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Role of Hr in Strategic Formulation

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					 C H A P T E R                                          T   T h r e e




          Strategic HRM and the HR

Lecture Outline
                         Scorecard
                                                                        3
    Strategic Overview
HR’s Strategic Challenges
    The Strategic Management Process
                                                        In Brief: This chapter explains how to
    Types of Strategic Planning
    Achieving Strategic Fit
                                                        design and develop an HR system that
    HR and Competitive Advantage                        supports the company’s strategic goals.
    Strategic Human Resource Management                 It explains the strategic management
HR’s Strategic Roles                                    process, how to develop a strategic plan,
    HR’s Strategy Execution Role                        and the HR manager’s role in the
    HR’s Strategy Formulation Role                      process in strategy execution and
Creating a Strategy Oriented HR System
                                                        formulation. It discusses how to create a
    The High- Performance Work System
    Translating Strategy into Policy and Practice
                                                        strategy oriented HR system and
    HR Strategy in Action: An Example                   reviews the HR scorecard approach to
The HR Scorecard Approach                               creating a strategy oriented HR system.
    Creating an HR Scorecard
    Using the HR Scorecard Approach                     Interesting Issues:         The Human
    The Hotel International: An Example                 Resource function today continues to
    The HR Scorecard
                                                        play an increasingly visible role in the
                                                        strategic planning and management
                                                        process, requiring a new level of skill
                                                        and       competency       among       HR
                                                        professionals. The authors suggest that
                                                        the most potent action HR managers can
                                                        take     to   ensure     their   strategic
                                                        contirbution    is    to     develop     a
                                                        measurement system that convincingly
                                                        showcases HR’s impact on business
                                                        performance. To design such a
                                                        measurement system, HR managers
                                                        must adopt a dramatically different
                                                        perspective that focuses on how human
                                                        resources can play a central role in
                                                        implementing the firm’s strategy.




                                                    1
ANNOTATED OUTLINE

I.   HR’s Strategic Challenges

     A strategic plan is the company’s plan for how it will match its internal
     strengths and weaknesses with external opportunities and threats in order to
     maintain a competitive advantage. The HR strategy needs to support the
     company’s strategic plan. In formulating their HR strategies, HR managers
     must address three basic challenges: 1) support corporate productivity and
     performance improvement efforts; 2) employees play an expanded role in
     employers’ performance improvement efforts; 3) HR must be more involved in
     designing – not just executing – the company’s strategic plan.

     A. The Strategic Management Process:

         Strategic management is the process of identifying and executing the
         organization’s mission, by matching the organization’s capabilities wit the
         demands of its environment. It consists of several related tasks:

        1.   Define the Business and Its Mission – Managers choose strategies to
             get the company from where it is to where it wants to be tomorrow.
             The company’s vision is a general statement of its intended direction
             that evokes emotional feelings in organization members. The mission
             is more specific and shorter term, communicating “who we are, what
             we do, and where we’re headed”

        2.   Perform External and Internal Audits – SWOT analysis is a commonly
             used tool that identifies the company’s strengths and weaknesses,
             opportunities and threats.

        3.   Formulate new business and mission statements – Decides on new
             business, products to sell, where to sell, and how the products differ
             from competitors.

        4.   Translate the Mission into Strategic Goals –       Operationalize the
             mission by getting specific around goals.

        5.   Formulate a Strategy to Achieve the Strategic Goals – A strategy is a
             course of action, showing how the enterprise will move from where it
             is now to where it wants to be as stated in its vision, mission and
             strategic goals, given its opportunities, threats, strengths and
             weaknesses.

        6.   Implement the Strategy – Translating the strategies into actions and
             results.

        7.   Evaluate Performance – Assessing progress toward strategic goals
             and taking corrective action as needed. Strategic control keeps the
             company’s strategy up to date, and identifies where adjustments need
             to be made

     B. Types of Strategic Planning – Managers have three levels of strategic
        planning.

        1.   Corporate-level strategy – Identifies the portfolio of businesses that
             comprise the company and the ways in which these businesses
             related to each other.         Diversification, vertical integration,
             consolidation and geographic expansion are all examples of corporate
             level strategies.


                                             2
            2.   Business-level/competitive strategy – Identifies how to build and
                 strengthen the business’s long term competitive position in the
                 marketplace. Companies try to achieve competitive advantages for
                 the business they are in, which allow them to differentiate its product
                 or services from those of its competitors to increase market share.
                 Examples of competitive strategies include cost leadership and
                 differentiation.

            3.   Functional strategies - identify the basic course of action that each
                 department will pursue in order to help the business attain its
                 competitive goals.

                          When You’re On Your Own: Using Computerized Business
                          Planning Software. There are several business planning
                          software packages available to help the small business owner
                          write top-notch strategic and business plans.

        C. HR and Competitive Advantage

                 In order to have an effective competitive strategy, the company must
                 have one or more competitive advantages. Technology itself is rarely
                 enough to set a firm apart as most companies today have easy access
                 to the same technologies, so that the real differentiation is people and
                 the management system.

        D. Strategic Human Resource Management

            HR strategies refer to the specific courses of action the company pursues
            to achieve its aims. It means formulating and executing HR systems that
            produce the employee competencies and behaviors the company needs to
            achieve its strategic aims.

     NOTES        Educational Materials to Use




II.     HR’s Strategic Roles

        A. Introduction

            1. HR is increasingly assuming more strategic planning responsibilities
               and involvement in the process. Among their contribution to strategic
               planning are identification of human issues that are vital to the
               business strategic, helping to establish and execute strategy, and
               forecast potential obstacles to success. HR Managers can provide
               alternative insights and are centrally involved in creating responsive
               and market driven organizations.

            2. In order to play this role, HR managers need an in-depth
               understanding of the value creating proposition of the firm.

       B.   HR’s Strategy Execution Role

            Strategy execution is traditionally the heart of the HR manager’s strategic
            planning job. The company’s HR strategies should flow directly from its
            company-wide and competitive strategies.




                                                  3
         C. HR’s Strategy Formulation Role

              1. HR increasingly plays an expanded strategic planning role, to include
                 working with top management to formulate the company’s strategic
                 plans. Formulating a company’s strategic plan requires identifying,
                 analyzing, and balancing the company’s external opportunities and
                 threats on the one hand and its internal strengths and weaknesses on
                 the other.

              2. HR Management is in a unique position to supply competitive
                 intelligence that may be useful in the strategic planning process, such
                 as competitors’ incentive plans, pending legislation, and the
                 company’s internal human strengths and weaknesses.

              3. By working closely with top management, HR is able to build a
                 persuasive case through a strategy oriented HR system to shows how
                 the firm’s HR activities contribute to creating value for the company.

      NOTES       Educational Materials to Use




III.     Creating a Strategy Oriented HR System

         A value-creating strategy-oriented HR process consists of three basic
         components which comprise what some experts refer to as a company’s basic
         HR architecture:

         1) HR professionals who have the strategic skills required to build a strategy
         oriented HR system; 2) HR policies and activities that comprise the HR
         system itself; and 3) Employee behaviors and competencies that the
         company’s strategy requires that emerge from the actions and policies of the
         firm’s strategy-supporting HR system.

         A.    The High Performance Work System – Managers and HR experts
              advocate that the HR system itself be a high-performance work system,
              maximizing the overall quality of human capital throughout the
              organization.

              1. Evidence suggests that high performance HR practices, combined
                 with new technology, produce better productivity, quality, sales, and
                 financial performance.

              2. HPWS practices include high-involvement organizational practices,
                 high-commitment work practices, and flexible work assignments, as
                 well as practices that foster skilled workforces and expanded
                 opportunities to use those skills.

         B. Translating Strategy into HR Policy and Practice – The basic model of
            how to align HR strategy and actions with business strategy is outlined in
            Figure 3.9. HR management formulates HR strategies, policies, and
            practices aimed at achieving the desired workforce skills, attributes, and
            behaviors. Metrics are identified which can be used to measure the extent
            to which new HR initiatives are supporting management’s strategic goals.

         C. HR Strategy in Action: An Example – This example illustrates how
            Einstein Healthcare’s HR managers formulated and used HR strategies to



                                                  4
           execute strategic plans. The example explains how the vision to change
           the organization into a comprehensive healthcare network providing a full
           range of high-quality services in various local markets required numerous
           changes in the organization and human resources. Behavioral outcomes
           by the CEO from which HR developed five key HR strategies aimed at
           creating the required employee competencies, skills and behaviors.
           Specific programs and practices were then developed by HR which
           contributed directly to achieving the organization’s strategic aims.

     NOTES      Educational Materials to Use




IV.     The HR Scorecard Approach

        HR creates value by engaging in activities that produce the employee
        behaviors the company needs to achieve strategic goals. Managers use an
        HR Scorecard to measure the HR function’s effectives and efficiency in
        producing these employee behaviors and thus in achieving the company’s
        strategic goals. The HR Scorecard – shows the causal link between the HR
        activities, and the emergent employee behaviors, and the resulting firm-wide
        strategic outcomes and performance.

        A. Creating a HR Scorecard - Three types of information are needed to
           create a HR Scorecard.

           1. Company strategy information

           2. Causal links between HR activities, employee behaviors,
              organizational outcomes, and the organization’s performance

           3. Metrics that can be used to measure HR activities, emergent
              employee behaviors, strategically relevant organizational outcomes,
              and organizational performance.

        B. Using the HR Scorecard Approach – There are ten steps involved in using
        the HR Scorecard to create a strategy-oriented HR system (see Figure 3.11)

           1. Define the business strategy – In this step, management translates its broad
              strategic plans into specific actionable goals.

           2. Outline the company’s value chain – Here the manager identifies the
              strategically relevant outcomes and required employee behaviors by identifying
              the value chain, which identifies the primary activities that create value for
              customers and the related support activities. The value chain is a tool for
              identifying, isolating, visualizing, and analyzing the firm’s strategic activities and
              strategic costs. This step allows managers to better understand the activitiesthat
              drive performance in their company.

           3. Outline a Strategy Map – A summary of the chain of major activities that
              contribute to a company’s success, the strategy map shows the “big picture” of
              how each department’s performance contributes to the achievement of company
              goals.

           4. Identify the strategically required organizational outcomes – In order to
              achieve its strategic goals, every company must produce critical, strategically
              relevant outcomes.



                                                5
   5. Identify the required workforce competencies and behaviors – Competencies
      and behaviors such as personal accountability, working proactively, motivation,
      courteous behavior, and commitment drive organizational performance by
      producing strategically relevant organizational outcomes.

   6. Identify the required HR system policies and activities – The question in this
      step is “what HR system policies and activities will enable us to produce those
      workforce competencies and behaviors?” The answer might include things like
      special training programs or changing the compensation plan. These policies and
      activities are often referred to as “HR enablers”, which create and make possible
      the HR “performance drivers” – the workforce competencies and behaviors that
      produce the strategically relevant organizational outcomes. Once these enablers
      are identified, the next question that follows is, what specific form should these
      policies and activities take? How and to what end should systems and processes
      be changed? The HR system must be aligned with the company’s specific
      strategic needs. At this point, the HR manager must become precise about the
      actual form and design of the firm’s HR deliverables.

   7. Create the HR Scorecard – In this step, the question is how are the
      organizational outcomes, workforce competencies and behaviors, and HR system
      policies and activities measured? Just a few sample measures for assessing HR
      performance drivers could be employee attitude surveys, employee turnover, level
      of organizational learning, employee productivity, percentage of retention of high
      performing key employees, number of hours of training employees receive every
      year, and percentage of the workforce routinely working in a self managed team.
      These types of measures allow the company to assess HR’s performance
      objectively and quantitatively, and also enable the HR manager to build a
      measurable and persuasive business case for how HR contributes to achieving
      the company’s strategic financial goals.

   8. Design HR Scorecard Measures – Find a balance of financial and non-financial
      goals, with both short and long-term foundations.

   9. Summarize the Scorecard Measures a in a Digital Dashboard – A digital
      dashboard usually presents information in a way that grabs management’s
      attention. It displays a “bird’s eye view” of how the HR function is doing.

   10. Monitor, Predict, Evaluate - The HR Scorecard’s various measures will not
       always stay the same, and should be evaluated periodically to ensure they are still
       valid.

C. The Hotel International: An Example

   This example illustrates how the multi-stop process for developing an HR
   Scorecard works. As a corporate strategy, the management and owners
   want to continue to expand geographically, believing that doing so will
   allow them to capitalize on their reputation for good service, by producing
   multi-city alternatives for guests. The challenge is that their reputation for
   good service has been deteriorating, thereby making the expansion
   strategy a risk since guest might actually prefer other hotels after trying
   the Hotel International. This example walks students through the steps
   involved in developing an HR management system.

    1. The Strategy - The strategy chosen by management is to use superior
        guest services to differentiate their properties, and increase the
        length of stays and return rate of guests, thereby boosting revenues
        and profitability.




                                         6
            2. The Value Chain – Figure 3.12 outlines the value chain. Inbound
               logistics activities (getting guests from the airport and checked in,
               operations activities (cleaning the guest’s room); outbound logistics
               activities (picking up baggage), marketing and sales activities
               (attracting guests to the hotel), service activities (travel awards) and
               support activities (purchasing, information systems, HR). The question
               for the HR manager is “given our strategic goals, how can HR
               management help our hotel achieve its goals by adding value to each
               of the hotel’s core value chain activities?”

            3. The Strategically Required Organizational Outcomes – the outcomes
               that the Hotel International is seeking includes fewer customer
               complaints, more written compliments, more frequent guest returns,
               longer stays, and higher guest expenditures per visit.

            4. The Strategically Relevant Workforce Competencies and Behaviors –
               Based on the value chain analysis, competencies and behaviors
               identified are “high quality front-desk customer serivce”, “taking calls
               for reservations in a friendly manner”, “greeting guests at the front
               door”, and “processing guests’ room service meals efficiently”.

            5. The Strategically Relevant HR System Policies and Activities – Here
               HR deliverables are identified to produce the crucial workforce
               competencies and behavior. For example, in order to produce “high
               quality front-desk customer service,”, an HR deliverable of instituting
               practices to improve disciplinary fairness and justice in the company
               with the aim of improving employee morale is identified.

            6. The HR Scorecard – Metrics are selected to show the links among the
               HR activities, workforce behaviors and organizational outcomes. The
               Scorecard is illustrated in Figure 3.13. For example, metrics of
               grievance activitiy, scores on attitude surveys, and customer
               complaints are chosen for inclusion in the scorecard.

                     Improving Productivity Through HRIS: Software Systems for
                     Managing Scorecard Programs. The balanced scorecard does for
                     the company as a whole what the HR scorecard does for the HR
                     function. It is a management tool (usually a computerized model)
                     that traces a multitude of performance measures simultaneously
                     and shows their interactions across the company. The balanced
                     scorecard includes multifunctional metrics that top management
                     believes contribute to the company’s strategic success .

   NOTES         Educational Materials to Use




DISCUSSION QUESTIONS

1. What is the difference between a strategy, a vision, and a mission? Please give one
   example of each. A strategy identifies a course of action to get the company from where it is
   today to where it wants to be tomorrow. One example of a company’s strategy given in the
   text is Dell Computer’s strategy to be a “low cost leader” by using the Internet and phone to
   sell PCs directly to end users at prices competitors cannot match. A vision is a general
   statement of the company’s intended direction that evokes emotional feelings in employees. It
   is a “mental image” of a possible and desirable future state for the organization, and articulates
   a view of a realistic, credible, attractive future of the organization that is better than what now


                                                  7
   exists. The mission is a more specific and shorter term statement which lays out what is
   supposed to be now, communicating “who we are, what we do, and where we’re headed”.

2. Define and give at least two examples of the cost leadership competitive strategy and
   the differentiation competitive strategy. The cost leadership competitive strategy means
   that the enterprise aims to become the low-cost leader in an industry. In a differentiation
   competitive strategy, firms seek to be unique in its industry along dimensions that are widely
   valued by buyers.

3. Explain how HR can help a company create its competitive advantage. Human
   Resources is regarded in a growing number of organizations as a source of competitive
   advantage, through recruiting, selecting, retaining and developing human capital that enables
   organizations to compete on a number of different levels to be flexible, capable, and
   responsive, demonstrating creativity and innovation in order to produce products and services
   of high quality.

4. What is a high performance work system? Provide several specific examples of the
   elements in a high performance work system. High Performance Work Systems are
   characterized by high involvement organizational practices, (such as job enrichment and team-
   based organizations), high-commitment work practices (such as improved employee
   development, communications, and disciplinary practices), and flexible work assignments. The
   evidence suggests that companies that employ HPWS practices produce better productivity,
   quality, sales and financial performance. What makes the HPWS unique is the quality,
   quantity, and specific features of the HR policies and practices. Each element is designed to
   maximize the overall quality of human capital throughout the organization. Several
   characteristics of high performance work organizations include multi-skilled work teams;
   empowered frontline workers; more training; labor management cooperation; commitment to
   quality; and customer satisfaction.

5. Define what a HR Scorecard is, and briefly explain each of the seven steps in the HR
   scorecard approach to creating a strategy oriented HR system. The HR Scorecard is a
   concise measurement system that shows the metrics the firm uses to measure HR activities,
   measures the employee behaviors resulting from these activities, and measures the
   strategically relevant organizational outcomes of those employee behaviors. It highlights the
   causal link between the HR activities, and the emergent employee behaviors, and the resulting
   firm-wide strategic outcomes and performance.

   The ten steps involved in the HR scorecard approach are as follows:

           1. Define the business strategy – In this step, management translates its broad
              strategic plans into specific actionable goals.

           2. Outline the company’s value chain – Here the manager identifies the
              strategically relevant outcomes and required employee behaviors by identifying
              the value chain, which identifies the primary activities that create value for
              customers and the related support activities. The value chain is a tool for
              identifying, isolating, visualizing, and analyzing the firm’s strategic activities and
              strategic costs. This step allows managers to better understand the activities that
              drive performance in their company.

           3. Outline a Strategy Map – A summary of the chain of major activities that
              contribute to a company’s success, the strategy map shows the “big picture” of
              how each department’s performance contributes to the achievement of company
              goals.

           4. Identify the strategically required organizational outcomes – In order to
              achieve its strategic goals, every company must produce critical, strategically
              relevant outcomes.




                                                8
            5. Identify the required workforce competencies and behaviors – Competencies
               and behaviors such as personal accountability, working proactively, motivation,
               courteous behavior, and commitment drive organizational performance by
               producing strategically relevant organizational outcomes.

            6. Identify the required HR system policies and activities – The question in this
               step is “what HR system policies and activities will enable us to produce those
               workforce competencies and behaviors?” The answer might include things like
               special training programs or changing the compensation plan. These policies and
               activities are often referred to as “HR enablers”, which create and make possible
               the HR “performance drivers” – the workforce competencies and behaviors that
               produce the strategically relevant organizational outcomes. Once these enablers
               are identified, the next question that follows is, what specific form should these
               policies and activities take? How and to what end should systems and processes
               be changed? The HR system must be aligned with the company’s specific
               strategic needs. At this point, the HR manager must become precise about the
               actual form and design of the firm’s HR deliverables.

            7. Create the HR Scorecard – In this step, the question is how are the
               organizational outcomes, workforce competencies and behaviors, and HR system
               policies and activities measured? Just a few sample measures for assessing HR
               performance drivers could be employee attitude surveys, employee turnover, level
               of organizational learning, employee productivity, percentage of retention of high
               performing key employees, number of hours of training employees receive every
               year, and percentage of the workforce routinely working in a self managed team.
               These types of measures allow the company to assess HR’s performance
               objectively and quantitatively, and also enable the HR manager to build a
               measurable and persuasive business case for how HR contributes to achieving
               the company’s strategic financial goals.

            8. Choose HR Scorecard Measures – Find a balance of financial and non-financial
               goals, with both short and long-term foundations.

            9. Summarize the Scorecard Measures a in a Digital Dashboard – A digital
               dashboard usually presents information in a way that grabs management’s
               attention. It displays a “bird’s eye view” of how the HR function is doing.

            10. Monitor, Predict, Evaluate – The HR Scorecard’s various measures will not
                always stay the same, and should be evaluated periodically to ensure they are still
                valid.

INDIVIDUAL AND GROUP ACTIVITIES

1. With three or four other students, form a strategic management group for your college
   or university. Your assignment is to develop the outline of a strategic plan for the
   college or university. This should include such things as mission and vision
   statements; strategic goals, and corporate, competitive, and functional strategies. In
   preparing your plan, make sure to show the main strengths, weaknesses, opportunities,
   and threats the college faces, and which prompted you to develop your particular
   strategic plans. Look for students to prepare a well developed mission and vision statement,
   making sure that they are clearly differentiated from each other with the vision being future
   focused, articulating the desired state, with the mission supporting the vision, describing “who
   we are, what we do, and where we are headed”. Use this exercise as an opportunity to
   discuss the problems that may be created by not clearly the defining the mission, vision, as
   well as the strengths, weaknesses and opportunities and threats.

2. Using the Internet or library sources, analyze the annual reports of at least five
   companies. Bring to class examples of how those companies say they are using their
   HR processes to help the company achieve its strategic goals. In class, facilitate a
   discussion on how effective students believe the HR processes each company is using to


                                                9
   support the strategic goals. Challenge students to come up with additional ideas for other
   approaches for using the HR processes and how they would go about implementing them,
   noting the specific challenges of each.

3. Interview an HR manager and write a short report on the topic: “The strategic roles of
   the HR manager at XYZ Company.” Instruct students to follow the model outlined in this
   chapter for the steps in the strategic management process, and HR’s role in strategy execution
   and strategy formulation.

4. Using the Internet or library resources, bring to class and discuss at least two examples
   of how companies are using an HR Scorecard to help create HR systems that support
   the company’s strategic aims. Do all managers seem to mean the same thing when they
   refer to “HR Scorecards”? How do they differ? For each example, ask students to
   comment on how effective they believe the measures that were selected by the company are
   in terms of allowing the company to assess HR’s performance objectively and quantitatively,
   as well as serving as a tool for the HR manager to build a measurable and persuasive
   business case for how HR is contributing to achieving the company’s strategic financial goals.
   Challenge students to critique the scorecard and how it could be improved to measure
   strategically relevant organizational outcomes, workforce competencies and behaviors, and
   HR system policies and activities.

   Examples of some multiple choice questions:

   1. Formulating and exeucting HR systems that produce the employee competencies and
      behaviors the company needs to achieve its strategic aims is called:
         a. The HR Scorecard
         b. Strategic human resource management
         c. Strategic control
         d. Competitve Advantage

               Answer: b

   2. The HR Scorecard does the following:
         a. Defines the companies business and its mission
         b. shows the causal link between HR activities, emergent empoyee behaviors and
             resulting strategic outcomes and performance
         c. Identifies how to build and strengthen the business’s long term competitive
             position in the marketplace
         d. Ensures that the firm’s functional strategies support its corporate and competitive
             strategies

               Answer: b

   3. Strategic HR Activity Metrics could be:
          a. Number of grievances per year
          b. Number of hours of training per employee per year
          c. Turnover costs
          d. All of the above

               Answer: d

   4. High Performance Work System practices include:
          a. Structured and hierarchical organizational structure
          b. Flexible work assignments
          c. Employees specializing in one job task
          d. Limited opportunities for training

               Answer: b




                                               10
EXPERIENTIAL EXERCISES & CASES


Experiential Exercise: Developing an HR Scorecard for Starbucks

Purpose: The purpose of this exercise is to give students experience in developing an HR
scorecard, by developing one for Starbucks or a similar food outlet. Students should understand
the HR scorecard approach to creating a strategy oriented HR system, and in particular, the seven
steps in the process.

Instructions: Set up groups of three to four students for this exercise. Using whatever sources
are available, including personal interviews with college administrators, each group should outline
an HR scorecard for Starbucks or a similar food outlet, by addressing each of the ten steps in the
process, starting with a short definition of the business strategy for the college.

Ask each group to present their scorecard to the rest of the class. Have the class play the role as
the Board of Directors for Starbucks or the similar food outlet. At the end of each presentation, ask
the class to provide feedback on the scorecard, commenting on the following:

    a. How effectively does the scorecard measure 1) organizational outcomes 2) workforce
       competencies and behaviors, and 3) HR system policies and activities?

    b. Comment on how effective scorecard is on the following dimensions:
          1) allowing the board to assess HR’s performance objectively and quantitatively
          2) as a tool for the HR manager to build a measurable and persuasive business case
             for how HR is contributing to achieving the organization’s strategic goals


Continuing Case: the Kwik and Kleen Laundry Company

1. Would you recommend that the company expand its quality program? If so, specifically
   what form should it take? Most students will agree that there are opportunities to expand the
   quality program. The employee meeting approach is a good start in terms of utilizing high
   involvement organizational practices. There are opportunities to maximize the overall quality of
   their human capital. For example, training seems to be an obvious area to focus in terms of
   educating and building awareness about basic standards and procedures.

2. Assume the company wants to institute a high performance work system as a test
   program in one of its stores. Write a one-page outline summarizing what such a
   program would consist of. Students should include some of the following ideas in their
   outline: Identify the types of HR practices it would implement to improve quality, productivity,
   financial performance; methods for job enrichment; strategies for implement and leverage a
   team-based organization; ways to implement and facilitate high commitment work practices;
   employee development and skill building to foster increased competency and capability in the
   workforce; a compensation program which provides incentives (for example profit sharing; pay
   for performance) for achieving major goals and financial targets.


                            For more Instructor’s Resources,
                   visit the Dessler & Tan companion Web site for
           Human Resource Management: An Asian Perspective (2nd edition) at
                     http://www.pearsoned-asia.com/desslertan/.




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          KEY TERMS
competitive advantage   Any factors that allow an organization to differentiate its product or
                        service from those of its competitors to increase market share.


HR scorecard            A concise measurement system that shows the quantitative
                        standards, or “metrics” the firm uses to measure HR activities, to
                        measure the employee behaviors resulting from these activities,
                        and to measure the strategically relevant organizational outcomes
                        of those employee behaviors.

metrics                 Statistics used to measure the activities and results involved in a
                        field.

mission                 A more specific and shorter term statement which communicates
                        for a company who they are, what they do, and where they are
                        headed.

strategic control       The process of assessing progress toward strategic goals and
                        taking corrective action as needed.

strategic human         Formulating and executing HR systems – policies and activities
resource management     – that produce the employee competencies and behaviors the
                        company needs to achieve its strategic aims.

strategic management    The process of identifying and executing the organization’s
                        mission, by matching the organization’s capabilities with the
                        demands of its environment.

strategic plan          The company’s plan for how it will match its internal strengths and
                        weaknesses with external opportunities and threats in order to
                        maintain competitive advantage.

strategy                Specific courses of action the company pursues to achieve its
                        aims.

SWOT Analysis           The process of identifying company strengths, weaknesses,
                        opportunities, and threats.

value chain analysis    Identifying the primary activities that create value for customers
                        and the related support activities.

vision                  A general statement of a company’s intended direction that
                        evokes emotional feelings in organization members.




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VIDEO CASE APPENDIX

                      Video 1: Showtime

                      Showtime Networks operates cable networks and pay-per-view cable
                      channels across the US and in several countries abroad. As this video
                      illustrates, its HR function support corporate strategy by helping to
                      determine what kind of employees are needed to keep the company in
                      peak performance, and then by providing the company and its employees
                      with the HR activities that these employees need to do their jobs.

                      For example, you will see that Showtime offers many development and
                      training programs, as well as personal development type activities
                      including mentoring programs and career oriented development activities.
                      The company’s performance management process (which the employees
                      helped develop) focuses specifically on the work activities and results that
                      help achieve department and corporate goals. In the this video, Mathew,
                      the company CEO, emphasizes that it is essential to use human
                      resources as a strategic partner and the video then goes on to provide
                      something of a summary of the basic HRM functions.


                      Video 2: IQ Solutions

                      IQ Solutions is in the business of providing health-care system services,
                      It says on of its aims is lessening the inequality that they say exists in
                      America’s health-care system, and the company uses its very diverse
                      employee base to better serve and attract a broad client base.

                      Employees at IQ Solutions work together in teams to achieve the
                      company’s goals. As we see in this video, the company itself is indeed
                      very diverse: for example, employees speak about 18 languages. The
                      company capitalizes on this diversity in many ways. For example, they
                      let their employees share their ethnically unique holidays, and provide
                      special training and other benefits that support diversity.




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