NETA PowerPoint® Slides

to accompany

COPYRIGHT © 2020 BY NELSON EDUCATION

LTD.
 CHAPTER 2

Strategy and Human

Resources Planning

COPYRIGHT © 2020 BY NELSON EDUCATION 2

LTD.
 Learning Outcomes
Explain how human resources planning and a
firm’s mission, vision, and values are integrally
linked to its strategy.
Understand how an organization’s external
environment influences its strategic planning.

Understand why it is important for an

organization to do an internal resource analysis.

Explain the linkages between competitive

strategies and human resources.

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 Learning Outcomes
Understand what is required for a firm to
successfully implement a strategy and assess
its effectiveness.
Describe how firms evaluate their strategies
and human resources implementation.

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 Strategic Planning and
Human Resources
Strategic Planning
• Procedures for making decisions about the organization’s
long-term goals and strategies

Human Resources Planning (HRP)

• The process of anticipating and providing for the movement
of people into, within, and out of an organization

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 Strategic Planning and HR Planning
Strategic Human Resources Management
(SHRM)
• The pattern of human resources deployments and
activities that enable an organization to achieve its
strategic goals

1–6
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 Strategic Planning and HR Planning
• Strategy formulation:
 providing input as to what is possible given the types
and numbers of people available
• Strategy implementation:
 making resource allocation decisions, including decisions
related to structure, processes, and human capital

1–7
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Strategic Planning and HR Planning

1–8
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 Step 1: Mission, Vision, and Values
Mission
• The basic purpose of the
organization as well as its
scope of operations
Strategic Vision
• A statement about where the
company is headed and
what it can become in the
future; clarifies the long-term
direction of the company
and its strategic intent
Core Values
• The strong and enduring
beliefs and principles that
the company uses as a
foundation for its decisions

1–9
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 Linking Strategic Planning and HRP
Strategic Analysis
• What human resources are needed and what are available?
Strategic Formulation
• What is required and necessary in support of the human
resources strategy?
Strategic Implementation
• How will the human resources be allocated for structure,
processes, and human capital decisions?

Human
HumanResources
Resources Strategic
Strategic
Planning
Planning Planning
Planning

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 Step 2: External Analysis
Environmental Scanning
• The systematic monitoring of the major external forces
influencing the organization
1. Economic and ecological changes: general, regional, and global
conditions
2. Technological changes: information technology and automation
3. Demographic changes and labour market trends: education,
age, composition, literacy, immigration
4. Social changes: priorities toward work, childcare, eldercare
5. Legal and regulatory changes: laws and rulings

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Step 2: External Analysis

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 Step 3: Internal Analysis

Culture
Culture Capabilities
Capabilities

Internal
Internal
Analysis
Analysis

Composition
Composition

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 Step 3: Internal Analysis
Core Capabilities
• Integrated knowledge sets within an organization that
distinguish it from its competitors and deliver value to
customers
• Can consist of a combination of three resources:
(1) processes, (2) systems (technologies), and (3) people

1–14
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 Step 3: Internal Analysis
Value Creation
• Cost/benefit scenario
• What the firm adds to a product or service by virtue of
making it; the amount of benefits provided by the product
or service once the costs of making it are subtracted

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 Step 3: Internal Analysis
• Sustaining a Competitive Advantage
through People
• Four criteria:
1. The resources must be valuable.
2. The resources must be rare.
3. The resources must be difficult to imitate.
4. The resources must be organized.

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 Corporate Culture
Cultural Audits
• Audits of the culture and quality of work life in
an organization
o How do employees spend their time?
o How do they interact with each other?
o Are employees empowered?
o What is the predominant leadership style of
managers?
o How do employees advance within the organization?

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 Forecasting: A Critical Element
of Planning
Forecasting involves:
• forecasting the
demand for labour
• forecasting the supply
of labour
• balancing supply and
demand
considerations

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Forecasting a Firm’s Demand
for Employees

Quantitative
QuantitativeMethods
Methods

Forecasting
Forecasting Demand
Demand

Qualitative
QualitativeMethods
Methods

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 Forecasting a Firm’s Demand
for Employees
Quantitative approaches
• Trend Analysis
 Forecasting labour demand based on an organizational
index (such as sales)
Qualitative approaches
• Management Forecasts
 opinions (judgments) of supervisors, department
managers, experts, or others knowledgeable about the
organization’s future employment needs

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Forecasting the Supply of Employees:
Internal Labour Supply
• Staffing tables Markov Analysis—transition probability matrix is developed
to determine the probabilities of job incumbents remaining
• Markov analysis in their jobs for the forecasting period.

• Skill/management
inventories
• Replacement
charts
• Succession
planning

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 Internal Demand Forecasting Tools
Skill Inventories
• Files of personnel education, experience, interests, and
skills that allow managers to quickly match job openings
with employee backgrounds

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Internal Demand Forecasting Tools
Replacement Charts
• Listings of current
jobholders and people
who are potential
replacements if an
opening occurs
Succession Planning
• The process of
identifying, developing,
and tracking key
individuals for executive
positions

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 Assessing a Firm’s Human Capital
Readiness: Gap Analysis
Human Capital Readiness
• Evaluating the availability of critical talent in a company
and comparing it to the firm’s supply

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 Step 4: Formulating Strategy
Strategy Formulation
• Moving from simple analysis to devising a coherent
course of action
SWOT Analysis
• A comparison of strengths, weaknesses, opportunities,
and threats for strategy formulation purposes
• Using the strengths of the organization to capitalize on
opportunities, counteract threats, and alleviate internal
weaknesses

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 BEN AND JERRY’S SWOT ANALYSIS
LOCATION OF
FACTOR
Favorable Unfavorable

Strengths: Weaknesses:
• Prestigious, well-known brand name • B&J’s social responsibility actions could
among U.S. consumers. reduce focus.
• Complements Unilever’s other ice • Experienced managers needed to help
Internal cream brands. growth.
• Recognized for its social mission, • Modest sales growth and profits in
values, and actions. recent years.

Opportunities: Threats:
• Growing demand for quality ice cream • B&J customers read nutritional labels
in overseas markets. and are concerned with sugary and
• Increasing U.S. demand for Greek-style fatty desserts.
yogurt. • Competes with General Mills and
External • Many U.S. firms successfully use Nestlé brands.
product and brand extensions. • Increasing competition in international
markets.
 Activity #1
Using your educational institution as the
example, conduct a SWOT analysis:
• The organization’s strengths and weaknesses
• What are the opportunities and threats in Niagara College
Toronto?

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Step 4: Formulating Strategy

Growth
Growthandand Mergers
Mergersand
and
Diversification
Diversification Acquisitions
Acquisitions

Corporate
Corporate
Strategy
Strategy

Strategic
StrategicAlliances
Alliances
and
andJoint
JointVentures
Ventures

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 Business Strategy
Value Creation
• What the firm adds to a product or service by virtue of
making it; the amount of benefits provided by the product or
service once the costs of making it are subtracted
(value = benefits − costs)
 Low-cost strategy: competing on productivity
and efficiency
– Keeping costs low to offer an attractive price to customers
(relative to competitors)
 Differentiation strategy: competing on added value
– Involves providing something unique and distinctive to
customers that they value

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 Business Strategy
Functional Strategy: Ensuring Alignment
 Vertical Fit/Alignment
– Focuses on the connection between the business
objectives and the major initiatives in HR
 Horizontal Fit/Alignment
– Aligning HR practices with one another internally to
establish a configuration that is mutually reinforcing
• Horizontal fit refers to the internal consistency of the
organisation's HR policies or practices, and vertical fit refers to
the congruence of the HR system with other organisational
characteristics such as firm strategy.

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 Business Strategy
The use of part-
time employees
helps contain
labour costs
at fast-food
restaurants.

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Step 5: Strategy Implementation

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 Step 5: Strategy Implementation
Reconciling Supply and Demand
• Balancing demand and supply considerations
 Forecasting business activities (trends)
 Locating applicants

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Step 5: Strategy Implementation
Reconciling Supply and
Demand
• Organizational
downsizing, outsourcing,
offshoring
 Reducing “head
count”
• Making layoff decisions
 Seniority or
performance?
 Collective
agreements

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 Step 6: Evaluation and Assessment
Benchmarking
• The process of comparing the organization’s processes
and practices to those of other companies
• Human capital metrics
 Assess aspects of the workforce
• HR metrics
 Assess the performance of the HR function itself

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Measuring a Firm’s Strategic Alignment
Balanced
Scorecard (BSC)
• A measurement
framework that helps
managers
translate strategic
goals into operational
objectives
• financial
• customer
• processes
• learning

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Measuring a Firm’s Strategic Alignment

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 Ensuring Strategic Flexibility
for the Future
Organizational Capability
• Capacity of the organization to continuously act and
change in pursuit of sustainable competitive advantage
Coordination Flexibility
• The ability to rapidly reallocate resources to new or
changing needs
Resource Flexibility
• Having human resources who can do many different
things in different ways

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Employee Turnover Rates

Computing the Turnover Rate

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Employee Absenteeism Rates

Computing Absenteeism Rates

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 Activity #2
• Why do People quit their jobs?

• List some of the reasons why you

and your friends would quit a job.

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