Chapter #3Strategic HRM and the HR Scorecard

HR must develop systems

that support the firm’s mission statement

– strategic goals and direction

– By hiring, firing, training etc.

Steps in the Strategic Process

Step 1 Vision, mission Step 2 SWOT Step 3 Translate mission to goals Step 4 Formulate strategy to achieve goals Step 5 Implement strategy Step 6 Evaluate performance

Levels of Strategic Planning

– Corporate level Diversification Vertical integration Consolidation Geographic Expansion

Business level– Define competitive advantage

Cost Leadership – Wal*mart Differentiation - Volvo Focuser - Ferrari

Strategic Fit

Structure must follow strategy– All activities must support strategy

– Look page #78

HR provides competitive advantage

Hiring right Training Motivating Inspiring commitment Policies and practices

HR strategic role cont.

To identify the human issues vital to business strategy U of Michigan study

HR is a partner not a cost center– Study of CEO’s

HR execs need strategic skills and business knowledge!!!!!!!

High Performance Work Systems

Idea is to create HPWS

HR must understand what competencies are need and know how to train and hire to acquire them.

LOOK # 85 (Comparing high and low performance)

The HR Scorecard Approach

Creates bottom line value

Measurable Metrics (quantitative

standards

You must have 3 types of information

Know strategic goals Match employee

behavior to goal attainment

Must have metrics or standards to measure by

Look # 88

Seven Step Approach

Step 1 - Define business strategy Step 2 Outline value chain Step 3 Identify outcomes or org. goals Step 4 Identify competencies needed Step 5 Identify polices, training programs Step 6 Design a measuring system Step 7 Continually evaluate ( Page # 92)