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CHAPTER ONE
Meeting Present and Emerging
Strategic Human Resource Challenges
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Chapter Objectives
Review Key Environmental
Challenges (external)
Review Key Organizational
Challenges (internal)
Review Individual
Challenges
Discuss Planning and
Implementing HR Policies
from a Strategic Prospective
Link HR Strategies and
Firms Performance
Briefly Look at Best HR
Practices
Review Key Terms
Brain Drain
Decentralization
Downsizing
Environmental Challenges
Exempt Employees (salaried)
Human Resource Strategies (HRS)
Human Resource Tactic
Human Resources (HR)
Line Employees
Managers
Nonexempt Employees
Outsourcing
Staff Employees
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Key Terms
Human Resources (HR) - people who work in an
organization (personal/associates/employees)
Human Resource Strategies (HRS) the deliberate
use a companys human resources to gain a
competitive advantage in the marketplace
Human Resource Tactics policies or procedures
put in place to gain that advantage


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More Terms
Managers person who is in charge of others and is responsible
for the timely and correct execution of actions that promote his or
hers units success
Line Employees employees that directly produces a companys
goods or delivers a companys services
Staff Employees - employees that support the line employees
Exempt Employees (salaried) employees that do not receive
extra pay for overtime (work beyond 40-hours per week)
Nonexempt Employees workers that do receive overtime
compensation




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Environmental Challenges
Environmental Challenges: forces external to a firm
influence behavior but largely beyond managements
control
Rapid Change
The Internet Revolution
Workforce Diversity
Globalization
Legislation
Work/Life Balance
Skill Shortages & the Rise of the Service Sector
Natural Disasters

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Organizational Challenges
Organizational Challenges concerns that are internal to a
company effective mangers identify these issues and deal with
them before they become a major issue for the company. This
requires a company be proactive rather than reactive when dealing
with HR issues
Competitive Position
Decentralization
Downsizing
Organizational Restructuring
Self-Managed Work Teams
The Growth of Small Businesses
Organizational Culture
Technology
Data Security
Outsourcing

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Individual Challenges
Individual Challenges address the issues relevant to
individual employees
Matching People and Organizations
Ethics and Social Responsibility
Productivity
Empowerment
Brain Drain
Job Insecurity
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Strategic Human Resource Planning
To be successful firms must align their HR
strategies with:
Their organizations overall strategies
The environment
Their organizations characteristics
Their organizations capabilities
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Strategic Human Resource Planning
- The Benefits
Encouragement of Proactive Rather Than Reactive
Behavior
Explicit Communication of Company Goals
Stimulation of Critical Thinking and Ongoing
Examination of Assumptions
Identification of Gaps Between Current Situation
and Future Vision
Encouragement of Line Managers Participation
Identification of HR Constraints and Opportunities
Creation of Common Bonds

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Strategic HR Planning -
The Challenges
Maintaining a Competitive Advantage
Reinforce Overall Business Support
Avoiding Excessive Concentration on Day-to-Day
Problems
Developing HR Strategies Suited to Unique
Organizational Features
Coping with the Environment
Securing Management Commitment
Translating the Strategic Plan into Action
Combining Intended and Emergent Strategies
Accommodating Change

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HR Strategies & Company Strategies
Best Fit
Fit - refers to the compatibly between the HR strategies
and other important aspect the organization

Evolutionary Business Strategy
(flexibility, quick response, entrepreneurship, risk-sharing, decentralization)
vs.
Steady-State Strategy
(efficiency, detailed work planning, internal grooming of employees for promotion,
long-term career development, centralization)
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Defender Strategy
(conservative businesses operating in a stable environment)
Work Flows
Detailed work planning
Explicit job descriptions
Staffing
Internal recruitment
HR department makes selection
decision
Formal hiring process
Employees Separations
Hiring Freeze
Concern for terminated workers
Preferential rehiring policy

Performance Appraisal
Uniform appraisal procedure
Used as a control devise
High dependence on superior
Training
Individual training
On-the job training
Job-specific training
Make Skills
Compensation
Fixed pay
Seniority based pay
Centralized pay decisions
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Prospector Strategy
(growth firms emphasizing innovation, new products and first to market)
Work Flows
Innovation
Flexibility
Broad job classes
Staffing
External recruitment
Coworkers makes selection decision
Emphasis on fit of coworkers with
culture
Informal hiring and socialization of
new employees
Employees Separations
Layoffs
Recruit as needed
Individuals are on their own

Performance Appraisal
Customized appraisals
Used as departmental tool
Multiple inputs for appraisals
Training
Team-based or cross-functional
training
External training
Buy skills
Compensation
Individual-based pay
Performance-based pay
Decentralized pay decisions

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HR Strategies & the Environment -
Best Fit
Degree of Uncertainty
How much accurate information you have to make decisions
Volatility
How often does your environment changes
Magnitude of Change
How drastic are the changes when they occur
Complexity
Sheer number of elements in the environment that effect the company
and the industry (individually or together)

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HR Strategies & Organizational Characteristics
Best Fit
The Production Process for Converting Inputs into
Output
Routine vs. non-routine product production
The Firms Market Posture
Low-rate of growth/narrow market vs. wide market segment and high
sales growth
The Firms Overall Managerial Philosophy
Autocratic leadership style/formal hiring procedures vs. risking taking
and supervisors having a major role in hiring procedures
The Firms Organizational Structure
Highly formalized HR systems vs. less regimented
The Firms Organizational Culture
Moral commitment vs. entrepreneurial climate

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HR Strategies & Organizational Capabilities
Best Fit
Leveraging your firms distinctive competencies
to give your company a competitive advantage:
Technical abilities
Management Systems
Reputation

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HR Best Practices
Employment Security
Selectivity in Recruiting
High Wages
Incentive Pay
Employee Ownership
Information Sharing
Participation & Empowerment
Self-managed Teams
Training & Skills Development
Cross-Utilization and Cross-training
Promotion from Within

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