Managing human resrouce management 5th by snel chapter 2

Strategy and Human Resources Planning Managing Human Resources Belcourt * Bohlander * Snell © 2008 by Nelson, a division of Thomson Canada Limited All rights reserved 5th Canadian edition PowerPoint Presentation by Monica Belcourt, York University, and Charlie Cook, The University of West Alabama Objectives After studying this chapter, you should be able to: Identify the advantages of integrating human resources planning and strategic planning Understand how an organization’s competitive environment influences strategic planning Recognize the importance of internal resource analysis Describe the basic tools for human resources forecasting Explain the linkages between competitive strategies and HR Understand the requirements of strategy implementation Recognize Copyright © 2008the bymethods Nelson, for a assessing and measuring the effectiveness of strategy division of Thomson Canada Ltd 2–2 Strategic Planning and Human Resources • Strategic Planning  Procedures for making decisions about the organization’s long-term goals and strategies • Human Resources Planning (HRP)  Process of anticipating and making provision for the movement (flow) of people into, within, and out of an organization Copyright © 2008 by Nelson, a division of Thomson Canada Ltd 2–3 Strategic Planning and HR Planning • Strategic Human Resources Management (SHRM)  The pattern of human resources deployments and activities that enable an organization to achieve its strategic goals  Strategy formulation—providing input as to what is possible given the types and numbers of people available  Strategy implementation—making primary resource allocation decisions about structure, processes, and human resources Copyright © 2008 by Nelson, a division of Thomson Canada Ltd 2–4 HRP and Strategic Planning • Strategic Analysis  What human resources are needed and what are available? • Strategic Formulation  What is required and necessary in support of human resources? • Strategic Implementation  How will the human resources be allocated? Human HumanResources Resources Copyright ©Planning 2008 by Nelson, Planning division of Thomson Canada Ltd a Strategic Strategic Planning Planning 2–5 Linking Strategic Planning and Human Resources Copyright © 2008 by Nelson, a division of Thomson Canada Ltd Figure 2.1 2–6 Step One: Mission, Vision, and Values • Mission  The basic purpose of the organization as well as its scope of operations • Strategic Vision  A statement about where the company is going and what it can become in the future; clarifies the longterm direction of the company and its strategic intent • Core Values  The strong and enduring beliefs and principles that the company uses as a foundation for its decisions Copyright © 2008 by Nelson, a division of Thomson Canada Ltd 2–7 Step Two: Environmental Analysis • Environmental Analysis  The systematic monitoring of the major external forces influencing the organization Economic factors: general and regional conditions Competitive trends: new processes, services, and innovations Technological changes: robotics and office automation Political and legislative issues: laws and administrative rulings Social concerns: child care and educational priorities Demographic trends: age, composition,and literacy Copyright © 2008 by Nelson, a division of Thomson Canada Ltd 2–8 Five Forces Framework Copyright © 2008 by Nelson, a division of Thomson Canada Ltd Figure 2.2 2–9 Step Three: Internal Analysis Culture Competencies Internal Analysis Composition Copyright © 2008 by Nelson, a division of Thomson Canada Ltd 2–10 Business Strategy • 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  Low-cost strategy: competing on productivity and efficiency  Keeping costs low to offer an attractive price to customers (relative to competitors)  Differentiation strategy: compete on added value Involves providing something unique and distinctive to customers that they value Copyright © 2008 by Nelson, a  division of Thomson Canada Ltd 2–30 Functional Strategy: Ensuring Alignment • External Fit (or External Alignment)  Focuses on the connection between the business objectives and the major initiatives in HR • Internal Fit (or Internal Alignment)  Aligning HR practices with one another to establish a configuration that is mutually reinforcing Copyright © 2008 by Nelson, a division of Thomson Canada Ltd 2–31 The 7-S Model Copyright © 2008 by Nelson, a division of Thomson Canada Ltd Source: McKinsey & Company 2–32 Figure 2.8 Step Five: Strategy Implementation • Taking Action: Reconciling Supply and Demand  Balancing demand and supply considerations  Forecasting business activities (trends)  Locating applicants  Organizational downsizing  Reducing “headcount”  Making layoff decisions  Seniority or performance?  Attrition strategies  Termination strategies Copyright © 2008 by Nelson, a division of Thomson Canada Ltd 2–33 Step Six: Evaluation and Assessment • Evaluation and Assessment Issues  Benchmarking: The process of comparing the organization’s processes and practices with those of other companies  Human capital metrics  Assess aspects of the workforce  HR metrics  Assess the performance of the HR function itself Copyright © 2008 by Nelson, a division of Thomson Canada Ltd 2–34 Measuring Strategic Alignment • Strategy Mapping and the Balanced Scorecard  Balanced Scorecard (BSC)  A measurement framework that helps managers translate strategic goals into operational objectives – financial – customer – processes – learning Copyright © 2008 by Nelson, a division of Thomson Canada Ltd 2–35 Balanced Scorecard Copyright © 2008 by Nelson, a division of Thomson Canada Ltd 2–36 Figure 2.9 Assessing Internal Fit Copyright © 2008 by Nelson, a division of Thomson Canada Ltd 2–37 Figure 2.10 Ensuring Strategic Flexibility for the Future • Organizational Capability  Capacity of the organization to act and change in pursuit of sustainable competitive advantage  Coordination flexibility  The ability to rapidly reallocate resources to new or changing needs  Resource flexibility  Having human resources who can many different things in different ways Copyright © 2008 by Nelson, a division of Thomson Canada Ltd 2–38 Key Terms • • • • • • • • • attrition Balanced Scorecard (BSC) benchmarking core competencies core values cultural audits environmental scanning hiring freeze human resources planning (HRP) • management forecasts • Markov analysis mission Copyright â 2008 by Nelson, organizational capability division of Thomson Canada Ltd • • • • • • • • • • • • a replacement charts severance pay skill inventories staffing tables strategic human resources management (SHRM) strategic planning strategic vision succession planning SWOT analysis termination trend analysis value creation 2–39 Calculating Turnover and Absenteeism Copyright © 2008 by Nelson, a division of Thomson Canada Ltd 2–40 Employee Turnover Rates • Computing Turnover Rates: Number of separations during the month X 100 Total number of employees at midmonth Copyright © 2008 by Nelson, a division of Thomson Canada Ltd 2–41 Employee Turnover Rates (cont’d) • Computing Turnover Rates (cont’d): Copyright © 2008 by Nelson, a division of Thomson Canada Ltd 2–42 Highlights in HRM Costs Associated With The Turnover Of One Computer Programmer (Turnover costs = Separation costs + Replacement costs + Training costs) Separation costs Exit interview cost for salary and benefits of both interviewer and departing employee during the exit interview = $30+$30 = $60 Administrative and record-keeping action = $30 Total separation costs = $60 + $30 = $90 Replacement costs Advertising for job opening = $2,500 Preemployment administrative functions and record-keeping action = $100 Selection interview = $250 Employment tests = $40 Meetings to discuss candidates (salary and benefits of managers while participating in meetings )= $250 Total replacement costs = $2,500 + $100 + $250 + $40 + $250 = $3,140 Training costs Booklets, manuals, and reports = $50 Education = $240/day for new employee’s salary and benefits x 10 days of workshops, seminars, or courses = $2,400 One-to-one coaching = ($240/day/new employee + $240/day/staff coach or job expert) x 20 days of one-to-one coaching = $9,600 Salary and benefits of new employee until he or she gets “up to par” = $240/day for salary and benefits x 20 days = $4,800 Training costs = $50 + $2,400 + $9,600 + $4,800 = $16,850 Copyright © 2008 by Nelson, a Total turnover costs= $90 + $3,140 + $16,850 = $20,080 division of Thomson Canada Ltd 2–43 Highlights 2.A1 Source: Adapted from the book Turning Your Human Resources Department into a Profit CenterTM by Michael Mercer, Ph.D (Castlegate Publishers, Inc., Barrington, Illinois) Copyright 2002 Michael Mercer Reproduced with permission from Michael Mercer, Ph.D., www.DrMercer.com Employee Absenteeism Rates Number of worker days lost through job absence during period X100 Average number of employees X number of work days Copyright © 2008 by Nelson, a division of Thomson Canada Ltd 2–44 ... 14.33 164 20 01 $2, 613 11. 12 235 20 02 $2, 935 8.34 3 52 2003 $3,306 10. 02 330 20 04 $3,613 11. 12 325 20 05 $3,748 11. 12 337 20 06 $3,880 12. 52 310 20 07* $4,095 12. 52 327 20 08* $4 ,28 3 12. 52 3 42 2009* $4,446... Copyright © 20 08 by Nelson, a division of Thomson Canada Ltd 2 23 Hypothetical Markov Analysis for a Retail Company Copyright © 20 08 by Nelson, a division of Thomson Canada Ltd 2 24 Figure 2. 6 Internal... composition,and literacy Copyright © 20 08 by Nelson, a division of Thomson Canada Ltd 2 8 Five Forces Framework Copyright © 20 08 by Nelson, a division of Thomson Canada Ltd Figure 2. 2 2 9 Step Three: Internal