Strategic Human Resource Management Management Principles Craig W. Fontaine, Ph.D.
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Transcript of Strategic Human Resource Management Management Principles Craig W. Fontaine, Ph.D.
History of HRM’s Organizational Role
Formerly (HRM):• Administration• Employee relations• BenefitsNow:
• Business Partner• Gaining Strategic Advantage
Models of Strategy
• Industrial Organization (O/I) Model• External environment is primary determinant of organizational
strategy • Environment presents threats & opportunities• All competing organizations control or have equal access to resources• Resources are highly mobile between firms• Organizational success is achieved by
• Offering goods & services at lower costs than competitors • Differentiating products to bring premium prices
Models of Strategy• Resource-Based View
• An organization’s resources & capabilities, create competitive advantage
• Organizations can identify, locate & acquire key valuable resources• Resources are not highly mobile across organizations & once acquired
are retained• Valuable resources are costly to imitate & non-substitutable
Both are Right…!
• Research provides support for both positions• Acquire resources to support strategy• Determine strategy based on resources
Strategy Human Resource Management addressed both approaches
Strategic HR Management
• Strategic Human Resource Management– Aligning initiatives and practices involving how
people are managed so that they support the organizational mission and business strategy
Core competencies should drive business strategy….
A Core Competency is a deep proficiency that enables a company to deliver unique value to customers.
• It embodies an organization’s collective knowledge.• Its creates sustainable competitive advantage for a company and helps
it branch into a wide variety of related markets. • It’s hard for competitors to copy or procure. • Understanding Core Competencies allows companies to invest in the
strengths that differentiate them and set strategies that unify their entire organization.
Example of Core Competencies
• Walt Disney World Parks and Resorts– Animatronics and Show Design– Story Creation and Themed Attractions– Efficient operation of theme parks
Strategic HRM Approach• Facilitates development of high-quality workforce through
focus on types of people & skills needed• Facilitates cost-effective utilization of labor, particularly in
service industries where labor is generally greatest cost• Facilitates planning & assessment of environmental
uncertainty & adaptation of organization to external forces
Distinctive Human Resources
• How can HRM practices specific to an organization create a competitive advantage?
Examples of HRM Practices
HRM practices can allow and motivate individuals to support an organization’s strategic objectives
– Hiring Practices• Who do we hire• Where do we look for workers
– Performance Management Practices• On what criteria are workers assessed
– Compensation and Reward Practices• What behaviors/actions are rewarded
HRM Practices - Exercise
– Hiring Practices• Who do we hire• Where do we look for workers
– Performance Management Practices• On what criteria are workers assessed
– Compensation and Reward Practices• What behaviors/actions are rewarded
Two Watch Companies
Rolex
Timex
• Very expensive• Hand Made
• Inexpensive• Mass Produced
Simple Concepts…
• People are the essential capital of all organizations
• Humans create organizational innovations and accomplishments
• Organizational success depends upon careful attention to human capital
But harder than you think…
Challenges: Economic
• Global Trade Challenge– Jobs and prosperity depend upon international trade– Job migration to South East Asia and China
• Challenge of Productivity Improvement– Productivity = outputs/inputs ratios– Essential for long-term success– Requires strategic thinking and creative responses– Understanding motivation
Challenges: Technological
• Computerization– Impacts virtually all aspects of work and life– Provide large amounts of data at great speed to managers– Flexibility e.g. telecommuting
• Automation– Potential benefits include speed, better customer service,
predictability and production quality– Use robots for hazardous or boring jobs
Challenges: Cultural
• Work related attitudes– Changing attitudes toward work and leisure– Demand for ethical conduct of business
• Ethnic diversity– Cultural mosaic
• Attitudes toward governments:– Divided population
Challenges: Demographic Trends
• Increasing number of women in the workforce• Shift toward knowledge workers• Educational attainment of workers (Bi-modal)• Employment of older workers• More part-time, contract and contingent workers
Objectives of SHRM: Organizational
• Contribute to organizational effectiveness• Means of helping the organization to achieve its primary
objectives• Provide level of service appropriate to the organization
Objectives of SHCM: Employee
• Assist employees in achieving their personal goals– Employee performance may decline or employees may
leave the organization if personal objectives are not considered
Objectives of HRM: Societal
• Respond to the needs and challenges of society• Minimize negative impacts on the organization• Reflect society’s concerns e.g. ecological
Goals of Strategic HCM
• Attract, retain, and motivate employees• Direct employee efforts toward goals of organization• Assist in the development of the strategic direction of the
organization• Provide the organization a source of competitive
advantage– Example: Watch Industry
Steps in Strategic HRM
EnvironmentalAnalysis
EnvironmentalAnalysis
OrganizationalMission &
GoalsAnalysis
OrganizationalMission &
GoalsAnalysis
Analysis ofOrganizational
Strengths &Culture
Analysis ofOrganizational
Strengths &Culture
Analysis ofOrganizational
Strategies
Analysis ofOrganizational
Strategies
Choice &Implementation
Of HCMStrategies
Choice &Implementation
Of HCMStrategies
Review & Evaluation of
HCM Strategies
Review & Evaluation of
HCM Strategies
Activities in Human Resource Management
• HC strategy formulation• Recruitment and selection (staffing)• Performance appraisal• Training and development• Compensation and benefits• Employee rights• Labor/management relations (if union)
Today’s Workforce Realities:
• Decade of boom & bust leaves working families with:– Stagnant, declining incomes– Increased inequality– Longer working hours– Less retirement savings; fewer health care benefits– Broader job insecurity– Loss of worker voice in society
• Current government policies producing:– Further cuts in services & jobs – Tax policies that further increase inequality– Deep divisions over war policies – Direct attacks on workers, unions, and core values
Job Satisfaction – Declining!
• The U.S. has seen a trend of increasingly high job dissatisfaction.
• Only 45 percent of Americans were satisfied with their jobs.
• A decrease from a 61 percent satisfaction rate in 1987
• Job dissatisfaction is highly correlated with a negative impact on organizational effectiveness
• Management must respond