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HRM504
HUMAN RESOURCE
MANAGEMENT
What it’s all about?
 Dr MEGHA MEHTA
HRM504 HUMAN RESOURCE MANAGEMENT

Learning Outcome

To enable students to learning the intent of strategic human

resource management.
 Dr MEGHA MEHTA
HRM504 HUMAN RESOURCE MANAGEMENT

NORDSTORM
VS
WALMART
Dr MEGHA MEHTA
HRM504 HUMAN RESOURCE MANAGEMENT
 Dr MEGHA MEHTA
HRM504 HUMAN RESOURCE MANAGEMENT

WALMART
 Dr MEGHA MEHTA
HRM504 HUMAN RESOURCE MANAGEMENT

A high-end retailer will have

different employee selection,
training, and pay policies as
compared to Walmart
 Dr MEGHA MEHTA
HRM504 HUMAN RESOURCE MANAGEMENT

STRATEGIC
HUMAN RESOURCE MANAGEMENT
formulating and executing human resource policies and
practices that produce the employee competencies and
behaviors the company needs to
ACHIEVE ITS STRATEGIC AIMS.
 Dr MEGHA MEHTA
HRM504 HUMAN RESOURCE MANAGEMENT

STRATEGIC HUMAN
RESOURCE MANAGEMENT
 Dr MEGHA MEHTA
HRM504 HUMAN RESOURCE MANAGEMENT

• Ritz-Carlton Company took over managing the Portman Hotel

in Shanghai, China.
• Reviewed the Portman’s strengths and weaknesses, and its
fast-improving local competitors.
• They decided that to compete, they had to improve the hotel’s
level of service.
• Achieving this meant formulating new human resource
management plans for hiring, training, and rewarding hotel
employees.
 Dr MEGHA MEHTA
HRM504 HUMAN RESOURCE MANAGEMENT

• It meant putting in place a new human resource strategy for

the Portman Hotel, one aimed at improving customer service.
• HR strategy involved taking these steps:
 Set the goal of making the Shanghai Portman outstanding by offering superior customer

service.

 Shanghai Portman employees would have to exhibit new skills and behaviors, for instance, in

terms of how they treated and responded to guests.

 selection [now] focuses on talent and personal values because these are things that can’t be

taught … it’s about caring for and respecting others.

 Dr MEGHA MEHTA
HRM504 HUMAN RESOURCE MANAGEMENT

MANAGEMENT’S EFFORTS PAID OFF

New human resource plans and practices helped to produce the
employee behaviors required to improve the Portman’s level of
service, thus attracting new guests.

Travel publications were soon calling it the “best employer

in Asia,” “overall best business hotel in Asia,” and “best
business hotel in China.”
 Dr MEGHA MEHTA
HRM504 HUMAN RESOURCE MANAGEMENT

Strategy MAP of

Southwest airlines
Dr MEGHA MEHTA
HRM504 HUMAN RESOURCE MANAGEMENT
 Dr MEGHA MEHTA
HRM504 HUMAN RESOURCE MANAGEMENT

Kia Motors today is a successful automobile

manufacturer employing tens of thousands

Of employees around the world.

 Dr MEGHA MEHTA
HRM504 HUMAN RESOURCE MANAGEMENT

In July 1997, Kia was under bankruptcy

protection and having difficulty servicing its
$10.6 billion of debt.

In 1998, Hyundai Motorcar Company of

Korea purchased 51% of Kia.
 Dr MEGHA MEHTA
HRM504 HUMAN RESOURCE MANAGEMENT

2006–2007
 Dr MEGHA MEHTA
HRM504 HUMAN RESOURCE MANAGEMENT

 Kia Motor’s UK subsidiary (Kia UK), which employed

about 2,500 people, faced particularly dire circumstances;
these included rapidly falling sales, increased financial
losses, and low levels of employee engagement.
 Employee turnover was 31%.
 The direct cost to the company from the 31% turnover
alone was estimated at about 600,000 British pounds
(about $1 million) in 2006 (due to higher than necessary
recruitment, legal, and employee dismissal costs)
 Dr MEGHA MEHTA
HRM504 HUMAN RESOURCE MANAGEMENT

• Gary Tomlinson, Kia UK’s newly appointed

head of HR, believed that Kia UK’s low
employee engagement was probably both a
cause and an effect of the unit’s poor
performance.
• Other reason was poor employee morale
and communications
 Dr MEGHA MEHTA
HRM504 HUMAN RESOURCE MANAGEMENT

3 Step action Plan

 Putting in place new HR policies and practices aimed at

improving employee engagement.

 Change Kia UK employees’ behavior (improve

performance and reduce turnover).

 Support the parent company’s stated strategy of “raising

our competencies as a global maker in all areas.”

 Dr MEGHA MEHTA
HRM504 HUMAN RESOURCE MANAGEMENT

HOW KIA EXECUTED EMPLOYEE

ENGAGEMENT STRATERGY?
 Dr MEGHA MEHTA
HRM504 HUMAN RESOURCE MANAGEMENT

1 st
Kia UK set measurable objectives for the program.

objectives included improving by at least 10% survey

feedback scores for line managers’ behaviors in terms of

communication, the quality of appraisal feedback they gave

their direct reports, the recognition of work done, and the

respect between manager and employee.

 Dr MEGHA MEHTA
HRM504 HUMAN RESOURCE MANAGEMENT

2 nd

held an extensive leadership development

program
Sent all managers for training to improve their management

skills. Kia then tested the new skills with “360-degree”

assessment tools (having managers’ bosses, peers, and

subordinates rate the managers’ new leadership skills)

 Dr MEGHA MEHTA
HRM504 HUMAN RESOURCE MANAGEMENT

3 rd

Instituted new employee recognition

programs

For instance, giving “Outstanding Awards” to selected

employees quarterly, and “Kia thank you” cards for jobs well

done.
 Dr MEGHA MEHTA
HRM504 HUMAN RESOURCE MANAGEMENT

4 th

IMPROVED INTERNAL COMMUNICATIONS

Instituted quarterly employee briefings and more extensive

use of performance appraisals, and launched a new corporate

intranet called Kia Vision (this provided key business

information and other useful communiqués to all employees).

 Dr MEGHA MEHTA
HRM504 HUMAN RESOURCE MANAGEMENT

5 th

EMPLOYEE DEVELOPMENT PROGRAM

Company’s appraisal process to identify employees’ training

needs. Kia then created training plans for each employee. It

based these plans on Kia’s needs and on the employee’s

stated career aspirations.

 Dr MEGHA MEHTA
HRM504 HUMAN RESOURCE MANAGEMENT

6 th

CHANHES TO COMPENSATION SYSTEM

eliminated bonuses and substituted fixed-rate percentage-

based salary increases. It also rewrote the entire employee

handbook and all HR policies and procedures “to ensure

they were aligned with [Kia UK’s new] cultural values

 Dr MEGHA MEHTA
HRM504 HUMAN RESOURCE MANAGEMENT

RESULTS
 Dr MEGHA MEHTA
HRM504 HUMAN RESOURCE MANAGEMENT

By 2009, employee turnover went below 2%.

Recruitment and turnover costs fell by more

than 400,000 British pounds

 Dr MEGHA MEHTA
HRM504 HUMAN RESOURCE MANAGEMENT

THE HOTEL PARIS

INTERNATIONAL
 Dr MEGHA MEHTA
HRM504 HUMAN RESOURCE MANAGEMENT

Starting as a single hotel in a Paris suburb in

1990, the Hotel Paris is now a chain of nine
hotels, with two in France, one each in
London and Rome, and others in New York,
Miami, Washington, Chicago, and Los
Angeles.
 Dr MEGHA MEHTA
HRM504 HUMAN RESOURCE MANAGEMENT

CORPORATE STRATEGY

The Hotel Paris’s management

and owners want to continue to expand
geographically
 Dr MEGHA MEHTA
HRM504 HUMAN RESOURCE MANAGEMENT

They believe doing so will let them capitalize

on their reputation for good service, by

providing multicity alternatives for their

satisfied guests.
 Dr MEGHA MEHTA
HRM504 HUMAN RESOURCE MANAGEMENT

PROBLEM

Their reputation for good service has been

deteriorating. If they cannot improve service,
it would be unwise for them to expand, since
their guests might prefer other hotels after
trying the Hotel Paris.
 Dr MEGHA MEHTA
HRM504 HUMAN RESOURCE MANAGEMENT

Several things are complicating their problem

 Country’s economic decline
 Tax rates of 75% on wealthy citizens forced
many to leave France.

Many tourists are increasingly staying at short-term rental apartments in

Paris, found on the Web, (often through sites such as airbnb.com) for a
fraction of what a fine hotel stay might cost.
 Dr MEGHA MEHTA
HRM504 HUMAN RESOURCE MANAGEMENT

THE STRATEGY
 Dr MEGHA MEHTA
HRM504 HUMAN RESOURCE MANAGEMENT

“The Hotel Paris International will use superior guest

services to differentiate the Hotel Paris properties, and to

thereby increase the length of stays and the return rate of

guests, and thus boost revenues and profitability”

 Dr MEGHA MEHTA
HRM504 HUMAN RESOURCE MANAGEMENT

Hotel Paris managers—including the director

of HR services—must now formulate

strategies that support this competitive

strategy
 Dr MEGHA MEHTA
HRM504 HUMAN RESOURCE MANAGEMENT

Strategically Required
Organizational Outcomes
 Dr MEGHA MEHTA
HRM504 HUMAN RESOURCE MANAGEMENT

The Hotel Paris’s basic strategy is to use

superior guest services to expand
geographically

Steps required to produce fewer

customer complaints and more
written compliments, more frequent
guest returns and longer stays, and
higher guest expenditures per visit.
 Dr MEGHA MEHTA
HRM504 HUMAN RESOURCE MANAGEMENT

Strategically Relevant

Workforce Competencies and

Behaviors
 Dr MEGHA MEHTA
HRM504 HUMAN RESOURCE MANAGEMENT

High-quality front-desk customer service

Taking calls for reservations in a friendly manner

Greeting guests at the front door

Processing guests’ room service meals efficiently

For all this the requirement is

HIGH EMPLOYEE MORALE
 Dr MEGHA MEHTA
HRM504 HUMAN RESOURCE MANAGEMENT

Strategically Relevant
HR Policies
and Activities
 Dr MEGHA MEHTA
HRM504 HUMAN RESOURCE MANAGEMENT

HR decided to institute practices to improve

the disciplinary fairness and justice in the
company, with the aim of improving employee
morale. The assumption was that enhanced
fairness will produce higher morale and that
higher morale will produce improved front-
desk service.
 Dr MEGHA MEHTA
HRM504 HUMAN RESOURCE MANAGEMENT

• HR decided to measure “improved disciplinary

procedures” in terms of how many grievances
employees submit each month.
• Measured “improved morale” in terms of “scores
on hotel’s semiannual attitude survey,”.
• Measures “high-quality front desk customer
service” in terms of “customer complaints per
month
 Dr MEGHA MEHTA
HRM504 HUMAN RESOURCE MANAGEMENT

IDEA
Cause-and-effect links among
the HR activities, the workforce
behaviors, and the
organizational outcomes
 Dr MEGHA MEHTA
HRM504 HUMAN RESOURCE MANAGEMENT

THANK YOU