Chapter 2: Strategic Human Resource Management

Labor and Employee Relations

-Companies can choose to treat employees as an asset or as an expense -HRM must make choices about how much employees participation in decision making, what rights employees have, and what company's responsibility is to them -The approach a company takes in making these decisions can result in it either successfully achieving its short and long-term goals or ceasing to exist

Five Categories of Directional Strategies

-Concentration -Internal growth -External growth -Downsizings -Mergers and acquisitions

Porter's Strategies

-Cost -Differentiation

Business Model Accounting Concepts

-Fixed costs -Variable costs -Margins -Gross margin

SWOT Analysis for Google, Inc.

Strengths -Expanding liquidity -Operational efficiency -Broad range of services portfolio Weaknesses -Issues with Chinese government -Dependence on advertising segment -Loses at YouTube Opportunities -Growing demand for online video -Growth in Internet advertising market -Inorganic growth Threats -Weak economic outlook -Invalid clicks -Microsoft-Yahoo! deal

Development

The acquisition of knowledge, skills, and behaviors that improve an employee's ability to meet changes in job requirements and in client and customer demands

Performance Management

The means through which managers ensure that employees' activities and outputs are congruent with the organization's goals -Pay structure, incentives, and benefits -Labor and employee relations

Strategic Choice

The organization's strategy; the ways an organization will attempt to fulfill its mission and achieve its long-term goals

Downsizing

The planned elimination of large numbers of personnel, designed to enhance organizational effectiveness

Selection

The process by which an organization attempts to identify applicants with the necessary knowledge, skills, abilities, and other characteristics that will help it achieve its goals

Strategy Formulation

The process of deciding on a strategic direction by defining a company's mission and goals, its external opportunities and threats, and its internal strengths and weaknesses

Job Design

The process of defining the way work will be performed and the tasks that will be required in a given job

Strategy Implementation

The process of devising structures and allocating resources to enact the strategy a company has chosen This includes structuring the organization, allocating resources, ensuring that the firm has skilled employees in place, and developing reward systems that align employee behavior with the strategic goals. this process entails a constant cycling of information and decision making

Internal Analysis

The process of examining an organization's strengths and weaknesses. It focuses on the quantity and quality of resources available to the organization - financial, capital, technological, and human resources. Organizations have to accurately assess each resource to decide whether it is a strength or a weakness

Job Analysis

The process of getting detailed information about jobs

Recruitment

The process of seeking applicants for potential employment

Vertical Alignment

-HR practices and processes address the strategic needs of the business -Through recruitment, selection and placement, training and development and career management, HRM secures the proper number of people with the levels, knowledge and skills required in the strategic plan -HRM develops "control" systems that ensure that those employees are acting in ways achieve of the goals in the strategic plan

HRM Practice Options

-Job analysis/design -Training/development -Labor-employee relations -Recruitment/selection -Pay structure/incentives/benefits -Performance management

Strategy Formulation

-Mission: statment of the organization's reason for being; it usually specifies the customers served, the needs satisfied and/or the values received by the customers, and the technology used -Goals -External Analysis -Internal analysis -Strategic choice

HRM's Three Implementation Variables

-Task -People -Reward systems

Strategy Implementation Variables

-Types of information -Organizational structure -Task design -Select, train, develop people -Reward systems

Strategy - Decisions about Competition

1. Where to compete? In what markets (industries, products, etc.) will we compete? 2. How to compete? On what criteria or differentiating characteristics will we compete? Cost? Quality? Reliability? Delivery? 3. With what will we compete? What resources will allow us to beat our competition? How will we acquire, develop, and deploy those resources?

Internal Growth Strategy

A focus on new market and product development, innovation, and joint ventures

Strategic Human Resource Management (SHRM)

A pattern of planned human resource deployments and activities intended to enable an organization to achieve its goals

Training

A planned effort to facilitate the learning of job-related knowledge, skills, and behavior by employees

Strategic Management

A process to address the organization's competitive challenges by integrating goals, policies, and action sequences into a cohesive whole

Concentration Strategy

A strategy focusing on increasing market share, reducing costs, or creating and maintaining a marker niche for new products and services

Concentration

A strategy focusing on increasing market share, reducing costs, or creating and maintaining a market niche for products and services

Linkages of Strategic Planning and HRM

Administrative linkage: Lowest level of interaction. HRM function's attention is focused on day-to-day activities One-way linkage: Firm's strategic business planning function develops the strategic plan then informs the HRM function of the plan. Recognizes the importance of HR in formulating the strategic plan but preclude the company from considering HR issues while formulating the strategic plan. This level of integration often leads to strategic plans that the company cannot successfully implement. Two-way linkage: Allows for consideration of HR issues during the strategy formulation process and are interdependent Integrative: Have their HRM functions built right into the strategy formulation and implementation processes

External Growth Strategy

An emphasis on acquiring vendors and suppliers or buying businesses that allow a company to expand into new markets

Role Behaviors

Behaviors that are required of an individual in his or her role as a jobholder in a social work environment

Strategic Competitive Advantage

Emergent strategies -Consists of the strategies that evolve from the grassroots of the organization and can be though of as what organizations actually do, as opposed to what they intend to do. -Most are identified by those lower in the organizational hierarchy. It is often the rank-and-file employees who provide ideas for new markets, new products, and new strategies. -HRM plays an important role in facilitating communication throughout the organization, and it is this communication that allows for effective emergent strategies to make their way up to top management Enhancing Competitiveness -Achieved in a variety of ways such as adapting to a changing and learning environment, developing a human capital pool, assimilating information, making decisions, and flexibility restructuring to compete

External Analysis

Examining the organization's operating environment to identify strategic opportunities and threats Examples -Customer markets that are not being served -Technological advances that can aid the company -Labor pools that have not been tapped Threats -Potential labor shortages -New competitors entering the market -Pending legislation that might adversely affect the company -Competitors' technological innovations

Mergers and acquisitions

HR needs to be involved in mergers and acquisitions

Pay Structure, Incentives, and Benefits

Pay has an important role in strategies -High pay and/or benefits relative to competitors can help company attract and retain high-quality employees, but might have a negative impact on overall labor costs -Tying pay to performance can elicit specific activities and levels of performance from employees

Goals

What an organization hoped to achieve in the medium- to long-term future