3 Qs

The Strategic Management Process involves a 7 step process. List and describe each step.

*1) ask, "Where are we now as a business?"* The manager typically begins (step 1) of the Strategic Management Process by asking this question. Here he or she defines the company's current business. Specifically, "What products do we sell, where do we sell them, and how do our products or services differ from our competitors'?" *2) evaluate the firm's internal and external strengths, weaknesses, opportunities, and threats;* to answer the question "Are we in the right business given our strengths and weaknesses and the challenges we face?" The manager's aim is to create a strategic plan that makes sense in terms of the company's strengths, weaknesses, opportunities, and threats. *3) formulate a new business direction;* based on the analysis (the environmental scan and SWOT). Decide what our new business should be, in terms of what we sell, where we will sell it, and how our products or services differ from competitors' products and services. Some managers express the essence of their new business with a vision statement. *4) decide on strategic goals;* the manager's next step is to translate step 3's desired new direction into strategic goals. *5) choose specific strategies or courses of action.* the manager chooses strategies—courses of action—that will enable the company to achieve its strategic goals. *6) implement/execute the strategic plan.* This means actually hiring (or firing) people, building (or closing) plants, and adding (or eliminating) products and product lines *7) evaluate the strategic plan's results.* Things don't always turn out as planned. All managers should periodically assess the progress of their strategic decisions.

Describe the three *standard* competitive strategies managers use to achieve competitive advantage.

*1. a Cost Leadership strategy* means becoming the low-cost leader in an industry. Walmart is a classic example. *2. a Differentiation strategy* is when the firm seeks to be unique in its industry along dimensions that are widely valued by buyers. *3. a Focusers strategy* is to carve out a market niche (like Ferrari). They offer a product or service that their customers cannot get from generalist competitors (such as Toyota).

Describe the three important tools HR managers use to translate the company's broad strategic goals into specific HR management policies and procedures.

*1. the Strategy Map* is a graphical tool that summarizes the chain of activities that contribute to a company's success, and so shows employees the "big picture" of how their performance contributes to achieving the company's overall strategic goals. *2. the HR Scorecard* refers to a process for assigning financial and nonfinancial goals or metrics to the human resource management-related strategy map chain of activities required for achieving the company's strategic aims. The idea is to take the strategy map and to quantify it. *3. a Digital Dashboard* presents the manager with desktop graphs and charts, showing a computerized picture of how the company is doing on all the metrics from the HR Scorecard process. It gives managers a picture of where the company has been and where it's going, in terms of each activity in the strategy map. This enables the manager to take corrective action.

Describe the three important tools HR managers use to translate the company's broad strategic goals into specific HR management policies and procedures?

*1. the Strategy Map* is a strategic planning tool that shows the "big picture" of how each department's performance contributes to achieving the company's overall strategic goals. It helps the manager and each employee visualize and understand the role their department plays in achieving the company's strategic plan. Management gurus sometimes say that the map clarifies employees' "line of sight," by linking their efforts with the company's ultimate goals. *2. the HR Scorecard* *3. the Digital Dashboard*

*T/F* Devising a strategic plan is top management's responsibility. In practice, devising the firm's overall strategic plan involves frequent meetings and discussions among top-level managers. Top-level managers then coordinate with lower-level managers to hammer out the details of their roles in achieving these strategic plans.

*False* Devising a strategic plan is top management's responsibility. However, top executives rarely formulate strategic plans without the input of lower-level managers. Few people know as much about the firm's competitive pressures, vendor capabilities, product and industry trends, and employee capabilities and concerns than do the company's department managers. In practice, devising the firm's overall strategic plan involves frequent meetings and discussions among and between top and lower-level managers. The top managers then use the information from these interactions to hammer out their strategic plan.

*T/F* Measuring how one is doing (for instance, in terms of employee turnover or productivity) is enough for deciding what to change.

*False* Measuring how one is doing (for instance, in terms of employee turnover or productivity) is *rarely* enough for deciding what to change. Instead, one must know "How are we doing?" in relation to something. Similarly, you may want to benchmark your results—compare high-performing companies to your own, to understand what makes them better.

Executing an employee engagement HR strategy involves six steps. Briefly describe each step.

*Step 1: Set measurable objectives* for the program. For example, Kia UK set objectives for improving the survey feedback scores for line managers' behaviors by 10% in terms of communication, the quality of appraisal feedback they gave their direct reports, the recognition of work done, and the respect between manager and employee. Other objectives included reducing employee turnover employment costs (e.g., recruitment costs) by at least 10% per year. *Step 2: Provide an extensive leadership development program.* Kia UK sent all managers for training to improve their management skills. They then tested the new skills with "360-degree" assessment tools. *Step 3: Institute new employee recognition programs.* For Kia UK, these included giving "Outstanding Awards" to selected employees quarterly and "Kia thank you" cards for jobs well done. *Step 4: Improve internal communications.* Kia UK instituted quarterly employee briefings, more extensive use of performance appraisals, and launched a new corporate intranet called Kia Vision that provided key business information to all employees. Based on employee feedback, Kia UK also decided to institute an employee forum consisting of one representative from each department. The forum empowered and involved employees by enabling them to express opinions, suggestions, and concerns about their jobs. *Step 5: Institute a new employee development program.* This involved using the company's appraisal process to identify employees' training needs. Kia then created training plans for each employee. They based these plans on Kia's needs and on the employee's stated career aspirations. *Step 6: Change the compensation and other policies to ensure they are aligned with the new cultural values.* Kia UK eliminated bonuses and substituted fixed-rate percentage-based salary increases. They also rewrote the entire employee handbook and all HR policies and procedures to ensure they were aligned with new cultural values.

Employers conduct HR audits to determine the HR function's current effectiveness and to ascertain what steps need to be taken to improve it. In conducting the HR audit, managers often benchmark their results to comparable companies. Discuss 4 things things that are typically audited.

1. Payroll (such as legal compliance) 2. Compensation (policies, incentives, survey procedures, and so on) 3. Training and development (new employee orientation, workforce development, technical and safety, career planning, and so on) 4. Compliance with federal, state, local employment-related legislation 5. Recruitment and selection (including use of selection tools, background checks, and so on)

Management planning involves what five steps:

1. setting goals 2 making basic planning forecasts 3. reviewing alternative courses of action 4. evaluating which options are best 5. choosing and implementing your plan.

How can HR policies and practices support a firm's sustainability strategy and goals?

Consider PepsiCo's aims to deliver "Performance with Purpose." This means achieving financial performance while also achieving human sustainability, environmental sustainability, and talent sustainability. PepsiCo's human resource managers can help the company achieve these goals. For example, they can use its *workforce planning processes* to help determine how many and what sorts of "green" jobs the company will need to recruit for. They can work with top management to institute flexible work arrangements that help sustain the environment by reducing commuting. They can *use incentive systems* that motivate employees to achieve PepsiCo's sustainability goals.

How can data mining systems help improve an employer's employee selections and other practices?

Data mining systems can use tools like statistical analysis to sift through huge amounts of employee data to identify correlations; these can then be used to improve an employer's employee selection and other practices.

How do human resource managers contribute to the development of the firm's overall strategic plan?

Devising a strategic plan is top management's responsibility. However, top executives rarely formulate strategic plans without the input of lower-level managers. Few people know as much about the firm's competitive pressures, vendor capabilities, product and industry trends, and employee capabilities and concerns than do the company's department managers. The human resource manager is in a good position to *supply "competitive intelligence"*— information on what competitors are doing. Details regarding competitors' incentive plans, employee opinion surveys that elicit information about customer complaints, and information about pending legislation such as labor laws are examples. Human resource managers should also be the masters of *information about their own firms' employees' strengths and weaknesses.*

Define employee engagement and explain why it is important?

Employee engagement refers to being psychologically involved in, connected to, and committed to getting one's jobs done. Employee engagement is important because it drives performance and productivity. Employee engagement is correlated with employees' customer service productivity, and improvements in employee engagement were associated with significant increases in sales, product quality, productivity, safety incidents at work, retention and absenteeism, and revenue growth. According to a Gallup survey, business units with the highest levels of employee engagement have an 83% chance of performing above the company median; those with the lowest employee engagement have only a 17% chance.

How does management depend on human resource managers to properly execute the company's strategic plans and goals?

First, management formulates strategic plans and goals. In turn, executing these plans and achieving these goals depends on having the right mix of employee competencies and behaviors. And finally, to produce these required employee competencies and behaviors, the human resource manager must put in place the right mix of recruitment, selection, training, and other HR strategies, policies, and practices.

Gallup recently found that about ____% of employees were engaged, ____% were not engaged, and ____% were actively disengaged.

Gallup recently found that about *30%* of employees were engaged, *50%* were not engaged, and *20%* were actively disengaged. The problem is that, depending on the study, only about 21-30% of employees nationally are engaged.

____ (quantitative measures of human resource management activities such as employee turnover) are critical in creating high-performance human resource policies and practices.

Human resource metrics

Name three important strategic human resource management tools.

Important strategic human resource management tools include the strategy map, the HR scorecard, and digital dashboards.

What are improvements in employee engagement associated with?

Improvements in employee engagement were associated with significant increases in sales, product quality, productivity, safety incidents at work, retention and absenteeism, and revenue growth. ▪ organizations with 9 engaged employees for every 1 actively disengaged had about 1 1/2 times the earnings per share of their competitors ▪a 5% increase in employee engagement correlates to a 0.7% increase in operating margins. ▪ Companies with highly engaged employees are also less likely to be unionized. ▪*Retention and Absenteeism* - highly engaged employees lost only about 7.5 days of productivity per year, compared to about 14 days for disengaged employees. ▪*Revenue Growth* - companies with highly engaged employees have 26% higher revenue per employee.

Why is it important for managers to understand the role HR policies and practices play in achieving their companies' strategic goals?

It is important because managers can't really design their human resource policies and practices without understanding the role these policies and practices are to play in achieving their companies' strategic goals.

What are the functional strategies of the human resource department?

Its functional strategies are human resource management strategies. Strategic human resource management means formulating and executing human resource policies and practices that produce the employee competencies and behaviors the company needs to achieve its strategic aims

Why must managers formulate strategic plans?

Managers formulate strategic plans *to take the company from where it is now to where he or she wants it to.*

What do managers use to answer questions such as: to what extent are your new policies helping to achieve strategic goals?

Managers use *strategy-based metrics* Strategy-based metrics measure the activities that contribute to achieving a company's strategic aims.

What can managers do to improve employee engagement?

Practical managerial actions that can foster employee engagement include: *1. Providing supportive Supervision* - managers who focus on their employees' strengths can "practically eliminate active disengagement," while "bosses from hell" will kill employee engagement *2.* Making sure employees *(a)* understand how their departments contribute to the company's success, *(b)* see how their own efforts contribute to achieving the company's goals, and *(3)* get a sense of accomplishment from working at the firm. *3. Hold managers responsible for employee engagement.*

What is the basic idea behind strategic human resource management?

The basic idea behind strategic human resource management is this: In formulating human resource management policies and activities, the aim should be to produce the employee skills and behaviors that the company needs to achieve its strategic goals. Accenture, a major global consulting company, puts it this way: HR strategy involves "Creating an HR vision and roadmap that supports strategic business outcomes while delivering high-value talent and HR services that drive an improved employee and manager experience."

What results should the company's HR policies and practice produce? How does HR produce these results?

The company's HR policies and practices should produce the employee competencies and behaviors that the company needs to achieve its strategic goals. To produce these required employee competencies and behaviors, the human resource manager must put in place the right mix of recruitment, selection, training, and other HR strategies, policies, and practices. This is called strategic human resource management.

What does the management planning process involve?

The management planning process includes: *1.* Setting an objective *2.* Making forecasts *3.* Determining what your alternative are *4.* Evaluating your alternatives, *5.* Implementing and evaluating your plan.

What is the "employee engagement problem"?

The problem is that, depending on the study, only about 21-30% of employees nationally are engaged. Gallup recently found that about 30% of employees were engaged, 50% were not engaged, and 20% were actively disengaged.

*T/F* Being able to measure, benchmark, and scientifically analyze human resource management practices makes it possible for the manager to identify and then to put in place high-performance work practices.

True

*T/F* Employers write their own policies and procedures, or adapt ones from existing sources (or both).

True

*T/F* Benchmarking shows how your human resource management system's performance compares to the competition. However it may not show the extent to which your firm's HR practices are supporting its strategic goals.

True Benchmarking provides only one perspective on how your company's human resource management system is performing.

Once a business decides how it will compete (develops a corporate strategy), it turns to formulating ____ to support its competitive aims

functional (departmental) strategies

Employers are using ____ to answer questions like these: "Which units, departments, or individuals need attention?" "Which actions have the greatest impact on my business?" "Why do employees choose to stay with—or leave—my company?" "What's the daily store volume?"

talent analytics