about the organization’s future employment needs.
• Delphi Technique
 An attempt to decrease the subjectivity of forecasts by soliciting and summarizing the judgments of a preselected group of individuals.
 The final forecast represents a composite group judgment.
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• Staffing Tables
• Markov Analysis
• Skill Inventories
• Replacement Charts
• Succession Planning
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• Promotions
• Demotions
• Terminations
• Lateral moves
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• Staffing Tables
 Graphic representations of all organizational jobs, along with the numbers of employees currently occupying those jobs and future (monthly or yearly) employment requirements.
• Markov Analysis
 A method for tracking the pattern of employee movements through various jobs.
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Figure 2–6
Hypothetical Markov Analysis for a Retail Company
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• Replacement Charts
 Listings of current jobholders and persons who are potential replacements if an opening occurs.
• Succession Planning
 The process of identifying, developing, and tracking key individuals for executive positions.
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Figure 2–7
An Executive Replacement Chart
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• Strategy Formulation
 Moving from simple analysis to devising a coherent course of action.
• SWOT analysis
 A comparison of strengths , weaknesses , opportunities , and threats for strategy formulation purposes.
 Use the strengths of the organization to capitalize on opportunities, counteract threats, and alleviate internal weaknesses.
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• Value Creation
 What the firm adds to a product or service by virtue of making it; the amount of benefits provided by the product or service once the costs of making it are subtracted.
 Low-cost strategy: competing on productivity and efficiency
 Keeping costs low to offer an attractive price to customers (relative to competitors).
 Differentiation strategy: compete on added value
 Involves providing something unique and distinctive to customers that they value.
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• External Fit (or External Alignment)
 Focuses on the connection between the business objectives and the major initiatives in HR.
• Internal Fit (or Internal Alignment)
 Aligning HR practices with one another to establish a configuration that is mutually reinforcing.
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• Taking Action: Reconciling Supply and Demand
 Balancing demand and supply considerations
 Forecasting business activities (trends)
 Locating applicants
 Organizational downsizing

Reducing “headcount”
 Making layoff decisions
 Seniority or performance?
 Labor agreements
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• Evaluation and Assessment Issues
 Benchmarking: The process of comparing the organization’s processes and practices with those of other companies
 Human capital metrics
 Assess aspects of the workforce
 HR metrics
 Assess the performance of the HR function itself
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Highlights in HRM 5
The Top Ten Measures Of Human Capital
1.
Your most important issues
2.
Human capital value added
3.
Human capital ROI
4.
Separation cost
5.
Voluntary separation rate
6.
Total labor-cost/revenue percentage
7.
Total compensation/revenue percentage
8.
Training investment factor
9.
Time to start
10.
Revenue factor
Source: “The Top 10 Measures of Human Capital Management,” HRFocus 78, no. 5 (May 2001): 8.
Copyright © 2001. Reprinted by permission of the publisher via Copyright Clearance Center.
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• Strategy Mapping and the Balanced Scorecard
 Balanced Scorecard (BSC)
 A measurement framework that helps managers translate strategic goals into operational objectives
– financial
– customer
– processes
– learning
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Figure 2–9
Balanced Scorecard
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Figure 2–10
Assessing Internal Fit
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• Organizational Capability
 Capacity of the organization to act and change in pursuit of sustainable competitive advantage.
 Coordination flexibility
 The ability to rapidly reallocate resources to new or changing needs.
 Resource flexibility
 Having human resources who can do many different things in different ways.
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• Balanced Scorecard (BSC)
• benchmarking
• core competencies
• core values
• cultural audits
• environmental scanning
• human resources planning
(HRP)
• management forecasts
• Markov analysis
• mission
• organizational capability
• replacement charts
• skill inventories
• staffing tables
• strategic human resources management (SHRM)
• strategic planning
• strategic vision
• succession planning
• SWOT analysis
• trend analysis
• value creation
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• Computing Turnover Rates:
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• Computing Turnover Rates (cont’d):
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Highlights in HRM 6
Costs Associated With The Turnover Of One Computer Programmer
(Turnover costs = Separation costs + Replacement costs + Training costs)
Separation costs
1. Exit interview cost for salary and benefits of both interviewer and departing employee during the exit interview = $30+$30 = $60
2. Administrative and record-keeping action = $30
Total separation costs = $60 + $30 = $90
Replacement costs
1. Advertising for job opening = $2,500
2. Preemployment administrative functions and record-keeping action = $100
3. Selection interview = $250
4. Employment tests = $40
5. Meetings to discuss candidates (salary and benefits of managers while participating in meetings )= $250
Total replacement costs = $2,500 + $100 + $250 + $40 + $250 = $3,140
Training costs
1. Booklets, manuals, and reports = $50
2.
Education = $240/day for new employee’s salary and benefits x 10 days of workshops, seminars, or courses = $2,400
3. One-to-one coaching = ($240/day/new employee + $240/day/staff coach or job expert) x 20 days of one-to-one coaching = $9,600
4.
Salary and benefits of new employee until he or she gets “up to par” = $240/day for salary and benefits x 20 days = $4,800
Training costs = $50 + $2,400 + $9,600 + $4,800 = $16,850
Total turnover costs= $90 + $3,140 + $16,850 = $20,080
Source: Adapted from the book Turning Your Human Resources Department into a Profit Center TM by Michael Mercer, Ph.D. (Castlegate Publishers, Inc.,
Barrington, Illinois). Copyright 2002 Michael Mercer. Reproduced with permission from Michael Mercer, Ph.D., www.DrMercer.com.
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• Computing Absenteeism Rates
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• Core knowledge workers
 Employees who have firm-specific skills that are directly linked to the company’s strategy.
 Example: Senior software programmer
• Traditional job-based employees
 Employees with skills to perform a predefined job that are quite valuable to a company, but not unique.
 Example: Security guard
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• Contract labor
 Employees whose skills are of less strategic value and generally available to all firms.
 Example: General electrician
• Alliance/partners
 Individuals and groups with unique skills, but those skills are not directly related to a company’s core strategy.
 Example: Independent product label designer
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Highlights in HRM 2
Succession-
Planning Checklist
RATE THE SUCCESS OF YOUR
SUCCESSION PLANNING
For each characteristic of a best-practice successionplanning and management program appearing in the left column below, enter a number to the right to indicate how well you believe your organization manages that characteristic. Ask other decision makers in your organization to complete this form individually. Then compile the scores and compare notes.
Scores
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Source:
From William J. Rothwell, “Putting Success into Your Succession Planning,”
The Journal of Business Strategy 23, no. 3 (May/June 2002): 32 –37. Republished with permission
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Highlights in HRM 4
Source: Company document.
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Figure 2–8
The 7-S Model
Source: McKinsey & Company
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Growth and
Diversification
Corporate
Strategy
Mergers and
Acquisitions
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Strategic Alliances and Joint Ventures
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