1. Human Resource Management (HRM) András Kun University of Debrecen – Faculty of Economics and Business Administration BA in MBA III. HRM strategies and HR Planning 20/Sept./2010

2. Readings Textbook Chapter 7., 8., 25.

3. Strategic HRM An integrated approach to the development of HR strategies that enable the organization to achieve its goals. –It is strategic –It is a part of the HRM system

4. Strategy The direction and scope of an organization over the long term. It should match the resources of the organization to its changing environment (markets, customers and other stakeholders). Strategy determines the direction where the organization is going

5. The stakeholders (figure from wikipedia)

6. The notion of strategy It is a long term plan It is the pattern of the organizations’s behavior over time (descriptive meaning of strategy) It is a perspective : a fundamental way of doing things (mission) A ploy: a specific manoeuvre to outwit a competitor

7. The concept of strategic management Vision and mission Strategic goals Strategic plans Implementing the strategy Managing strategy (goals, plans, implementation)

8. Strategic fit Capabilities and resources to the environment (opportunities and threats) The business (or corporate) strategy to functional strategies and strategies of business units Every part of the strategy area should be mutually supportive

9. Strategic HRM (SHRM) A strategic approach to HRM Focus on: –(business) Strategy –Integration –Coherence It plans, not only reacts (HRM strategy is vertically integrated with business strategy) People are strategic resources (+ human capital approach) It is both integrated and integrative (focuses on strategic fit) Strategic decision making (long-term impact on success)

10. Soft & hard SHRM Soft SHRM: greater emphasis on human relations –Continuous development –Communication –Involvement –Security of employment –Quality of worklife –Work-life balance –Ethics Hard SHRM: focuses on yield from HR investments –HC management

11. Resource based SHRM People are strategic resources. To built a HR advantage, we need: Higher quality workers than our competitors Unique intellectual capital (develop and nurture) Faster organizational learning than the competitors Organization specific values and culture that bind our people together and give the organization a focus

12. High-performance management approach A number of interrelated processes Leadership, vision and benchmarking Constant progress measurement Main drivers: –Decentralized decision making –Customer-orientation –Development of human capacities through extensive and intesive learning –Building trust, commitment and enthusiasm –Fair and ethical treatment of employees and leavers –Rigorous recruitment and selection –Incentive remuneration systems

13. High commitment management model HRM should enhance mutual commitment to achieve self-regulated behaviour Tools: –Career ladders –Emphasis on trainability –High level of functional flexibility –Reduction of hierarchies and status differentials –Reliance on team structure for disseminating information, structuring work and solving problems –Job design (staisfaction and motivation) –Involvement in the management of quality

14. High involvement Treating employees as partners in the enterprise Climate of continuous communication with managers Establishing mutual understanding of the aims to ensure the achievement of these aims Practices: –Team-work –Job rotation –Suggestion programmes –Decentralisation of quality management

15. HR strategies

16. A good HR strategy: satisfy business needs is founded on detailed analysis can be turned into actionable programmes is coherent and integrated Takes account of the needs of line magagers, employees and other stakeholders

17. An HR strategy can be Overarching (general) Specific: focuses on specific areas –Talent management –Development –Rewarding –…

18. Human resource planning

19. Definition of HR planning The process for ensuring that the human resource requirements of an organization are identified and plans are made for satisfying those requirements. It is generally concerned with matching resources to business needs on the longer term and sometimes on the shorter term (operative planning). Two main questions: –How many people (quantity) –What short of people (quality)

20. As an integrated part of business planning… Changes in environment and activities Core competences Skill and labour requirements Motivation Focus on specific areas if it is needed

21. Hard & soft HR planning Hard (≈ manpower planning): –quantitative analysis –right number of the right short of people Soft: –Right attitudes and motivation –Commitment and engagement –Behaviour & culture

22. A shift from manpower planning Reconciling numbers of employees & predictable stable jobs Skills, competency development

23. Classic 3 steps model Demand forecasting (future jobs) Supply forecasting (people) Plans to match supply and demand Complexity and continuous changes Skills and competences instead of numbers

24. „Managers don’t like HR planning” Difficulties of predictions Priorities and strategies are also changing Distrust: they simply don’t like theory or planning but pragmatic solutions Lack of evidence that it works

25. Evidence on the benefits Planning for substantive reasons –Supporting decisions –Identifying potential problems –Optimizing resources Benefits from the planning process –Understanding the HR processes Planning for organizational reasons –Linking HR to business plans –Regaining control over operating units –Coordinating decision making

26. Aims of HR planning Attract and retain the number of people required with the appropriate skills Anticipate the problems of potential surpluses or deficit of manpower Development goals Reduces dependence on external factors (like external recruitment) Designing work systems to be more efficient (utilization)

27. Process of HR planning Its non-linear (feedbacking, replanning) Strategy is more likely to be evolutionary than deliberate

28. The place of HR planning in the hierarchy of planning Business planning Resourcing strategy Scenario planning Demand/supply forecasting HR plans Action planning

29. Forcasting and analysis Macro and micro environment Labor turnover analysis: actual and trends (part of supply forecast) Work environment analysis: skill development and job satisfaction Operational effectiveness analysis: productivity, utilization, fexibility

30. Methods of forecasting Subjective: –Expert judgment –Using team techniques Objective: –Ratio trend analysis (statistics) –Work study techniques

31. Labour turnover It is costly: –Money: administration, replacement (recruiting & training), opportunity cost of managing the leavings, decreasing productivity before leaving, productivity loss during the training of the replacement –Impact on the work environment It is normal (it should be measured and forcasted)

32. Measuring labour turnover Indices: –Labour turnover index (% of the average number of workers) –Survival rate (% of the total entrants) –Half-life index (time taken to reducing a cohort to the half of its original size) –Stability index (those who had at least 1 yr service / those employed 1 yr ago) Length of service analysis (ratios of groups with different service levels, average service time, average service time of the leavers, etc.) Analysing reasons of leave (interviewing the leavers) Benchmarking turnover

33. Thank you for your attention Next week: Dr. Enikő Szilágyi - Analysing roles, competencies and skills