Strategic Planning &

Human Resources
 Strategic Planning & Organizational
Behavior
• Strategic Planning
 Procedures for making decisions about the
organization’s long-term goals and strategies
• Organizational Behavior - Human Resources
Planning (HRP)
 Process of anticipating and making provision for the
movement (flow) of people into, within, and out of an
organization.
 Organizational Behavior
• Actually Strategic Human Resources
Management (SHRM)
 The pattern of human resources deployments and
activities that enable an organization to achieve its
strategic goals
 Strategy formulation—providing input as to what is
possible given the types and numbers of people
available.
 Strategy implementation—making primary resource
allocation decisions about structure, processes, and
human resources.
 OB and Strategic Planning
• Strategic Analysis
 What human resources are needed to do job and
what are available?
• Strategic Formulation
 What structure is required and necessary in support
of human resources?
• Strategic Implementation
 How will the human resources be allocated?

Human
HumanResources
Resources Strategic
Strategic
Planning
Planning Planning
Planning
Linking Strategic Planning and Organizational Behavior
1. Mission, Vision, and Values
• Mission
 The basic purpose of the organization as well as its
scope of operations
• Strategic Vision
 A statement about where the company is going and
what it can become in the future; clarifies the long-
term direction of the company and its strategic intent
• Core Values
 The strong and enduring beliefs and principles that
the company uses as a foundation for its decisions
 FEEDBACK

APPLY
ASSESS SET HUMAN EVALUATE
ENVIRONMENT OBJECTIVES RESOURCE RESULTS
ACTIVITIES
EXTERNAL
CONDITIONS EFFICIENCY PLANNING EFFICIENCY
• • Organization
World
• Employee STAFFING
Conditions EQUITY
• Economic
Conditions EQUITY DEVELOPMENT
• Government • Organization
Regulations • Employee EMPLOYEE/UNION
• Unions
RELATIONS
• Technology
ORGANIZATIONAL
CONDITIONS COMPENSATION
• Nature of the
Organization
• Nature of the
Work 2. THE DIAGNOSTIC MODEL
EMPLOYEE George Milkovich
CONDITIONS John Boudreau
• Abilities (KSA)
• Motivation
• Interests
 2. Diagnostic Model - External
Environmental Scanning
• Environmental Scanning (Assess Environment)
 The systematic monitoring of the major external
forces influencing the organization.
1. Economic factors: general and regional conditions
2. Competitive trends: new processes, services, and
innovations
3. Technological changes: robotics and office automation
4. Political and legislative issues: laws and administrative
rulings
5. Social concerns: child care and educational priorities
6. Demographic trends: age, composition, and literacy
3. Internal Organizational Analysis

Culture Competencies

Internal
Analysis

Composition
Scanning the Internal Environment
• Cultural Audits
 Audits of the culture and quality of work life in an
organization.
How do employees spend their time?
How do they interact with each other?
Are employees empowered?
What is the predominant leadership style of
managers?
How do employees advance within the
organization?
4. Determining Required Employee Skill Mix

• Core Competencies
 Integrated knowledge sets within an organization
that distinguish it from its competitors and deliver
value to customers.
• Sustained competitive advantage through
people is achieved if these human resources:
1. Are valuable.
2. Are rare and unavailable to competitors.
3. Are difficult to imitate.
4. Are organized for synergy.
5. Formulating Strategy – (Setting Objectives)

• Strategy Formulation
 Moving from simple analysis to devising a coherent
course of action.
• SWOT analysis
 A comparison of strengths, weaknesses,
opportunities, and threats for strategy formulation
purposes.
 Use the strengths of the organization to capitalize on
opportunities, counteract threats, and alleviate
internal weaknesses.
 Corporate Strategy

Growth and Mergers and

Diversification Acquisitions

Corporate
Strategy

Strategic Alliances
and Joint Ventures
 Setting Business Strategy
• Value Creation
 What the firm adds to a product or service by virtue of
making it; the amount of benefits provided by the
product or service once the costs of making it are
subtracted.
 Low-cost strategy: competing on productivity and
efficiency
 Keeping costs low to offer an attractive price to
customers (relative to competitors).
 Differentiation strategy: compete on added value
 Involves providing something unique and distinctive to
customers that they value.
Functional Strategy: Ensuring Alignment

• External Fit (or External Alignment)

 Focuses on the connection between the business
objectives and the major initiatives in HR.
• Internal Fit (or Internal Alignment)
 Aligning HR practices with one another to establish a
configuration that is mutually reinforcing.
 6. Applying Human Resource Activities
Forecasting: A Critical Element of Planning

• Forecasting involves:
a. forecasting the demand for labor
b. forecasting the supply of labor
c. balancing supply and demand considerations.
 Model of HR Forecasting

FORECASTING
FORECASTINGDEMAND
DEMAND
Considerations
Considerations Techniques
Techniques BALANCING
BALANCING
• •Product/service • •Trend SUPPLY
SUPPLYAND
Product/servicedemand
demand Trendanalysis
analysis DEMAND
AND
• •Technology • •Managerial DEMAND
Technology Managerialestimates
estimates
• •Financial
Financialresources
resources • •Delphi technique
Delphi technique
• •Absenteeism/turnover
Absenteeism/turnover (Shortage)
(Shortage)
• •Organizational
Organizationalgrowth
growth Recruitment
Recruitment
• •Management philosophy
Management philosophy • •Full-time
Full-time
• •Part-time
Part-time
• •Recalls
Recalls
Techniques
Techniques External
ExternalConsiderations
Considerations
• •Staffing
Staffingtables
tables • •Demographic
Demographicchanges
changes
(Surplus)
(Surplus)
• •Markov • •Education Reductions
Markovanalysis
analysis Educationof
ofthe
theworkforce
workforce Reductions
• •Skills inventories • •Labor mobility • •Layoffs
Layoffs
Skills inventories Labor mobility
• •Management • •Government • •Terminations
Managementinventories
inventories Governmentpolicies
policies Terminations
• •Replacement charts • •Unemployment • •Demotions
Replacement charts Unemploymentraterate Demotions
• •Succession • •Retirements
Successionplanning
planning Retirements
FORECASTING
FORECASTINGSUPPLY
SUPPLY
 Applying Human Resource Activities:
Determining Types of Employees
• Core knowledge workers
 Employees who have firm-specific skills that are
directly linked to the company’s strategy.
 Example: Senior software programmer

• Traditional job-based employees

 Employees with skills to perform a predefined job that
are quite valuable to a company, but not unique.
 Example: Security guard
 Applying Human Resource Activities:
Determining Types of Employees
• Contract labor
 Employees whose skills are of less strategic value
and generally available to all firms.
 Example: General electrician

• Alliance/partners
 Individuals and groups with unique skills, but those
skills are not directly related to a company’s core
strategy.
 Example: Independent product label designer
 McKinsey’s 7-S Model

Source: McKinsey & Company

7. Strategy Implementation
• Taking Action: Reconciling Supply and Demand
 Balancing demand and supply considerations
 Forecasting business activities (trends)
 Locating applicants

 Organizational downsizing
 Reducing “headcount”

 Making layoff decisions

 Seniority or performance?
 Labor agreements
8. Evaluation and Assessment
• Evaluation and Assessment Issues
 Benchmarking: The process of comparing the
organization’s processes and practices with those of
other companies
 Human capital metrics
 Assess aspects of the workforce
 HR metrics
 Assess the performance of the HR function itself
 Measuring Strategic Alignment
• Strategy Mapping and the Balanced Scorecard
 Balanced Scorecard (BSC)
 A measurement framework that helps managers translate
strategic goals into operational objectives
– financial
– customer
– processes
– learning
Balanced Scorecard
Ensuring Strategic Flexibility for the Future

• Organizational Capability
 Capacity of the organization to act and change in
pursuit of sustainable competitive advantage.
 Coordination flexibility
 The ability to rapidly reallocate resources to new or
changing needs.

 Resource flexibility
 Having human resources who can do many different
things in different ways.