Fundamentals of

Human Resource
Management
2e

Gary Dessler
 Strategic Human Resource
Management
Chapter 3

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 When you finish studying this chapter,
you should be able to:
1. Outline the steps in the strategic management
process.
2. Explain and give examples of each type of
companywide and competitive strategy.
3. Explain how employers create competitive
advantage through human resource management.
4. Define and give several examples of strategic
human resource management.
5. Learn how to devise human resource practices to
support the employers business strategy.
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 Case study: LIDL Romania

In 2010, LIDL took over the Tengelmanns group

networks of PLUS discount stores, from Romania and
Bulgaria.
March 2012 : This year, the German retailer LIDL
aims to expand its stores network in Romania to 200
units, compared to 134 at present, investing around
one million euros for each store. (http://www.zf.ro/)

What HR actions, related to this moves, you think

were necesarry?
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 The Planning Process

1. Set an objective
2. Make forecasts
3. Determine your alternatives for getting from
where you are now to where you want to be
4. Evaluate your alternatives
5. Implement and evaluate your plan

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 The Strategic Management Process

Strategic management
The process of identifying and executing the
companys strategic plan by matching its
capabilities with the demands of its environment

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 The Strategic Management Process

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 The Strategic Management Process

Strategic plan
The companys plan for how it will
match its internal strengths and
weaknesses with external
opportunities and threats in order
to maintain a competitive
advantage.

Competitive advantage occurs when an organization acquires or develops an

attribute or combination of attributes that allows it to outperform its competitors.
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 Results
Strategic planning

Objective

Strategic
actions
???

Current Forecast
situation
Time

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 The Strategic Management Process

Strategy
The companys long-term plan for how it will
balance its internal strengths and weaknesses
with its external opportunities and threats to
maintain a competitive advantage

SWOT Matrix
Environmental Scanning

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 SWOT Matrix with
Generic Examples: Figure 3.4

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 Worksheet for Environmental Scanning

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 The Strategic Management Process

Vision statement
A general statement of the companys intended
direction that evokes strong emotions in
organization members
Mission statement
Spells out who the company is, what it does, and
where its headed

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 Sample Hierarchy of Goals Diagram for
a Company: Figure 3.1

2013

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 Types of Strategies

Corporate strategy
Identifies the sorts of businesses that will
comprise the company and the ways in which
these businesses relate to each other

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 Generic Corporate Strategy Options

Diversification

Concentration

Vertical integration

Geographic expansion

Consolidation

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 Competitive Strategy

Competitive strategy
Identifies how to build and strengthen the
companys long-term competitive position in the
marketplace
Competitive advantage
Any factors that allow a company to differentiate
its product or service from those of its
competitors to increase market share

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 Generic Competitive Strategies

Cost
Differentiation
leadership

Focusers

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 Functional Strategies
Identify the basic courses of action that each
department will pursue in order to help the company
attain its competitive goals

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 Strategic Human Resource
Management
Human resource strategies
Refer to the specific human resource
management functional policies and practices
the company uses to help achieve its strategic
aims

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 Linking Company-wide
and HR Strategies: Figure 3.6

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 How to Align HR Strategy and Actions
with Business Strategy: Figure 3.9

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 Source: http://www.csb.gov.hk/english/publication/files/Develop_HRM_Plan_e.pdf

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 What is Strategic Human Resource
Management?
Strategic human resource management
Formulating and executing human resource
policies and practices that produce the employee
competencies and behaviors that the company
needs to achieve its strategic aims.

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 Alternative opinion

Strategic HR management is defined as:

Integrating human resource management
strategies and systems to achieve the overall
mission, strategies, and success of the firm
while meeting the needs of employees and
other stakeholders.

Source: Herman Schwind, Hari Das and Terry Wagar, Human Resource Management: A Strategic
Approach., cited on http://hrcouncil.ca/hr-toolkit/planning-strategic.cfm

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 Strategic Human Resource Management
The process:
1. Decide what the strategic goals are
2. Identify the employee skills and behaviors
that are required to achieve these goals
3. Formulate human resource management
policies and practices that will produce these
required employee skills and behaviors

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 HRs Strategy Formulation Role

The HR manager is in a good position to supply

competitive intelligence, such as details of
competitors incentive plans and information about
pending labor laws.
It is also in the best position to give advice about
the companys internal human strengths and
weaknesses.

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 Examples of overarching HR strategy
statements
A manufacturing company:
The HR strategy is to stimulate changes on a broad front
aimed ultimately at achieving competitive advantage through
the efforts of our people. In an industry of fast followers,
those who learn quickest will be the winners.

GlaxoSmithKline:
We want GSK to be a place where the best people do their
best work.

Source: http://s-h-r-m.blogspot.ro/2010/07/hr-strategies.html

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 Examples of overarching HR strategy
statements
AEGON:
The Human Resources Integrated Approach aims to ensure
that from whatever angle staff now look at the elements of
pay management, performance, career development and
reward, they are consistent and linked.

Pilkington Optronics:
The business strategy defines what has to be done to achieve
success and the HR strategy must complement it, bearing in
mind that one of the critical success factors for the company
is its ability to attract and retain the best people. HR strategy
must be in line with what is best in industry.
Source: http://s-h-r-m.blogspot.ro/2010/07/hr-strategies.html
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 HRs Strategy Execution Role

Top management formulates the companys

corporate and competitive strategies.
Next, the human resource manager creates and
implements human resource management policies
and practices that make sense in terms of the
companys goals.

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 Hourly Employee Attendance Policy
(example)
Excellent attendance is an expectation of all
employees of Your Company, Inc. Daily attendance is
especially important for hourly employees whose
customers and coworkers have the expectation of
on-time product shipping and delivery.
(source:http://humanresources.about.com/od/attendancepolicy/a/attendance_pol.htm)

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 Breaks and Lunch Policy (example)

Breaks and lunch time off are periods of time,

specified by the employer, during which employees
are not actively working on the job.
Employees use break time, which generally lasts
from 5 20 minutes per four hours worked, to eat,
visit the restroom, read, talk with friends, smoke, and
handle personal business.
(source:http://humanresources.about.com/od/attendancepolicy/a/attendance_pol.htm)

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 Five HR strategies for meeting your
organization's needs in the future
Restructuring strategies
Training and development strategies
Recruitment strategies
Outsourcing strategies
Collaboration strategies

(source: http://hrcouncil.ca/hr-toolkit/planning-strategic.cfm)

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 Three Important Strategic HR Tools:
Figure 3.8

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 Strategic
Management Tools

Strategy map
A graphical tool that
summarizes the chain
of activities that
contribute to a
companys success

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 Strategy Map for
Southwest Airlines: Figure 3.7

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 The Balanced Scorecard

Balanced scorecard
A process for assigning financial and nonfinancial
goals to the chain of activities required for
achieving the companys strategic aims and for
continuously monitoring results

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Kaplan and Norton model (1996)
Strategic map example (BSC format)
 The Balanced Scorecard

HR Scorecard
A process for assigning financial and nonfinancial
goals or metrics to the human resource
managementrelated chain of activities required
for achieving the companys strategic aims and
for monitoring results.

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 HR scorecard structure - Example

http://nachhaltigkeit2008.daimler.com/daimler/annual/2008/nb//English/30/50/10/Personalmanagement_Global-HR-Scorecard.gif
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 Digital Dashboards

Digital dashboard
Presents the manager with desktop graphs and
charts, so he or she gets a computerized picture
of where the company
stands on all the
metrics from the HR
Scorecard process

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 HR dashboards

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 HR dashboards

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 HR dashboards

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 Reports on Romanian HR practices and
strategies

Link: http://www.hr-club.ro/en/
(registration is necessary, but free)

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 Copyright

All rights reserved. No part of this publication may be reproduced, stored in a

retrieval system, or transmitted, in any form or by any means, electronic,
mechanical, photocopying, recording, or otherwise, without the prior written
permission of the publisher. Printed in the United States of America.

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