1. Meeting Present and Emerging Strategic Human Resource Challenges

2. Challenges facing HR
How can HR influence firm
performance?
How can HR cope with
workplace changes and trends?
What are HR strategies that
help a firm achieve competitive
advantage?

3. Key HR Challenges for Today’s Managers: Environmental
Rapid change
Workforce diversity
Globalization
Internet revolution
Legislation
Evolving work and family roles
Skill Shortages
Rise of the service sector
Environmental challenges are the forces external to the firm. They influence organizational performance but are largely beyond management’s control. Managers need to monitor the external environment constantly for opportunities and threats. This slide demonstrates how a variety of environmental factors impact the organization.

4. Key HR Challenges for Today’s Managers: Organizational
Competitive Position: Cost,
Quality, distinctive capabilities
Decentralization
Downsizing
Organizational restructuring
Self-managed work teams
Small business growth
Technology
Outsourcing

5. Key HR Challenges for Today’s Managers: Cultural
Basic assumptions and beliefs shared by members of an organization…
rules, norms
behaviors
philosophy
dominant values
feeling or climate
The term organizational culture refers to the basic assumptions and beliefs shared by members of an organization. These beliefs operate unconsciously, are taken for granted, and are typically very apparent to someone outside the organization. This slide illustrates the key elements of organizational culture, and the ways in which these elements differ between two organizations.

6. Individual Challenges
Key HR Challenges for
Today’s Managers: Individual
Matching People and Organization
Matching people and organizations
Ethical dilemmas
Social responsibility
Productivity
Empowerment
Brain drain
Job insecurity

7. Strategic HR Choices – Options Available in Designing an HR System
Work Flows
Staffing
Employee Separations
Performance Appraisal
Training and Career Development
Compensation
Employee Relations
Employee Rights
International Management

8. HR Strategy Leads to Improved Organizational Performance
Organizational Strategies
Organizational Capabilities
HR Strategies
The success of HR strategies depends on the situation or context in which they are used. An HR strategy’s effect on firm performance is always dependent on how well it fits with other factors. This slide depicts the key factors that firms should consider in determining which HR strategies will have positive impact on firm performance: organizational strategies, environment, organizational characteristics, and organizational capabilities.
Organizational Characteristics
Environments

9. Porter’s Differentiation Strategy
HR Strategies:
Emphasis on innovation and flexibility
Broad job classes
Loose work planning
External recruiting
Team based training
Emphasis on individual-based pay
Use performance appraisal as a developmental tool
A differentiation business strategy attempts to achieve a competitive advantage by creating a product or service that is perceived as unique. Approaches to differentiation can take may forms, among them: design or brand image; technology; features; customer service; and dealer networks.

10. Porter’s Low-cost Leadership Strategy
HR Strategies:
Efficient production
Explicit job descriptions
Detailed work planning
Emphasis on qualifications and skills
Emphasis on job-specific training
Emphasis on job-based pay
Use of performance appraisal as a control device
The overall cost leadership strategy is aimed at gaining a competitive advantage through lower costs. Cost leadership requires aggressive construction of efficient plant facilities, intense supervision of labor, vigorous pursuit of cost reductions, and tight control of distribution costs and overhead.

11. Porter’s Focus Strategy
Low cost
Differentiation
A focus strategy relies on both a low-cost position and differentiation, with the objective of serving a narrow target market better than other firms. The HR strategies likely to fit the focus strategy best would be somewhere in the middle of those described for low-cost producers and differentiators.

12. Miles and Snow
Defender – conservative business units that prefer to maintain a secure position in a relatively stable product or service area
Prospector – emphasize growth and innovation, development of new products

13. Miles and Snow Defender Strategy -- RECRUITING
Internal recruitment
HR makes selection decision
Emphasis on qualifications and skills
Formal hiring and socialization process

14. Miles and Snow Prospector Strategy -- RECRUITING
External recruitment
Supervisor makes selection decision
Emphasis on applicant fit with culture
Informal hiring and socialization process of new employees

15. Miles and Snow Defender Strategy -- Compensation
Fixed pay
Job-based pay
Seniority-based pay
Centralized pay decisions

16. Miles and Snow Prospector Strategy --Compensation
Variable pay
Individual-based pay
Performance-based pay
Decentralized pay decisions

17. HR Best Practices Employment security Selectivity in recruiting
High wages
Incentive pay
Employee ownership
Information sharing
Participation and empowerment
Self managed teams
Training and skill development
Cross-utilization and cross training
Promotion from within

18. HR Department and Managers
“The role of a company’s HR department is to support, not supplant managers’ HR responsibility” “Every manager is an HR manager”

19. KNOWLEDGE OF BUSINESS How HR can be a Strategic Partner
HR must understand…
internal / external customers
key business disciplines
business structure, vision, values,
goals, strategies, finances
competitors, products, technology
and sources of competitive advantage

20. STRATEGIC THINKING How HR can be a Strategic Partner
Understand strategic business planning
Apply a systematic HR planning process
Integrate HR systems to build capability and competitive advantage for the firm
Develop and integrate department strategies within corporate framework

21. PROCESS SKILLS How HR can be a Strategic Partner
Know management processes
Know process skills: consulting, problem solving, evaluation and communication
Understand organizational development
Facilitate and manage change
Manage under uncertainty and instability

22. TECHNOLOGY How HR can be a Strategic Partner
Maintain HR documentation using knowledge management and technology
Build firm’s capability using info systems
Provide training in use of technology

23. Case XYZ has a 1 billion budget and staff of 7,000.
To speed growth, XYZ announced a series of performance objectives for individual business chiefs who before enjoyed much free rein. In addition, XYZ introduced specially trained
“black belts” to root out inefficiencies in departments. If you were a “black belt”, what would you look for?
Students should identify many of the concepts presented in this chapter, including individual challenges, organizational challenges, cultural challenges, ethical dilemmas and environmental challenges.