Human Resource Management Strategy HR Management

Human Resource Management Strategy The Meaning of “Strategy” A critical factor that affects Firm Performance A factor that contributes to Competitive Advantage in markets Having a long-term focus Plans that involve the top executives and/or board of directors of the firm A general framework that provides a perspective for selecting specific policies and procedures

Human Resource Management Strategy Why is HR critical to firm performance? Service is delivered by people. Low quality HR leads to low quality customer service. In the 21st century effective knowledge management translates into competitive advantage and profits. Knowledge comes from a firm’s people.

Human Resource Management Strategy What is unique about Human Resource Management? HR is multidisciplinary: It applies the disciplines of Economics (wages, markets, resources), Psychology (motivation, satisfaction), Sociology (organization structure, culture) and Law (min. wage, labor contracts, EEOC) HR is embedded within the work of all managers, and most individual contributors due to the need of managing people (subordinates, peers and superiors) as well as teams to get things done.

HR Strategy: Strategic Fit Vertical Fit Training Rewards Horizontal Fit

HR Strategy: HR System Internal Fit Goal Setting Appeal Performance Measurement Coaching Rewards Performance Evaluation Performance Management System

HR Strategy: Context of HR System The “Five Factors” Influencing the HR System External Environment Social: social values, roles, trends, etc. Political: political forces, changes. Ex. Bush presidency and its agenda for Social Security. Legal: laws, court decisions, regulatory rules. Economic: product, labor, capital, factor markets.

HR Strategy: Context of HR System The Workforce Demographics

HR Strategy: Context of HR System Organization Culture Weak vs. Strong culture “Type” of culture

HR Strategy: Context of HR System Organization Strategy What are a firm’s distinctive competencies? What is the basis that competitive strategy be sustained? What are a firm’s strategic objectives? Compare corporate and Business strategies.

HR Strategy: Context of HR System Technology of Production & Organization of Work Physical layout/employee proximity Required employee skills Ease of monitoring employees’ input

HR Strategy: Context of HR System Critical Thinking Questions: Should a company monitor the HR environment and imitate “Best Practices” of HR from successful firms? What caveats would you want to apply to applying Best HR Practices? Give an example of a type of Organizational Culture that would reinforce strategy: What type of HR practices would fit with this culture? What type of HR practices would fit with jobs with tasks that are highly ambiguous, uncertain and creative? What about predictable, routine and certain tasks?

HR Strategy: Strategic Roles Distribution of Task Outcomes: 3 Possibilities “Foot soldier”: low upside, low downside of performance variance “Guardian”: low upside, high downside of performance variance “Star”: high upside, low downside of performance variance

HR Strategy: Strategic Roles Critical Thinking Questions: Which Roles are Strategic? Foot soldier, guardian or star? What are the advantages of focusing on foot soldiers with the company HR policies? What are the liabilities of stars? When is it advantageous to cultivate and sustain stars?

HR Strategy: Consistency Consistency is an important quality related to the implementation of HR policies. Employees should receive a clear, undiluted message of what behaviors are important and desirable. When there is a fit between HR systems, employees are likely to receive consistent feedback. The 3 types of consistency are… Single-employee consistency Among-employee consistency Temporal consistency

HR Strategy: Consistency Critical Thinking Questions Are there circumstances when it is effective to have inconsistent HR policies? Give an example. Does an emphasis on temporal consistency create a barrier for change when change is necessary? What impact (if any) would consistency have on the organization culture?