HRM

HR STRATEGY
Instructor: Mariam
Tameezuddin
MEGA TRENDS
INNOVATIONS
GLOBALIZATION
VALUE CHANGE
WEB 2.0
DEMOGRAPHICS
INNOVATIONS
DEMOGRAPHICS
Fortune magazine says that Millennial/Generation Y employees bring
challenges and strengths. They may be “the most high maintenance
workforce in the history of the world.
globalization
The tendency of firms to extend their sales, ownership, and/or
manufacturing to new markets abroad.

Globalization refers to companies extending their sales, ownership,

and/or manufacturing to new markets abroad. For example, Toyota
builds Camrys in Kentucky, while Dell assembles PCs in China.
Free-trade areas—agreements that reduce tariffs and barriers among
trading partners— further encourage international trade. NAFTA (the
North American Free Trade Agreement) and the EU (European Union)
are examples.
Globalization compels employers to be more efficient. More globalization
means more competition, and more competition means more pressure to be
“world class”—to lower costs, to make employees more productive, and to do
things better and less expensively. Thus, when the Japanese retailer Uniqlo
opened its first store in Manhattan, many local competitors had to
institute new testing, training, and pay practices to boost their
employees’ performance. The search for greater efficiencies prompts many
employers to offshore (export jobs to lower-cost locations abroad). For
example, Dell offshored some call-center jobs to India. Many employers
offshore even highly skilled jobs such as sales managers, general
managers—and HR managers.
WEB 2.0 INTERNET

For one thing, technology dramatically changed how human resource

managers do their jobs. LinkedIn and Facebook recruiting are
examples.Employers can access candidates via Facebook’s job board. This
provides a seamless way to recruit and promote job listings from
Facebook.Then, after creating a job listing, the employer can advertise its job
link using Facebook. Innovations like these have dramatically changed how
human resource managers do things.Another example, The HR Portal, follows.
HR STRATEGY
Building an HR strategy
HR STRATEGY

Future Business of the

company
HR ADMINISTRATION
Daily, operational issues and topics
There is an SME operating as a supplier in the
automotive industry (3,500 employees). It is
desperately looking for software developers. Relying on
job ads only doesn’t seem to lead to expected results
anymore. Engaging an executive search consultancy
turns out to be too expensive. What to do?
In recent years a company had to deal with an
increasing turnover among its most talented and most
motivated people. Further research and discussions
made clear that there is a lack of career prospects
among most talented employees. At the same time key
positions mainly have been filled with external
candidates. What to do?
The new externally hired CEO at an insurance
company became instantly aware of the lacking
ambition and drive for performance in almost all areas
and functions. A strong appeal to all managers and
employees probably might not be enough. The
company is thinking about a new kind of performance
management system. Does this make sense? If yes,
how could it look like?
A company in the retail sector sees a decline in sales
and is continuously losing market share. The new
corporate strategy now consistently focuses on
digitizing the supply and distribution channels as well as
all related business processes. An analysis has shown
that the workforce has little knowledge of digitization
and is rather reluctant to deal with this topic. What is to
be done?
A company’s HR strategy refers to all people-related approaches
that address both strategic business challenges and purpose in
order to strengthen a company’s competitive advantage.
Moreover, the HR strategy defines how all critical approaches are
aligned to the structural and cultural context.
HR STRATEGY
https://www.youtube.com/watch?v=0Yd3QJvrFa0
EXAMPLE OF HR STRATEGY
https://www.youtube.com/watch?v=jWdovBCWTF0
MAJOR PITFALLS WHEN DEVELOPING AN
HR STRATEGY
Solutions are pushed into the organization without having involved those
who are supposed to benefit from them. Change management follows
ignorance
Complicatedness, as an technocratic, sometimes bureaucratic answer to
complexity. HR related solutions must be simple. Otherwise they won’t
work
Lacking focus. There are too many top priorities. If everything is critical,
nothing is critical.
MAJOR PITFALLS WHEN DEVELOPING AN
HR STRATEGY

Copying from others. Adapting so called best practices from other

companies without taking into considerations relevant internal context
Focusing on solutions. An early definition of relevant solutions and
concepts without having understood the problems to be solved
Example of strategic statement:
COMPANY AND HR
As a company, we have a responsibility to develop our most
talented people.
EMPLOYEE THEMSELVES

The responsibility for the development of our employees lies with

the employees themselves. We enable them for this where
necessary and where desired.
SOLUTION OR PROBLEM AS STARTING
POINT

SOLUTION- DESIGN- CONTEXT - PROBLEM

PROBLEM-CONTEXT-SOLUTION-SOLUTION
COMPANY DEVELOPMENT
Attitude of the founders- Attitude about good management
etc eg Steve Jobs/ Bill gates

Culture- Rules about good/behaviour

Roles and Structures- institutionalization

Strategic Management System

Company development within two hemispheres
INSTITUTIONALIZATION
1- Heirarchy and Stability
Responsibility is bundled at top management level
Central planning and control

2- Agility and Network

Responsibility is shared in decentralized network
People centered enablement
 Central
planning and control
THREE TYPES
1- Hire and do nothing
2- HR takes all responsibility
3- People share and have responsibility
BUILDING A HR STRATEGY
IMAGINE YOU ARE A NEWLY APPOINTED HR
EXECUTIVE AND YOU HAVE TO BUILD A HR
STRATEGY

HOW WILL YOU START AND PROCEED

BUILDING AN HR STRATEGY
There are various steps needed to build a powerful HR
strategy. Everything starts with the business. Then, critical
HR challenges and key approaches need to be defined and
strategically aligned. All this happens within the current or
future structural or cultural context.
1- COMPANY STRATEGY

Purpose of the company- Why does it exist?

CRITICAL BUSINESS CHALLENGES
COMPETITIVE ADVANTAGE
our products and services are more innovative
we are technologically more advanced
we can offer our products at a lower price
our products and services are of higher quality
our products have a better design
we communicate our promise more effectively (brand)
we have a more effective and faster access to markets
we have the largest market share in the world.
2- PEOPLE RELATED CHALLENGES
PEOPLE RELATED CHALLENGES
Filling key and expert positions
Valid selection of the right candidates
Being fair on compensation
Allowing a balance of work and family
Shaping productive working conditions
Identify and leverage people‘s potential
Open long-term development opportunities
Sharing relevant knowledge across the firm
Retaining best and high-potential employees
Building relevant skills and competencies
Keeping level of engagement high
Dealing with various generations
Allowing and building workforce diversity
3- STRATEGIC HR TOPICS AND
APPROACHES
POTENTIAL HR TOPICS TO OVERCOME
PEOPLE RELATED PROBLEMS
Talent acquisition and selection
Employer Branding
Candidate sourcing and relation
Selection and fit
Onboarding
Learning and knowledge

Vocational training
Executive education
Continuous learning
Knowledge management
 Engagement

and loyality

Working conditions and employer attractivenes

Employee survey
Employee retention
Performance, feedback and appraisal

Objective setting
Feedback
Formal review
Development and careers

Talent identification
Talent development
Expert career
Compensation and reward

Reward strategy
Base pay
Variable pay
4- how to align
5- CONTEXT( ALL OF THIS HAPPEN IN
CONTEXT)
STRATEGIC STATEMENT- EXAMPLE:
EMPLOYER BRANDING

Loud and dominant

In order to be perceived as an attractive employer, we display the

fire-works. We appear as a whole, very self-confident, and visible
from afar.
STRATEGIC STATEMENT- EXAMPLE:
EMPLOYER BRANDING
Quiet and personal

We appear as rather quiet and discreet and convince above all in

personal communication. We do not urge but offer good reasons to
everyone who might be interested
WHICH FUNCTIONS AND ROLE ARE MORE
IMPORTANT AND CHALLENGING FOR
BUSINESS THAN OTHERS?
STRATEGIC RELEVANCE
High Strategic Relevance-

Significant effect on competitive advantage

You need the best possible people

Low Strategic Relevance:

You need the good people.

EG pharma company wants to be innovative

You better have the best scientist you can get
R&D will differentiate
While in other departs like finance etc you have good people
Eg You offer product at the lowest price
You better have the best purchasers, because through strong negotiations you can have
the best price
Eg your competitive advantage is to best brand
You better have the best marketers
TALENT AVAILABILITY
High Talent Availability

Low Talent Availability

Software Developers
DEMAND
High
Eg : Hiring Truck Drivers ever year

Low
Hiring Finance Experts once in a while
BOTTLE NECK/KEY FUNCTIONS
Bottleneck Function
Big demand (volume) hard to be filled and replaced (low
availability)

Key Function
High strategic relevance
A KEY FUNCTION
A function is a key function, if ..
the future competitiveness of the company directly depends on it
high performance in the function makes a significant or dramatic
difference to the company’s success
you need to hire and develop the best – not just the suitable
related costs for hiring, development and retention don’t matter
it is on the radar of the CEO
A KEY FUNCTION
A function is not necessarily a key function, if ..
high performance in the function has a big impact on the success of the
company but does not relate to it’s strategy
the entire company would suffer, when getting rid of it
related pay grades are high
if related positions are hard to be filled from the in- or outside
the need to place a position is urgent
BOTTLE NECK FUNCTION

A function is a bottleneck function, if its demand is of high volume and

hard to be met due to labour market conditions
There are less candidates searching for jobs actively than new hires
needed
Bottleneck functions often are not of high strategic relevance but they
could be. Then a function is both, a bottleneck and a key function
Often bottleneck functions refer to a common pain (need) across different
decentral entities (e.g. divisions, locations, subsidiaries)
For bottleneck functions very often homogeneous target groups with
comparable profiles are supposed to be addressed (e.g. graduates of
mechanical engineering)
Added value in key functions compared to others
High the function, the higher the added value

But for key function, higher the function, the added value
increases by exponential amount
Eg having the right idea in the right moment can boost the revenue
and success
Eg Pfizer Vaccine

So ask yourself, would it really make a difference to hire a good/best

person.
You will see this difference only in Key function
STRUCTURAL AND CULTURAL CONTEXT
Dimensions coming up
All dimensions of the structural and cultural context
All dimensions of the structural and cultural context
EMPLOYEES
Individuality
Appreciation
Concept of man
Dependency
DIVERSITY VS CONFORMITY
Conformity
Fit with common standards

Diversity
Value of individuality
APPRECIATION:
TRADITIONAL/INVERTED
TRADITIONAL
INVERTED PYRAMID
CONCEPT OF MAN
WHICH THEORY APPLIES TO YOUR COMPANY?
THEORY X
People have an inherent dislike for work and will avoid it whenever possible.

People must be coerced, controlled, directed, or threatened with punishment in

order to get them to achieve the organizational objectives.

People prefer to be directed, do not want responsibility, and have little or no

ambition.

People seek security above all else.

THEORY Y
The expenditure of physical and mental effort in work is as natural as play or rest

Man will exercise self-direction and self-control in the service of objectives to which
he is committed.

The average human being learns not only to accept but to seek responsibility.

The capacity to exercise a relatively high degree of imagination, ingenuity, and

creativity in the solution of organizational problems is widely, not narrowly,
distributed in the population.
TASKS
Optimization versus disruption
Task certainty
Thinking and acting
STATIC VS DISRUPTIVE DEVELOPMENT
TASK CERTAINTY
Certainty of outcome vs certainty of process
LEADERSHIP
Professional superiority
Dominant leadership style
Autonomy and
self-regulation
Managers’ and employees’ general knowledge and expertise
Dominant Leadership Roles

Bosses give direction, control and own responsibilities

Coaches leave or push back responsibilities to their teams

Partners share responsibilities with their teams and facilitate on same

eye-level

Enablers make sure employee have everything they need to do a good

job
AUTONOMY AND SELFREGULATION
ORGANIZATION
Division of labour and task dynamics
Consequences and commitment
Division of labour/Task Dynamic
COMMITMENT OF EMPLOYEES AND
TEAMS
All dimensions of the structural and cultural context
All dimensions of the structural and cultural context
DEVELOPING AN HR STRATEGY FOR
STARBUCKS
Few years ago, Starbucks was facing serious challenges. Sales per store were
stagnant or declining, and its growth rate and profitability were down. Many
believed that its introduction of breakfast foods had diverted its “baristas” from
their traditional jobs as coffee-preparation experts. McDonald’s and Dunkin’
Donuts were introducing lower-priced but still high-grade coffees. Starbucks’
former CEO stepped back into the company’s top job. You need to help him
formulate a new direction for his company.

Purpose: The purpose of this exercise is to give you experience in developing

an HR strategy, in this case, by developing one for Starbucks.

required Understanding: You should be thoroughly familiar with the material

in this chapter.
How to Set Up the exercise/instructions: Set up groups of three or four students
for this exercise. You are probably already quite familiar with what it’s like to have a
cup of coffee or tea in a Starbucks coffee shop, but if not, spend some time in one
prior to this exercise. Meet in groups and develop an outline for an HR strategy for
Starbucks Corp. Assume that for a corporate strategy Starbucks will remain
primarily an international chain of coffee shops. Your outline should include four
basic elements: a business/competitive strategy for Starbucks, the workforce
requirements (in terms of employee competencies and behaviors) this strategy
requires, specific HR policies and the activities necessary to produce these
workforce requirements, and suggestions for metrics to measure the success of the
HR strategy.
SIEMENS BUILS A STRATEGY-ORIENTED
HR SYSTEM
Siemens Builds a Strategy-Oriented HR System
Siemens is a 150-year-old German company, but it’s not the company it was even a few
years ago. Until recently, Siemens focused on producing electrical products. Today the
firm has diversified into software, engineering, and services. It is also global, with more
than 400,000 employees working in 190 countries. In other words, Siemens became a
world leader by pursuing a corporate strategy that emphasized diversifying into high-tech
products and services, and doing so on a global basis.

With a corporate strategy like that, human resource management plays a big role at
Siemens. Sophisticated engineering and services require more focus on employee
selection, training, and compensation than in the average firm, and globalization requires
delivering these services globally. Siemens sums up the basic themes of its HR strategy
in several points. These include:
1. a living company is a learning company. The high-tech nature of Siemens’ business
means that employees must be able to learn on a continuing basis. Siemens uses its system of
combined classroom and hands-on apprenticeship training around the world to help facilitate
this. It also offers employees extensive continuing education and management development.

2. Global teamwork is the key to developing and using all the potential of the firm’s
human resources. Because it is so important for employees throughout Siemens to feel free to
work together and interact, employees have to understand the whole process, not just bits and
pieces. To support this, Siemens provides extensive training and development. It also ensures
that all employees feel they’re part of a strong, unifying corporate identity. For example, HR
uses cross-border, cross-cultural experiences as prerequisites for career advances.
3. a climate of mutual respect is the basis of all relationships— within the company and with
society. Siemens contends that the wealth of nationalities, cultures, languages, and out- looks
represented by its employees is one of its most valuable assets. It therefore engages in numerous HR
activities aimed at building openness, transparency, and fairness, and supporting diversity.

Questions

3-18. Based on the information in this case, provide examples for Siemens of at least four
strategically required organizational outcomes, and four required workforce competencies and
behaviors.
3-19. Identify at least four strategically relevant HR policies and activities that Siemens has
instituted in order to help human resource management contribute to achieving Siemens’
strategic goals.
3-20. Provide a brief illustrative outline of a strategy map for Siemens.
TALENT ACQUISITION
Which parts of all talent acquisition activities are critical to the
competitive advantage of your company and its long-term success?

What are major challenges in talent acquisition and how does your
company allocate resources to these?

Related to the given challenges and goals, what are keyapproaches

in talent acquisition?

How are those key approaches strategically aligned given the

internal cultural and structural context?
Definition and prioritization of current and future demands (critical
target functions, roles, jobs or areas) …
lead to distinct Hiring Scenarios
EVP

•An Employee Value Proposition (EVP) provides an authentic,

unique and relevant answer to the question, why anyone should be
interested in working at a particular employer or why anyone
should apply for a specific job
•WHY DO YOU WANT TO WORK AT MCDONALDS?

•Global presence

•Job Security

•Career opportunities
•"There’s no one kind of Googler, so we’re always
looking for people who can bring new perspectives
and life experiences to our teams. If you’re looking
for a place that values your curiosity, passion, and
desire to learn, if you’re seeking colleagues who
are big thinkers eager to take on fresh challenges
as a team, then you’re a future Googler.“
•"When you join NIKE, Inc., you’re part of the
family. To inspire greatness inside and outside
work, we invest in our culture and offer employees
competitive health, financial, security and work-life
benefits. From opportunities for career
development to personalized benefit options, we
want all who join our team to realize their full
potential."
EVP
Men wanted for hazardous journey.
Low wages, bitter cold,
long hours of complete darkness.
Safe return doubtful.
Honour and recognition
in event of success
Ernest Shackleton
Job Ads – Selection or Marketing Tool?
Focus in Job Ads
Requirements

In our job advertisements, we primarily communicate the

responsibilities and requirements associated with the position in
question.
Employee Value Proposition

In our job advertisements, we primarily provide reasons why a

suitable candidate should be interested in the job.
Low versus strong differentiation of the employer brand
Employer Branding Differentiation

General
Our employee value proposition represents us as one employer to
all relevant target groups. We have only one core proposition to
which we are fully committed.
Differentiated
We have developed a separate employee value proposition for
each critical target function because we have to reach
heterogeneous target groups. A single proposition would not do
justice to diversity.
Running Job Attraction Interviews – A good question
Employer Branding starts by listening and feeling
What will you do if job ads won’t
work anymore and executive
search turns out to be too
expensive?
Three types of candidates in the external labour market
Current and possible sourcing strategies
Activity of search and approach
Passive and active Sourcing Strategies

Candidate
Identification
And approach

Line Engagement
Intense Specialist Hiring Action Plan