Chapter 2 Strategy and Human Resources Planning

Chapter 2 Strategy and Human Resources Planning.

Learning Outcomes. After studying this chapter, you should be able to Explain how human resources planning and a firm’s mission, vision, and values are integrally linked to its strategy. Understand how an organization’s external environment influences its strategic planning. Understand why it is important for an organization to do an internal resource analysis. Explain the linkages between competitive strategies and HR. Understand what is required for a firm to successfully execute a strategy and assess its effectiveness. Describe how firms evaluate their strategies and HR execution..

Discussion Starter #1. This photo shows an Amazon Prime Air drone..

2.1 Strategic Planning and Human Resources Planning.

Figure 2.1: Linking Strategic Planning and Human Resources.

2.2 Step One: Mission, Vision, and Values. Mission – The basic purpose of the organization as well as its scope of operations Strategic vision – A statement about where the company is going and what it can become in the future Core values – The strong and enduring beliefs and principles that guide a firm’s decisions and are the foundation of its corporate culture.

2.2a Developing a Mission Statement. To begin crafting a business’s mission statement, one should answer the following questions: What is my organization’s reason for being? What need does the organization need to fulfill that isn’t already being met by another firm or could be better met? For whom will the firm fulfill the need? Who are its customers? Where is the firm’s market and customers? Will the firm operate locally, geographically, or globally? What core values do the people in the firm share as part of the organization’s mission? How do these values differentiate the organization from other companies?.

2.2b HR’s Role in Establishing and Reinforcing a Firm’s Mission, Vision, and Values.

2.3 Step Two: External Analysis. SWOT analysis – A comparison of one’s strengths, weaknesses, opportunities, and threats for strategy formulation purposes Summarizes the major facts and forecasts derived from external and internal analyses Environmental scanning – Systematic monitoring of the major external forces influencing the organization Includes forces in the business environment (also called the remote environment) and the competitive environment Business environment – Factors in the external environment that a firm cannot directly control but that can affect its strategy and performance.

Figure 2.2: The Five Forces Framework. An illustration shows the five forces framework. In the middle of the illustration is a circle labeled “RIVAL FIRMS” surrounded by rectangles labeled with the other four forces. The rectangle above the circle is labeled “NEW ENTRANTS”; the rectangle below the circle is labeled “SUBSTITUTES”; the rectangle to the left of the circle is labeled “SUPPLIERS”; the rectangle to the right of the circle is labeled “CUSTOMERS.” An arrow from each of the rectangles points toward the circle labeled “RIVAL FIRMS” in the middle of the illustration..

Figure 2.4: An Example of an HR Dashboard. The H R dashboard provides the H R departmental view, which includes the following tabs: workforce demographics, turnover, retirement, service years, and absentee. A pie chart provides the 20 18 headcount by status. Full-time, 308. Part-time, 19. Others, 152. A stacked bar chart provides the average employee absentee hours on a scale of 0 to 10 hours. 3.32 hours is marked. A speedometer chart provides the employee turnover rate, 11.54%. A bar chart provides the average employee service years, 7.44 and 3.06..

2.4 Step Three: Internal Analysis. In addition to an external analysis, organizations must also analyze their own strengths and weaknesses..

2.4a Core Capabilities. Core capabilities – Integrated knowledge sets within an organization that distinguish it from its competitors and deliver value to customers Value creation – What a firm adds to a product or service by virtue of making it; the amount of benefits provided by the product or service once the costs of making it are subtracted Core capabilities can consist of a combination of three resources: Processes – “Recipes” or standard routines for how work will be done and results will be accomplished Systems (technologies) – Include information systems, databases, proprietary technologies, and the like People – Include the knowledge, skills, and abilities of employees most critical for executing the firm’s plan to create the most value for customers and whose skills are difficult to replicate or replace.

2.4b Sustaining a Competitive Advantage Through People.

2.4c Types of Talent and Their Composition in the Workforce.

2.4d Corporate Culture. Cultural audits – Audits of the culture and quality of work life in an organization Examine values, attitudes, beliefs, and expectations Conducting a Cultural Audit To conduct a cultural audit, employees can be surveyed about how they feel about issues such as: How is business conducted within your organization? How do people communicate with one another? How are conflicts and crises resolved?.

Figure 2.6: Four Basic Types of Organizational Culture.

2.4e Forecasting (slide 1 of 3). Forecasting a Firm’s Demand for Employees Quantitative Approaches Trend analysis – A quantitative approach to forecasting labor demand based on a factor such as sales More sophisticated statistical planning methods include modeling or multiple predictive techniques. Qualitative Approaches Management forecasts – The opinions (judgments) of supervisors, department managers, experts, or others knowledgeable about the organization’s future employment needs Delphi technique – Attempts to decrease the subjectivity of forecasts by soliciting and summarizing the judgments of a preselected group of individuals.

2.4e Forecasting (slide 2 of 3). Forecasting the Supply of Employees Staffing Tables and Markov Analyses Staffing table – A table that shows a firm’s jobs, along with the numbers of employees currently occupying those jobs and future (monthly or yearly) employment requirements Markov analysis – A method for tracking the pattern of employee movements through various jobs in a firm Quality of fill – A metric designed to measure how well new hires that fill positions are performing on the job Skill Inventories and Management Inventories Skill inventories – Files of personnel education, experience, interests, skills, and so on that allow managers to quickly match job openings with employee backgrounds. Management inventories – Data gathered on managers.

2.4e Forecasting (slide 3 of 3). Forecasting the Supply of Employees (cont’d) Replacement Charts and Succession Planning Replacement charts – Listings of current jobholders and people who are potential replacements if an opening occurs Succession planning – The process of identifying, developing, and tracking key individuals for executive positions Succession planning and replacement charts are often developed in conjunction with talent reviews. Talent reviews – Strategic meetings to determine if a company has the human resources it needs to compete in the future.

Figure 2.9: An Executive Replacement Chart. A hierarchy in an executive replacement chart is shown. In the upper-right corner, the following Key is shown: Names provided are replacement candidates. A. Promotable now. B. Needing development. C. Not fitted to position. 1. Superior performance. 2. Above-average performance. 3. Acceptable performance. 4. Poor performance. The hierarchy in an executive replacement chart is as follows. Manager, J Green A 2, branches into the following two. Assistant to manager, L Martinez B 1. Assistant Manager, R Gorton A 2, and T Brown B 3. Assistant manager further branches into 8, which are grouped in two of four. Group 1. Division H R manager, C Broderick A 1. Accounting division manager, W Shepard C 2. Planning division manager, B Verkozen A 1, and T Turner B 1. Technical advisor, N Lyman B 3. Group 2. Northwest region manager, L Green A 2, and A Tupper C 4. Central region manager, J Gomez A 1. North central region manager, D Lim B 2. Eastern region manager, O Morris B 3..