1. Meeting Present and Emerging Strategic Human Resource Challenges1
Meeting Present and Emerging Strategic Human Resource Challenges

2. Challenges
Explain how a firm’s human resources influence its performance.
Describe how firms can use HR initiatives to cope with workplace changes and trends such as a more diverse work force, the global economy, downsizing, and new legislation.
Distinguish between the role of the HR department and the role of the firm’s managers in utilizing human resources effectively.
Indicate how members of the HR department and managers within a company can establish a strong partnership.
Formulate and implement HR strategies that can help the firm achieve a sustained competitive advantage.
Identify HR strategies that fit corporate and business unit strategies.

3. Key HR Challenges for Today’s Managers
Environment
Rapid Change
Workforce Diversity
Globalization
Rise of Internet
Legislation
Evolving Work and Family Roles
Skill Shortages and the Rise
of the Service Sector
Organization
Competitive Position: Cost,
Quality, Distinctive Capabilities
Decentralization
Downsizing
Organizational Restructuring
Self-Managed Work Teams
Small Businesses
Organizational Culture
Technology
Outsourcing
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.
Individual
Matching People and Organization
Ethical Dilemmas and Social Responsibility
Productivity
Empowerment
Brain Drain
Job Insecurity

4. Blazing Graphics’ Mission Statement
Blazing Graphics will provide you with the most effective visual communication attainable. We will help you achieve all of your goals while providing you with the greatest value both seen and unseen.
Here at Blazing Graphics we will take the time to do things right. We do this by controlling the entire graphic art process. This enables us to better coordinate each job while providing a higher level of service.
This slide, and the next, represent an organization’s mission statement. Mission statements have become useful tools that an organization may use to clarify the essential strengths and purposes of an organization, as well as point to where the organization would like to go.

5. Blazing Graphics’ Mission Statement (cont.)
Our mission is to ensure exceptional quality by opening up communication between crafts normally separated and at times adverse to one another.
Here at Blazing Graphics we have committed ourselves and our resources to being on the forefront of technology.
Creative technical know-how is the single most critical determinant of economic competitiveness.
It’s our real belief that together we can create an environment that will be both personally and professionally fulfilling for all the people who make up the Blazing Community.

6. Effective HR Strategy Formulation and Implementation
Organizational
Strategies
Consistency
Environment
Fit
Fit
Improved
Firm
Performance
HR Strategies
Consistency
Consistency
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.
Fit
Fit
Organizational
Characteristics
Organizational
Capabilities
Consistency

7. Selected HR Strategies That Fit Porter’s Three Major Types of Business Strategies
Strategy
Common Organizational
Characteristics
HR Strategies
Overall
cost
leadership
Sustained capital investment and access to capital
Intense supervision of labor
Tight cost control requiring frequent, detailed control reports
Low-cost distribution system
Structured organization
and responsibilities
Products designed for ease in manufacture
Efficient production
Explicit job descriptions
Detailed work planning
Emphasis on technical
qualifications and skills
Emphasis on job-specific
training
Emphasis on job-based pay
Use of performance
appraisal as a control device
These next three slides illustrate Porter’s three major types of business strategies. 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.

8. Selected HR Strategies That Fit Porter’s Three Major Types of Business Strategies (cont.)
Strategy
Common Organizational
Characteristics
HR Strategies
Differ-
entiation
Strong marketing abilities
Product engineering
Strong capability in basic research
Corporate reputation for
quality or technological
leadership
Amenities to attract highly skilled labor, scientists, or creative people.
Emphasis on innovation
and flexibility
Broad job classes
Loose work planning
External recruitment
Team-based training
Emphasis on individual-
based pay
Use of performance appraisal as development 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.

9. Selected HR Strategies That Fit Porter’s Three Major Types of Business Strategies (cont.)
Strategy
Common Organizational
Characteristics
HR Strategies
Focus
Combination of cost-
leadership and
differentiation strategy
directed at a particular
strategic target.
Combination of HR
strategies above.
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.

10. Selected HR Strategies That Fit Miles and Snow’s Two Major Types of Business Strategies
Strategic
HR Area
Defender Strategy
Prospector Strategy
Innovation
Flexibility
Broad job classes
Loose work planning
External recruitment
Supervisor makes selection decision
Emphasis on fit of applicant with culture
Informal hiring and socialization process of new employees
Work flows
Staffing
Efficient production
Control emphasis
Explicit job descriptions
Detailed work planning
Internal recruitment
HR department makes selection decision
Emphasis on technical qualifications and skills
Formal hiring and socialization process
These next three slides illustrate how strategic HR areas differ between the two major types of business strategies suggested by Miles and Snow. Work flows, staffing, employee separations, performance appraisal, training, and compensation all can be approached differently; depending on whether a defender strategy or a prospector strategy is used.

11. Selected HR Strategies That Fit Miles and Snow’s Two Major Types of Business Strategies (cont.)
Strategic
HR Area
Defender Strategy
Prospector Strategy
Employee
separations
Performance
appraisal
Voluntary inducements to leave
Hiring freeze
Continuing concern for terminated employee
Preferential rehiring policy
Uniform appraisal procedures
Used as control device
Narrow focus
High dependence on superior
Layoffs
Recruit as needed
Individual on his/her own
No preferential treatment for laid-off workers
Customized appraisals
Used as developmental tool
Multipurpose appraisals
Multiple inputs for appraisals

12. Selected HR Strategies That Fit Miles and Snow’s Two Major Types of Business Strategies (cont.)
Strategic
HR Area
Defender Strategy
Prospector Strategy
Training
Compensation
Individual training
On-the-job training
Job-specific training
“Make” skills
Fixed pay
Job-based pay
Seniority-based pay
Centralized pay decisions
Team-based or cross-functional training
External training
Generic Training emphasizing flexibility
“Buy” skills
Variable pay
Individual-based pay
Performance-based pay
Decentralized pay decisions

13. Selected HR Strategies For Firms Low and High on Different Environmental Characteristics
Dimension
Low
High
Degree of
Uncertainty
Volatility
Detailed work planning
Job-specific training
Fixed pay
High dependence on superior
Control emphasis
Efficient production
Loose work planning
Generic training
Variable pay
Multiple inputs for appraisals
Flexibility
Innovation
The next two slides focus on four major dimensions of the environment in which an organization operates: degree of uncertainty, volatility, magnitude of change, and complexity. HR strategies are given for environments that are low in the particular environmental dimension, and different strategies are given for environments that are high in the same environmental dimension.

14. Selected HR Strategies For Firms Low and High on Different Environmental Characteristics (cont.)
Dimension
Low
High
Magnitude
of Change
Complexity
Explicit job descriptions
Formal hiring and socialization of new employees
“make” skills
Uniform appraisal procedures
Control emphasis
Internal recruitment
Centralized pay decisions
High dependence on superior
Broad job classes
Informal hiring and socialization of new employees
“buy” skills
Customized appraisals
Flexibility
External recruitment
Decentralized pay decisions
Multiple inputs for appraisals

15. Competencies Required of HR Department to Become a Full Strategic Partner
Leadership
Understand the nature and styles of leadership, and display appropriate leadership characteristics in performance of professional responsibilities.
Demonstrate leadership at multiple performance levels:
Individual
Team
Unit or Organization
For the sake of the firm, managers and the HR department need to work together closely. Lack of cooperation has traditionally been a problem. The next five slides highlight five competencies required of HR departments in order that they might be strategic partners with management. Companies can take certain steps to foster an effective partnership between managers and HR department. Companies should: (1) Analyze the people side of productivity rather than depend solely on technical solutions to problems. (2) View HR professionals as internal consultants who can provide valuable advice and support that improve the management of operations. (3) Instill a shared sense of common fate in the firm rather than a win/lose perspective among individual departments and units. (4) Require some managerial experience as part of the training of HR professionals. (5) Actively involve top corporate and divisional managers in formulating, implementing, and reviewing all HR plans and strategies in close collaboration with the HR department. (6) Require senior HR executives to participate on an equal basis with other key managers from the various functional areas (marketing, finance) involved in charting the enterprise’s strategic direction.

16. Competencies Required of HR Department to Become a Full Strategic Partner (cont.)
Knowledge of the Business
Understand corporate business (structure, vision and values, goals, strategies, financial, and performance characteristics).
Understand the unit’s business, including special knowledge of competitors, products, technology, and sources of competitive advantage.
Understand internal and external customers.
Understand the environment (external and internal) of corporation and individual businesses.
Understand key business disciplines
Nature, scope, and HR implications of business globalization
Information technology as it affects competitiveness and business processes

17. Competencies Required of HR Department to Become a Full Strategic Partner (cont.)
HR Strategic Thinking
Understand the strategic business planning process.
Understand and be able to apply a systematic HR planning process.
Be able to select, design, and integrate HR systems or practices to build organizational mindset, capability, and competitive advantage for the business.
Be able to develop and integrate business unit HR strategies within framework of corporate HR strategies.

18. Competencies Required of HR Department to Become a Full Strategic Partner (cont.)
Process Skills
All HR professionals should be competent in key corporate processes and understand management processes critical to particular business units.
Understand key process skills such as consulting, problem solving, evaluation/diagnosis, workshop design, and facilitation.
Understand the basic principles, methodologies, and processes or organizational change and development.
Facilitate and manage organizational change.
Balance, integrate, and manage under conditions of uncertainty and paradox.

19. Competencies Required of HR Department to Become a Full Strategic Partner (cont.)
HR Technologies
All HR professionals should have a generalist perspective on HR systems and practices as they relate to achievement of business competitive advantage.
Generalists are capable of designing, integrating, and implementing HR systems to build organizational capability and create business competitive advantage.
Specialists are capable of designing/delivering leading-edge practices to meet competitive business needs.
All HR professionals are capable of measuring effectiveness of HR systems and practices.

20. Relationship of HR Department and managers
HR responsible for developing programs; management responsible for implementation
Each accountable for assisting the other!

21. Companies can foster effective partnership
Formal HR skills training for managers
Managerial experience as part of training for HR professionals
Position HR staff as internal consultants
Implement incentives for HR and managers to work together
Involve top operational managers in development of HR strategies
Involve senior HR executive(s) as equal partners in corporate strategic planning

22. Companies can foster effective partnership
Establish ongoing evaluation process
Predetermined goals (specific, measurable, related to corporate goals)
Data gathering systems
Evaluate both process and outcomes—relate to goals!

23. Recap Chapter 1 HR includes a long list of functions
There are strategic choices in each of these functional areas that should be made in a way that supports the mission and overall strategic plan
Environmental factors and organizational characteristics impact the most effective mix of HR strategies
HR professionals and operating management must collaborate on both strategy development and implementation of HR processes