Strategic Human Resource Management Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall

Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall What is strategic HRM? Strategic HRM is developed through three steps: Decide on the strategic goals Identify employee skills and behaviors necessary for success Formulate HR management policies and practices that will produce these required skills Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall

The Strategic Management Process The process begins by developing a strategic plan that describes how internal strengths and weaknesses will be matched with external opportunities and threats Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall

Steps in Strategic Management Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall

Step 1: Define the current business Begin by asking these questions: What products do we sell? Where do we sell these products? How do our products or services differ from our competitors? Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall

Step 2: Perform External and Internal Situational Audits The key to success is adaptation Situational audits require SWOT (strengths, weaknesses, opportunities, and threats) analysis Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall

Step 3: Formulate a New Business Direction What should our new business be in terms of product, placement and competitive advantage? The vision statement describes the following: What do we want to become? The mission statement explains the following: Where are we now? Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall

Step 4: Translate the Mission into Strategic Goals Operationalize the mission for managers What does the mission mean to each department? What goals follow implementation? Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall

Step 5: Formulate Strategies to Achieve the Strategic Goals What is the game plan? Decide on a course of action Best strategies are concise Easily communicated Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall

Step 6: Implement the Strategies Get the game plan going Do what needs to be done Hire or fire people Build or close plants Adding or eliminating products and product lines Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall

Step 7: Evaluate Performance Evaluate, evaluate, evaluate Ongoing process vis-à-vis strategic control Addresses the following questions: Are resources being utilized as planned? Are discrepancies explained? Do changes in our situation suggest change? Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall

Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall Types of Strategies Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall

Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall Corporate Strategy Top-level, company-wide Identifies the portfolio of existing business segments Strategic possibilities include the following: Diversification or vertical integration Consolidation Geographic expansion Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall

Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall Competitive Strategy Identifies how to build upon and strengthen the business’s long-term marketplace position Identifies and develops competitive advantage Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall

Competitive Advantage Cost leadership indicates that the enterprise intends to become the low-cost leader in the industry Differentiation strategies seek to be unique in its industry along dimensions valued by buyers Focusers carve out niche markets and compete by providing a product/service that customers can get through no other means Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall

Functional Strategies Identifies basic courses of action that each department will pursue to achieve strategic goals – consider Southwest Airlines Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall

The Importance of Leverage Leverage means supplementing what you have and doing more with what you’ve got! Human resources can be a crucial competitive advantage! Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall

HRM Creates Competitive Advantage Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall

Four Important Strategic HR Issues HR must understand that employees play a key role in employers’ performance improvement efforts HR teams should support corporate productivity and performance improvement efforts Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall

Four Important Strategic HR Issues, cont. HR units must be more involved in designing – not just executing – the strategic plan HR managers must understand how to create value Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall

How Involved Is HR in Strategic Management? Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall

Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall What Roles Does HR Play? Strategy execution Strategy formulation SWOT analysis Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall

Translating Strategy into HR Policy and Practice Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall

HR’s Role in Mergers and Acquisitions Early HR involvement creates synergy HR involvement increases M and A success rates Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall

Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall Specific HRM M&A Roles Manage the deal price Manage the messages Secure top team and key talent Prioritize and manage activities Define and implement an effective HR service delivery strategy Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall

Specific HRM M&A Roles, cont. Develop a workable change management plan Design and implement the right staffing model Align total rewards Measure synergies Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall

Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall