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HRM Lecture 2

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21 views

HRM Lecture 2

Uploaded by

farha naz
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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HUMAN RESOURCE

MANAGEMENT STRATEGY AND


PERFORMANCE

LECTURE 2

DR. QAZI MOINUDDIN MAHMUD


AFHEA
LEARNING OBJECTIVES

✔ To understand the basic terminologies relating to SHRM


✔ To illustrate the strategic management process
✔ To explain the major types of strategies
✔ To define SHRM
✔ To know about the major SHRM tools
✔ To discuss the concept of high-performance systems
✔ To explain how you would design a program to improve
employee engagement
✔ To describe the HR scorecard approach
BASIC TERMINOLOGIES
Strategy: A course of action a company can pursue
to achieve its strategic goals.

Strategic plan: The company’s plan for how it will


match its internal strengths and weaknesses
with its external opportunities and threats to
maintain a competitive advantage.

Strategic management: The process of identifying


and executing an organization’s strategic plan by
matching its capabilities with the demands of its
environment.
BASIC TERMINOLOGIES
Mission: reason an organization exists

Mission statement: Brief statement explaining an


organization’s purpose

Vision statement: A general statement of the firm’s intended


direction

SWOT analysis: A process for determining an organization’s


strengths, weaknesses, opportunities, and threats

Core competency: Organizational strengths that represent


unique skills or resources
THE STRATEGIC MANAGEMENT
PROCESS

Step 1: Define the current business – ask, “what


business are we in now”

Step 2: Perform external & internal audits


(SWOT+PEST) – ask, “are we in the right business
given our strengths and weaknesses and the
challenges that we face”

Step 3: Formulate a new direction – decide “what


should our new business be”
THE STRATEGIC MANAGEMENT
PROCESS

Step 4: Translate the mission into strategic goals

Step 5: Formulate strategies to achieve the


strategic goals

Step 6: Implement the strategies

Step 7: Evaluate performance


TYPES OF STRATEGIES
Corporate-level strategy
⚫ Identifies the portfolio of businesses that, in total,
comprise the company and the ways in which these
businesses relate to each other.
Diversification strategy implies that the firm will
expand by adding new product lines.
Vertical integration strategy means the firm
expands by, perhaps, producing its own raw
materials, or selling its products direct.
Consolidation strategy reduces the company’s size
Geographic expansion strategy takes the
company abroad.
TYPES OF STRATEGIES
Business-level/competitive strategy
⚫ Identifies how to build and strengthen the business’s
long-term competitive position in the marketplace.
Cost leadership: the enterprise aims to become the
low-cost leader in an industry.
Differentiation: a firm seeks to be unique in its
industry along dimensions that are widely valued by
buyers.
Focus: a firm seeks to carve out a market niche, and
compete by providing a product or service customers
can get in no other way.
TYPES OF STRATEGIES

Functional strategies
⚫ Identify the broad activities that each department
will pursue in order to help the business accomplish
its competitive goals.
STRATEGIC HRM

Formulating & executing HR policies &


practices that produce the employee
competencies & behaviors the company
needs to achieve its strategic aims.
MAJOR TOOLS OF SHRM

Managers mostly use the following


tools to translate the company’s
strategic goals into HRM policies and
practices:

1) Strategy map
2) HR scorecard
3) Digital dashboard
STRATEGY MAP

A strategic planning tool that shows the


“big picture” of how each department’s
performance contributes to achieving the
company’s overall strategic goals.
HR SCORECARD

A process for assigning financial &


nonfinancial goals or metrics to the HRM –
related strategi-map chain of activities
required for achieving the company’s
strategic aims & for monitoring results.

It helps employers quantify & computerize


the strategy map’s activities.
DIGITAL DASHBOARD

It presents the manager with desktop


graphs & charts, showing a computerized
picture of how the company is doing on all
the metrics from the HR scorecard process.
HIGH-PERFORMANCE WORK
SYSTEM (HPWS)
A HPWS is a set of HRM policies & practices that
together produce superior employee performance
or organizational effectiveness.

A high-performing company typically does the


following:
Recruit more job candidates
Use more selection tests
Spend many more hours training employees
EMPLOYEE ENGAGEMENT

Employee engagement is crucial since it drives performance &


productivity.

It refers to being psychologically involved in, connected to,


and committed to getting one’s jobs done.

Engaged employees “experience a high level of connectivity


with their work tasks,” and work hard to accomplish their
task-related goals.
WHAT CAN MANAGERS DO TO
FOSTER EMPLOYEE
ENGAGEMENT?
❑ Provide supportive supervision
❑ Make sure that employees understand how their
departments contribute to the company’s success
❑ Make sure that employees see how their efforts
contribute to achieving the company’s goals
❑ Make sure that employees get a sense of
accomplishment from working at the firm
❑ Make sure that employees are highly involved –
as when working in self-managing teams
Employers should also hold managers responsible
for employee engagement.
HR AND COMPETITIVE
ADVANTAGE

Competitive advantage
⚫ Any factors that allow an organization to
differentiate its product or service from those of its
competitors to increase market share.
⚫ Superior human resources are an important source of
competitive advantage
THE HR SCORECARD APPROACH
HR scorecard
⚫ Measures the HR function’s effectiveness and
efficiency in producing employee behaviors needed to
achieve the company’s strategic goals.

Creating an HR scorecard
⚫ Must know what the company’s strategy is.
⚫ Must understand the causal links between HR
activities, employee behaviors, organizational
outcomes, and the organization’s performance.
⚫ Must have metrics to measure all the activities and
results involved.
USING THE HR SCORECARD
APPROACH
THANK YOU

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