Chapter Two Strategic human resource management

Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Human Resource Management in Australia 2e by De Cieri, Kramar, Noe, Hollenbeck, Gerhart & Wright. Slides prepared by Helen De Cieri 2-2 Strategic human resource management (SHRM) Objectives 1 Describe the differences between strategy formulation and strategy implementation. 2 List the components of the strategic management process. 3 Discuss the role of the HR function in strategy formulation. 4 Describe the linkages between HR and strategy formulation.

Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Human Resource Management in Australia 2e by De Cieri, Kramar, Noe, Hollenbeck, Gerhart & Wright. Slides prepared by Helen De Cieri 2-3 Strategic human resource management (SHRM) Objectives (continued) 5 Discuss the more popular typologies of generic strategies and the various HR practices associated with each. 6 Describe the different HR issues and practices associated with various directional strategies. 7 List the competencies the HR executive needs to become a strategic partner in the company.

Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Human Resource Management in Australia 2e by De Cieri, Kramar, Noe, Hollenbeck, Gerhart & Wright. Slides prepared by Helen De Cieri 2-4 What is strategic management? A process or approach to addressing the competitive challenges faced by an organisation. It can be thought of as managing the ‘pattern or plan that integrates an organisation’s major goals, policies and action sequences into a cohesive whole’ (Quinn, 1980).

Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Human Resource Management in Australia 2e by De Cieri, Kramar, Noe, Hollenbeck, Gerhart & Wright. Slides prepared by Helen De Cieri 2-5 Generic strategies (Porter) Cost Differentiation Focus

Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Human Resource Management in Australia 2e by De Cieri, Kramar, Noe, Hollenbeck, Gerhart & Wright. Slides prepared by Helen De Cieri 2-6 Strategic types (Miles & Snow) Defender Analyser Prospector Reactor

Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Human Resource Management in Australia 2e by De Cieri, Kramar, Noe, Hollenbeck, Gerhart & Wright. Slides prepared by Helen De Cieri 2-7 Strategic human resource management (SHRM) A pattern of planned human resource deployments and activities intended to enable an organisation to achieve its goals.

Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Human Resource Management in Australia 2e by De Cieri, Kramar, Noe, Hollenbeck, Gerhart & Wright. Slides prepared by Helen De Cieri 2-8 Components of the strategic management process Strategy formulation –The process of deciding on a strategic direction by defining a company’s mission and goals, its external opportunities and threats, and its internal strengths and weaknesses. Strategy implementation –The process of devising structures and allocating resources to enact the strategy chosen by a company.

Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Human Resource Management in Australia 2e by De Cieri, Kramar, Noe, Hollenbeck, Gerhart & Wright. Slides prepared by Helen De Cieri 2-9 Linkage between HR and the strategic management process Strategic choice –The organisation’s strategy; the ways an organisation will attempt to fulfill its mission and achieve its long-term goals.

Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Human Resource Management in Australia 2e by De Cieri, Kramar, Noe, Hollenbeck, Gerhart & Wright. Slides prepared by Helen De Cieri 2-10 Strategic choice External analysis Internal analysis HR needs HR capability HR actions Firm performance Strategy formulation Strategy implementation Strategy evaluation Emergent strategies GoalsMission HR practices A model of the strategic management process (see Figure 2.1 for more detail)

Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Human Resource Management in Australia 2e by De Cieri, Kramar, Noe, Hollenbeck, Gerhart & Wright. Slides prepared by Helen De Cieri 2-11

Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Human Resource Management in Australia 2e by De Cieri, Kramar, Noe, Hollenbeck, Gerhart & Wright. Slides prepared by Helen De Cieri 2-12 Figure 2.2 Linkages of strategic planning and HRM Source: Adapted from K. Golden & V. Ramanujam, ‘Between a Dream and a Nightmare: On the Integration of the Human Resource Function and the Strategic Business Planning Process’, Human Resource Management 24, 1985, pp. 429–51.

Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Human Resource Management in Australia 2e by De Cieri, Kramar, Noe, Hollenbeck, Gerhart & Wright. Slides prepared by Helen De Cieri 2-13 Figure 2.3 Strategy formulation

Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Human Resource Management in Australia 2e by De Cieri, Kramar, Noe, Hollenbeck, Gerhart & Wright. Slides prepared by Helen De Cieri 2-14 Strategy formulation: four components Mission: a statement of the organisation’s reason for being. Goals: What an organisation hopes to achieve in the medium- to long-term future. SWOT analysis (strengths, weaknesses, opportunities, threats), comprising: –External analysis: Examining the organisation’s operating environment to identify strategic opportunities and threats. –Internal analysis: The process of examining an organisation’s strengths and weaknesses. HR input: HR executives involved in strategy formulation.

Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Human Resource Management in Australia 2e by De Cieri, Kramar, Noe, Hollenbeck, Gerhart & Wright. Slides prepared by Helen De Cieri 2-15 Figure 2.4 Variables to be considered in strategy implementation

Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Human Resource Management in Australia 2e by De Cieri, Kramar, Noe, Hollenbeck, Gerhart & Wright. Slides prepared by Helen De Cieri 2-16 Strategic choice HR needs HR capability HR actions Firm performance Emergent strategies HR practices Strategy implementation (see Figure 2.5 for more detail)

Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Human Resource Management in Australia 2e by De Cieri, Kramar, Noe, Hollenbeck, Gerhart & Wright. Slides prepared by Helen De Cieri 2-17 Figure 2.5 Strategy implementation

Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Human Resource Management in Australia 2e by De Cieri, Kramar, Noe, Hollenbeck, Gerhart & Wright. Slides prepared by Helen De Cieri 2-18 Menu of HR practice options Job analysis and design Recruitment and selection Employee learning and development Performance management Pay structure, incentives and benefits Industrial relations See Table 2.4 for more detail

Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Human Resource Management in Australia 2e by De Cieri, Kramar, Noe, Hollenbeck, Gerhart & Wright. Slides prepared by Helen De Cieri 2-19 Directional strategies Concentration strategies Internal growth strategies External growth strategies Divestment or downsizing strategies

Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Human Resource Management in Australia 2e by De Cieri, Kramar, Noe, Hollenbeck, Gerhart & Wright. Slides prepared by Helen De Cieri 2-20 The role of HR in providing strategic competitive advantage Emergent strategies Enhancing firm competitiveness

Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Human Resource Management in Australia 2e by De Cieri, Kramar, Noe, Hollenbeck, Gerhart & Wright. Slides prepared by Helen De Cieri 2-21 Figure 2.7 HR competencies

Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Human Resource Management in Australia 2e by De Cieri, Kramar, Noe, Hollenbeck, Gerhart & Wright. Slides prepared by Helen De Cieri 2-22 Summary SHRM: to proactively provide a competitive advantage through the company’s human resources. The HR function needs to be integral to strategy formulation. HRM has an impact on strategy implementation. The strategic role of the HR function requires business, professional–technical, change management and integration competencies.