1-1

Module 01

The Strategic Role of Human

Resource Development
 Outline

Š Strategic Planning and Strategic Trends

„ The Basics of Strategic Planning
„ The Strategic Planning Process
„ Basic Strategic Trends
„ Managerial Consequences of the Basic
Trends
 Outline

Š HR’s Strategic Role

„ HR’s Evolving Role
„ Strategic Human Resource Management
„ HR’s Role as a Strategic Partner
„ HR and Technology
„ HR and Employee Performance and
Commitment
„ Research Insight
 After Studying This Chapter,
You Should Be Able To:
Š Utilize your understanding of Human Resources
Management to better understand human resources
development.
Š Explain what human resource development is and how
it relates to Human Resources Management.
Š Explain how human resources development relates to
the management process.
Š Give at least eight examples of how HR management
concepts and techniques can be of use to all
managers.
Š Illustrate the HR management responsibilities of line
managers and staff (HR) managers.
 The Management Process

Š Planning
Š Organizing
Š Staffing
Š Leading
Š Controlling
 Management Process

Š Planning
„ Goals and standards
„ Rules and procedures
„ Plans and forecasting.
Š Organizing
„ Tasks
„ Departments
„ Delegating
„ Authority and communication
„ Coordinating
 Management Process

Š Staffing
„ Hiring
„ Recruiting
„ Selecting
„ Performance standards
„ Compensation
„ Evaluating performance
„ Counseling
„ Training and developing
 Management Process

Š Leading
„ Getting the job done
„ Morale
„ Motivation
Š Controlling
„ Setting standards
„ Comparing actual performance to standards
„ Corrective action
 HRM Function

Human Resource Management is the process

of acquiring, training, appraising, and
compensating employees and attending to
their labor relations, health and safety, and
fairness concerns.
 HRM People Functions
Include:
Š Job analyses Š Performance
Š Labor needs Š Communicate
Š Recruit Š Train and develop
Š Select candidates Š Employee commitment
Š Orient and train Š Equal opportunity
Š Health and safety
Š Wages and salaries
Š Grievances/labor
Š Incentives and relations
benefits
 HRM is Important to all Managers.
Don’t Let These Happen to You!

Š The wrong person

Š High turnover
Š Poor results
Š Useless interviews
Š Court actions
Š Safety citations
Š Salaries appear unfair
Š Poor training
Š Unfair labor practices
 HR – It’s All About Results

“For many years it has been said that capital is

the bottleneck for a developing industry. I don’t
think this any longer holds true. I think it’s the
work force and a company’s inability to recruit
train and maintain a good work force that does
constitute the bottleneck….” F. K. Foulkes
Line and Staff Aspects of HR

Š Authority
„ Making decisions
„ Directing work
„ Giving orders
Š Line Managers
„ Accomplishing goals
Š Staff Managers
„ Assisting and advising line managers
 Line Manager’s HR Jobs

Š The right person Š Policies and

Š Orientation procedures
Š Training Š Labor costs
Š Performance Š Development
Š Creativity Š Morale
Š Working Š Protecting
relationships
 Staff Manager’s HR Jobs

Š Line authority
Š Implied authority
Š Functional control
Š Employee advocacy
HR Department
Organizational
Chart
 Strategic Planning and
Trends

Š Strategy is the company’s long-term plan

for how it will balance its internal
strengths and weaknesses with its
external opportunities and threats to
maintain a competitive advantage.
 Recall Strategic Planning
There are three levels of strategic planning as
shown below

Corporate
Strategy

Business Business Business Business

Strategy Strategy Strategy Strategy

Functional
Strategies
 The Strategic Planning
Process
Š SWOT analysis - Strengths, Weaknesses,
Opportunities, and Threats
Š Best strategic plans balance a company’s Strengths
and Weaknesses with the Opportunities and Threats
the firm faces
Š Basic strategic trends
„ Globalization

„ Technological advances

„ The nature of work

„ The workforce
 Recall Importance of
Globalization

80
70
60
50
40 % fortune 500 with a
global presence
30
20
10
0
1920 1950 1970 2000
 Technological Advances and the
Nature of Work

Š Technology mandates and

enables companies to be Carrier
more competitive
Š Knowledge intensive jobs in
industries such as
aerospace, computers,
telecommunications, and
biotechnology are replacing
factory jobs in steel, auto,
rubber and textiles
 The Workforce Itself is Diverse

Asian
Black
Hispanic
Men
Women
US Department of Labor website
 Consequences of these basic
trends

Global expansion
Companies
Uncertainty,
Technology must be
Turbulence,
Strengths and Fast,
Rapid
Weaknesses Responsive,
Change,
and
Improved competition Changing
Cost-
power
effective
bases
 HR’s evolving role

Protector Change Agent

and
Screener
Strategic Partner
 Strategic HRM
Clarify the business
strategy
Š Strategic human resource
management: linking HRM Realign the HR
with strategic goals and functions and key
objectives to improve people practices

business performance and

develop organizational
cultures fostering
innovation and flexibility.
Create needed competencies
and behaviors
Realization of business
strategies and results

Evaluate and refine

 HR’s evolving role as strategic
partner
Corporate strategy
HR operations

Corporate strategy

HR programs
Corporate strategy

HR programs
FedEx
 How HR helps strategy execution

Š Functional strategies
should support
competitive
strategies
Š Value chain analysis
Š Outsourcing
Š Strategy Formulation
 How HR helps form strategy

Š Formation of a
company’s strategy =
identifying, analyzing
and balancing external
opportunities and
threats with internal
strengths and
weaknesses
Š Environmental
scanning
The Value Chain Approach
 HR and technology- End User Technology
can be the Human Resources engine of
change

Š Basic HR systems demand paperwork

„ 70% of HR’s employees time = paperwork

„ Off the shelf forms from Office Depot/Office max

„ Online forms

Š Human Resource Information Systems (HRIS)

Š HR on the Internet
 Trends: Increased Use of Internet
60% 54%
48%
42%

34% 33%

27%
22%
21%
18% 18%
16% 16%
10%
9% 9% 8%

0%
Telephone Internet Mail In-person
Sep/Oct 00* Sep/Oct 01* Jun 02* Two years from now**

* Thinking now of your most recent contact with the federal government, what was the method of contact?
** Thinking about two years from now, what do you think will be your main method of contact with
governments? (June, 2002)
 HR portals

Employees can
answer their own
questions

HR moves from
reactive to proactive
 Training and Development
translates into performance

Š Can HR have a measurable

impact on a company’s bottom
line?
Š Better HR Training translates into
improved employee attitudes and TOYOTA
motivation (e.g., working at home)
Š Well run HR training programs
drive employee commitment
Factors affecting the training
structure:

Š Management Philosophy
Š Organizational Strategy
Š Organizational Structure
Š Size
Š Technology Requirements
Š Industry demands
 Role of Training in Organizations

Š Regardless of where training lies in an organization,

its role is to improve the organization’s effectiveness
by:
„ Providing employees w/ necessary KSAs

„ Provide personal enrichment

„ Increase competitive advantage

„ Respond to specific organizational needs

„ Increase organizational strategic capability

„ Improve quality

„ While staying within the budget!

 Implications of
Implications of Business
Business Strategy
Strategy for
for Training
Training

How Training
Strategy Achieved Key Issues Implications
Concentration - improve - current skills - team building
quality - develop - cross-training
work force - people skills
- on-the-job
 Implications of
Implications of Business
Business Strategy
Strategy for
for Training
Training

How Training
Strategy Achieved Key Issues Implications
Concentration - improve - current skills - team building
quality - develop - cross-training
work force - people skills
- on-the-job
Internal Growth - global - innovation - cultural training
expansion - creating new - creativity training
- new products jobs & tasks - communication
- joint ventures - technical skills
- conflict resolution
 Implications of
Implications of Business
Business Strategy
Strategy for
for Training
Training

How Training
Strategy Achieved Key Issues Implications
Concentration - improve - current skills - team building
quality - develop - cross-training
work force - people skills
- on-the-job
Internal Growth - global - innovation - cultural training
expansion - creating new - creativity training
- new products jobs & tasks - communication
- joint ventures - technical skills
- conflict resolution
External Growth - acquire firms - integration - integrate training
(acquisition) - redundancy systems
- restructuring - team building
- identify capabilities
 Implications of
Implications of Business
Business Strategy
Strategy for
for Training
Training
How Training
Strategy Achieved Key Issues Implications
Concentration - improve - current skills - team building
quality - develop - cross-training
work force - people skills
- on-the-job
Internal Growth - global - innovation - cultural training
expansion - creating new - creativity training
- new products jobs & tasks - communication
- joint ventures - technical skills
- conflict resolution
External Growth - acquire firms - integration - integrate training
(acquisition) - redundancy systems
- restructuring - team building
- identify capabilities
Disinvestment - cost reduction - efficiency - stress management
- redefine goals - time management
- sell assets - cross-training
- outplacement
 Key Training Roles
Š Researcher
Š Needs Analyst
Š Evaluator
Š Program Designer
Š Materials Developer
Š Manager
Š Marketer
Š Counselor
Š Change Agent
Š Instructor
Š Communicator
 TRAINING COMPETENCIES

Š Computer and data analysis skill

Š Research skills
Š Understanding of Adult Learning
Š Oral and Written Communication Skills
Š Goal setting
Š Understanding how careers develop
Š Ability to coach and give feedback
Š Cost/benefit analysis
Š Project Management/Records Management
Š Delegation skills
Š Logistics
Š Strategic Planning
Š Negotiation
Š General business and industry understanding
 A Training Process Model

Š Utilizing Input-Process-Output Model

„ Needs Analysis/Assessment
„ Design
„ Development
„ Implementation
„ Evaluation
„ Follow-up
 Ultimate Goal of Training:

Š To provide and facilitate effective and

efficient organizational learning that
improves organizational performance
 KSAs….
Š Knowledge - Info. we acquire & place into memory,
how it’s organized into our structure & to our
understanding of how/when it’s used
Š Skills - Capacities needed to perform a set of tasks
developed from a training experience
Š Attitudes - Reflections of employee beliefs/opinions
that support/inhibit behavior
Š Abilities - General capacities related to performing a
set of tasks developed over time as a result of
heredity and experience
 A Case Study

Dell’s dual HR roles

OPERATIONS MANAGEMENT

Deals with staff Deals with management

- benefits - education
- compensation - recruitment
- call center - planning
- training
- personnel needs
 Is There a “One Best HR Way”?

Š Follow a company’s operating and

strategic initiatives
Š All companies can benefit from
„ Profit sharing programs
„ Results oriented appraisals
„ Employment security
„ Foster informal relationships- promote worldwide
communications
„ Develop global executives
 Societal Trends, Work Place Changes, and
Human Resource Challenges
Societal trends
• Rapid Change • Legislation
• Globalization • Hyper competitiveness
• Rise of Internet • Rise of the service sector

Work place changes

• Competitive Position: Cost, • Self-Managed Work Teams
Quality, Distinctive Capabilities • Small Businesses
• Decentralization • Organizational Culture
• Downsizing • Technology
• Organizational Restructuring • Outsourcing
Human Resource Challenges
• Ethical Dilemmas and Social Responsibility
• Staffing, Development, and Productivity
• Job Design and Empowerment
• Brain Drain and Talent Shortage
• Safety Net and Job Insecurity
 Human Resource Challenges in
HK and China
Hong Kong
„ Declining growth, a stagnant economy
„ Primarily service economy
„ Influx of talents from mainland
„ Unclear competitive edge in global market
Š Chinese mainland
„ Rapidly growth, especially private sector
„ Competitive skilled & professional labor markets
„ Evolving business and labor laws
„ WTO and increasing competitiveness
„ Business ethics
 A Hong Kong Company:
Computime
Š 28 years old
Š 30% annual sales growth in past 3 years
Š 5% profit margin
Š Production plant in Shenzhen
Š Administrative and HQ offices in HK
Š 7 divisions – 4 functions and 3 business units
Š About 500 staff employees and 3000 production
workers
Š ISO objective but defective products due to rush
 Computime (VMV)
Vision Mission Value

To become a global We act as one Customer First

leader in electronics responsive, flexible and
innovative team with full Zero Defect
supply chain services
through establishing commitment and Innovations
long-term partnerships dedication to exceed
our customers’ One Team
based on integrity and
ethical business expectations in quality, Business Ethics
practices. cost, delivery and
service. Social Responsibility
 Discussion Questions

Š What are the HR challenges facing

Computime?
Š What information do we need to identify
the HRM challenges of Computime?
Š How can Computime use HRM to stay
competitive and sustain its rapid growth?
 An HRM Framework for analyzing HRM
challenges of a company

Business
Business Consistency Environment
Environment
Strategies
Strategies
Fit Fit

Consistency
Consistency

Improved
Improved
HR Strategies
Firm
Firm
And choices
Performance
Performance
Fit Fit
Organizational
Organizational Organizational
Organizational
Characteristics
Characteristics Consistency Capabilities
Capabilities
 Influence of Business Strategies on HRM
Business Common Organizational
Strategy Characteristics
Overall • Sustained capital
investment
cost
• Tight cost control
leadership • Low-cost distribution
system
• Structured organization
and responsibilities
• Product engineering
Differ-
• Strong capability in basic
entiation
research
• Reputation for quality or
technological leadership
Focus • Combination of business
strategies above.
HR Strategies
• Explicit job descriptions
• Detailed work planning
• Emphasis on technical
qualifications and skills
• Emphasis on job-specific
training
• Emphasis on job-based pay
• Broad job classes
• Loose work planning
• External recruitment
• Individual-based pay
• performance appraisal as
development tool
• Combination of HR
strategies above.
 The Importance of Organizational
Characteristics on HRM

Overall management philosophy

Structure
Culture
 Influence of Environment on HRM

Environmental
Dimension Low High
Degree of • Detailed work planning • Loose work planning
Uncertainty • Job-specific training • Generic training
• Fixed pay • Variable pay
• High dependence on • Multiple inputs for
superior appraisals

Volatility • Control emphasis • Flexibility

• Efficient production • Innovation
• Job-specific training • Generic training
• Fixed pay • Variable pay
 Influence Environment on HRM (cont.)
Environmental
Dimension Low High
Magnitude • Explicit job descriptions • Broad job classes
of Change • Formal hiring and • Informal hiring and
socialization of new socialization of new
employees employees
• “make” skills • “buy” skills
• Uniform appraisal • Customized appraisals
procedures
Complexity • Control emphasis • Flexibility
• Internal recruitment • External recruitment
• Centralized pay • Decentralized pay
decisions decisions
• High dependence on • Multiple inputs for
superior appraisals
 Importance of Organizational
Capabilities on HRM

Leadership – at all levels

Technology – process and product
Management Systems – information
and control
Quality – reliability and timeliness
Distinctive competences?
 Human Resource Strategies and
Choices

1. Determining HR needs– HR planning and job analysis (chapter 2)

2. Importing HR – recruiting and selection (chapter 5)
3. Preparing HR – socialization and training (chapter 8)
4. Compensating HR – setting compensation (chapter 10)
5. Evaluating HR – appraising and managing performance (chapter 7, 14)
6. Incentives HR – rewarding performance (chapter 11)
7. Appreciating HR differences – managing diversity (chapter 4)
8. Developing HR – career development (chapter 9)
9. Protecting HR – designing and administering benefits (12)
10. Positive HR relations – developing employee relations (chapter 13)
11. HR in global companies – international HRM (chapter 17)
12. Exporting HR – separation, downsizing and outplacement (chapter 6)
 Questions to consider

1. How much responsibility does an organization have to shield its

employees from the effects of rapid changes in the environment?
2. Does an employer have an ethical responsibility to train employees
who lack basic literary and numerical skills? Why yes or why no?
3. In today’s increasing chaotic business and economic environment, does
an employer have a responsibility to help employees prepare for these
changes that may affect their jobs and careers?
4. All civil servants in HK will face a pay reduction of 1 to 5% this
October. Is this fair to the employees? Why yes or why no?
5. Some European countries have laws barring organizations form using
computer technology that invades employee privacy. Do you believe
that similar laws should be developed in Hong Kong? Why yes or no?
 HRM and the Bottom Line

Š Research has shown consistently a clear link

between progressive HR practices (e.g., High
involvement HR systems) and
„ Sales
„ Productivity
„ Retention
 An Exceptional Company:
Southwest Airline

Š 31 years old
Š Post 9/11, SWA had no layoff, posted profits and
did not reduce flights

Š What account for the success of SWA?

Š Can or how can SWA sustain its success?
Š Can other companies imitate SWA’s approach to
HRM? If not, why not?
Š What can Computime learn from SWA?
 Continuum of Resources Sustainability

Level of Resource Sustainability

Low
(Easy to Imitate)

Slow-Cycle Standard-Cycle Fast-Cycle

Resources Resources Resources
• Strongly shielded • Standardized mass • Easily duplicated
production
• Patents, brand name • Idea driven
• Economies of scale
• Gillette: Sensor razor Complicated processes • Sony: Walkman
• Chrysler: Mini-van

Source: Suggested by J. R. Wiliams, “How Sustainable Is Your Competitive Advantage?” California Management Review
(Spring 1992), p. 33.
 Typical Value Chain for a Manufactured
Product

Raw Primary Product

Fabrication Distributor Retailer
Materials Manufacturing Producer

Source: Suggested by J. R. Galbraith, “Strategy and Organization Planning,” in The Strategy Process: Concepts, Contexts, Cases,
2nd ed., edited by H. Mintzberg and J. B. Quinn (Englewood Cliffs, N.J.: Prentice Hall, 1991), p. 316.
 Corporate Value Chain

Firm Infrastructure
(general management, accounting, finance, strategic planning)

Human Resource Management

(recruiting, training, development)
Support
Activities
Technology Development
(R&D, product and process improvement)
Profit
Procurement Margin
(purchasing of raw materials, machines, supplies) Source: Adapted/repri
nted with the
permission of the The
Inbound Operations Outbound Marketing Service Free Press, an imprint
Logistics (machining, Logistics and Sales (installation, of Simon & Schuster,
(raw assembling, (warehousing (advertising, repair, parts)
materials testing) and promotion, from Competitive
handling and distribution pricing, Advantage: Creating and
warehousing) of finished channel Sustaining Superior
product) relations) Performance by Michael
E. Porter, p. 37.
Copyright © 1985 by
Michael E. Porter.

Primary Activities
Basic Structures of Corporations: Simple
and Functional

I. Simple Structure

Owner-Manager

Workers

II. Functional Structure

Top Management

Manufacturing Sales Finance Personnel

 Basic Structures of Corporations: Divisional

III. Divisional Structure*

Top Management

Product Division A Product Division B

Manufacturing Finance Manufacturing Finance

Sales Personnel Sales Personnel

*Conglomerate structure is a variant of the division structure.

 Engineering Perspective on Quality

Product Design Life Cycle

Idea Prototype
Generation Iterations
Preliminary
Design
Prototype
Development

Final
Definition
Product
Design &
Evaluation
Implemen-
tation
 Operations Perspective on Quality

The Systems View of Operation Management

Planning Organizing

Conversion
Inputs Outputs Customers
Process

Feedback

Controlling
Operations Perspective on Quality

An Operations Management Competence Model

The Sand Cone Model

Cost Efficiency

Speed

Dependability

Quality
Strategic Management Perspective on
Quality
A Generic Strategic Planning Process
Firm Mission
and Goals
External Internal
Analysis Strategic Analysis
Options

Business Level
Strategy
Corporate Level
Strategy
Operational
Subplans

Organizational Conflict Politics Org. Reward

Design and Change Systems

Strategic Alignment
Between
Structure and Goals
 Marketing Perspective on Quality

A Marketing System

Organization
Offering Payment

Offering Intermediary Payment

Offering Payment

Customer
 Financial Perspective on Quality

The Deming Value Chain

Cost decrease because of less

Improve rework, fewer mistakes, fewer Productivity
Quality delays, snags; better use of Improves
machine-time and materials

Capture
Stay in Provide Jobs
the
Business and More Jobs
Market
 Financial Perspective on Quality

Basic Economic Quality Level Model

Cost Total Quality Costs = Sum of Losses and Gains

Costs of Improving
Minimum Quality
Cost

Losses due to poor

quality

Optimum Quality Level Quality

 The Three Spheres of Quality

Quality
Management

Quality Quality
Assurance Control