1. HR STRATEGY MANA 3320 Dr. Jeanne Michalski

2. Strategic Planning and Human Resources Strategic Planning Strategic Planning Human Resources Planning (HRP) Human Resources Planning (HRP) Strategic Human Resources Planning Strategic Human Resources Planning

3. HR Alignment Planning and Job Design Recruiting and Selection Training and Development Performance Management Compensation Employee Relations

4. HR Alignment Planning and Job Design Recruiting and Selection Training and Development Performance Management Compensation Employee Relations INTERNAL FIT

5. HR Alignment Planning and Job Design Recruiting and Selection Training and Development Performance Management Compensation Employee Relations INTERNAL FIT

6. Business Strategy Value Creation 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). 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 Low-cost strategy: competing on productivity and efficiency Keeping costs low to offer an attractive price to customers (relative to competitors). Keeping costs low to offer an attractive price to customers (relative to competitors). Differentiation strategy: compete on added value Differentiation strategy: compete on added value Involves providing something unique and distinctive to customers that they value. Involves providing something unique and distinctive to customers that they value.

7. How do they compete? Wal-Mart Wal-Mart Apple Apple McDonald’s McDonald’s Starbucks Starbucks

8. McDonalds’ vs. Starbucks

9. “To Woo Europeans, McDonald’s Goes Upscale” McDonald’s in London NYT August 25, 2007

10. McDonald’s Goes Upscale Aiming to create a more relaxed experience in a sophisticated atmosphere, McDonald’s is replacing bolted-down plastic yellow-and-white furniture with lime-green designer chairs and dark leather upholstery. Aiming to create a more relaxed experience in a sophisticated atmosphere, McDonald’s is replacing bolted-down plastic yellow-and-white furniture with lime-green designer chairs and dark leather upholstery. The changes are more than cosmetic. McDonald’s is introducing healthier foods and items that cater to regional tastes, like caffè lattes. The changes are more than cosmetic. McDonald’s is introducing healthier foods and items that cater to regional tastes, like caffè lattes. Hoping to attract more young adults and professionals, the chain is also adding amenities like Internet access and rental iPods. Hoping to attract more young adults and professionals, the chain is also adding amenities like Internet access and rental iPods. The original impetus for the makeover was a European sales slump in the late 1990s, brought on by concerns about obesity and annoyance at unappealing décor and grumpy employees. The original impetus for the makeover was a European sales slump in the late 1990s, brought on by concerns about obesity and annoyance at unappealing décor and grumpy employees.

11. Mission, Vision, and Values Mission Mission The basic purpose of the organization as well as its scope of operations The basic purpose of the organization as well as its scope of operations Strategic Vision 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 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 Core Values The strong and enduring beliefs and principles that the company uses as a foundation for its decisions The strong and enduring beliefs and principles that the company uses as a foundation for its decisions

12. © 2010 South-Western, a part of Cengage Learning. All rights reserved.2–12 FIGURE 2.1 Linking Strategic Planning and Human Resources

13. Competitive Advantage Technological Capability

14. Competitive Advantage Cap Technological Capability Financial Capability

15. Competitive Advantage M Technological Capability Financial Capability Marketing Capability

16. Competitive Advantage o M Technological Capability Financial Capability Marketing Capability Organizational Capability

17. Environmental Analysis Economy Economy Competition Competition Technology Technology Government Government Labor Market Labor Market

18. Internal Analysis Culture Culture Capabilities Capabilities Composition Composition

19. Composition: The Human Capital Architecture Strategic Knowledge Workers Strategic Knowledge Workers Employees who have unique skills that are directly linked to the company’s strategy. Employees who have unique skills that are directly linked to the company’s strategy. Example: R&D scientists Example: R&D scientists Core Employees Core Employees Employees with skills to perform a predefined job that are quite valuable to a company, but not particularly unique or difficult to replace. Employees with skills to perform a predefined job that are quite valuable to a company, but not particularly unique or difficult to replace. Example: salespeople Example: salespeople

20. Composition: The Human Capital Architecture (cont’d) Supporting Labor Supporting Labor Employees whose skills are of less strategic value and generally available in the labor market. Employees whose skills are of less strategic value and generally available in the labor market. Example: clerical workers Example: clerical workers Alliance Partners Alliance Partners Individuals and groups with unique skills, but those skills are not directly related to a company’s core strategy. Individuals and groups with unique skills, but those skills are not directly related to a company’s core strategy. Example: consultants Example: consultants

21. Model of HR Forecasting

22. How many people do we need? Product Demand X Labor Productivity Product Demand X Labor Productivity Turnover Turnover Where are they coming from? Internal Labor Market Internal Labor Market Succession Planning Succession Planning External Labor Market External Labor Market Recruiting and Selection Recruiting and Selection HR Planning

23. Forecasting: A Critical Element of Planning Forecasting involves: Forecasting involves: a. forecasting the demand for labor b. forecasting the supply of labor c. balancing supply and demand considerations.

24. InternalExternal Supply Demand What will we need? JOB ANALYSIS How many will we need? Managerial estimates Statistical modeling What do we have? Skills inventory Succession plans Statistical modeling What will be out there? Labor Market Statistics and Forecasts Who else will need them? Competitive Analysis Forecasting Labor Requirements

25. Quantitative Approach: Trend Analysis Forecasting labor demand based on an organizational index such as sales: Forecasting labor demand based on an organizational index such as sales: 1. Select a business factor that best predicts human resources needs. 2. Plot the business factor in relation to the number of employees to determine the labor productivity ratio. 3. Compute the productivity ratio for the past five years. 4. Calculate human resources demand by multiplying the business factor by the productivity ratio. 5. Project human resources demand out to the target year(s).

26. Trend Analysis of HR Demand 2002$2,35114.33164 2003$2,61311.12235 2004$2,9358.34352 2005$3,30610.02330 2006$3,61311.12325 2007$3,74811.12337 2008$3,88012.52310 2009$4,09512.52327 2010*$4,28312.52342 2011*$4,44612.52355 BUSINESS  LABOR = HUMAN RESOURCES FACTORPRODUCTIVITYDEMAND YEAR (SALES IN THOUSANDS)(SALES/EMPLOYEE)(NUMBER OF EMPLOYEES) *Projected figures

27. Qualitative Approaches Management Forecasts Management Forecasts The opinions (judgments) of supervisors, department managers, experts, or others knowledgeable about the organization’s future employment needs. The opinions (judgments) of supervisors, department managers, experts, or others knowledgeable about the organization’s future employment needs. Delphi Technique Delphi Technique An attempt to decrease the subjectivity of forecasts by soliciting and summarizing the judgments of a preselected group of individuals. An attempt to decrease the subjectivity of forecasts by soliciting and summarizing the judgments of a preselected group of individuals. The final forecast represents a composite group judgment. The final forecast represents a composite group judgment.

28. Forecasting the Supply of Employees: Internal Labor Supply Staffing Tables Staffing Tables Markov Analysis Markov Analysis Skill Inventories Skill Inventories Replacement Charts Replacement Charts Succession Planning Succession Planning

29. Forecasting Internal Labor Supply Staffing Tables Staffing Tables Graphic representations of all organizational jobs, along with the numbers of employees currently occupying those jobs and future (monthly or yearly) employment requirements. Graphic representations of all organizational jobs, along with the numbers of employees currently occupying those jobs and future (monthly or yearly) employment requirements. Markov Analysis Markov Analysis A method for tracking the pattern of employee movements through various jobs. A method for tracking the pattern of employee movements through various jobs.

30. Hypothetical Markov Analysis for a Retail Company

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