chapter 2 - hr strategy and planning (10 mc) Flashcards
strategic hr planning
Strategic Human Resource Management - The pattern of human resources activities that enable an organization to achieve its strategic goals
Strategy formulation - providing input as to what is possible given the types and numbers of people available
Strategy implementation - making resource allocation decisions about structure, processes, and human resources to implement/meet strategic goals
strategic hr planning steps
Step 1: Mission, Vision and Values
Step 2: Environmental Scanning
Environmental Scanning
The systematic monitoring of the major external forces influencing the organization.
Step 3: Internal Analysis
(ON EXAM) - core knowledge employees
Core employees
Strategic knowledge workers
- Employees who have firm-specific skills that are directly linked to the company’s strategy
- High in strategic value; high in unique skills
Example job: Senior software programmer
(ON EXAM) - non-core employees: job-based employees
- Job-based employees
- Employees with skills to perform a predefined job that are quite valuable to a company, but not unique
- Transferable skills, low investment in training
- High in strategic value; low in unique skills
Example job: Accountant
(ON EXAM) - non-core employees: contract supporting workers
- Contract/supporting workers
- Employees whose skills are of less strategic value and generally available to all firms
- Low in strategic value; low in unique skills
Example job: General electrician
(ON EXAM) - non-core employees: complimentary partners
- Partners with complementary skills
- Individuals and groups with unique skills, but those skills are not directly related to a company’s core strategy
- Low in strategic value; high in unique skills
Example job: Contract lawyer
forecasting labor demand - labor demand defined
Labor demand – derived demand - determined by demand for product/service
(ON EXAM) - Forecasting Labor DEMAND QuaNtitatively - trend (ratio) analysis (REMEMBER FORMULA AND PRACTICE THIS)
of employees = X
Forecasting labor demand based on an organizational index such as sales: Commonly used approach for forecasting HR demand, need 3 pieces of info:
1. organizational indicator: e.g., sales
2. # of employees last period
3. Forecasted sales
REMEMBER:
Last yrs sales = Forecasted sales
$3,880,000 = $4,095,000
310 X = (solved is 327 employees)
STEPS:
1. $3,880,000 / 310 = 12,516
2. $4,095,000 / 12,516 = 327
310 people make us $3,880,000 so X people make us $4,095,000
X = 327
Hire 17 more people to make more money
(ON EXAM) - Forecasting Labor DEMAND QuaLitatively - Management Forecasts
Management Forecasts
The opinions (judgments) of supervisors, department managers, experts, or others knowledgeable about the organization’s future employment needs
(ON EXAM) - Forecasting Labor DEMAND QuaLitatively - Delphi Technique
Delphi Technique
Experts answer questionnaires in two or more rounds. After each round, a facilitator provides an anonymous summary of the experts’ forecasts
- Experts are encouraged to revise their earlier answers in light of the replies of other members
Both approaches consider knowledge of future issues
- New technology, new competitors, etc. - this information may not be reflected in historical data
Forecasting Labor Supply – two components:
Forecasting Labor Supply
Labor supply – two components:
1) Internal labor supply = current employees
2) External labor supply = all people outside the organization who make themselves available for employment
(ON EXAM) - Forecasting INTERNAL Labor Supply QuaNtitative Forecast - Markov Analysis (STUDY THIS AND LOOK AT CHART GIVEN)
Markov Analysis - quantitative
- Method for tracking the pattern of employee movements through various jobs
- Looks at the internal labor market
- Examines flows into, between, and out of the organization
- Easy diagnostic tool for identifying staffing problems or “gaps”
- Snapshot of movement across 2 time periods
(ON EXAM) - Forecasting INTERNAL Labor Supply QuaLitative Forecast - Replacement charts (STUDY THIS AND LOOK AT CHART GIVEN)
Chart of positions and persons who are potential replacements if an opening occurs - qualitative
- Considers individual’s specific KSAs
- Looks at the internal labor market
- More focus on individual employees and their career development needs
- “What if” analysis
(ON EXAM) - core vs. non-core employees
Core employee – employees central to our strategic goals and objectives
Non-core employee – employees in staff positions, low skill jobs or skills found readily in the labor market
Core/Non-core Model uses may use more of a commitment approach for the core ees, more of a transactional approach for the non-core positions
- Is it possible to pay all of our employees above market wages?
(ON EXAM) - vertical fit (LOOK AT IMAGE ON NOTES)
Vertical Fit = HR practices fit with overall organizational strategy
Focuses on the connection between the business objectives and the various functional area initiatives
organizational strategy
I I I I
production, hr, accounting, marketing
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(ON EXAM) - horizontal fit (LOOK AT IMAGE ON NOTES)
Horizontal Fit = HR practices complement each other
Aligning HR practices with one another to establish a configuration that is mutually reinforcing
human resources:
recruiting - training
compensation - training
performance management
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(ON EXAM) - business strategy (2)
How are we going to compete in our given business?
1) Low-cost strategy: competing on productivity and efficiency
- Keeping costs low to offer an attractive price to customers (relative to competitors)
- Ex: Dollar Tree, Shein, Walmart
2) Differentiation strategy: compete on added value
- Involves providing something unique and distinctive to customers that they value
(ON EXAM) - HR Strategy - Labor Transaction
Labor Transactional Model
Employees are a cost to be minimized rather than an asset that adds value
- HR’s primary purpose is to minimize labor costs
- No long term commitment to employees
- No training investment–job specific training only
- No career development
- Performance appraisal primary purpose – weed out
(ON EXAM) - HR Strategy - Commitment (workforce commitment model)
Workforce Commitment Model
Employees are assets which warrant investment
- Encourage productivity and loyalty through commitment
- Training for expanding skills to use for current and future jobs
- Job security
- Career development
- Performance appraisal focus on developing employees
(ON EXAM) - Calculating turnover rate (STUDY THIS REAL HARD)
turnover =
number of separations during a month
————————————————————- x 100
total number of employees at mid month
EX: IF THERE WERE 25 SEPARATIONS IN A MONTH AND THE TOTAL NUMBER OF EMPLOYEES AT MIDMONTH WERE 500, THE TURNOVER RATE WOULD BE:
25
—- x 100 = 5%
500
(ON EXAM) - Calculating AVOIDABLE turnover rate (STUDY THIS REAL HARD)
what is a unavoidable separation: pregnancy, return to school, death or marriage
avoidable turnover =
avoidable separations - unavoidable separations
———————————————————————–x 100
total number of employees at mid month
S - US
_____ x 100
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