unit one- introduction to strategic hrm

7/29/2019 UNIT ONE- Introduction to Strategic HRM

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Strategic HRM - Using Metrics

and Data to Design andEvaluate HRM Prac

tices

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Strategic HRM What is it?

Who does it?

When do you do it?

How is it measured?

What are the

components?

Good HRM = GoodFinancial Results

Financial Results

HR


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The Topics

What is Strategic HRM?

What are the forces creating a need for

Strategic HRM?

How can Strategic HRM use data and

metrics to design and evaluate its

processes?


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Why is Strategic HRM Vital?

Because an organization must have people

who are involved in the development of the

business strategy, understand it, arecommitted to it, and can make a

contribution to its success


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What is Strategic HRM?

It is how an organization uses its

people to help form and execute its

business strategy

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Steps in the Strategic HRM

Process

New Business

Strategy

SWOT Analysis Assess HR Capacity

Develop Core

Competencies Test and Evaluate

Initiate HR Practices

HR Must be a Key

Player in this

Process. Design New

Organization

Assess new core

competencies

Recruit


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Steps in the Process

Orient, Train and

Develop

EvaluatePerformance

Establish Career and

Succession Plans

Set Total Reward

System


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How Can HRM Be Strategic?

Participate in the

Discussion of the

New Strategy

Evaluate

Organizational

Capacity

Design HR

Practices Which

Can Execute NewStrategy (Link)

Establish Metrics

to EvaluatePractices


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What are the competencies of a

Strategic HRM Executive?

Be a Strategist - Know the Business

Be an Administrator - Deliver the Basics

Be a People Champion

Be a Change Agent


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What is the New Strategy?

Defend Your Market

Expand Your

Market New Product

New Service

Downsize/Centralize

Prepare for WTO

Transition to e-

commerce Create New

Customer Loyalty

Lower Costs ofProduct or Service


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HRM Integration

HR Practices Must be Linked to

Achieving the Business Strategy

Each HR Practice must be Designed,

Aligned, and Measured Using an

Integrated Set of Metrics


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Quick Case Examples

Company has high

turnover.

General Managerwants it reduced.

What are the steps?

What are the metrics?

Company HR

manager wants to

start new educationcenter.

She is competing for

capital.

What are the metrics?


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The New Global Market

Liberalization of

Trade - The Barriers

Come Down Shorter Product Cycle

High Demand for

Value

Accelerated Growth in

IT/Telecommunication

Result:

Need for Market

Access Need for

Standardization


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What are the Standardization

Processes?

ISO

HACCP

CE Mark

GMP

HR Implications:

Organizational

Structure Recruitment/Selection

Training and

Development

Performance

Evaluation

Reward


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What is ISO? (International Organization forStandards)

Assure Product

Consistency

Develop QualitySystem

Do Gap Analysis

Quality Manual

Process Control

Documentation

Changes:

Management

Responsibility Attention to Detail

Get it Right the First

Time

Decrease Inspection

and Testing


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What are the HRM Changes?

Cultural

Organizational

Recruitment and Selection

Training and Development

Performance Management Reward System


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What is a CE Mark(Conformite Europene)

EU Requirements for

Product Safety

Steps: Disclosure

Minimize Variations

Compatibility Quality Performance

Required Changes

Tight Internal Control

of Production Production Quality

Assurance

Product Quality

Assurance

Loss Prevention


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What are the HRM

Implications?

Organizational

Recruitment and

Selection Training and

Development

Performance

Management

Reward System

New Commitment to

Invest in People


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What is HACCP? (Hazard Analysis And CriticalControl Points)

Produce Safe Food

Steps:

Describe Product

Critical Points/Flow

Critical Limits and

Risks

Monitoring

Correct/Verify

Resulting Changes:

Prevention vs. Testing

Documentation

Get Right First Time

Less Recalls/Customer

Satisfaction Higher Productivity


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What are the HRM

Implications?

How would jobs change?

New commitment to people issues

How would you measure?


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Case Example - Export/WTO

Enhance Productivity -

Machines, Production

Management, LowerCosts.

What are HRM

Implications?


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Case Example - New Strategies

Production

Management

Flexibility - Quick tochange/Quick to

market

E-Commerce?

Industrial Integration

What are the HRM

Challenges?


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Global Competitiveness

HRM Challenges:

Convert to Teams

Delegation

Empowerment

New Selection

New Training

New Rewards

HRM Challenges

New Job Design

New Accounting/MIS

New Performance

Evaluation and

Accountabilities

New Authorities

All Must Be Linked


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New Strategies - Strategic

Partner

Contract Packing

No more A to Z

Joint Ventures forNew Products

Mergers

Venture Capital Public Ownership

Licensing

Information

Technology

E-commerce

New Niche Marketing

Industrial Integration


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What are the HRM issues?

New Organization

New Culture

Competencies Dispute Resolution

Selection

Training/Development

Career Paths

Rewards

How would you

manage this change?


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What About Measurement?

We have designed and pursued a new

business strategy.

We have instituted new HRM changes andinterventions

How and why do we use data and metrics to

both design and evaluate such HRpractices?


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Protocols for Measurement -

The Balanced Score Card

Financial Customers

Employees Business Development


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Pointsfor Measurement

Convert soft to

hard

Establish Baselines

Make causal

connection

Apply Balanced

Scorecard

Connect to businessstrategy


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Factors Affecting HRM?

Legal Environment

Demand, Supply, Education of Human

Resources

Economic Conditions of Area


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Case -- What are the Metrics

for Turnover?

Employee Surveys

Ex-employee Surveys

Cost of turnover

Customer surveys

Financial Measures

Organizational

Performance Benchmarks


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What are the types of Metrics -

- Recruitment?

Competencies

Cost per hire

Retention rate Time to fill

Performance

evaluations

Overall companyperformance

Surveys


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Case - What are the data

sources for training program?

Employee Surveys

Customer Surveys

Service andproduction

measurements

Knowledge/skill

transfer

Actual Climate and

Work Changes.

Higher productivity of

trained personnel


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Convert Data to Metrics -

Training

Costs of proposed

training

Baseline measures

Post training measures

Return on investment

Does this program

have any measurable

results? Is it worth an

investment?


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Training Metrics - Some Issues

Cost effective? ROI?

Timeliness

Adaptable, Simple Measure a variety of

outcomes

Look at soft andhard data - convert if

possible

Is there a casual

connection?


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The Kroger CBT Experience

The Steps

The Baselines

The Metrics

The Pilots and

Controls

The Results

The Causal

Connection

The ROI


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Other Types of Measurement

Leading Edge

Practices and Market

Capitalization Link between

preferred customer

and employer of

choice

Ulrich Matrix

Sears approach

Use the Customer

Loop - Kroger CBES


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The Kroger CBES Program

Customer Service

Opportunity

Selection not trainingproblem

Use customers to

identify positive

employee behaviors

Convert to

competencies

Take baseline

measures

Create hypotheses

Set Pilots and

Controls

Select using new

competencies

Measure against

baselines


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Integrated Problem - Strategy

and Metrics

Kamal Enterprises

Manufacturer of 5 distinct consumer products with nearly

independent and dispersed business units wants to reduce

costs of products and maximize synergies, develop brand

extensions, eliminate wide variations in HR practices,

establish better accountabilities, enhance follow-up,

improve communication up and down, establish a

corporate role, and become an employer of choice.


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Kamals New Goals and

Strategy

Design new

organization

Develop new policies

Commit to effective

communication

Streamline

Lower Costs

New products

Maximize autonomy

and flexibility

Facilitate follow upand execution

Maintain caring

culture

Maximize synergies

Employer of choice


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Steps and Metrics - Kamal

Conduct SWOT

New Mission

Statement? HR Policies to fill

gaps

New job designs

New competencies

Recruit and Select

Performance

Management

Training &Development

Career Paths -

Succession

Total Reward Plan

Metrics


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New Organizational Structure -

Kamal

Eliminate overlaps

Enhance synergies

Reduce cost Uniform practices

R&D for new

products

Communication

New Corporate role

Metrics to developand to evaluate

Linked to Strategy

Acceptance byorganization


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Recruitment and Selection -

Kamal

New Jobs

New core

competencies New work methods

Validity of selection

Effectiveness ofselection

Efficiency of

selection

Skill acquisition andrequirements

Metrics


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Trainingand Development-

Kamal

Needs assessment

Linked to new

competencies Communication

skills

Metrics and Data

Inputs and Outputs

Linked to career

paths


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Performance Management -

Kamal

Development

perspective

Simple Accepted

MBO/Competency

Job traits for non-

management

Link to strategy Metrics


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Career Paths - Kamal

What are the

competencies/skills of

General Managers? Career path and

steps

Make a plan for all

high potentials

Stick to and monitor

the plan

Metrics


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Reward strategy - Kamal Compensation

philosophy?

Internal equitywithin and among

business units

Incentives - unit

performance

Incentives - what

drives performance

Funding incentives Line of sight.

Metrics and Balance

Some Models

Wh b hi d l


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What about ethics and values -

Kamal?

Employee treatment

Confidentiality

Conflicts of interest Sex harassment

Merit is key

Corporate

citizenship

Democraticcapitalism


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What is Major Issue Here?

How do you manage this change?

Who manages the change?

How do you overcome cultural resistance?

Remember the interstices!

Design a good implementation strategy!

M i d E l i N


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Metrics and Evaluation - New

Kamal Strategy and HRM

Goals met?

Plans conform to

principles? Sales

Profits

Cash flows ROIs

Productivity

Costs

Quality Customers

Employee surveys

Turnover

Are managers

complying?


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Evaluate

Figure 1

HRMs Select to Profits Loop

Enroll

P

Select

Productivity

Enroll Train

MotivateCosts

Profits

Sales

Reward


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Figure 2

Linking Customers to Employees

A Data and Metrics Driven Approach

1. Customer Data Determines

Expectations for Service and

Quality

2. Employee Data Determines

Capacity of Organization to

Deliver

3. Based upon Research,

HRM Designs Practice

to Meet Customer

Expectations

4. HRM Pilots and

Tests to See What

Works, What Does

Not, and Financial

Returns

5. HRM Implements

Proven Practices and

Measures Customer

Response


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Case Problems

Identify a range of possible HRM

solutions.

What analysis, data, metrics would youapply in designing these solutions?

Are there additional facts you need to

know? Choose 1 or 2 solutions. How would you

evaluate them?


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Remember: There is only one

boss - the customer. And, heor she can fire all of us! (Sam

Walton)

Link your HRM practices to

satisfying the customer!

unit one- introduction to strategic hrm

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