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MGHB12H3 (73)
Chapter 002

Human Resource Management - Chapter 002

7 Pages
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Department
Management (MGH)
Course Code
MGHB12H3
Professor
Joanna Heathcote

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CHAPTER 2: STRATEGY & HR PLANNING 25 September 2013 Strategic Planning are procedures for making decisions about the organization’s long-term goals and strategies. It focuses on how the organization will position itself relative to its competitors to ensure its long-termsurvival,createvalue,andgrow.HumanResourcesPlanning(HRP)istheprocessofanticipating and providing for the movement of people into, within, and out of an organization. Strategic Human Resources Management (SHRM) is the pattern of human resources deployments and activities that enable an organization to achieve its strategic goals. Strategic Planning and HR Planning: Linking the Processes HRP relates to strategic planning in several ways, at a fundamental level: Strategy formulation and strategy implementation. HRP provides a set of inputs into the strategic formulation process in terms of whatispossible,whetherafirm hasthetypesandnumbersofpeopleavailabletopursueagivenstrategy. HRP is important in terms of strategy implementation, as once the firm has devised its strategy, the company’s executives must make resource allocation decisions to implement that strategy (IE: Firm’s structure, processes, human capital). HRP and strategic planning tends to be most effectivewhen there is a reciprocal relationship between the two processes. Step 1: Mission, Vision, and Values Mission is the basic purpose of the organization as well as its scope of operations. Strategic Vision is a statement about where the company is going and what it can become in the future; clarifies the long- term direction of the company and its strategic intent. Core Values are the strong and enduring beliefs and principles that the company uses as a foundation for its decisions. Step 2: Environmental Analysis Mission, vision, and values drive the analysis of external opportunities and threats. These changes representopportunitiesandsomeofthemrepresentthreatstotheorganization.EnvironmentalScanning is the systematic monitoring of the major external forces influencing the organization:  Economic factors and development information (IE: General, regional, global conditions)  Industry and competitive trends (IE: New processes, services, innovations)  Technological changes (IE: Information technology, innovations, automations)  Government and legislative issues (IE: Laws, administrative rulings)  Social concerns (IE: Childcare, eldercare, environment, educational priorities)  Demographic and labor market trends (IE: Age, composition, literacy) The competitive environment includes the specific organizations with which the firm interact (IE: Customers, rival firms, new entrants, substitutes, suppliers). Many factors influence the labor supply (IE: Demographics, population, national and regional economics, education, etc). At an operational level, the change in labor supply directly influences hiring plans that must take into account the demographic composition of the population in the area in which the organization is located or plans to locate. With a “maturing” workforce, HRP must consider the implications for recruitment and replacement policies. From a strategic standpoint, changes in the labor supply can limit the strategies available to firms. High growth companies may find it difficult to find the talent they need to expand their business. Step 3: Internal Analysis Internal analysis provides strategic decision makers with an inventory of organizational skills and resources as well as performance levels. Three C’s:  Capabilities: People as a Strategic Resource o Core Capabilities are integrated knowledge sets within an organization that distinguish it from itscompetitors and delivervalueto customers. It tends to be limited in number, but they provide a long-term basis for technology innovation, product development, and service delivery o Organizations can achieve a sustained competitive advantage through people if they:  Valuable resources  People are a competitive advantage when they improve efficiency  Value increased when employees find way to decrease costs or provide something unique to customers  Rare resources  Knowledge, skills, abilities not available to competitors  Resources difficult to imitate  Employees cannot be copied by others  Resources must be organized  Talents combined  Composition: The Human Capital Architecture o Managers must determine whether people are available, internally or externally, to execute an organization’s strategy o Managers have to make tough choices about whom to employ internally, contract externally, how to manage different types of employees with different skills o Strategic Knowledge Workers are a group of employees who tend to have unique skills directly linked to the company’s strategy and are difficult to replace (IE: R&D scientists). Companies tend to make long-term commitments to these employees, investing in their continuous training and development o Core Employees area group ofemployeeswho haveskills that arevaluableto acompany but are not particularly unique or difficult to replace (IE: Salespeople) o Supporting Workers are a group of employees who have skills that are of less strategic value to the firm and available in the labor market o Partners and Complementary Skills are a group of individuals with skills that are unique but frequently are not directly related to a company’s core strategy (IE: Lawyers)  Culture: Values, Assumptions, Beliefs, and Expectations (VABEs) o Cultural Audits are audits of the culture and quality of work life in an organization o Values Based Hiring is the process of outlining the behaviors that exemplify a firm’s corporate culture and then hiring people who are a fit for them Forecasting: A Critical Element of Planning  Forecasting the Demand for Labor o Considerations  Product or Service Demand  Economics  Technology  Financial Resources  Absenteeism or Turnover  Organizational Growth  Management Philosophy o Techniques  Trend Analysis is a quantitative approach to forecasting labor demand based on an organizational index (IE: Sales)  Select an appropriate business factor (Sales or value added: The selling price of the firm’s products minus the costs of the materials and supplies used to make them)  Plot a historical trend of the business factor in relation to the number of employees  Compute the productivity ratio for at least the past five years  Calculate HR demand by multiplying the business factor by the productivity ratio  Project the firm’s HR demand out to the target year  Managerial Forecasts is a qualitative approach. The opinions (judgments) of supervisors, department managers, experts, or other 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 (IE: HR personnel developing a list of questions to ask managers in companies)  Forecasting the Supply of Labor o Techniques  Staffing Tables is a graphic representation of all organizational jobs, along with thenumbersofemployeescurrentlyoccupyingthosejobsandfuture(monthlyor yearly) employment requirements (focus on number of employees)  Markov Analysis is a method for tracking the pattern of employee movements through various jobs (focus on number of employees)  Quality of Fill is a metric designed to assess how well new hires and performing on the job (turnover and absenteeism rates, focus on number of employees)  SkillsInventoriesarefilesofpersonneleducation,experience,interests,andskills that allow managers to quickly match job openings with employee backgrounds (focus on types of employees)  Management Inventories is when data are gathered on managers  Replacement Charts are listings of current jobholders and people who are potential replacements if an opening occurs  Succession Planning is the process of identifying, developing, and tracking key individuals for executive positions o External considerations  Demographic changes  Education of workforce  Labor mobility  Government policies  Unemployment rate  Balancing supply and demand considerations o Shortage: Recruitment  Full time  Part time  Recalls o Surplus: Reductions  Layoff  Attrition
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