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fundamentals of

Human Resource Management

3rd edition by R.A. Noe, J.R. Hollenbeck, B. Gerhart, and P.M. Wright

CHAPTER 2 Human Resources Strategies And Planning

Definition: HR strategies are the integration between HR policies and practices with business strategies of an organization. Question: “HR strategies lead business strategies”. It is: a. Right b. Wrong c. Both right and wrong d. No controversial

Functional-level strategy . Corporate-level strategy 2.Business strategy 1. Business-level strategy 3.

CorporateCorporate -level strategy Strengths Growth strategy Stablity strategy Company status Weaknesses Opportunities Entrenchment strategy Environment status Threats .

 Methods: . related to the current one.  Methods: Unrelated/Conglomerate Diversification:  New business units.Growth strategy Concentration Strategy:  Only 1 business unit  Methods:  Related/ Concentric Diversification:  New business units. not related to the current one.

Corporate level strategy • Stability strategy • Entrenchment strategy .

Business-level strategy • Cost .leadership strategy • Differentiation strategy • Focus strategy .

Functional strategy • • • • • Marketing strategies Financial strategies R&D strategies HR strategies …. .

HR STRATEGIES . Differentiation strategies ……. Entrenchment strategies 5. Cost-leadership strategies 6.HR STRATEGIES BUSINESS STRATEGIES 1. Growth by M&A strategies 3. ……. Self-Growth strategies 2. Stability strategies 4. …… …… …….

and setting up plans in order to deal with labor surplus or shortage. . determining the labor surplus or shortage.HR planning • Definition: The process of forecasting labor demand and supply.

• Deal with labor surplus or shortage. . • Cooperate and link to other HR practices. • Respond quickly to changes in business environment. and right time. right position.Objectives of HR Planning • Recruit right persons.

1: Overview of the Human Resource Planning Process 5‐5 .Figure 5.

Step 1: Environment scanning • External environment • Internal environment .

Forecasting • Forecasting: attempts to determine the supply and demand for various types of human resources to predict areas within the organization where there will be labor shortages or surpluses. Forecasting the demand for labor 2. There are three major steps to forecasting: 1.Step 2. Determining labor surplus or shortage 5‐6 . Determining labor supply 3.

5‐7 .Forecasting the Demand for Labor Trend Analysis • Constructing and applying statistical models that predict labor demand for the next year. Leading Indicators • Objective measures that accurately predict future labor demand. given relatively objective statistics from the previous year.

Mathematically based methods: .Forecasting the Demand for Labor 1. Judgmentally-based method: 2.

“Where did people now in each job category come from? 5‐8 . “Where did people in each job category go?” 2. It answers two questions: 1.Step 3. Determining Labor Supply • Transitional matrix: a chart that lists job categories held in one period and shows the proportion of employees in each of those job categories in a future period.

Table 5.Example for an Auto Parts Manufacturer 5‐9 .1: Transitional Matrix .

Step 3. Determining Labor Supply • Skills inventory • Management inventory .

Determining Labor Surplus or Shortage Based on the forecasts for labor demand and supply. • 5‐10 . • Determining expected shortages and surpluses allows the organization to plan how to address these challenges. the planner can compare the figures to determine whether there will be a shortage or surplus of labor for each job category.

Goal Setting and Strategic Planning The purpose of setting specific numerical goals is to focus attention on the problem and provide a basis for measuring the organization’s success in addressing labor shortages and surpluses. • The goals should come directly from the analysis of supply and demand. • For each goal. • 5‐11 . the organization must choose one or more human resource strategies.

Options for Avoiding a Shortage 3. Which of them is the last option that firms may take? . Options for Reducing a Surplus 2.Discussion 1.

What should they do? • A. Offer early retirement C. Hire temporary workers B. Wait for attrition and implement a hiring freeze for those positions 5‐15 . Downsize people in those positions D.Test Your Knowledge A public accounting firm of 250 employees realizes they have a surplus of 15 support personnel (not auditors).

Implementing and Evaluating the HR Plan When implementing the HR strategy. the organization must hold some individual accountable for achieving the goals. • Regular progress reports should be issued. • The evaluation of results should not only look at the actual numbers. but should also identify which parts of the planning process contributed to success or failure. • That person must also have the authority and resources needed to accomplish those goals. • 5‐16 .