Human Resource Management: Gaining a Competitive Advantage Chapter 02 Strategic Human Resource Management McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc All rights reserved Learning Objectives Describe the differences between strategy formulation and strategy implementation List strategic management process components Discuss HRM function’s role in strategy formulation Describe the linkages between HRM and strategy formulation Discuss typologies of strategies and associated HRM practices Describe HR issues and practices associated with various directional strategies 2-2 Introduction • Goal of strategic management is to deploy and allocate resources in a way that gives an organization competitive advantage • HRM function must be integrally involved in the company’s strategic management process • A business model is how the firm will create value for customers profitably 2-3 What is Strategic Management?  Strategic human resource management (SHRM) is the pattern of planned HR activities and deployments intended to enable an organization to achieve its goals  Strategic management is a process to address the organization’s competitive challenges by integrating an organization’s goals, policies and action sequences into a cohesive whole 2-4 2-5 Strategic Management Process Model Strategy Formulation Strategy Implementation HR Practices Mission Goals Strategic Choice Internal Analysis •Strengths •Weaknesses HR Needs •Skills •Behavior •Culture •Recruiting •Training •Performance management •Labor relations •Employee relations •Job analysis •Job design •Selection •Development •Pay structure •Incentives •Benefits HR Capability •Skills, •Abilities •Knowledge 2-6 Strategy- Competition Decisions 2-7 Strategic Planning and HRM Linkages 2-8 Strategy Formulation External Analysis •Opportunities •Threats Internal Analysis •Strengths •Weaknesses 2-9 SHRM-Strategy Formulation Mission Mission Goals Goals Strategic Strategic Choice Choice Internal Internal Analysis Analysis 2-10 SWOT Analysis for Google, Inc SWOT Analysis for Google Inc 2-11 Strategy Implementation Variables Organizational Structure Types of Information Reward Systems Task Design Select Train Develop People 2-12 HRM’s Implementation Variables: 2-13 HR Practices •Recruiting •Training •Performance management •Labor relations •Employee relations •Job analysis •Job design •Selection •Development •Pay structure •Incentives •Benefits Strategic Implementation Human Resource Needs •Skills •Behavior •Culture Human Resource Capability •Skills, •Abilities •Knowledge Human Resource Actions •Behaviors •Results -productivity -absenteeism - turnover 2-14 HRM Practices 2-15 Porter’s Strategies 2-16 Categories of Directional Strategies Concentration Concentration Internal Internal Growth Growth External External Growth Growth Mergers Mergers & & Acquisitions Acquisitions 2-17 Role Behaviors  Behaviors that are required of an individual in his or her role as a jobholder in a social work environment  Different role behaviors are required for different strategies 2-18 Summary Human Resources are the most important asset and single largest most controllable cost within the business model HR professionals must develop business, professional-technical, change management and integration competencies HRM has a profound impact on the strategic plan implementation by developing and aligning HRM practices that ensure the company has motivated employees with necessary skills 2-19 ... directional strategies 2- 2 Introduction • Goal of strategic management is to deploy and allocate resources in a way that gives an organization competitive advantage • HRM function must be integrally... the company’s strategic management process • A business model is how the firm will create value for customers profitably 2- 3 What is Strategic Management?  Strategic human resource management. .. the pattern of planned HR activities and deployments intended to enable an organization to achieve its goals  Strategic management is a process to address the organization’s competitive challenges