Aligning HR with Strategy

Question 1

What is Strategic HRM?

Answer 1

The management of interrelated HR philosophies, policies, and practices that facilitate the attainment of organisational strategy

Question 2

Resource-based view- Theories for Strategic HRM

Answer 2

A true resource is:
Scarce
Hard to imitate
Gives sustained competitive advantage
Hard to substitute

Human Resources can fit the resources that can aid a company achieve its strategic goals.

Question 2

The contingency perspective

Answer 2

The nature of one’s HR strategy differs based on Business strategy being used

The cost-effectiveness of HR’s strategy depends on the business strategy being used.

Question 3

Human Capital

Answer 3

The sum of employees’
knowledge, skills,
experience, and commitment invested in the
organization.

Question 4

Human Capital Theory

Answer 4

The characteristics needed to make a business successful is found in its human capital

Question 5

Human Capital Value

Answer 5

Total revenue- (operating expenses-total compensation costs)
all divided by total compensation costs

Question 6

Behavioural Theory

Answer 6

Different HR strategies require different employee behaviours

Question 7

Creating Behaviours

Answer 7

• The company must decide on the behaviours it needs

-Implement practices that produce those behaviours

Question 8

Sample activities that prompt behaviours

Answer 8

Involvement in decision-making, incentives to prompt behaviour,

Question 9

Traditional view of HRM planning

Answer 9

only with possible problems of labour surpluses and shortages.

The goal was to determine the knowledge, skills, and abilities (KSAs) required within
broad organizational outcomes such as growth or decline. Much emphasis was put on
the statistical techniques for analyzing resource supply and demand forecasting while
ignoring managerial realities and support for the process.

Question 10

Hr continuum

Answer 10

AD HOC- No workforce planning/hire as needed

Headcount Planning- Headcount analysis and basic labour costing

Workforce forecasting analytics- Historical/lagging performance indicators/ descriptive workforce analytics

Strategic Workforce Planning- Workforce segmentation/ workforce planning to support projected business needs

Human Capital Planning- Enterprise-level workforce planning/ workforce risk management and mitigation planning.

Question 11

Importance of Strategic HR planning

Answer 11

1. employees help an organization achieve
   success because they are strategic resources
2. the planning process itself results
   in improved goal attainment

Question 12

Practical Barriers to Workforce Planning

Answer 12

• Leaders lack planning and business acumen
• Moving targets- business goals are not clear
• Not enough time, too busy, competing priorities, “daily
  bombs,” and “fighting fires”

Question 13

PERCEPTION AND ATTITUDE BARRIERS

Answer 13

• Seen as important, but not urgent
• Resistance to change: “We always got by in the past”
• Seen as too daunting to change
• Lack of a holistic approach

Question 14

LINKING HR PROCESSES TO STRATEGY

Answer 14

Can be one of the following:
1. Start with an organizational strategy and then create an HR strategy.
2. Start with HR competencies and then craft corporate strategies based on
these competencies.
3. Do a combination of both in the form of a reciprocal relationship.

Question 15

CORPORATE STRATEGY LEADS TO HR STRATEGY

Answer 15

look to corporate strategy an then build strategy for hr. Strategy would cover recruitment and selection, training and development, compensation, performance evaluation, labour relations

Question 16

Eg. of corporate to hr strategy

Answer 16

Corp: low cost

HR Planning: entry level-minimal succession planning, ensuring labor supply for entry-level. Use of fringe workers part of strategy.

exec level-succession management
assumes the same importance as in other organizations.

R&S: save costs with word-of-mouth applications, on site applications, inward promotions.

Compensation: price lag strategy, outsource to lower wage paying places, offer fringe benefits, make use of part time with no fringe benefits - students, contract,

Training: Minimized to those things that increase efficiency- quick and fast

Performance Evaluation: Short-term results, with explicit and standardized criteria,
are used to evaluate an employee’s performance.

Labour relations: try to prevent labour unions from forming.

Question 17

HR COMPETENCIES LEAD TO BUSINESS STRATEGY

Answer 17

A competing view states that an organization cannot implement a strategy if it does
not have the human resources necessary.

The owners of very small
businesses are nimble and quickly recognize that if an employee has a certain capability,
it can be exploited to develop new products or services

This view involves identofying the skills of workers and ignores the enviornment which is not realistic

Question 18

RECIPROCAL INTERDEPENDENCY BETWEEN HR STRATEGY
AND BUSINESS STRATEGY

Answer 18

An emerging perspective sees HR strategy as contributing to business-level strategy and
vice versa. Increasingly, in large firms, senior HR vice-presidents are asked not only to
review business plans to ensure consistency with HR strategy but also to provide input
to this strategy based on HR strengths and weaknesses.

Simply phrased, an organization develops its
employees and then capitalizes on their skills; the employees then learn new skills, and
so it continues.

Question 19

HR BECOMES A BUSINESS PARTNER

Answer 19

Strategy development is conducted at the same time that H RM issues are considered. The HR senior
management team moves from outsider status to insider status.

They must be able to understand
analyses presented by marketing, financial, and operational managers

Question 20

BECOMING MORE STRATEGIC

Answer 20

• moving from just being a functional unit to enhancing performance of business units and supporting business moves.

Question 21

HR STRATEGY DIFFERENTIATION- multiple corporate strategies and hr strategies

Answer 21

The challenge is to treat employees across
divisions in an equitable fashion while motivating different behaviours that align with
the divisions’ strategies or functions.

look at HR PLANNING TODAY 2.2

Question 22

CHARACTERISTICS OF AN EFFECTIVE HRM STRATEGY

Answer 22

external and internal fit, and a focus on results.

Question 23

Fit

Answer 23

EXTERNAL FIT- Strategy compatibility with advancing business strategy and other functional strategies. HR senior management must
be included in strategy discussions to be sure this happens. This is sometimes called
the “best fit” approach to strategic HR, where HR strategies match organizational
strategies.

INTERNAL FIT- a fit with other functional areas, such as marketing,
and a fit among all HR programs-This working together is commonly referred to as “bundling” HR practices.

Question 24

Focus on Results

Answer 24

FOCUS ON RESULTS- HR program ~ employee human capital and behaviours
~ organizational strategy ~ organizational outcome

So, if the overall corporate outcome for a retailer is “growth in sales,” and the
strategy to do this is through customer service (a differentiation strategy), then what
employee human capital and behaviours are required? If, for example, product
knowledge and sales skills are needed, then HR programs could be designed to select
and/ or develop these skills.

Question 25

Are you a strategic partner?

Answer 25

Do you understand the business?

What financial indicators are important to the company?

Who are your customers, and what is your competitive advantage?

What major technological changes will affect your work?

Do you know what the corporate plan is?

Can you quickly list the major initiatives of your organization?

Do you align HR programs, policies, and practices with organizational strategies and goals?

How can HR position the organization to succeed?

Are the people management
processes focused and measured on deliverables and not functions?

Does HR report on effectiveness (the impact
that the training program had on employee behaviour)
or just efficiencies (such as the number of people being
trained)?

Are major organizational decisions made with your input? Are you on the executive team? Are you part of the strategic planning process?