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Chapter 3 HR Management Strategy and Analysis

Hierarchy of goals- traditional view of goals from the top of the firm down to
front-line employees as a chain.
Procedures- spell out what to do if a specific situation arises.
Strategic plan- the companys overall plan for how it will match its internal
strengths and weaknesses with external opportunities and threats in order to
maintain a competitive advantage.
o Similar to business models but not the same. A Business Model is the
companys method for making money in the current business
Strategy- the course of action the company can pursue to achieve its strategic
Strategic management- the process of identifying and executing the
organizations strategic plan, by matching the companys capabilities with the
demands of its environment.
o Steps of Strategic Management1) Ask, where are we now?
Define the companys current business and mission. Focus
on 4 aspects of the current business: (1) product scopecurrent range of products and services. (2) Vertical
integration- factor that distinguishes one business from
another. (3) Geographic Range (4) Competitive Advantage
Mission Statement- sums up the essence of what the
company must do to compete in the marketplace, and
provides the framework that guides managers and
employees day-to-day.
2) Size up the Situation: Perform External and Internal Audits
Are we heading in the right direction given the challenges
that we face?
Use SWOT analysis or Environmental Scanning
3) Create Strategic Options
4) Review Strategic Options
5) Make A Strategic Choice
6) Translate into Goals
7) Implement the Strategies
8) Evaluate Performance

3 types of Strategic Planning1) Corporate-Level Strategy: type of strategy that identifies the portfolio of
businesses that, in total, comprise the company and the ways in which
these businesses relate to each other.
Diversification corporate strategy means that the firm will expand
by adding new product lines.

Consolidation strategy means that the company will reduce its

Vertical integration strategy means that the firm expands.
Geographic expansion means that the company grows by entering
new territorial markets.
2) Competitive Strategy- a strategy that identifies how to build and
strengthen the businesss long-term competitive position in the
Competitive Advantage- any factors that allow an organization to
differentiate its product or service from those of its competitors to
increase market share.
Cost leadership- becoming the low-cost leader in an industry (ex:
Differentiation- seeks to be unique in its industry along
dimensions that are widely valued by buyers (Ex: Papa Js fresh
Focusers- carve out a market niche (Ex: Bugatti Cars).
3) Functional Strategy- a strategy that identifies the broad activities that
each department will pursue in order to help the business accomplish its
competitive goals.

Strategic Human Resource Management- formulating and executing human

resource policies and practices that product the employee competencies and
behaviors the company needs to achieve its strategic aims.
1) What are the strategic goals or aims?
2) What employee behaviors and skills do we need to achieve our strategic
3) What HR policies and practices will enable us to product the necessary
employee behaviors and skills?
Strategy map- a strategic planning tool that shows the big picture of how
each departments performance contributes to achieving the companys
overall strategic goals.
HR Scorecard- a process for assigning financial and nonfinancial goals or
metrics to the human resource management- related chain of activities
required for achieving the companys strategic aims and for monitoring results.
The computerized scorecard process helps the manager quantify
the relationships between (1) the HR activities (amount of testing,
training, etc.) (2) the resulting employee behaviors (customer
service, etc). (3) the resulting firm-wide strategic outcomes and
performance (customer satisfaction and profitability).
Digital dashboard- presents the manager with desktop graphs and charts, and
so a computerized picture of where the company stands on all those metrics
from the HR scorecard process.

SHRM has a benchmarking service that enables employers to compare their

own HR metrics with those of other companies. Like employer size, company
revenue, and geographic region.
Strategy-based metrics- metrics that specifically focus on measuring the
activities a companys strategic aims.
Data Mining- the set of activities use to find new, hidden, or unexpected
patterns in data and make predictions off that.
Employers use talent analytics to answer 6 types of talent management
1) Human Capital Facts- What are the key indicators of my orgs overall
2) Analytical HR- Which units, departments or individuals need attention?
3) Human Capital Investment Analysis- Which actions have the greatest
impact on my business?
4) Workforce Forecasts- predicting headcount for reach business unit based
off sales trends.
5) Talent Value Model- Why do employees choose to stay with or leave my
6) Talent Supply Chain- How should my workforce needs adapt to changes
in the business environment?
HR Audit- an analysis by which an organization measures where it currently
stands and determines what it has to accomplish to improve its HR functions.
Typical HR Audit areas include:
1) Roles and headcount
2) Compliance with federal, state, and local employment-related legislation
3) Recruitment and selection
4) Compensation
5) Employee relations
6) Mandated benefits
7) Group benefits
8) Payroll
9) Documentation and record keeping
10) Training and development
11) Employee communications
12) Termination and transition policies and practices
Evidence-based HR management- using data, facts, analytics, scientific rigor,
critical evaluation, and critically evaluated research/case studies to support HR
management proposals, decisions, practices, and conclusions.
Being scientific as an HR manager Be objective
Use experimentation
The point of being scientific is to make better decisions by forcing
you to gather facts.
High performance work systems (HPWS) - a set of HR management policies
and practices that promote organizational effectiveness.

HR Metrics- the quantitative gauge of a HR management activity, such as

employee turnover, hours or training per employee, or qualified appliances per