1. Meeting Present and Emerging Strategic Human Resource Challenges
CHAPTER ONE
Meeting Present and Emerging Strategic Human Resource Challenges

2. Chapter Objectives Review Key Environmental Challenges (external)
Review Key Organizational Challenges (internal)
Review Individual Challenges
Discuss Planning and Implementing HR Policies – from a Strategic Prospective
Link HR Strategies and Firm’s Performance
Briefly Look at Best HR Practices
Review Key Terms
Brain Drain
Decentralization
Downsizing
Environmental Challenges
Exempt Employees (salaried)
Human Resource Strategies (HRS)
Human Resource Tactic
Human Resources (HR)
Line Employees
Managers
Nonexempt Employees
Outsourcing
Staff Employees

3. Key Terms
Human Resources (HR) - people who work in an organization (personal/associates/employees)
Human Resource Strategies (HRS) – the deliberate use a company’s human resources to gain a competitive advantage in the marketplace
Human Resource Tactics – policies or procedures put in place to gain that advantage

4. More Terms
Managers – person who is in charge of others and is responsible for the timely and correct execution of actions that promote his or hers unit’s success
Line Employees – employees that directly produces a company’s goods or delivers a company’s services
Staff Employees - employees that support the line employees
Exempt Employees (salaried) – employees that do not receive extra pay for overtime (work beyond 40-hours per week)
Nonexempt Employees – workers that do receive overtime compensation

5. Environmental Challenges
Environmental Challenges: forces external to a firm – influence behavior but largely beyond management’s control
Rapid Change
The Internet Revolution
Workforce Diversity
Globalization
Legislation
Work/Life Balance
Skill Shortages & the Rise of the Service Sector
Natural Disasters

6. Organizational Challenges
Organizational Challenges – concerns that are internal to a company – effective mangers identify these issues and deal with them before they become a major issue for the company. This requires a company be proactive rather than reactive when dealing with HR issues
Competitive Position
Decentralization
Downsizing
Organizational Restructuring
Self-Managed Work Teams
The Growth of Small Businesses
Organizational Culture
Technology
Data Security
Outsourcing

7. Individual Challenges
Individual Challenges – address the issues relevant to individual employees
Matching People and Organizations
Ethics and Social Responsibility
Productivity
Empowerment
Brain Drain
Job Insecurity

8. Strategic Human Resource Planning
To be successful firms must align their HR strategies with:
Their organization’s overall strategies
The environment
Their organization’s characteristics
Their organization’s capabilities

9. Strategic Human Resource Planning - The Benefits
Encouragement of Proactive Rather Than Reactive Behavior
Explicit Communication of Company Goals
Stimulation of Critical Thinking and Ongoing Examination of Assumptions
Identification of Gaps Between Current Situation and Future Vision
Encouragement of Line Managers’ Participation
Identification of HR Constraints and Opportunities
Creation of Common Bonds

10. Strategic HR Planning - The Challenges
Maintaining a Competitive Advantage
Reinforce Overall Business Support
Avoiding Excessive Concentration on Day-to-Day Problems
Developing HR Strategies Suited to Unique Organizational Features
Coping with the Environment
Securing Management Commitment
Translating the Strategic Plan into Action
Combining Intended and Emergent Strategies
Accommodating Change

11. HR Strategies & Company Strategies Best Fit
Fit - refers to the compatibly between the HR strategies and other important aspect the organization
Evolutionary Business Strategy
(flexibility, quick response, entrepreneurship, risk-sharing, decentralization)
vs.
Steady-State Strategy
(efficiency, detailed work planning, internal grooming of employees for promotion, long-term career development, centralization)

12. Defender Strategy (conservative businesses operating in a stable environment)
Work Flows
Detailed work planning
Explicit job descriptions
Staffing
Internal recruitment
HR department makes selection decision
Formal hiring process
Employees Separations
Hiring Freeze
Concern for terminated workers
Preferential rehiring policy
Performance Appraisal
Uniform appraisal procedure
Used as a control devise
High dependence on superior
Training
Individual training
On-the job training
Job-specific training
“Make” Skills
Compensation
Fixed pay
Seniority based pay
Centralized pay decisions

13. Prospector Strategy (growth firms emphasizing innovation, new products and first to market)
Work Flows
Innovation
Flexibility
Broad job classes
Staffing
External recruitment
Coworkers makes selection decision
Emphasis on ‘fit’ of coworkers with culture
Informal hiring and socialization of new employees
Employees Separations
Layoffs
Recruit as needed
Individuals are on their own
Performance Appraisal
Customized appraisals
Used as departmental tool
Multiple inputs for appraisals
Training
Team-based or cross-functional training
External training
“Buy” skills
Compensation
Individual-based pay
Performance-based pay
Decentralized pay decisions

14. HR Strategies & the Environment - Best Fit
Degree of Uncertainty
How much accurate information you have to make decisions
Volatility
How often does your environment changes
Magnitude of Change
How drastic are the changes when they occur
Complexity
Sheer number of elements in the environment that effect the company and the industry (individually or together)

15. HR Strategies & Organizational Characteristics Best Fit
The Production Process for Converting Inputs into Output
Routine vs. non-routine product production
The Firm’s Market Posture
Low-rate of growth/narrow market vs. wide market segment and high sales growth
The Firm’s Overall Managerial Philosophy
Autocratic leadership style/formal hiring procedures vs. risking taking and supervisors having a major role in hiring procedures
The Firm’s Organizational Structure
Highly formalized HR systems vs. less regimented
The Firm’s Organizational Culture
Moral commitment vs. entrepreneurial climate

16. HR Strategies & Organizational Capabilities Best Fit
Leveraging your firms distinctive competencies to give your company a competitive advantage:
Technical abilities
Management Systems
Reputation

17. HR Best Practices Employment Security Selectivity in Recruiting
High Wages
Incentive Pay
Employee Ownership
Information Sharing
Participation & Empowerment
Self-managed Teams
Training & Skills Development
Cross-Utilization and Cross-training
Promotion from Within