Announcements

q It is highly important that you read the syllabus on

DocenciaWeb and the ppt presentation from our 1st
class.
It has valuable information about assessments and deadlines

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Strategic HRM defined (Source: Michael Armstrong)

Strategic HRM is the process of

defining how the organisations
goals will be achieved through
people by means of HR strategies
and integrated HR policies and
practices

There must be a connection

between the business strategy
and the HR strategy

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 Seven steps to being strategic
Practice

Make evidence-

convincing based

business management
Act as
Case for
change
innovation
See the big agent
Appreciate picture
how HR
can add
Understand
value
the
Aware of business
business
context

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Strategic Priorities

Innovation Brand Price Design Quality

Source: Adapted from Armin Trost

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Measuring a Firms Strategic Alignment

q Strategy Mapping and the Balanced Scorecard

Balanced Scorecard (BSC)
q A measurement framework that helps managers translate
strategic goals into operational objectives

Financial People

Customer Processes

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Balanced Scorecard at Starbucks

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What do HR Professionals do?

https://www.youtube.com/watch?v=9ZLbSk1Te68

q Which area or process do you believe to be more

challenging? Why?

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A Human Resource Management
Department
Human
Resource
Management

Organisational Compensation & Personnel

Development Benefits Administration

Performance Health &

Management Safety

Organisational
Labour
Change and
Communications Relations

Recruitment & Work Law

Selection Administration

Training and
Career Payroll
Development 8
HR Management functions

Recruitment

Identifying people with the potential to become

members of an organization and encouraging
them to apply for a position in the organization

Selection

Identifying from a pool of applicants those who

are a good fit with the position and the
organization so that they can start working soon
at the highest performance level

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HR Management functions

Training:

Training programs focused on issues concerning short term

performance.

Development:

Training programs focused on broadening an individuals skills

for future responsibilities and jobs.

Organizational Climate and Culture:

Aligning employees with the strategic goal of the company and

keeping them satisfied

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HR Management functions

Compensation:

What the organization gives its employees in return for their service and
contribution to the productivity of the institution.
Includes both direct and indirect financial compensation as non-economic
compensation (i.e. flexible hours, parking spot, etc.)

Work Regulations:

Hiring and firing

Health and safety insurances
Managing retirement plans
Managing sick leaves

Health and Safety:

Ensuring that there is a safe working environment to reduce risks of accidents

and maintaining employees health

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Cycle of HRM
Planning People
Requirements

Job Design Organizational

Development
Maintaining Job Analysis Organizational Design Providing
People Position Design Culture and Climate People
Information
Compensation Systems Recruitment
Health and Safety Selection
Databases Induction
Quality of Life
Information Management
Work Regulations

Managing
Developing
Peoples
People
Performance

Training &
Development 12
PAC Resources, Inc.

A Case Study in HR Practices

PAC Resources, Inc.-
A Case Study in HR Practices
q PAC Resources is a small manufacturing company located in a mid-
sized city in the upper Midwest.

q PAC manufactures high-quality specialty components for the

computer industry.

q The company was founded in 1994 by current CEO, David Dukakis.

Cliff McNamara acts as CFO

q Today, PAC employs 835 full-time workers.

q PAC sells its own products and has a small customer base scattered
throughout the United States and Asia, but this generates only a
small percentage of PACs revenue. Eighty-three percent of PACs
sales come from building original specialty components for one
(troubled) manufacturer.

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q PAC instituted a hiring freeze, and marketing and sales budgets
were directed to increasing the companys customer base.

q Though PAC remains non-union, three years ago the organization

went through a difficult period of employee unrest.
There were complaints of poor management, inconsistently enforced
policies and unfair practices regarding job changes and movement of
employees within the organization.
This brought in union organizers who distributed leaflets and circulated
authorization cards inviting employees to join them.

q With a history that has known only growth and strong revenue, it will
be a major cultural change for PAC to respond to the eroding
economy and a possible decline in sales.

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The Human Resources Department
q Patricia Harris was HR director at PAC for eight years before
she was fired in 2007
Her management stylewhen she managed at allwas divisive.
There was little cooperation across functional areas. Certainly
things couldnt get worse

q When Harris left, Ben Trudeau who was manager of safety

and security, was promoted to HR Director
q Trudeau management style was the polar opposite of Harriss.
Where she micromanaged and criticized, Trudeau believed in
encouragement and responsibility
q HR department employees feel their work is not supported by
management and that there is little feedback on progress
toward goals
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PAC Organigram

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 PACs SWOT analysis

Strengths Weaknesses Opportunities Threats

Niche market. Dependence Streamline Possible
Patents on on one labour and cut unionization.
specialty primary costs. Economic
components. customer. Establish new downturn.
Strong history No markets. Decreased
of growth. experience in product
All products downsizing. demand.
made in the Unethical Possible
US. practices. lawsuits on
Consistent Unhappy the horizon.
management employees.
through Cliff
McNamara.

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Your task

q You must form teams of 3 q The task is:

people approx. 1. Describe the role and
purpose of the two areas
q Each team will analyse two reviewed
HR functional areas
2. Identify the key issues
Human Resource
Development 3. Propose opportunities for
improvement and support
Staffing to the business
Compensation and Benefits 4. Identify the
interrelationship of
activities in your area with
the other areas of HR

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Human Resource Development
q PAC has been a strong supporter of q Stephens established communities
employee development
q PAC encourages employees to
attend training seminars, and tuition
reimbursement is available for
college-level courses that are
related to the employees job
q Whenever possible, training
programs are developed and
facilitated by in-house staff
members.
q All too often Stephens hears
managers say that there is the
classroom way and the shop floor
way. She sees training for PAC
managers as an ongoing process.
of practice
q an idea blog was added to the
companys intranet
q improve the exit interview process
q HRD was asked to update and
improve the companys
performance management system.
q In addition, the organization is
looking closely at all training
expenses, and Stephens was asked
to identify the return on investment
for all programs.
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Staffing
q Wong runs a tight ship and manages
the department with only one other
recruiter and an administrative
assistant, who maintains all job
postings, including a telephone
employment hotline and the
companys job line web site.
q Wong is well-respected across the
organization for his strict adherence
to ensuring equity in hiring and job
placement that goes well beyond
equal opportunity requirements.
q Wong recently completed an
aggressive hiring drive at major
universities
q The staffing department has known
only hiring; they never had to plan for
a layoff.
q Wong received a confidential memo
from Schilling and Trudeau requiring
a 10 percent reduction in labor costs
by the end of the fiscal year.
q A few managers will be delighted;
they all have some bad apples they
want to get rid of. Wong wonders how
he is going to ensure that the layoffs
are equitable and non-discriminatory.
q He also worries about the loss of
talent and retaining the knowledge of
long-time employees.
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 Compensation and Benefits
q PAC pays at market rate
q Conducts a salary survey every three years to
ensure the company remains competitive.
q Two years ago, Culbertson restructured the
compensation system by broad-banding 14 salary
grade levels into a far simpler system of 5 levels
outcry from some employees who claimed it was
nothing but the loss of promotion levels and a
manipulation of the system (salary compression).
there are managers who have abused the system,
using the higher salary ranges to reward their favored q
few regardless of performance or longevity.
q The merit bonus plan had been Harriss baby. She
thought it was a good way to link compensation to q
actual results, and it was a key compensation
element in the early years, when Dukakis wanted
to encourage innovation and creativity. It may have
been effective early on, but Culbertson now sees it q
as an expensive giveaway that creates employee
anxiety.
q Employee benefits are another issue. Benefits
became increasingly expensive over time, and
every piece of the package is under scrutiny for
cost effectiveness.
q PAC supports retirement savings by matching
employee contributions to their pension plan at
50% of the employee contributions
q Paid time off is available as paid vacation time and
sick leave.
Stephens lobbied hard to get McNamara and
Dukakis to agree to tuition reimbursement for work-
related college courses.
Some employees work flexible schedules, and
some telecommute a few days a week if it is
appropriate to the job.
With the bonus system in place, annual base
salary adjustments have been kept low, generally
at a 2 to 2.5% increase. Culbertson suspects a
salary freeze is in the offing
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