1. Strategy and Human Resources Planning
The Challenges of Human Resources Management

2. Chapter Objectives After studying this chapter, you should be able to
Identify the advantages of integrating human resources planning and strategic planning.
Understand how an organization’s competitive environment
influences its strategic planning.
Understand why it is important for an organization to do an internal resource analysis.
Describe the basic tools used for human resources forecasting.
Explain the linkages between competitive strategies and HR.
Understand what is required for a firm to successfully implement a strategy.
Recognize the methods for assessing and measuring the effectiveness of a firm’s strategy.
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3. Strategic Planning and Human Resources
Procedures for making decisions about the organization’s long-term goals and strategies
Human Resources Planning (HRP)
Process of anticipating and making provision for the movement (flow) of people into, within, and out of an organization.

4. Strategic Planning and HR Planning
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Strategic Planning and HR Planning
Identify the advantages of integrating human resources planning and strategic planning.
Strategic Human Resources Management (SHRM)
The pattern of human resources deployments and activities that enable an organization to achieve its strategic goals
Strategy formulation —providing input as to what is possible given the types and numbers of people available.
Strategy implementation —making primary resource allocation decisions about structure, processes, and human resources.

5. Step One: Mission, Vision, and Values
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Step One: Mission, Vision, and Values
Mission
The basic purpose of the organization as well as its scope of operations
Strategic Vision
A statement about where the company is going and what it can become in the future; clarifies the long- term direction of the company and its strategic intent
Core Values
The strong and enduring beliefs and principles that the company uses as a foundation for its decisions

6. Step Two: Environmental Analysis
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Step Two: Environmental Analysis
Understand how an organization’s competitive environment influences its strategic planning.
Environmental Scanning
The systematic monitoring of the major external forces influencing the organization.
Economic factors: general, regional, and global conditions
Industry and competitive trends: new processes, services, and innovations
Technological changes: robotics and office automation
Government and legislative issues: laws and administrative rulings
Social concerns: child care and educational priorities
Demographic and labor market trends: age, composition, literacy, and immigration

7. Step Two: Environmental Analysis (Cont.)
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Step Two: Environmental Analysis (Cont.)

8. Step Two: Environmental Analysis (Cont.)
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Step Two: Environmental Analysis (Cont.)
Understand why it is important for an organization to do an internal resource analysis.
Culture
Composition
Capabilities
Internal Analysis

9. Forecasting involves:
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Planning
Describe the basic tools used for human resources forecasting.
Forecasting involves:
forecasting the demand for labor
forecasting the supply of labor
balancing supply and demand considerations.

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11. Forecasting Demand for Employees
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Forecasting Demand for Employees
Quantitative Methods
Qualitative Methods
Forecasting Demand

12. Internal Demand Forecasting Tools
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Internal Demand Forecasting Tools
Skill Inventories
Files of personnel education, experience, interests, skills, etc., that allow managers to quickly match job openings with employee backgrounds.
Replacement Charts
Listings of current jobholders and persons who are potential replacements if an opening occurs.
Succession Planning
The process of identifying, developing, and tracking key individuals for executive positions.

13. Step Four: Formulating Strategy
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Step Four: Formulating Strategy
Explain the linkages between competitive strategies and HR.
Strategy Formulation
Moving from simple analysis to devising a coherent course of action.
SWOT analysis
A comparison of strengths, weaknesses, opportunities, and threats for strategy formulation purposes.
Use the strengths of the organization to capitalize on opportunities, counteract threats, and alleviate internal weaknesses.

14. Step Four: Formulating Strategy
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Step Four: Formulating Strategy
Strategic Alliances and Joint Ventures
Growth and Diversification
Mergers and Acquisitions
Corporate Strategy

15. Value Creation Business Strategy
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Business Strategy
Value Creation
What the firm adds to a product or service by virtue of making it; the amount of benefits provided by the product or service once the costs of making it are subtracted (value = benefits - costs).
Low-cost strategy: competing on productivity and efficiency
Keeping costs low to offer an attractive price to customers (relative to competitors).
Differentiation strategy: compete on added value
Involves providing something unique and distinctive to customers that they value.
Functional Strategy: which is an alignment that ensures external and internal fit.

16. Step Five: Strategy Implementation
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Step Five: Strategy Implementation
Understand what is required for a firm to successfully implement a strategy.
Taking Action: Reconciling Supply and Demand
Balancing demand and supply considerations
Forecasting business activities (trends)
Locating applicants
Organizational downsizing, outsourcing, offshoring
Reducing “headcount”
Making layoff decisions
Seniority or performance?
Labor agreements

17. Step Five: Strategy Implementation (Cont.)
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Step Five: Strategy Implementation (Cont.)

18. Step Six: Evaluation and Assessment
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Step Six: Evaluation and Assessment
Recognize the methods for assessing and measuring the effectiveness of a firm’s strategy.
Evaluation and Assessment Issues
Benchmarking: The process of comparing the organization’s processes and practices with those of other companies
Human capital metrics
Assess aspects of the workforce
HR metrics
Assess the performance of the HR function itself

19. Measuring a Firm’s Strategic Alignment
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Measuring a Firm’s Strategic Alignment
Strategy Mapping and the Balanced Scorecard
Balanced Scorecard (BSC)
A measurement framework that helps managers translate strategic goals into operational objectives
financial
customer
processes
learning

20. Key Terms Balanced Scorecard (BSC) benchmarking core capabilities
core values
cultural audits
environmental scanning
human capital readiness
human resources planning (HRP)
management forecasts
Markov analysis
mission
organizational capability
replacement charts
skill inventories
staffing tables
strategic human resources management (SHRM)
strategic planning
strategic vision
succession planning
SWOT analysis
trend analysis
value creation