Human Resource Management: Gaining a Competitive Advantage McGraw-Hill/Irwin ©2012 The McGraw-Hill Companies, All Rights Reserved

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. 2-2

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. 2-3

2 Phases of Strategic Management Strategy Formulation Strategy Implementation 2-4

Strategic Management Process Model Strategy FormulationStrategy Implementation HR Practices Recruiting Training Performance management Labor relations Employee relations Job analysis Job design Selection Development Pay structure Incentives Benefits HRCapability Skills, Abilities Knowledge HRNeeds Skills Behavior CultureStrategicChoiceGoalsMission InternalAnalysis Strengths Weaknesses 2-5

Strategy- Competition Decisions With What? How?Where? 2-6

Strategic Planning and HRM Linkages Administrative One-way Two-way 2-7

Strategy Formulation External Analysis OpportunitiesOpportunities ThreatsThreats Internal Analysis StrengthsStrengths WeaknessesWeaknesses 2-8

SHRM-Strategy Formulation Mission Goals Strategic Choice Internal Analysis 2-9

SWOT Analysis for Google Inc. SWOT Analysis for Google, Inc. 2-10

Strategy Implementation Variables Types of Information Organizational Structure Task Design Select Train Develop People Reward Systems 2-11

HRM’s 3 Implementation Variables: Task People Reward systems 2-12

Strategic Implementation HR Practices Recruiting Training Performance management Labor relations Employee relations Job analysis Job design Selection Development Pay structure Incentives Benefits HumanResourceActions Behaviors Results -productivity -absenteeism - turnover HumanResourceCapability Skills, Abilities Knowledge HumanResourceNeeds Skills Behavior Culture 2-13

HRM Practices 2-14 Job Analysis/Design Recruitment /Selection Performance Management Recruitment/ Selection Training/Development Pay Structure/ Incentives/ Benefits Labor-employee Relations

Porter’s Strategies CostDifferentiation 2-15

5 Categories of Directional Strategies Concentration Internal Growth External Growth Mergers & Acquisitions 2-16

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. 2-17