Meeting Present and Emerging Strategic Human

Resource Challenges

• How can HR influence firm performance?

• How can HR cope with workplace changes and trends?• What are HR strategies that help a firm achieve competitive

advantage?

Challenges facing HR

Key HR Challenges for Today’s Managers: Environmental

• Rapid change• Workforce diversity• Globalization• Internet revolution• Legislation• Evolving work and family roles• Skill Shortages • Rise of the service sector

• Competitive Position: Cost,• Quality, distinctive capabilities

• Decentralization• Downsizing• Organizational restructuring

• Self-managed work teams• Small business growth• Technology• Outsourcing

Key HR Challenges for Today’s Managers:

Organizational

Basic assumptions and beliefs shared by members of an organization…

• rules, norms• behaviors• philosophy• dominant values• feeling or climate

Key HR Challenges for Today’s Managers: Cultural

Individual Challenges

• Matching People and Organization• Matching people and

organizations• Ethical dilemmas • Social responsibility• Productivity• Empowerment• Brain drain• Job insecurity

Key HR Challenges for Today’s Managers: Individual

Strategic HR Choices – Options Available in Designing an HR

SystemWork Flows

Staffing

Employee Separations

Performance Appraisal

Training and Career Development

Compensation

Employee Relations

Employee Rights

International Management

HR Strategy Leads to Improved Organizational

Performance

HR Strategies

Organizational Strategies

Organizational Characteristics

Organizational Capabilities

Environments

Porter’s Differentiation Strategy

HR Strategies:• Emphasis on innovation and

flexibility• Broad job classes• Loose work planning• External recruiting• Team based training• Emphasis on individual-based pay• Use performance appraisal as a

developmental tool

Porter’s Low-cost Leadership Strategy  

HR Strategies:• Efficient production• Explicit job descriptions• Detailed work planning• Emphasis on qualifications and

skills• Emphasis on job-specific training• Emphasis on job-based pay• Use of performance appraisal as a

control device

Porter’s Focus Strategy

Low cost Differentiation

Miles and Snow

Defender – conservative business units that prefer to maintain a secure position in a relatively stable product or service area

Prospector – emphasize growth and innovation, development of new products

Miles and Snow Defender Strategy -- RECRUITING

• Internal recruitment• HR makes selection decision• Emphasis on qualifications and

skills• Formal hiring and socialization

process

Miles and Snow Prospector Strategy -- RECRUITING

• External recruitment• Supervisor makes selection decision• Emphasis on applicant fit with culture• Informal hiring and socialization

process of new employees

Miles and Snow Defender Strategy -- Compensation

• Fixed pay• Job-based pay• Seniority-based pay• Centralized pay decisions

Miles and Snow Prospector Strategy --Compensation

• Variable pay• Individual-based pay• Performance-based

pay• Decentralized pay

decisions

HR Best Practices• Employment security• Selectivity in recruiting• High wages• Incentive pay• Employee ownership• Information sharing• Participation and empowerment• Self managed teams• Training and skill development• Cross-utilization and cross training• Promotion from within

HR Department and Managers

“The role of a company’s HR department is to support, not supplant managers’ HR responsibility”

“Every manager is an HR manager”

HR must understand…• internal / external customers

• key business disciplines

• business structure, vision, values, goals, strategies, finances

• competitors, products, technology and sources of competitive

advantage

KNOWLEDGE OF BUSINESSHow HR can be a Strategic Partner

STRATEGIC THINKINGHow HR can be a Strategic Partner

• Understand strategic business planning

• Apply a systematic HR planning process

• Integrate HR systems to build capability and competitive advantage for the firm

• Develop and integrate department strategies within corporate framework

PROCESS SKILLSHow HR can be a Strategic

Partner• Know management processes• Know process skills: consulting,

problem solving, evaluation and communication

• Understand organizational development

• Facilitate and manage change• Manage under uncertainty and

instability

TECHNOLOGYHow HR can be a Strategic Partner• Maintain HR documentation

using knowledge management and technology

• Build firm’s capability using info systems

• Provide training in use of technology

XYZ has a 1 billion budget and staff of 7,000.

To speed growth, XYZ announced a series of performance objectives for individual business chiefs who before enjoyed much free rein. In addition, XYZ introduced specially trained

“black belts” to root out inefficiencies in departments. If you were a “black belt”, what would you look for?

Case