HUMAN RESOURCE MANAGEMENT

Chapter 3
The Manager’s Role
in Strategic Human
Resource
Management

Part 1 Introduction

PowerPoint Presentation by Charlie Cook

Copyright © 2011 Pearson Education GARY DESSLER The University of West Alabama
WHERE WE ARE NOW…

Copyright © 2011 Pearson Education 3–2

LEARNING OUTCOMES
1. Explain why strategic planning is important to all
managers.
2. Outline the basic steps in the management planning
process.
3. List the main contents of a typical business plan.
4. Answer the question, “What should a manager do to set
‘smart’ motivational goals?”
5. Explain with examples each of the seven steps in the
strategic planning process.
6. List with examples the main generic types of corporate
strategies and competitive strategies.

Copyright © 2011 Pearson Education 3–3

LEARNING OUTCOMES (cont’d)
7. Define strategic human resource management and give
an example of strategic human resource management
in practice.
8. Briefly describe three important strategic human
resource management tools.
9. Explain with examples why metrics are essential for
identifying and creating high-performance human
resource policies and practices.

Copyright © 2011 Pearson Education 3–4

Why Strategic Planning Is Important
To All Managers
• The firm’s strategic plan guides much of what is done by
all to accomplish organizational goals.
• Decisions made by managers depend on the goals set
at each organizational level in support of higher level
goals.

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 FIGURE 3–1 Sample Hierarchy of Goals Diagram for a Company

Copyright © 2011 Pearson Education 3–6

Fundamentals of Management Planning

The Planning Process

1 Set an objective.

2 Make forecasts and check assumptions.

3 Determine/develop alternative courses of action.

4 Evaluate the alternatives.

5 Implement and evaluate your plan.

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 FIGURE 3–2 Business Plan Table of Contents

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 FIGURE 3–3 Acme Consulting Profit and Loss

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How Managers Set Objectives:
SMART Goals

S Specific

M Measureable

A Attainable

R Relevant

T Timely

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How to Set Motivational Goals

Motivational Goal Setting

Assign Assign Assign Encourage

specific measurable challenging but employee
goals goals doable goals participation

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Using Management by Objectives (MBO)

The MBO Process

1 Set overall organizational goals.

2 Set departmental (supporting) goals.

3 Discuss departmental goals with subordinates.

4 Set individual goals and timetables.

5 Give feedback on progress toward goal.

Copyright © 2011 Pearson Education 3–12

The Strategic Management Process
• Strategy
 A course of action the organization intends to pursue to achieve
its strategic aims.
• Strategic Plan
 How an organization intends to match its internal strengths and
weaknesses with its external opportunities and threats to
maintain a competitive advantage over the long term.
• Strategic Management
 The process of identifying and executing the organization’s
mission by matching its capabilities with the demands of its
environment.
• Leveraging
 Capitalizing on a firm’s unique competitive strength while
underplaying its weaknesses.

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Business Vision and Mission
• Vision
 A general statement of an organization’s intended direction that
evokes emotional feelings in organization members.
 is a projection of where the company wants to be in the future.
 outlines what a company wants to be in the future.
• Mission
 Spells out who the firm is, what it does, and where it’s headed.
 talks primarily about what the company is currently doing. It
focuses on the present state of the organization.
 describes what a company wants to do now

One key difference with mission and vision statements is the

time element.

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Business Vision and Mission

• A Mission Statement
 concentrates on the present; it defines the customer(s), critical
processes and it informs you about the desired level of
performance.

• A Vision Statement
 focuses on the future; it is a source of inspiration and motivation.
Often it describes not just the future of the organization but the
future of the industry or society in which the organization hopes
to effect change.

Copyright © 2011 Pearson Education 3–15

Comparison Chart - Vision and Mission
Mission Statement
A Mission statement talks about
HOW you will get to where you want
About to be. Defines the purpose and
primary objectives related to your
customer needs and team values.
It answers the question, “What do
Answer we do? What makes us different?”
A mission statement talks about the
Time present leading to its future.
It lists the broad goals for which the
organization is formed. Its prime
Function function is internal; to define the key
measure or measures of the
organization's success and its prime
audience is the leadership, team
and stockholders.
Vision Statement
A Vision statement outlines WHERE
you want to be. Communicates both
the purpose and values of your
business.
It answers the question, “Where do
we aim to be?”
A vision statement talks about your
future.
It lists where you see yourself some
years from now. It inspires you to
give your best. It shapes your
understanding of why you are
working here.
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Comparison Chart - Vision and Mission
Mission Statement
Change Your mission statement may change,
but it should still tie back to your core
values, customer needs and vision.
Developing a What do we do today? For whom do
we do it? What is the benefit? In other
statement words, Why we do what we do? What,
For Whom and Why?
Features of an Purpose and values of the
organization: Who are the
effective organization's primary "clients"
statement (stakeholders)? What are the
responsibilities of the organization
towards the clients?
Vision Statement
As your organization evolves, you
might feel tempted to change your
vision. However, mission or vision
statements explain your organization's
foundation, so change should be kept
to a minimum.
Where do we want to be going
forward? When do we want to reach
that stage? How do we want to do it?
Clarity and lack of ambiguity:
Describing a bright future (hope);
Memorable and engaging expression;
realistic aspirations, achievable;
alignment with organizational values
and culture.
3–17
Example – Coca Cola
• Our Mission
 Our Roadmap starts with our mission, which is enduring. It declares our purpose
as a company and serves as the standard against which we weigh our actions
and decisions.
 To refresh the world...
 To inspire moments of optimism and happiness...
 To create value and make a difference.

• Our Vision
 Our vision serves as the framework for our Roadmap and guides every aspect of
our business by describing what we need to accomplish in order to continue
achieving sustainable, quality growth.
 People: Be a great place to work where people are inspired to be the best they can be.
 Portfolio: Bring to the world a portfolio of quality beverage brands that anticipate and satisfy people's
desires and needs.
 Partners: Nurture a winning network of customers and suppliers, together we create mutual, enduring
value.
 Planet: Be a responsible citizen that makes a difference by helping build and support sustainable
communities.
 Profit: Maximize long-term return to shareowners while being mindful of our overall responsibilities.
 Productivity: Be a highly effective, lean and fast-moving organization.

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Business Core Values
• The core values of an organization are those values we hold which
form the foundation on which we perform work and conduct
ourselves. A general statement of an organization’s intended
direction that evokes emotional feelings in organization members.

Copyright © 2011 Pearson Education 3–19

Core Values
CORE VALUES CORE VALUES ARE NOT
Govern personal relationships Operating practices
Guide business processes
Clarify who we are Business strategies
Articulate what we stand for Cultural norms
Help explain why we do business
the way we do Competencies
Guide us on how to teach Changed in response to market/
Inform us on how to reward
Guide us in making decisions administration changes
Underpin the whole organization Used individually
Require no external justification
Essential tenets

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Example – Coca Cola
• Live Our Values
 Our values serve as a compass for our actions and describe how we behave in
the world.
 Leadership: The courage to shape a better future
 Collaboration: Leverage collective genius
 Integrity: Be real
 Accountability: If it is to be, it's up to me
 Passion: Committed in heart and mind
 Diversity: As inclusive as our brands
 Quality: What we do, we do well

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 FIGURE 3–4 Management Objectives Grid

Company-Wide or Departmental Objective:

Double sales revenue to $16 million in fiscal year 2011

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 FIGURE 3–5 The Strategic Management Process

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 FIGURE 3–6 Worksheet for Environmental Scanning

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 FIGURE 3–7 SWOT Matrix, with Generic Examples

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 FIGURE 3–8 Type of Strategy at Each Company Level

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Types of Corporate Strategies

Corporate Strategy Possibilities

Concentration Diversification Consolidation

Vertical Geographic
integration expansion

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Types of Competitive Strategies

Business-Level
Competitive Strategies

Cost leadership Differentiation Focus/Niche

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Achieving Strategic Fit
• The “Fit” Point of View (Porter)
 All of the firm’s activities must be tailored to or fit the chosen
strategy such that the firm’s functional strategies support its
corporate and competitive strategies.
• Leveraging (Hamel and Prahalad)
 “Stretch” in leveraging resources—supplementing what you have
and doing more with what you have—can be more important
than just fitting the strategic plan to current resources.

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 FIGURE 3–9 Southwest Airlines’ Activity System

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Departmental Managers’
Strategic Planning Roles

Department Managers
and Strategy Planning

Formulate
Help devise supporting, Execute
the strategic functional/ the strategic
plan departmental plans
strategies

Copyright © 2011 Pearson Education 3–31

Strategic Human Resource Management
• 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.
 Involves formulating and executing HR systems—HR policies
and activities—that produce the employee competencies and
behaviors that the company needs to achieve its strategic aims.

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 FIGURE 3–10 Linking Company-Wide and HR Strategies

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 FIGURE 3–11 Basic Model of How to Align HR Strategy
and Actions with Business Strategy

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Strategic HRM Tools

Strategic HRM Tools

Strategy map HR scorecard Digital dashboard

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 FIGURE 3–13 Strategy Map for Southwest Airlines

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 FIGURE 3–14 The Basic HR Scorecard Relationships

HR activities

Emergent employee
behaviors

Strategically relevant
organizational outcomes

Organizational
performance

Achieve strategic goals

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Creating an HR Scorecard

The 10-Step HR Scorecard Process

Identify required HR policies

1 Define the business strategy 6
and activities

2 Outline value chain activities 7 Create HR Scorecard

Choose HR Scorecard
3 Outline a strategy map 8
measures
Identify strategically required Summarize Scorecard
4 9
outcomes measures on digital dashboard
Identify required workforce 10
5 Monitor, predict, evaluate
competencies and behaviors

Copyright © 2011 Pearson Education 3–38

 FIGURE 3–15 Three Important Strategic HR Tools
Strategy Map
A graphical tool that
summarizes the chain of
activities that contribute
to a company's success,
and so shows employees
the "big picture" of how
their performance
contributes to achieving
the company's overall
strategic goals.
Copyright © 2011 Pearson Education
HR Scorecard Digital Dashboard
A process for managing An information
employee performance technology tool that
and for aligning all presents the manager
employees with key with desktop graphs and
objectives, by assigning charts, so he or she gets
financial and a picture of where the
nonfinancial goals, company has been and
monitoring and where it's going, in terms
assessing performance, of each activity in the
and quickly taking strategy map.
corrective action.
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Building A High-Performance Work System
• High-Performance Work System (HPWS)
 A set of human resource management policies and practices
that promote organizational effectiveness.
• High-Performance Human Resource Policies
and Practices
 Emphasize the use of relevant HR metrics.
 Set out the things that HR systems must do to become an
HPWS.
 Foster practices that encourage employee self-management.
 Practice benchmarking to set goals and measure the notable
performance differences required of an HPWS.

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 TABLE 3–1 Comparison of Selected Human Resource Practices in
High-Performance and Low-Performance Companies

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 FIGURE 3–16 Simple Value Chain for “The Hotel Paris”

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 FIGURE 3A-1 Simple Value Chain for “The Hotel Paris”

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 FIGURE 3A-2 Revenue per FTE (by Industry)

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 FIGURE 3A-3 2007 Target Bonus Percentage for Executives
(Percent of Total Compensation, by Organizational Size)

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 FIGURE 3A-4 Sample Metrics from SHRM Measurements Library

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 FIGURE 3A-5 Highlights of SHRM® Customized Benchmarking Service

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 FIGURE 3A-6 Customized Human Capital Benchmarking Report
for [Your Organization’s Name Here]

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 FIGURE 3A-7 Customized Human Capital Benchmarking Report
for [Your Organization’s Name Here]

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