bsad 310 spring 2017 - ch 2
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Chapter 2:
Strategy-
Driven
Human
Resource
Management
Strategy and Strategic
Planning in the 21st Century
• Managers look at the organization, its environment today, and expected future goals.
• Managers must seek employees who embrace the organization’s ultimate strategic goals.
• Working in unison accomplishes a whole that is greater than the sum of its parts.
2Lussier and Hendon, Fundamentals of Human Resource Management. © 2017, SAGE Publications.
Exhibit 2-1: Strategic Choice
3Lussier and Hendon, Fundamentals of Human Resource Management. © 2017, SAGE Publications.
Exhibit 2-2: External Influences
Managers Cannot Control
4Lussier and Hendon, Fundamentals of Human Resource Management. © 2017, SAGE Publications.
Exhibit 2-3: The Internal Environment
5Lussier and Hendon, Fundamentals of Human Resource Management. © 2017, SAGE Publications.
What Managers Can Control
What Is Strategy?
• Strategy
– Plan of action designed to achieve a particular set of objectives
– Looks at the external environment and the internal (organizational) environment to create strategic advantages
• Strategic Advantage
– Occurs when organizations analyze the environments better and react quicker than their competitors
6Lussier and Hendon, Fundamentals of Human Resource Management. © 2017, SAGE Publications.
Three Strategic Questions
• These questions may appear
simplistic, but they are the essence
of success:
– What is the present situation?
– Where do we want to go?
– How do we plan to get there?
7Lussier and Hendon, Fundamentals of Human Resource Management. © 2017, SAGE Publications.
Vision and Mission
• Vision: Provides a focus for the future
• Mission: Expectations of what the organization will do to realize the vision; the most successful businesses strive for a higher purpose.
Vision + Mission = Focus
• Focus on the direction for the organization and its people.
8Lussier and Hendon, Fundamentals of Human Resource Management. © 2017, SAGE Publications.
Objectives
• Objectives: Follow from the mission to
address strategic issues
– State what is to be accomplished in
singular, specific, measurable terms with a
target date
• Successful managers have a goal
orientation.
9Lussier and Hendon, Fundamentals of Human Resource Management. © 2017, SAGE Publications.
Types of Strategies
• Cost Leadership
– Focuses on lowering organizational costs required to create products or services.
• Differentiation
– Focuses on developing a distinctive impression of the product or service in customers’ minds.
• Focus or Niche
– Focuses on a specific portion of a larger market.
10Lussier and Hendon, Fundamentals of Human Resource Management. © 2017, SAGE Publications.
How Strategy Affects HRM
• HRM and Cost Leadership
– Maximizes employee efficiency and effectiveness
– Uses highly specialized jobs
– Requires employees to repeat the same task
• HRM and Differentiation
– Maximizes employee flexibility and adaptability
– Uses cross-functional teams
– Innovates and tries new processes in uncertain environments
11Lussier and Hendon, Fundamentals of Human Resource Management. © 2017, SAGE Publications.
How HR Promotes Strategy
• Through Employees– Recruiting
– Selecting
– Training
– Evaluating
– Interacting based on the organizational strategies
• Through the Organization– Evaluating objectives and company
characteristics
– Assessing competitors
– Analyzing strengths and weaknesses
12Lussier and Hendon, Fundamentals of Human Resource Management. © 2017, SAGE Publications.
Basics of Organizational
Structure• Structure determines how an organization
groups its resources to accomplish its mission.
• Basics of Organizational Structure
– Complexity: degree of vertical, horizontal, and spatial differentiation within the organization
– Formalization: degree to which jobs are standardized within an organization
– Centralization: degree to which decision-making is concentrated within the organization
13Lussier and Hendon, Fundamentals of Human Resource Management. © 2017, SAGE Publications.
Organizational Structure
Is There One “Best” Structure?
• The best organizational structure fits
the firm’s current competitive situation
and its internal capabilities and enables
successful strategy.
14Lussier and Hendon, Fundamentals of Human Resource Management. © 2017, SAGE Publications.
How Structure Affects
Employee Behavior and HRM• Employee Behavior
– The way organizations combine
complexity, formalization, and
centralization affects employee autonomy.
• HRM
– Structure affects the nature of job
expertise, training, evaluation, and
appraisal of HR employees
15Lussier and Hendon, Fundamentals of Human Resource Management. © 2017, SAGE Publications.
Organizational Culture
• What Is Organizational Culture?
– Employees’ shared values, beliefs, and
assumptions about appropriate behavior.
• Basics of Organizational Culture
– Every organization has a culture, and
success depends on the health and
strength of it.
16Lussier and Hendon, Fundamentals of Human Resource Management. © 2017, SAGE Publications.
How Culture Controls Employee
Behavior in Organizations
• Powerful Force
– Culture is a very powerful force in controlling how people act within its boundaries.
• Cultural Values
– HR is not to dictate and impose cultural values, but rather to redefine and shape the culture of an organization.
– Individuals typically adapt their actions to conform to those of the culture’s values.
17Lussier and Hendon, Fundamentals of Human Resource Management. © 2017, SAGE Publications.
Social Media and
Culture Management• Internal Environment
– Companies can monitor the internal
environment using social media venues.
• External Environment
– Companies can monitor their external
environment by accessing media links,
government web pages, and competitors’
sites.
– Social media can also be used to reach
communities that are generally hard to reach.
18Lussier and Hendon, Fundamentals of Human Resource Management. © 2017, SAGE Publications.
Exhibit 2-4: The Internal and
External Environment
19Lussier and Hendon, Fundamentals of Human Resource Management. © 2017, SAGE Publications.
An Introduction to
Data Analytics for HRM• What Is Data Analytics?
– Process of assessing large amounts of data, analyzing those data, and gaining insight into significant trends and patterns within organizations or industries
• Big Data
– Involves the collection of extremely large data sets to locate patterns that allow the making of Important organizational decisions
20Lussier and Hendon, Fundamentals of Human Resource Management. © 2017, SAGE Publications.
A Brief on Data Analytics
• Uses of Big Data
• Companies are using big data as
competitive weapons.
• Big data provides information that HR
managers can immediately act on.
• Big data allows the transformation of
pattern knowledge into improved
decision-making and performance.
21Lussier and Hendon, Fundamentals of Human Resource Management. © 2017, SAGE Publications.
HR Analytics
• Uses of Analytics Tools and Processes
– Talent Acquisition
– Management Training
– Management Development
– Work and Job Analysis
– Productivity
– Motivation
– Retention
– Engagement
22Lussier and Hendon, Fundamentals of Human Resource Management. © 2017, SAGE Publications.
HR Analytics and
Desired Outcomes• Organizational silos, skill shortages and
suspicion are preventing HR departments from effectively using talent analytics.
• The convergence of HRM and big data is sometimes called workforce science.
• With HR analytics, HR managers can gain their seat at the table when strategy is being discussed.
23Lussier and Hendon, Fundamentals of Human Resource Management. © 2017, SAGE Publications.
What Are Human Resource
Information Systems (HRIS)?• Human Resource Information Systems
are interacting database systems that “aim at generating and delivering HR information and allow us to automate some human resource management functions.”
• Some of the most common features in HRIS include modules for tracking attendance and leave, job, and pay history and logging appraisal scores and review dates.
24Lussier and Hendon, Fundamentals of Human Resource Management. © 2017, SAGE Publications.
How Does HRIS Assist in
Making Decisions?• HRIS are database management systems
that manage and manipulate data that influence organizational performance:– Attendance and leave tracking
– Job and pay history
– Job descriptions
– Appraisal scores and review date tracking
– Benefits enrollment and tracking
• Also used when considering promotions, transfers, team assignments, and other daily activities.
25Lussier and Hendon, Fundamentals of Human Resource Management. © 2017, SAGE Publications.
Measurement Tools for
Strategic HRM• Economic Value Added (EVA)
• Return on Investment (ROI)
• Balanced Scorecard (BSC)
• HR Scorecard
26Lussier and Hendon, Fundamentals of Human Resource Management. © 2017, SAGE Publications.
Trends and Issues in HRM
• Everything Old Is New Again
– Advances in computing power and storage
in past few years.
• Continuing Globalization Increases
Need for Strategic and HRM Planning
– As business in most industries continue to
globalize, competition will continue to
increase.
27Lussier and Hendon, Fundamentals of Human Resource Management. © 2017, SAGE Publications.
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