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Human Resource Management Strategy
HR Management
Human Resource Management Strategy
The Meaning of “Strategy” A critical factor that affects Firm Performance A factor that contributes to Competitive
Advantage in markets Having a long-term focus Plans that involve the top executives and/or
board of directors of the firm A general framework that provides a perspective
for selecting specific policies and procedures
Human Resource Management Strategy
Why is HR critical to firm performance? Service is delivered by people. Low quality HR leads to low quality customer
service. In the 21st century effective knowledge
management translates into competitive advantage and profits.
Knowledge comes from a firm’s people.
Human Resource Management Strategy
What is unique about Human Resource Management? HR is multidisciplinary: It applies the disciplines of
Economics (wages, markets, resources), Psychology (motivation, satisfaction), Sociology (organization structure, culture) and Law (min. wage, labor contracts, EEOC)
HR is embedded within the work of all managers, and most individual contributors due to the need of managing people (subordinates, peers and superiors) as well as teams to get things done.
HR Strategy: Strategic Fit
Training Rewards
Corporate Strategy
Business Strategy
HR Strategy
HR System
(Performance Mgmt.)
HR Strategy: HR System Internal Fit
Performance Management System
HR StrategyGoal Setting
Performance Measurement
Coaching
Rewards
Appeal
Performance Evaluation
HR Strategy: Context of HR System
1. The “Five Factors” Influencing the HR System External Environment Social: social values, roles, trends, etc. Political: political forces, changes. Ex. Bush
presidency and its agenda for Social Security. Legal: laws, court decisions, regulatory rules. Economic: product, labor, capital, factor markets.
HR Strategy: Context of HR System
2. The Workforce Demographics
HR Strategy: Context of HR System
3. Organization Culture Weak vs. Strong culture “Type” of culture
HR Strategy: Context of HR System
4. Organization Strategy What are a firm’s distinctive competencies? What is the basis that competitive strategy be
sustained? What are a firm’s strategic objectives? Compare corporate and Business strategies.
HR Strategy: Context of HR System
5. Technology of Production & Organization of Work Physical layout/employee proximity Required employee skills Ease of monitoring employees’ input
HR Strategy: Context of HR System
Critical Thinking Questions:1. Should a company monitor the HR environment and
imitate “Best Practices” of HR from successful firms? What caveats would you want to apply to applying Best HR Practices?
2. Give an example of a type of Organizational Culture that would reinforce strategy: What type of HR practices would fit with this culture?
3. What type of HR practices would fit with jobs with tasks that are highly ambiguous, uncertain and creative? What about predictable, routine and certain tasks?
HR Strategy: Strategic Roles
Distribution of Task Outcomes: 3 Possibilities
1. “Foot soldier”: low upside, low downside of performance variance
2. “Guardian”: low upside, high downside of performance variance
3. “Star”: high upside, low downside of performance variance
HR Strategy: Strategic Roles
Critical Thinking Questions:
1. Which Roles are Strategic? Foot soldier, guardian or star?
2. What are the advantages of focusing on foot soldiers with the company HR policies?
3. What are the liabilities of stars? When is it advantageous to cultivate and sustain stars?
1. Single-employee consistency
2. Among-employee consistency
3. Temporal consistency
HR Strategy: Consistency
Consistency is an important quality related to the implementation of HR policies. Employees should receive a clear, undiluted message of what behaviors are important and desirable. When there is a fit between HR systems, employees are likely to receive consistent feedback. The 3 types of consistency are…
HR Strategy: Consistency
Critical Thinking Questions
1. Are there circumstances when it is effective to have inconsistent HR policies? Give an example.
2. Does an emphasis on temporal consistency create a barrier for change when change is necessary?
3. What impact (if any) would consistency have on the organization culture?
