© 2012 South-Western, Cengage Learning, Inc All rights reserved Prepared by Joseph B Mosca, Monmouth University & Marla M Kameny, Baton Rouge Community College Learning Objectives After studying this chapter, you should be able to: Describe the strategic context of human resource management Identify three types of strategies and relate each to human resource management Discuss human resource strategy formulation and relevant organizational factors Discuss the processes through which human resource strategy is implemented Discuss how the human resource function in organizations can be evaluated © 2012 South-Western, Cengage Learning, Inc All rights reserved 4–2 • The Competitive Environment for Human Resource Management  HRM occurs not in a vacuum, but in a complex and dynamic milieu of forces within the organizational context  HR managers now have a strategic perspective that recognizes the critical links between organizational strategy and HR strategy © 2012 South-Western, Cengage Learning, Inc All rights reserved 4–3 Strategic Human Resource Management © 2012 South-Western, Cengage Learning, Inc All rights reserved 4–4 Beyond the Book: Considering Fundamental HRM Practices  If we examine fundamental HRM practices, it seems reasonable to suggest two points:  Formal performance appraisals are better than none  Using systematic selection techniques is better than hiring based on intuition © 2012 South-Western, Cengage Learning, Inc All rights reserved 4–5 A Strategic Perspective • What is meant when we refer to strategy and a strategic perspective  All firms exist in a competitive environment, with competitors trying to attract the same customers  Therefore, a firm implements a strategy that its competitors are unable to implement © 2012 South-Western, Cengage Learning, Inc All rights reserved 4–6 The Influence of Organizational Purpose and Mission • What is an organization’s purpose?  It is the organization’s basic reason for existence • What is an organization’s mission?  It is the organization’s statement of how it intends to fulfill its purpose • Both purpose and mission affect an organization’s HR practices © 2012 South-Western, Cengage Learning, Inc All rights reserved 4–7 Starbucks Corporate Mission Statement © 2012 South-Western, Cengage Learning, Inc All rights reserved 4–8 What Is a Top Management Team? The organization’s group of senior executives responsible for the overall strategic operation of the firm © 2012 South-Western, Cengage Learning, Inc All rights reserved 4–9 Beyond the Book: Organizational Culture and HRM Success Understanding Understanding the the Cultural Cultural Environment Environment Sets Setsthe thetone tone for forthe the organization organization Plays Playsaamajor major role rolein in shaping shaping its itsculture culture © 2012 South-Western, Cengage Learning, Inc All rights reserved Have Haveaavision vision of ofwhere wherefirm firm isisgoing going Have Haveaavision vision of ofhow howfirm firm should shouldget get there there 4–10 Corporate Strategy and HRM • Corporate Strategy  Deals with determining what businesses the corporation will operate • Growth Strategy  Focuses on growing and expanding the business, which can be pursued through joint ventures or acquisitions © 2012 South-Western, Cengage Learning, Inc All rights reserved 4–11 Corporate Strategy and HRM (cont’d) • Retrenchment Strategy  Occurs when an organization operations are not effective and changes are required • Stability Strategy  Maintains the status quo © 2012 South-Western, Cengage Learning, Inc All rights reserved 4–12 Diversification Strategies • Diversification Strategy  Occurs when an organization adds new products and services • Related Diversification  Occurs when a firm achieves synergy among the various businesses it owns • Unrelated Diversification  Is used when a firm operated several unique businesses in different unrelated markets © 2012 South-Western, Cengage Learning, Inc All rights reserved 4–13 Business Strategies (cont’d) • Adaptation Model  Is an approach to business strategy where a firm seeks ways to adapt to its environment • Basic Strategy Alternatives:  Defender strategy  Prospector strategy  Analyzer strategy © 2012 South-Western, Cengage Learning, Inc All rights reserved 4–14 Business Strategy Alternatives Defender Strategy Works best in an environment with little uncertainty and risk and a high degree of stability Prospector Strategy Works best in dynamic and growing environments with much uncertainly and risk Analyzer Strategy Work best in stable conditions with a moderate degree of uncertainly and risk © 2012 South-Western, Cengage Learning, Inc All rights reserved 4–15 Other Other Competitive Competitive Strategies Strategies Differentiation Differentiation strategy strategy Cost Costleadership leadership strategy strategy © 2012 South-Western, Cengage Learning, Inc All rights reserved Focus Focus strategy strategy 4–16 Human Resource Strategies © 2012 South-Western, Cengage Learning, Inc All rights reserved 4–17 What Is Organizational Design? • The framework of jobs, positions, clusters of positions, and reporting relationships among positions that are used to construct an organization © 2012 South-Western, Cengage Learning, Inc All rights reserved 4–18 The Impact of Organization Design Organization Organization Design Design Forms Forms U-form U-form (unitary/functional) (unitary/functional) H-form H-form (holding (holdingcompany) company) © 2012 South-Western, Cengage Learning, Inc All rights reserved M-form M-form (multidivisional) (multidivisional) 4–19 HR Strategy Implementation • Psychological Contract  The overall set of expectations held by the individual that they can contribute to the organization • Personality  The stable set of psychological attributes or traits that distinguish one person from another © 2012 South-Western, Cengage Learning, Inc All rights reserved 2–20 HR Strategy Implementation (cont’d) • Communication  The exchange of information and shared meaning  HR managers are responsible for coordinating communication among employees © 2012 South-Western, Cengage Learning, Inc All rights reserved 2–21 Motivation is:  The set of forces that causes people to behave in certain ways  A major determinant of individual performance  What causes an employee to choose to expend effort to support an organizational activity © 2012 South-Western, Cengage Learning, Inc All rights reserved 4–22 Understanding Stress • Stress  A person’s adaptive response to a stimulus that places excessive psychological or physical demands on that person • Managing stress requires understanding:  The causes of stress  How stress affects individuals  How organizations and individuals can better cope with stress © 2012 South-Western, Cengage Learning, Inc All rights reserved 4–23 Human Resource Management Practices That May Lead to Improved Firm Performance © 2012 South-Western, Cengage Learning, Inc All rights reserved 4–24 ... this chapter, you should be able to: Describe the strategic context of human resource management Identify three types of strategies and relate each to human resource management Discuss human resource. .. relevant organizational factors Discuss the processes through which human resource strategy is implemented Discuss how the human resource function in organizations can be evaluated © 2012 South-Western,... South-Western, Cengage Learning, Inc All rights reserved 4–2 • The Competitive Environment for Human Resource Management  HRM occurs not in a vacuum, but in a complex and dynamic milieu of forces