HR STRATEGYHR STRATEGY

MANA 3320 MANA 3320

Dr. Jeanne MichalskiDr. Jeanne Michalski

Strategic Planning and Strategic Planning and Human ResourcesHuman Resources

Strategic PlanningStrategic Planning Procedures for making decisions about the Procedures for making decisions about the

organization’s long-term goals and strategiesorganization’s long-term goals and strategies Human Resources Planning (HRP)Human Resources Planning (HRP)

Process of anticipating and making provision Process of anticipating and making provision for the movement (flow) of people into, within, for the movement (flow) of people into, within, and out of an organization. and out of an organization.

Strategic Planning and HR Strategic Planning and HR PlanningPlanning

Strategic Human Resources Management Strategic Human Resources Management (SHRM)(SHRM)

The pattern of human resources deployments The pattern of human resources deployments and activities that enable an organization to and activities that enable an organization to achieve its strategic goalsachieve its strategic goals

Strategy formulation—providing input as to what is Strategy formulation—providing input as to what is possible given the types and numbers of people possible given the types and numbers of people available.available.

Strategy implementation—making primary resource Strategy implementation—making primary resource allocation decisions about structure, processes, and allocation decisions about structure, processes, and human resources.human resources.

Mission, Vision, and ValuesMission, Vision, and Values MissionMission

The basic purpose of the organization as well as The basic purpose of the organization as well as its scope of operationsits scope of operations

Strategic VisionStrategic Vision A statement about where the company is going A statement about where the company is going

and what it can become in the future; clarifies and what it can become in the future; clarifies the long-term direction of the company and its the long-term direction of the company and its strategic intentstrategic intent

Core ValuesCore Values The strong and enduring beliefs and principles The strong and enduring beliefs and principles

that the company uses as a foundation for its that the company uses as a foundation for its decisionsdecisions

Changing Views of HRChanging Views of HR

Business strategies require specific skills Business strategies require specific skills and behaviors to be successful.and behaviors to be successful.

HR practices can be crafted to develop HR practices can be crafted to develop certain types of skills and encourage certain types of skills and encourage behaviors.behaviors.

HR practices should support the “core HR practices should support the “core competencies” and strategy of the competencies” and strategy of the organization.organization.

HR AlignmentHR Alignment

Planning and Job Design

Compensation

EmployeeRelations

Recruiting and Selection

Training and Development

Performance Management

HR AlignmentHR Alignment

Planning and Job Design

Compensation

EmployeeRelations

Recruiting and Selection

Training and Development

Performance Management

INTERNAL FIT

HR AlignmentHR Alignment

Planning and Job Design

Compensation

EmployeeRelations

Recruiting and Selection

Training and Development

Performance Management

INTERNAL FIT

Business StrategyBusiness Strategy Value CreationValue Creation

What the firm adds to a product or service by virtue of What the firm adds to a product or service by virtue of making it; the amount of benefits provided by the making it; the amount of benefits provided by the product or service once the costs of making it are product or service once the costs of making it are subtracted (value = benefits — costs).subtracted (value = benefits — costs).

Low-cost strategy: competing on productivity and Low-cost strategy: competing on productivity and efficiencyefficiency

Keeping costs low to offer an attractive price to customers Keeping costs low to offer an attractive price to customers (relative to competitors).(relative to competitors).

Differentiation strategy: compete on added valueDifferentiation strategy: compete on added value Involves providing something unique and distinctive to Involves providing something unique and distinctive to

customers that they value.customers that they value.

Business Strategy (cont’d)Business Strategy (cont’d) Functional Strategy: Ensuring AlignmentFunctional Strategy: Ensuring Alignment

External Fit/AlignmentExternal Fit/Alignment Focuses on the connection between the business Focuses on the connection between the business

objectives and the major initiatives in HR.objectives and the major initiatives in HR. Internal Fit/AlignmentInternal Fit/Alignment

Aligning HR practices with one another to establish a Aligning HR practices with one another to establish a configuration that is mutually reinforcing.configuration that is mutually reinforcing.

How do they compete?How do they compete?

Wal-MartWal-Mart AppleApple McDonald’sMcDonald’s StarbucksStarbucks

McDonalds’ vs. StarbucksMcDonalds’ vs. Starbucks

Rapid GrowthRapid Growth

Starbucks opens three new stores every day.Starbucks opens three new stores every day.2006 = 12,4402006 = 12,4402005 = 10,2412005 = 10,2412004 = 8,337 2004 = 8,337 2003 = 7,225 2003 = 7,225 2002 = 5,886 2002 = 5,886 2001 = 4,709 2001 = 4,709 2000 = 3,5012000 = 3,5011990 = 841990 = 84

120,000 employees worldwide120,000 employees worldwide The long-term goal is 30,000 around the world, including The long-term goal is 30,000 around the world, including

15,000 in the U.S.15,000 in the U.S. The company is adding people at the rate of 200 a day.The company is adding people at the rate of 200 a day.

Starbucks StrategyStarbucks Strategy

Price of a tall latte in the U.S. is around $3.00 Price of a tall latte in the U.S. is around $3.00

High-speed wireless Internet service – now available at High-speed wireless Internet service – now available at Starbucks. Starbucks.

October 1, 2007 “Starting tomorrow at certain Starbucks October 1, 2007 “Starting tomorrow at certain Starbucks stores, a person with an iPhone or iTunes software loaded stores, a person with an iPhone or iTunes software loaded onto a laptop can download the songs they hear over the onto a laptop can download the songs they hear over the speakers directly onto those devices.”speakers directly onto those devices.”

Rapid growth.Rapid growth.

Howard Schultz on Starbuck’s Howard Schultz on Starbuck’s StrategyStrategy

1997 Interview w/ Larry King:1997 Interview w/ Larry King:

““So the question is: How could a company So the question is: How could a company create retail stores where coffee was not create retail stores where coffee was not previously sold, ... charge three times more previously sold, ... charge three times more for it than the local doughnut shop, put for it than the local doughnut shop, put Italian names on it that no one can Italian names on it that no one can pronounce, and then have six million pronounce, and then have six million customers a week coming through the customers a week coming through the stores?” stores?”

Working at StarbucksWorking at StarbucksThe downside:The downside: Salaries are lowSalaries are low Shift assignments are unpredictable Shift assignments are unpredictable Number of working hours cannot be relied upon. Number of working hours cannot be relied upon.

The upside:The upside: FlexibilityFlexibility Company cultureCompany culture Employee empowermentEmployee empowerment Benefits packageBenefits package Fortune Fortune magazine #16 best companies to work for in U.S.magazine #16 best companies to work for in U.S.

Partners who work full time or part time (generally 20 hours or more per Partners who work full time or part time (generally 20 hours or more per week) may participate in a variety of programs including:week) may participate in a variety of programs including:

Progressive CompensationProgressive Compensation Healthcare Benefits (Medical, Prescription Drugs, Dental and Vision)Healthcare Benefits (Medical, Prescription Drugs, Dental and Vision) Retirement Savings PlanRetirement Savings Plan Stock Options and Discounted Stock Purchase Plan “Bean Stock”Stock Options and Discounted Stock Purchase Plan “Bean Stock” Income Protection Plan (Life and Disability Coverage)Income Protection Plan (Life and Disability Coverage) Management Bonus PlanManagement Bonus Plan Adoption Assistance PlanAdoption Assistance Plan Domestic partner benefitsDomestic partner benefits Referral programs and support resources for child and eldercareReferral programs and support resources for child and eldercare Employee involvement Employee involvement A pound of coffee each weekA pound of coffee each week

http://www.starbucks.com/aboutus/jobcenter_thesbuxexperience.asphttp://www.starbucks.com/aboutus/jobcenter_thesbuxexperience.asp

Working at Starbucks

““To Woo Europeans, McDonald’s Goes To Woo Europeans, McDonald’s Goes Upscale”Upscale”

McDonald’s in LondonNYT August 25, 2007

McDonald’s Goes UpscaleMcDonald’s Goes Upscale

Aiming to create a more relaxed experience in a sophisticated Aiming to create a more relaxed experience in a sophisticated atmosphere, McDonald’s is replacing bolted-down plastic yellow-atmosphere, McDonald’s is replacing bolted-down plastic yellow-and-white furniture with lime-green designer chairs and dark and-white furniture with lime-green designer chairs and dark leather upholstery. leather upholstery.

The changes are more than cosmetic. McDonald’s is introducing The changes are more than cosmetic. McDonald’s is introducing healthier foods and items that cater to regional tastes, like caffè healthier foods and items that cater to regional tastes, like caffè lattes. lattes.

Hoping to attract more young adults and professionals, the chain Hoping to attract more young adults and professionals, the chain is also adding amenities like Internet access and rental iPods. is also adding amenities like Internet access and rental iPods.

The original impetus for the makeover was a European sales The original impetus for the makeover was a European sales slump in the late 1990s, brought on by concerns about obesity slump in the late 1990s, brought on by concerns about obesity and annoyance at unappealing décor and and annoyance at unappealing décor and grumpy employeesgrumpy employees. .

Competitive AdvantageCompetitive Advantage

Technological

Capability

Competitive AdvantageCompetitive Advantage

CapTechnologic

al Capability

Financial Capability

Competitive AdvantageCompetitive Advantage

M

Technological

Capability

Financial Capability

Marketing Capability

Competitive AdvantageCompetitive Advantage

o

M

Technological Capability

Financial Capability

Marketing Capability

Organizational Capability

Capabilities: People as a Capabilities: People as a Strategic ResourceStrategic Resource

Core CapabilitiesCore Capabilities Integrated knowledge sets within an organization Integrated knowledge sets within an organization

that distinguish it from its competitors and deliver that distinguish it from its competitors and deliver value to customers.value to customers.

Sustained competitive advantage through Sustained competitive advantage through people is achieved if these human resources:people is achieved if these human resources:

1.1. Are valuable.Are valuable.

2.2. Are rare and unavailable to competitors.Are rare and unavailable to competitors.

3.3. Are difficult to imitate.Are difficult to imitate.

4.4. Are organized for teamwork and cooperation.Are organized for teamwork and cooperation.

Company Vision - ExampleCompany Vision - Example

Provide transportation services that Provide transportation services that consistently meet customers expectationsconsistently meet customers expectations

Strategic Initiatives – Strategic Initiatives – ExampleExample

PeoplePeople GrowthGrowth EfficiencyEfficiency Ease of Doing BusinessEase of Doing Business ServiceService

Human Resources VisionHuman Resources Vision

HR makes it happen for “Company”HR makes it happen for “Company”

Great Company…...Great Company…...

Great People……Great People……

Great Leaders….. Great Leaders…..

………….Engaged in delivering extraordinary results.Engaged in delivering extraordinary results

People Strategies People Strategies

Drive Performance EthicDrive Performance Ethic Transform LeadersTransform Leaders Enhance TalentEnhance Talent Engage all EmployeesEngage all Employees