BM7023 HUMAN RESOURCE MANAGEMENT

Chapter 3:
Human Resource Management
Strategy and Performance

Dr. Jakaria Dasan (Dr. Jake)

Ph.D. Human Resource Management (USM),
Master of Business Administration (UMS),
BSc. In Public Administration (West Texas A&M, U.S.A.)
E-mail: jakaria@ums.edu.my; Instagram: Jackarea_Dawson
 HRM ~ Strategy & Performance
A general statement contained
intended direction that evokes
emotional feelings in organizational Strategic Management
VISION members.
04 After setting goals, procedures &
Strategic Planning objectives, be competitive by
03
effectively deploying staff
Spells out who the firm is, and resources. Matching the
MISSION what it does, and where it company’s capabilities with the
is headed
02 demands of the environment.
Manager
Identify approaches
“May actas a manager, but
STRATEGY
and recognize impacts
(external, competition Resource Based View Theory
& labor dynamic) think like a leader”
VRIN VRIO
The non-substitutable value needs
to be strategized or organized back

HRM Functions 01
POSLC~ Staffing
“Organizations will not pay for
the value of the job but for the
value of the person”

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 LO1
7-step in SM
01 02 03 04 05 06
1. Management planning process
2. Strategic planning
3. Strategic management process
practices
Types of

Employee
strategies

HR metrics

HPWS
Strategic HRM &

engagement
7-steps in SM

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1. The Management Planning Process
• The Hierarchy of Goals (top-
down view – President
allocates amounts of
budget to be cascaded
down to each
departments/front line)

• As guided by Policies (day-

to-day guidance) and
following the specified
Procedures (what to do)

Figure 3-1 Sample Hierarchy of Goals Diagram for a Company

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2. What is Strategic Planning?
The company’s overall plan for how
it will match its internal
strengths and weaknesses
with its external
opportunities and threats in A general statement
contained intended
order to maintain a competitive VISION direction that evokes
emotional feelings in
position. organizational
members.

Spells out who the firm is,

MISSION what it does, and where it
is headed

Identify approaches and

STRATEGY
recognize impacts (external,
competition & labor dynamic)

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3. The Strategic Management Process

Where are
we now as a Biz direction
business?”
SWOT Decide on Choose
strategic specific
goals strategies

The Strategic Management Process – Is defined as the process of

identifying and executing the organization's strategic plan by
matching the company’s capabilities with the demands of the
environment.
Figure 3-2 The Strategic Management Process

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 LO2 Types of Strategies
1. Corporate strategies
2. Competitive strategies
1 2 3 4 5 6 3. Functional strategies
HRM &

HPWS
HR metrics
strategies

Strategic

opractices

Pemployee
Types of

engagement
7-steps in SM

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 Types of Strategies

Corporate Competitive Functional

Strategy Strategy Strategy

1. Concentration 1. Cost leadership Broad activities of a

2. Diversification 2. Differentiation department
3. Vertical integration 3. Focused
4. Consolidation
5. Geographic expansion

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Corporate Level Strategy identifies the portfolio of businesses that, in total,
comprise the company and how these businesses relate to each other

CONCENTRATION Single product/service

GEOGRAPHIC
DIVERSIFICATION
EXPANSION

CORPORATE
LEVEL
STRATEGY

New territorial market Add new product/service

VERTICAL
CONSOLIDATION
INTEGRATION

Reducing size

Produce own raw material or selling direct

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The Three Standard Competitive Strategies
• A strategy that identifies how to build and strengthen the business’s long-term
competitive position in the marketplace, which is also known as business-
level/competitive strategy.
• “on what basis will each of our businesses compete?”

1. Cost Leadership – low-cost leader in an industry; e.g. Walmart

2. Differentiation – being unique; Volvo (safety of the car)
3. Focus – specific product that competitor can’t produce; Toyota

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Functional Strategy
• A strategy that identifies the broad activities that each
department will pursue in order to help the business
accomplish its competitive goals.
• “what each dept must do to ensure the success of the
organization strategic competitive goals.”

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Managers’ Role in Strategic Planning
• Devising the company’s overall strategic plan is top
management’s responsibility. However, few top
executives formulate strategic plans without lower-level
managers’ input. (Discuss)
• Direction of communication/networks led by HOD = to
hammer strategic plan

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 LO3 Strategic HRM &
Practices
0 0 0 0 0 0 1. Strategic HRM
1 2 3 4 5 6 2. Sustainability and Strategic HRM
3. Strategic management process
strategies

HRM &
practices
Strategic

HR metrics

Pemployee
HPWS
Types of

engagement
7-steps in SM

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What is Strategic Human Resource
Management?
Strategic human resource management – means
formulating and executing human resource policies and
practices that produce the employee competencies and
behaviors the company needs to achieve its strategic aims.

The Shanghai Ritz-Carlton Portman Hotel

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Improving Performance: The Strategic
Context
The Shanghai Ritz-Carlton Portman Hotel

• When the Ritz-Carlton Company took over managing the Portman Hotel in
Shanghai, China, the new management reviewed the Portman’s strengths and
weaknesses, and its fast-improving local competitors. They decided that in
order to compete, they had to improve the hotel’s level of service. Achieving
that meant formulating new human resource management plans for hiring,
training, and rewarding hotel employees. It meant putting in place a new
human resource strategy for the Portman Hotel, one aimed at improving
customer service.

• Asian culture is different from that in the United States. For example, team
incentives tend to be more attractive to people in Asia than are individual
incentives. How do you think these cultural differences would have affected
how the hotel’s new management selected, trained, appraised, and
compensated the Shanghai Portman’s employees?

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Sustainability and Strategic Human
Resource Management
• Strategic human resource management means having
human resource policies and practices that produce the
employee skills and behaviors that are necessary to
achieve the company’s strategic goals, and these include
sustainability goals.
• i.e. PepsiCo: achieving financial performance while also
achieving human sustainability, environmental
sustainability, and talent sustainability.

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Strategic Human Resource Management
Tools
• Strategy map - the “big picture” of how each department’s
performance contributes to achieving the company’s
overall strategic goals
• The HR scorecard - a process for assigning financial and
nonfinancial goals or metrics to important human resource
management–related chain of activities.
• Digital dashboards - showing a computerized picture of
how the company is doing on all the metrics from the HR
Scorecard process.

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 0
1
7-steps in SM

Types of

0
2
strategies

Strategic

0
3
HRM &
opractices

0
4
HR metrics
LO4
0
5
HPWS

Pemployee
0
6

engagement
HR metrics

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HR Metrics, Benchmarking, and Data
Analytics
• Human resource metrics – the quantitative gauge of a
human resource management activity.
• Benchmarking – comparing the practices of high-
performing companies’ results to your own.
• Data Analytics – using statistical and mathematical
analysis to find relationships and make predictions.

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Benchmarking
• Just measuring is rarely enough
• “How are we doing?” in relation to something

Strategy-Based Metrics
• Strategy-based metrics specifically focus on measuring
the activities that contribute to achieving a company’s
strategic aims.

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What Are HR Audits?
The HR audit generally involves using a checklist to review the
company’s human resource functions (recruiting, testing, training, and so on), as
well as ensuring that the firm is adhering to regulations, laws, and company policies.

• The HR auditor may first review payroll data, focusing on what and
when each employee was paid.
• He or she will then turn to whether the human resource records are in
order
• He or she will also review the employer’s handbooks and policies, for
instance, checking for disability accommodation policies, social
media policies, and family and medical leave policies.
• He or she may also want to benchmark the results to comparable
companies’.

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 01
7-steps in SM

Types of

02
strategies

Strategic

03
HRM &
opractices

04
HR metrics
LO5

05
HPWS

Pemployee
06

engagement
HPWS

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High-Performance Work Systems is a
set of human resource management
policies and practices that promote
organizational effectiveness.
– Show examples of HR metrics
– Illustrates what employers must do to have HPWS
– Aspire to encourage employee involvement and self
management

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 Employee
LO6
Engagement
01 02 03 04 05 06
strategies

opractices

Pemployee
HR metrics

engagement
7-steps in SM

HRM &
Types of

Strategic

HPWS

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Employee Engagement Guide for Managers:
Employee Engagement and Performance
• Employee engagement refers to being psychologically
involved in, connected to, and committed to getting one’s
jobs done.

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The Employee Engagement Problem
• Gallup found:
– about 30% of employees were engaged - Passionate
– 50% were not engaged – Presenteeism?
– 20% were actively disengaged –Absenteeism?

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What Can Managers Do to Improve
Employee Engagement? (1 of 2)
• Provide supportive supervision.
• Ensure employees understand how their departments
contribute.
• See how their efforts contribute to achieving the
company’s goal.

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What Can Managers Do to Improve
Employee Engagement? (2 of 2)
• Ensure employees get a sense of accomplishment from
working at the firm.
• Ensure employees are highly involved.
• Employers should hold managers responsible for
employee engagement.

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THE END

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