1. H UMAN R ESOURCE M ANAGEMENT S TRATEGY

2. 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

3. H UMAN R ESOURCE M ANAGEMENT S TRATEGY Why is HR critical to firm performance? 85% of all firms in the US are service firms. 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.

4. H UMAN R ESOURCE M ANAGEMENT S TRATEGY 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.

5. HR S TRATEGY : S TRATEGIC F IT Training Rewards

6. HR S TRATEGY : HR S YSTEM I NTERNAL F IT HR Strategy Performance Management System Goal Setting Performance Measurement Coaching Rewards Appeal Performance Evaluation

7. HR S TRATEGY : C ONTEXT OF HR S YSTEM 1.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.

8. HR S TRATEGY : C ONTEXT OF HR S YSTEM 2.The Workforce Demographics

9. HR S TRATEGY : C ONTEXT OF HR S YSTEM 3.Organization Culture Weak vs. Strong culture “Type” of culture

10. HR S TRATEGY : C ONTEXT OF HR S YSTEM 4.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.

11. HR S TRATEGY : C ONTEXT OF HR S YSTEM 5.Technology of Production & Organization of Work Physical layout/employee proximity Required employee skills Ease of monitoring employees’ input

12. HR S TRATEGY : C ONTEXT OF HR S YSTEM Critical Thinking Questions: 1.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? 2.Give an example of a type of Organizational Culture that would reinforce strategy: What type of HR practices would fit with this culture? 3.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?

13. HR S TRATEGY : S TRATEGIC R OLES Distribution of Task Outcomes: 3 Possibilities 1.“Foot soldier”: low upside, low downside of performance variance 2.“Guardian”: low upside, high downside of performance variance 3.“Star”: high upside, low downside of performance variance

14. HR S TRATEGY : S TRATEGIC R OLES Critical Thinking Questions: 1.Which Roles are Strategic? Foot soldier, guardian or star? 2.What are the advantages of focusing on foot soldiers with the company HR policies? 3.What are the liabilities of stars? When is it advantageous to cultivate and sustain stars?

15. HR S TRATEGY : C ONSISTENCY 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… 1.Single-employee consistency 2.Among-employee consistency 3.Temporal consistency

16. HR S TRATEGY : C ONSISTENCY Critical Thinking Questions 1.Are there circumstances when it is effective to have inconsistent HR policies? Give an example. 2.Does an emphasis on temporal consistency create a barrier for change when change is necessary? 3.What impact (if any) would consistency have on the organization culture?