MGTO 231

Human Resources
Management
The Importance of HRM


Dr. Kin Fai Ellick WONG
Personnel vs. HRM
Personnel Department vs.
Human Resource Management
Are they the same?
If no, what are the differences?
How come there are two names?
You will know the answer at the end of
this class
Outline
Business Strategy
Strategy and HRM
Strategic HR Choices
Importance of strategic HR Planning
Outline
Business Strategy
Strategy and HRM
Strategic HR Choices
Importance of strategic HR Planning
Business Strategy
What is a strategy
Text book definition: The companys long-term
plan for how it will balance its internal strengths
and weaknesses with its external opportunity
and threats to maintain a competitive advantage
Simply speaking: A plan that is expected to
make an organization adaptive and competitive
Simplest speaking: A plan to make money
Business Strategy
Example of strategic choices
Defender vs. Prospector
Exploitation vs. Exploration
Quality vs. Quantity
Focused vs. Diversified
Examples
Defender vs. Prospector strategy
A defender strategy ()
Conservative, prefer to maintain a secure
position in relatively stable product or service
areas
Not so looking to expand into new territory
Attempting to protect market share from
competitors; not to engage in new-product
development
Low risk, stable return
Examples
Defender vs. Prospector strategy
A prospector strategy ()
Aggressive, emphasize growth and
innovation
Looking to expand into new territory
Attempting to engage in new-product
development
Failure is regarded as normal
High risk, high return
Examples
Exploitation vs. Exploration
Exploitation
Seeking to improve the current version of
product
Incremental improvement
Exploration
Seeking to have breakthrough in product
development
Dramatic changes in the fundamental
concepts or architect of a product
Examples
Exploitation vs. Exploration
Examples
Game software
EA Sports vs. Nintendo
Game lists of EA
NBA Live 1996
NBA Live 1997
NBA Live 1998
NBA Live. 07
http://www.easports.com/
How about Nintendo?
Made in Wario (key control)
Mawaru Made in Wario (key + motion control)
Examples
Exploitation vs. Exploration
Examples
TV industry
Panasonic vs. Samsung
Panasonic: Improving the quality of CRT TV
Samsung: Switching to LCD TV
Mobile phone
Keep improving 2G vs. Switching to 3G

Examples
Exploitation vs. Exploration
Similar to prospector, exploration is high
risk high return
Anyone remember this product by NOKIA


Examples
Quality vs. Quantity
Examples
Car industry
Rolls Royce vs. Toyota

Examples
Focused vs. Diversified
Examples
Hey, would you give me an example?

Outline
Business Strategy
Strategy and HRM
Strategic HR Choices
Importance of strategic HR Planning
Personnel vs. HR
For organizations with a personnel
department
Top-management often regard various
HR functions (e.g., recruitment, pay,
training) as IRRELEVANT to business
strategies;
Their managers usually do not involve in
the strategic planning and decision-
making of organizations
Personnel vs. HR
For organizations with a HR
department
Top-management often regard various
HR functions (e.g., recruitment, pay,
training) as a part of business strategy;
Their managers usually play an important
role in strategic planning of organizations
The role of HR managers
They have to decide policies and
actions that are consistent with their
goals!
There are many strategies they can
choose in various HR contexts
The choices may be different for
different business strategies
Strategic HR Choices
Strategic HR choices
Managers or top-management have to
decide policies and actions that are
consistent with their goals!
There are many strategies they can
choose in various HR contexts
The choices may be different for
different business strategies
Some strategic HR Choices
Work Flows
Efficiency Innovation
Control Flexibility
Explicit job description Broad job classes
Detailed work planning Loose work planning
Staffing
Internal recruitment External recruitment
Supervisor makes hiring HR makes hiring
Fit in with firms culture Skill and qualification
Informal hiring Formal hiring
Separations
Inducing voluntary retirement Layoffs
Hiring freeze Recruitment as needed
Continuing support after termination Letting them fend for themselves
Preferential rehiring No preference


Performance appraisal
Customized appraisals Uniform appraisal procedures
Multiple-purpose appraisals Control-oriented appraisals
Multiple inputs (peers, subordinate) Supervisory input only
Training and development
Individual training Team training
Job-specific training Generic training
Buy skills with higher wages Make skills at lower wages
Compensation
Fix pay Variable pay
Job-based pay Individual-based pay
Seniority-based pay Performance-based pay
Centralized pay decisions Decentralized one
International management
Create global company culture Adapt to local culture
Rely on expatriates Rely on own country nationals
Repatriation agreement No formal repatriation
Universal company policies Country-specific company polices
Choices of HR strategies
No HR strategy is good or bad in
and of itself
Depend on situation context
Fit between the strategies and
organizations
Outline
Business Strategy
Strategy and HRM
Strategic HR Choices
Importance of strategic HR Planning
Importance of strategic HR planning
Encourage proactive behavior
Vision, active, anticipation
Translating the strategic plans into
actions
A good HR planning makes strategic
HR choices that fit the overall
organizational strategies
A good HR planning
Fits organizational strategies
Fits environments

Conclusions
HRM is at a strategic level
Managers can formulate HR functions
in a way that facilitate business
strategies
It is a matter of fit between the HR
choices and (1) business strategies,
and (2) environments