ch2

Human resource management

• Dr. ferase elshalbe

• Ch 2• The strategy human resource environment

Prepared by Heba_masha’leh Arwa _hariza Lana _ka’ka’

What will you learn in this chapter?

• To define the meaning of the strategy • To understand the strategy management• To know and discuss the levels of strategy• To discuss internal and external environment of h.r.m• To understand h.r.strategy

the meaning of Strategy:

Strategy management :is a set of tools and practices or political that are used to recognize and gain access to a specific purpose.

The strategy of human resource management Working to:

understand the internal environment of the organization, and requirements and the basic variables and influential in terms of its mission, goals, objectives, and methods of administrative, organizational culture, and the requirements of the work .. And others, as well as the understanding of the external environment surrounding the organization, and take all the variables, and laws, and trends affecting or that may affect the work of the Organization and its activities, and this understanding of the internal and external environment of the organization, you can manage human resources to develop its strategy successfully and has to harmonize the large between the practices and activities human resources management, and the changes and challenges that they contain internal and external environment of the organization

• Strategies human resource management

2-4

Organizational effectiveness; attainment of strategic goals

Organizational effectiveness; attainment of strategic goals

Human resource strategy implementation

Human resource strategy implementation

Top management oversight and

strategic leadership

Top management oversight and

strategic leadership

Organization designOrganization design

TechnologyTechnology Work/labor forceWork/labor force

Organization cultureOrganization culture

Human resource strategy formulationHuman resource strategy formulation

Organizational systems and

processes

Organizational systems and

processesInterpersonal/

group processes

Interpersonal/ group processes

Individual Process

Individual Process

Organizational mission, top

management team

Organizational mission, top

management team

Developmentstrategy

Developmentstrategy

Compensationstrategy

Compensationstrategy

Staffingstrategy

Staffingstrategy

Implementation of other

functional strategies

Implementation of other

functional strategies

Formulation of other functional

strategies

Formulation of other functional

strategies

SWOT analysisSWOT analysis Corporate and business strategies

Corporate and business strategies

Context of strategy view:

• The best solution or practices will depend on various characteristic of the organization what is best will depend on factors such as strategy goals and top managers level tools

The influent of organizational purpose and mission

– Organization‘s purpose and mission are among the most fundamental contextual force.

Difference between purpose and mission

• Purpose: is organization reason of existence• Mission : is how it’s manager have decided to fulfill organization’s

purpose

What do mission statement specify?

1. Unique characteristics and strenghts of an oranization. 2. Identify the scope of business’s operation.3. Provide subtle cues to the importance the organisation

places on its human resouece(valuing human resource).

The influence of the top management team

• The top management team of an organization refers to the group of senior executives responsible for the overall strategic operation of a firm:

– Chairperson of the board of directors– Chief Executive Officer (CEO)– Chief Operating Officer (COO)– Chief Financial Officer (CFO)– President of the firm– Senior executives responsible for each major functional area

• Top management’s clear communication of the strategic vision sets the tone for the organization and plays a major role in shaping its culture.

• Effective leader need both a clear vision and means communicative that vision.

SWOT Analysis and Human Resource Management

SWOT: is an acronym that stands for strengths, weaknesses, opportunities and threats.

The external environment

Consists of variables opportunities and threats that are outside the organization and not typically within short-run control of top management.*these variables form the context within which the corporation exists.

The internal environment

Consists of variables strengths and weaknesses that are within the organization itself and are not usually within the short-run control of top management .

*these variables form the context in which work is done.*these variables include the corporation’s structure , culture and resources.

*The managers attempt to use the firm’s strengths to capitalize on environmental opportunities and to cope with environmental threats . Strengths are used to offset weaknesses within the organization.

*Human resources play a fundamental role in SWOT analysis because the nature and type of people that work within an organization and the organization’s ability to attract new talent represent significant strengths or weaknesses .

Accomplish the strategy by exploiting opportunities with strengths , correcting weaknesses and building defenses against threats.

The levels of strategy Organizations formulate strategy at three basic levels:Corporate strategy :The set of strategic alternatives that an organization chooses when managing operations across several industries and diverse markets.Business strategy :The set of strategic alternatives that an organization selects form in order to most effectively compete in a particular industry or market.Functional strategy :Consider how the firm will manage each of its major functions, such as marketing, finance, and human resources .

Corporate strategy Most organization develop a corporate strategy from one of two perspectives:Grand strategy•Growth•Retrenchment•stabilityDiversification strategy•Related •Unrelated

Corporate strategy Grand strategy : is a single overall framework for action that the top management team develops as the corporate level.growth strategy: Identifying a unique niche and is successfully expanding aggressively within that particular market niche.

focuses on growth and expansion of the corporation.

Corporate strategy:

challenges for Human resource managers under growth strategy:To successfully recruit and train a large numbers of qualified employees to help operate growing operations.To merge two existing workforces into a single cohesive and integrated unit.

Corporate strategyRetrenchment strategy: it happens when an organization finds that its current operations are less than effective.

•Downsizing or “rightsizing”To close operation ,shut down factories, terminate employees, and take other actions to scale back current operations and reduce their workforce.Thier ultimate goal is to be able to take the resources that are generated as a result of these steps and reinvest them into other promising products and markets.

Corporate strategy challenges for Human resource managers during this period:

To manage the process so that employees feel attached to and committed to the organization.

To optimize the transition process for displaced workers through severance packages and outplacement counseling.

Corporate strategy Stability strategy: focuses on maintaining the status quo.•The strategy’s goals are to stay in its current businesses and to protect itself from external threats.•Stability strategy is used after a period of retrenchment or after a period of growth.•Challenges for HR managers of the stability strategy:•To retain the firm’s existing employees when the firm can offer little in the way of advancement opportunities ,salary, increases.

Corporate strategyDiversification strategy: is used by companies that are adding new products, product lines , or businesses to their existing core products, product lines, or businesses.

Related strategy : relatedness of businesses is used to achieve synergy among the various businesses it owns.

This type of organization often adopts a policy of rotating managers across the various businesses in order for them to develop an overall managerial perspective on the whole firm.

Corporate strategy Unrelated strategy : the diversity of businesses is used to expand products or markets that are unrelated to its current ones.HR managers function during this period are customized and decentralized to the particular business units.

Business strategy

There are two approaches used to develop business strategy:

The adaptation model

Competitive strategy

Business strategyThe adaptation model :this model suggest that managers in an organization should try to match its strategy with the basic conditions of its environment .

The three basic strategy :•Defender strategy •Prospector strategy•Analyzer strategy

Business strategyDefender strategy :

work in very stable environment with little uncertainty and risk .

The goals of defender are to identify for itself a relatively narrow niche in the market and to direct a limited set of products or services at that niche. Prospector strategy : work in a dynamic and growing environment characterized by high uncertainty and risk.

Business strategy:

Prospector seeks new ideas and opportunities.

Analyzer strategy: work in a moderately stable environment with some uncertainty and risk. Analyzer tries to identify and take advantage of new markets and products while maintaining a nucleus of

traditional core products and customers .

Business strategy

Reactor strategy : is seen as a strategic failure .A reactor is a firm that either improperly ignores its environment or attempt to react to its environment in inappropriate ways.

Competitive strategies : suggests that three basic strategies are appropriate for a wide variety of organization in diverse industries:

•Differentiation strategy :attempt to develop an image or reputation for its product or services that sets it apart from the competition.

•HR managers activities focus on recruiting and retaining employees who can perform high-quality work and can provide exemplary customer service.

Business strategy A cost leadership strategy: focuses on minimizing costs , a firm can offer the lowest prices and gain high revenues .

HR managers focus on recruiting and training employees who can work as efficiently and productively as possible.

Focus strategy: tries to target a specific segment of the marketplace for its products or services.

HR managers recruit and retain employees who understand the focal market.Functional strategy: the third level of strategy concerns with how a company will manage its basic functional activities such as marketing, finance m operations ,research and development and human resources.

HR strategy formulation should be integrated with corporate ,business, and other functional strategies .

Strategic Human Resources Management (SHRM)

• Strategic HRM: is the process by which managers seek to link human assets to the strategic needs of the organization.

• HR strategy: is discussed in terms of an

‘outcome’ – the pattern of decisions relating to HR policies and practices.

Human Resources Strategy formulation

• HR strategy formulation should be integrated with corporate, business, and other functional strategies.

Human Resource Strategies

Human resourcestrategy formulation

Human resourcestrategy formulation

Development strategy•Performance management•Training•Development•Career planning

Development strategy•Performance management•Training•Development•Career planning

Staffing strategy•HR Planning•Recruiting•Selection•Placement

Staffing strategy•HR Planning•Recruiting•Selection•Placement

Compensation strategy•Wage/salary structure•Employee benefits•Incentives

Compensation strategy•Wage/salary structure•Employee benefits•Incentives

Important components that affects the formulation & implementation of the strategies:

1. Organization design2. Corporate Culture3. Technology4. Work/Labor force

Organization design

Organization Design: the framework of jobs, positions, clusters of positions & reporting relationships among positions that are used to construct an organization.

The Impact of Organization Design

• basic functional groups (marketing, finance & operations)• requires coordination• Single HR department

Functional Design (U-Form)Unitary

• used at unrelated diersification strategy• Corporate -level HR Staff & each of the unrelated businesses have an HR

department

Conglomerate Design (H-Form) Holding

• used when businesses are closly related• popular for synergies resulted from related business groupings• decentrelized coordination& may have corporate-level HR staff

Divisional Design (M-Form) Multidivisional

• reduce bureaucracy• relay on teamwork• highly flixable& fewer managers• smaller HR staff

Flat Organization (horizontal

corporation)

The impact of corporate cultureOrganization Culture: the set of values that help its

members understand what the organization stands for, how it does things & what it considers important

Importance of culture1. Determining how well the organization will be able

to achieve its goals & how well the members of the organization will be able to function together

2. Affects virtually every aspect of individual behaviors within an organization

Determinants of Corporate Culture

Culture(values)

Symbols,Stories

Heroes,

Ceremonies

Founder’s

Vision

Shared Exp

erience

s

Managing Culture

Changing culture for current employees through:1. Training2. Consistent behavior3. Other Organizational activitiesChanging culture for new comers through:4. Orientation5. Training6. Telling & retelling stories

The Impact of Technology through

1. Manufacturing: is a form of business that combines & transforms resources into tangible outcomes that are then sold to others

2. Service: Transforms resources into intangible outputs & creates time or place utility for its customers

3. Automation: the process of designing work so that it can be completed or almost completely performed by machines

How HR functions differs from manufacturing business to service business

1. Criteria used for hiring employees2. Methods used for training employees3. Reward system used to compensate

employees4. Labor relations with unionized employees

The Impact of the work forceWorkforce trends & issues

– Age– Gender– Ethnicity– Disabilities– Lifestyles

Unionization & Collective bargaining issue

Labor relations: the process of dealing with employees who r represented by an employee association usually called a union

– Union membership– Organizing drives– Strikes

Human Resource Strategy Implementation

Organizational systems/processes

•Single-use plans– programs– projects•Standing plans– policies– standard operating

procedures– rules

Organizational systems/processes

•Single-use plans– programs– projects•Standing plans– policies– standard operating

procedures– rules

Individualprocesses

•PsychologicalContracts•Personality traits•Attitudes•Motivation Equity Theory Expectancy Theory Reinforcement•Stress

Individualprocesses

•PsychologicalContracts•Personality traits•Attitudes•Motivation Equity Theory Expectancy Theory Reinforcement•Stress

Interpersonalprocesses

•Group dynamics•Leadership•Communications

Interpersonalprocesses

•Group dynamics•Leadership•Communications

Human resourcestrategy implementation

Human resourcestrategy implementation

Individual Processes & HRM• Psychological contracts: is the overall set of expectations held by an individual

with respect to what he or she will contribute to the organization & what the organization, in turn, will provide to the individual

• Personality traits: is the relatively stable set of psychological attributes or traits that distinguish one person from another

• Attitudes: through developing attitude surveys, administering the surveys to workers, interpreting & evaluating the results

• Motivation : is the set of forces that cause people to behave in certain ways & is a major determinant of individual performance

• Stress: is a person’s adaptive response to a stimulus that places excessive psychological or physical demands on that person

Perspectives on Motivation

• Equity theory of motivation suggests that a key ingredient in employee motivation is the extent to which people perceive that they are being treated equitably by their organizations, especially relative to other people

• Expectancy theory suggests that motivation depends on how much we want something & how likely we think we are to get it

• Reinforcement suggests that behavior that results in pleasant consequences is more likely to be repeated & the behavior that results in unpleasant consequences is less likely to be repeated

Interpersonal processes & HRM

• Leadership – effective leadership is important to organizational success

• Communication: is the process by which two or more parties exchange information & share meaning

Evaluating the human resource function in organizations

– Evaluating HR functions by attempting to measure costs & benefits of a specific function

– Evaluating entire systems of HR activities (practices)

Human Resource Practices That may lead to improved firm performance

• Attitude surveys• Information sharing (e.g. newsletters)• Contingent pay• Favorable selection ratio (many applicants for

each opening)• Formal performance appraisal• Social events