Strategic Human Resource Management and the HR Scorecard

Q.1 Outline the steps in the strategic management process. Answer. Strategic plan A companys plan for how it will match its internal strengths and weaknesses with external opportunities and threats in order to maintain a competitive advantage. Three basic challenges The need to support corporate productivity and performance improvement efforts. That employees play an expanded role in employers performance improvement efforts. HR must be more involved in designingnot just executingthe companys strategic plan. Strategic management The process of identifying and executing the organizations mission by matching its capabilities with the demands of its environment. Strategy A strategy is a course of action. The companys long-tem plan for how it will balance its internal strengths and weaknesses with its external opportunities and threats to maintain a competitive advantage.

Strategic management process

Strategic management tasks Step 1: Define the Business and Its Mission Step 2: Perform External and Internal Audits Step 3: Translate the Mission into Strategic Goals Step 4: Formulate a Strategy to Achieve the Strategic Goals Step 5: Implement the Strategy Step 6: Evaluate Performance

Step 1: Define the Business and Its Mission

In what business we are. What we sell; product or service. Geographical location where we sell. Hoe our product or service distinguishes from competitors product. What business do we want according to our opportunities and threats? Manager must identify that where company is today and where it want to be tomorrow. Now manager made a vision statement. Vision A general statement of its intended direction that evokes emotional feelings in organization members. Mission Spells out who the company is, what it does, and where its headed. 1 SYED ZULQARNAIN HAIDER

 Step 2: Perform External and Internal Audits

The aim of any SWOT analysis is to identify the key internal and external factors that are important to achieving the objective. These come from within the company's unique value chain. SWOT analysis groups key pieces of information into two main categories: Internal factors The strengths and weaknesses internal to the organization. External factors The opportunities and threats presented by the external environment to the organization. Strengths: characteristics of the business or project that give it an advantage over others Weaknesses: are characteristics that place the team at a disadvantage relative to others Opportunities: elements that the project could exploit to its advantage Threats: elements in the environment that could cause trouble for the business or project

Step 3: Formulate new business and mission statement.

It is based on situation analyses that what should our new business, what product or service we sell, how we sell our product or service, how it is differ from competitors product, what is our new vision and mission.

Step 4: Translate the Mission into Strategic Goals

Manger should translate the mission into strategic goals and should kept these points in his mind. To make quality job. Operationalize that mission Manager need long term strategic goals for accomplishing the missions. These strategic goals may be: What exactly does that mission mean for each department? How we will boost the quality of job in each department, through strategic goal.

Step 5: Formulate a Strategy to Achieve the Strategic Goals

Strategy A strategy is a course of action. Strategies are also a bridge, where the company is now and where it wants to be in tomorrow. It will happened through this bridge (Strategy).

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Step 6: Implement the Strategy

It involves all the management functions like planning, organizing, leading, controlling, staffing. For example; put strategies in to actions by actually hiring or firing of people, building or closing the plant, adding or eliminate the products or product line etc.

Step 7: Evaluate Performance

It means to check the actual and desired results. Strategies may always not succeed, so in that situation corrective actions is to be needed. Strategic control Keep the companys strategy up o date. The process of assessing progress toward strategic goals and taking corrective actions. Q.2 what are the types of strategies?

TYPES OF STARATEGIC PLANNING Corporate-level strategy

Identifies the portfolio of businesses that, in total, comprise the company and the ways in which these businesses relate to each other. Diversification strategy implies that the firm will expand by adding new product lines. 1. Concentric: Adding new but related product 2. Conglomerate: Adding new but unrelated 3. Horizontal: Adding new product in new geographical area. Vertical integration strategy means the firm expands by, perhaps, producing its own raw materials, or selling its products direct. Consolidation strategy reduces the companys size Geographic expansion strategy takes the company abroad.

Business-level/competitive strategy
Identifies how to build and strengthen the businesss long-term competitive position in the marketplace. Cost leadership: the enterprise aims to become the low-cost leader in an industry. Differentiation: a firm seeks to be unique in its industry along dimensions that are widely valued by buyers. Focus: a firm seeks to carve out a market niche, and compete by providing a product or service customers can get in no other way.

Functional strategies
Identify the basic courses of action that each department will pursue in order to help the business attain its competitive goals. Q.3 Describe Achieving fit and leverage? Answer

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Achieving Strategic Fit

Michael Porter Emphasizes the fit point of view that all of the firms activities must be tailored to or fit its strategy, by ensuring that the firms functional strategies support its corporate and competitive strategies. Gary Hamel and C. K. Prahalad Argue for stretch in leveraging resourcessupplementing what you have and doing more with what you havecan be more important than just fitting the strategic plan to current resources.

Leverage Supplementing what you have and doing more with what you have
The ability to influence a system, or an environment, in a way that multiplies the outcome of one's efforts without a corresponding increase in the consumption of resources. In other words, leverage is the advantageous condition of having a relatively small amount of cost yield a relatively high level of returns. See also financial leverage and operating leverage.

Q.4 Explain HRM and competitive advantage, Strategic HRM HR and Competitive Advantage
Competitive advantage Any factors that allow an organization to differentiate its product or service from those of its competitors to increase market share. Superior human resources are an important source of competitive advantage Strategic Human Resource Management The linking of HRM with strategic goals and objectives in order to improve business performance and develop organizational cultures that foster innovation and flexibility. Formulating and executing HR systemsHR policies and activitiesthat produce the employee competencies and behaviors the company needs to achieve its strategic aims.

Q.5 Explain HRM strategic roles. HRS Strategic Roles

HR professionals should be part of the firms strategic planning executive team. Identify the human issues that are vital to business strategy. Help establish and execute strategy. Provide alternative insights. Are centrally involved in creating responsive and market-driven organizations. Conceptualize and execute organizational change.

HRs Strategy Execution Role

The HR departments strategies, policies, and activities must make sense in terms of the companys corporate and competitive strategies, and they must support those strategies.

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HRs Strategy Formulation Role

HR helps top management formulate strategy in a variety of ways by. Supplying competitive intelligence that may be useful in the strategic planning process. Supplying information regarding the companys internal human strengths and weaknesses. Build a persuasive case that shows howin specific and measurable termsthe firms HR activities can and do contribute to creating value for the company.

Q.6 Explain what a high performance work system is and why it is important. The High-Performance Work System
High-performance work system (HPWS) practices. High-involvement employee practices (such as job enrichment and team-based organizations), High commitment work practices (such as improved employee development, communications, and disciplinary practices) Flexible work assignments. Other practices include those that foster skilled workforces and expanded opportunities to use those skills. Q.7 Illustrate and explain each of the seven steps in the HR Scorecard approach to creating HR systems.

The HR Scorecard Approach

HR scorecard Measures the HR functions effectiveness and efficiency in producing employee behaviors needed to achieve the companys strategic goals. Creating an HR scorecard Must know what the companys strategy is. Must understand the causal links between HR activities, employee behaviors, organizational outcomes, and the organizations performance. Must have metrics to measure all the activities and results involved.

Using the HR Scorecard Approach

Step 1: Define the Business Strategy Step 2: Outline the Companys Value Chain Step 3: Identify the Strategically Required Organizational Outcomes Step 4: Identify the Required Workforce Competencies and Behaviors Step 5: Identify the Strategically Relevant HR System Policies and Activities Step 6: Design the HR Scorecard Measurement System Step 7: Periodically Evaluate the Measurement System

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