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 Chapter 3
Human Resource Strategy and
Analysis

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 • Managers should know what they want to
accomplish strategically before formulating
and putting in place specific human resource
management policies and practices.

• Therefore the main purpose of this chapter is to

explain how managers formulate human
resource strategies for their companies.

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 The chapter addresses
• the strategic management process,
• strategic human resource management,
• human resource metrics and analysis, and
• building high-performance work systems.

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 Learning Objectives
1. Explain why strategic planning is important to all
managers.
2. Explain with examples each of the seven steps in
the strategic planning process.
3. List with examples the main generic types of
corporate strategies and competitive strategies.

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 Learning Objectives (cont.)
4. Define strategic human resource management and
give an example of strategic human resource
management in practice.
5. Briefly describe three important strategic human
resource management tools.
6. Explain with examples why metrics are important for
managing human resources.

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 Goal-Setting and the
Planning Process
• A plan shows the course of action for getting from
where you are to where you want to go in other
words, to the goal.
• Planning is always goal-directed
• Goals are the result or achievement toward which
effort is directed or aimed.
• Objectives define strategies or implementation steps
to attain the identified goals.

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 Hierarchy of Goals

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 Strategic management
• A strategy is a course of action the company can
pursue to achieve its strategic aims.
• A strategic plan is the company’s plan for how it will
match its internal strengths and weaknesses with
external opportunities and threats in order to maintain
a competitive advantage.
• Strategic management is the process of identifying and
executing the organization’s strategic plan, by
matching the company’s capabilities with the
demands of its environment.

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 The Strategic Management Process

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 Worksheet for Environmental Scanning
(a.k.a SWOT)

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 SWOT Matrix Example

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 SWOT ANALİZİ

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 FORMULATE A NEW
DIRECTION
• The vision statement is a general statement of the
firms intended direction; it shows, in broad terms,
what we want to become.
• Whereas vision statements usually describe in broad
terms what the business should be, the company s
mission statement summarizes what the company s
main tasks are now

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 Starbucks Coffee’s corporate mission is “to inspire and
nurture the human spirit – one person, one cup and
one neighborhood at a time.”

Starbucks Coffee’s corporate vision is “to establish

Starbucks as the premier purveyor of the finest coffee
in the world while maintaining our uncompromising
principles while we grow.”

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 Types of Strategies*
1. Corporate-Level Strategy
• Concentration(single-business): wd-40
• Diversification: Pepsi + Frito Lay
• Vertical Integration: Apple + Apple Stores
• Consolidation
• Geographic Expansion

*use the board!

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 Corporate-level Strategy
• A corporate-level strategy is the type of strategy that identifies the
portfolio of businesses that, in total, comprise the company and the
ways in which these businesses relate to each other. For example:
• A concentration (single-business) corporate strategy offers one
product/service in one market. (wd-40)
• A diversification corporate strategy means the firm will expand by
adding new product lines. (Pepsi + Frito Lay)
• A vertical integration strategy means the firm expands by
producing its own raw materials (Apple + Apple Stores)
• A consolidation strategy is when the company reduces its size.
• A geographic expansion means the company expands locations
abroad.

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 Types of Strategies
2. Competitive (Business Unit) Strategy: A competitive
strategy identifies how to build and strengthen the
business’s long-term competitive position in the
marketplace.
o Cost leadership (Wal-Mart)
o Differentiation (Volvo)
o Focus (Ferrari)
Competitive Advantage

3. Functional (Departmental) Strategy

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 Type of Strategy at Each Company
Level

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 Functional Strategy
• A functional strategy is a department’s functional
strategy which identifies what the department must
do in terms of specific departmental policies and
practices to help the business accomplish its
competitive goals.

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 Managers’ Role in Strategic
Planning

Devise a Plan

Obtain Competitive
Intelligence
Participate in
Communication
Identify Strengths &
Weaknesses

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 What is Strategic Human Resource
Management?
Formulate strategic plans

Ensure employee competencies & behaviors

HR strategies, policies, & practices

Executing strategic plans and achieving goals

depends on having the right mix of employee
competencies and behaviors

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 Strategic Human Resource
Management Tools
• Managers use several tools to translate the
company’s broad strategic goals into human
resource management policies and activities.
• Three important tools include;
• the strategy map,
• the HR Scorecard, and
• the digital dashboard.

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 Strategy Map
• The strategy map provides an overview of how
each department's performance contributes to
achieving the company s overall strategic goals.
• It helps the manager understand the role his or her
department plays in helping to execute the
company s strategic plan.

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 The HR Scorecard*

Metrics

Digital Dashboard

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 DIGITAL DASHBOARDS
• A digital dashboard is an electronic interface used
to acquire and consolidate data across an
organization.
• A digital dashboard presents the manager with desk-
top graphs and charts, and a computerized picture
of where the company stands on all those metrics
from the HR scorecard process.

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 Three Important Strategic HR Tools

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 HR Metrics & Benchmarking

Types of Metrics*

Benchmarking

Strategy-Based Metrics

Analytics & Data Mining

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 Metrics/Benchmarking Report

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 Benchmarking
• Benchmarking is measuring how one is doing
against the best in that area.
• SHRM provides a customized benchmarking
service. This enables employers to compare
their own HR-related metric results with those of
other companies.

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 Strategy-based metrics
• Benchmarking is measuring how one is doing
against the best in that area.
• SHRM provides a customized benchmarking
service. This enables employers to compare
their own HR-related metric results with those of
other companies.

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 Workforce/Talent Analytics and
Data Mining
• Workforce analytics means using special software
applications to analyze human resources data and
to draw conclusions from it.
• Data mining shifts through huge amounts of
employee data to identify correlations that
employers then use to improve their employee
selection and other practices. Data mining is the
“set of activities used to find new, hidden, or
unexpected patterns in data.”

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 What Are HR Audits?
• An analysis by which an organization measures
where it currently stands and determines what it has
to accomplish to improve its HR function.
• the HR audit generally involves
(1) reviewing the functioning of most aspects of the
company’s human resource function (recruiting, testing,
training, and so on), usually using a checklist, as well as
(2) ensuring that the employer is adhering to
government regulations and company policies.
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 Evidence-Based HR

Objective

Experimentation

Predict

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 Employee Engagement
• Why is employee engagement important:
because it drives performance and productivity

• The employee engagement problem:

only 25% are engaged!

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 Employee Engagement
• What can managers do?
They can have their employees
1) understand how their departments contribute to
company success;
2) see how their own efforts contribute towards company
goals;
3) get a sense of accomplishment from working at the
firm.

• How to measure employee engagement

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 Employer Actions for More
Engagement

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 Employee Engagement Guide

How Kia Motors Improved

Performance

The Challenges

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 The New HRM Strategy for Kia

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 Summary
1. Strategic planning is important to all managers.
2. Each function or department needs its own functional
strategy, including HR.
3. The manager will want to gather and analyze data
prior to making decisions.
4. High-performance work system is a set of HRM policies.
5. Employee engagement is important.
6. HR Strategy work as a profit center.

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