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Human Resource Human Resource ManagementManagement
ELEVENTH EDITIONELEVENTH EDITION
G A R Y D E S S L E RG A R Y D E S S L E R
B I J U V A R K K E YB I J U V A R K K E Y
© 2009 Dorling Kindersley (I) Pvt. Ltd.© 2009 Dorling Kindersley (I) Pvt. Ltd.All rights reserved.All rights reserved.
Strategic Human Resource Management Strategic Human Resource Management and the HR Scorecardand the HR Scorecard
Chapter 3Chapter 3
Part 1 | IntroductionPart 1 | Introduction
3–2© 2009 Dorling Kindersley (I) Pvt. Ltd. All rights reserved.
The Strategic Management ProcessThe Strategic Management Process
• Strategic ManagementStrategic Management The process of identifying and executing the The process of identifying and executing the
organization’s mission by matching its capabilities organization’s mission by matching its capabilities with the demands of its environment.with the demands of its environment.
• StrategyStrategy A chosen course of action.A chosen course of action.
• Strategic PlanStrategic Plan How an organization intends to balance its internal How an organization intends to balance its internal
strengths and weaknesses with its external strengths and weaknesses with its external opportunities and threats to maintain a competitive opportunities and threats to maintain a competitive advantage over the long-term.advantage over the long-term.
3–3© 2009 Dorling Kindersley (I) Pvt. Ltd. All rights reserved.
Business Vision and MissionBusiness Vision and Mission
• VisionVision A general statement of an organization’s intended A general statement of an organization’s intended
direction that evokes emotional feelings in direction that evokes emotional feelings in organization members.organization members.
• MissionMission Spells out who the company is, what it does, and Spells out who the company is, what it does, and
where it’s headed.where it’s headed.
3–4© 2009 Dorling Kindersley (I) Pvt. Ltd. All rights reserved.
FIGURE 3–1 The Strategic Management Process
3–5© 2009 Dorling Kindersley (I) Pvt. Ltd. All rights reserved.
FIGURE 3–2 A SWOT Chart
3–6© 2009 Dorling Kindersley (I) Pvt. Ltd. All rights reserved.
Achieving Strategic FitAchieving Strategic Fit
• The “Fit” Point of View (Porter)The “Fit” Point of View (Porter) All of the firm’s activities must be tailored to or fit All of the firm’s activities must be tailored to or fit
the chosen strategy such that the firm’s functional the chosen strategy such that the firm’s functional strategies support its corporate and competitive strategies support its corporate and competitive strategies.strategies.
• Leveraging (Hamel and Prahalad) Leveraging (Hamel and Prahalad) ““Stretch” in leveraging resources—supplementing Stretch” in leveraging resources—supplementing
what you have and doing more with what you have—what you have and doing more with what you have—can be more important than just fitting the strategic can be more important than just fitting the strategic plan to current resources.plan to current resources.
3–7© 2009 Dorling Kindersley (I) Pvt. Ltd. All rights reserved.
Strategic Human Resource ManagementStrategic Human Resource Management
• Strategic Human Resource ManagementStrategic Human Resource Management The linking of HRM with strategic goals and The linking of HRM with strategic goals and
objectives in order to improve business performance objectives in order to improve business performance and develop organizational cultures that foster and develop organizational cultures that foster innovation and flexibility.innovation and flexibility. Involves formulating and executing HR systems—HR Involves formulating and executing HR systems—HR
policies and activities—that produce the employee policies and activities—that produce the employee competencies and behaviors that the company needs competencies and behaviors that the company needs to achieve its strategic aims.to achieve its strategic aims.
3–8© 2009 Dorling Kindersley (I) Pvt. Ltd. All rights reserved.
FIGURE 3–6 Linking Company-Wide and HR Strategies
Source: © Gary Dessler, Ph.D., 2007.
3–9© 2009 Dorling Kindersley (I) Pvt. Ltd. All rights reserved.
Strategic Human Resource ChallengesStrategic Human Resource Challenges
Corporate productivity and
performance improvement
efforts
Increased HR team involvement
in design of strategic plans
Basic Strategic Challenges
Expanded role of employees in the
organization’s performance
efforts
3–10© 2009 Dorling Kindersley (I) Pvt. Ltd. All rights reserved.
Human Resource Management’s Human Resource Management’s Strategic RolesStrategic Roles
Strategy Execution
Role
Strategic Planning
Roles
Strategy Formulation
Role
3–11© 2009 Dorling Kindersley (I) Pvt. Ltd. All rights reserved.
FIGURE 3–7 Percent of Successful Mergers in Which HR Manager Was Involved
Source: Jeffrey Schmidt, “The Correct Spelling of M & A Begins with HR,” HR Magazine, June 2001, p. 105. Reproduced with permission of Soc. for Human Resource Mgmt. via Copyright Clearance Center.
3–12© 2009 Dorling Kindersley (I) Pvt. Ltd. All rights reserved.
Creating the Strategic Human ResourceCreating the Strategic Human ResourceManagement SystemManagement System
Human Resource Professionals
Employee Behaviors and Competencies
Components of a Strategic HRM System
Human Resource Policies and
Practices
3–13© 2009 Dorling Kindersley (I) Pvt. Ltd. All rights reserved.
FIGURE 3–8 Three Main Strategic Human Resource System Components
Source: Adapted from Brian Becker et al., The HR Scorecard: Linking People, Strategy, and Performance (Boston: Harvard Business School Press, 2001), p. 12.
Characteristics of HPWS• multi-skilled work teams• empowered front-line
workers• extensive training• labor-management
cooperation• commitment to quality• customer satisfaction
3–14© 2009 Dorling Kindersley (I) Pvt. Ltd. All rights reserved.
FIGURE 3–9 Basic Model of How to Align HR Strategy and Actions with Business Strategy
Source: Adapted from Garrett Walker and J. Randal MacDonald, “Designing and Implementing an HR Scorecard,” Human Resources Management 40, no. 4 (2001), p. 370.
“
3–15© 2009 Dorling Kindersley (I) Pvt. Ltd. All rights reserved.
FIGURE 3–A1 The Basic HR Scorecard Relationships
HR Activities
Organizational Performance
Emergent Employee Behaviors
Strategically Relevant
Organizational Outcomes
Achieve Strategic
Goals
3–16© 2009 Dorling Kindersley (I) Pvt. Ltd. All rights reserved.
FIGURE 3–A2 The Ten Steps in the HR Scorecard Approach to Formulating HR Policies, Activities, and Strategies
Source: © Gary Dessler, Ph.D., 2007.
3–17© 2009 Dorling Kindersley (I) Pvt. Ltd. All rights reserved.
Creating an HR ScorecardCreating an HR Scorecard
1
2
3
4
5
Outline value chain activities
Define the business strategy
Outline a strategy map
Identify strategically required outcomes
Identify required workforce competencies and behaviors
6
7
8
9
10
Create HR Scorecard
Identify required HR policies and activities
Choose HR Scorecard measures
Summarize Scorecard measures on digital dashboard
Monitor, predict, evaluate
The 10-Step HR Scorecard Process
3–18© 2009 Dorling Kindersley (I) Pvt. Ltd. All rights reserved.
FIGURE 3–A3 Simple Value Chain for “The Hotel Paris”
Source: © Gary Dessler, Ph.D., 2007.
3–19© 2009 Dorling Kindersley (I) Pvt. Ltd. All rights reserved.
FIGURE 3–A4Strategy Map for Southwest Airlines
Source: Adapted from “Creating a Strategy Map,” Ravi Tangri, [email protected].
3–20© 2009 Dorling Kindersley (I) Pvt. Ltd. All rights reserved.
FIGURE 3–A5 HR Scorecard Process for Hotel Paris International Corporation*
*Note: An abbreviated example showing selected HR practices and outcomes aimed at implementing the competitive strategy, “To use superior guest services to differentiate the Hotel Paris properties and thus increase the length of stays and the return rate of guests, and thus boost revenues and profitability and help the firm expand geographically.”