Human resource management

• Dr. ferase elshalbe

• Ch 2
• The strategy human resource environment

Prepared by
Heba_masha’leh
Arwa _hariza
Lana _ka’ka’
 What will you learn in this chapter?

• To define the meaning of the strategy

• To understand the strategy management
• To know and discuss the levels of strategy
• To discuss internal and external environment of h.r.m
• To understand h.r.strategy
 the meaning of Strategy:

Strategy management :is a set of tools and practices or political that are used
to recognize and gain access to a specific purpose.

The strategy of human resource management Working to:

understand the internal environment of the organization, and requirements

and the basic variables and influential in terms of its mission, goals, objectives,
and methods of administrative, organizational culture, and the requirements
of the work .. And others, as well as the understanding of the external
environment surrounding the organization, and take all the variables, and
laws, and trends affecting or that may affect the work of the Organization and
its activities, and this understanding of the internal and external environment
of the organization, you can manage human resources to develop its strategy
successfully and has to harmonize the large between the practices and
activities human resources management, and the changes and challenges that
they contain internal and external environment of the organization
 • Strategies human resource management
Organizational
Organizationalmission,
mission,top SWOT Corporate
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andbusiness
management team
top SWOTanalysis
analysis business
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and Staffing Development Compensation functional
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strategic leadership
strategic leadership Staffing Development Compensation
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Organization
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Organizationculture
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Technology
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force

Human
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 Context of strategy view:

• The best solution or practices will depend on

various characteristic of the organization what is
best will depend on factors such as strategy goals
and top managers level tools
 The influent of organizational purpose and mission

– Organization‘s purpose and mission are among the most

fundamental contextual force.

Difference between purpose and mission

• Purpose: is organization reason of existence

• Mission : is how it’s manager have decided to fulfill organization’s
purpose
 What do mission statement specify?

1. Unique characteristics and strenghts of an oranization.

2. Identify the scope of business’s operation.
3. Provide subtle cues to the importance the organisation
places on its human resouece(valuing human resource).
 The influence of the top management team

• The top management team of an organization refers to

the group of senior executives responsible for the
overall strategic operation of a firm:

– Chairperson of the board of directors

– Chief Executive Officer (CEO)
– Chief Operating Officer (COO)
– Chief Financial Officer (CFO)
– President of the firm
– Senior executives responsible for each major functional area
• Top management’s clear communication of the strategic vision sets the
tone for the organization and plays a major role in shaping its culture.
• Effective leader need both a clear vision and means communicative that
vision.
 SWOT Analysis and Human Resource
Management

SWOT: is an acronym that stands for

strengths, weaknesses, opportunities and
threats.
 The external environment

Consists of variables opportunities and

threats that are outside the organization
and not typically within short-run control of
top management.
*these variables form the context within
which the corporation exists.
 The internal environment
Consists of variables strengths and weaknesses that
are within the organization itself and are not
usually within the short-run control of top
management .

*these variables form the context in which work is done.

*these variables include the corporation’s structure , culture
and resources.
*The managers attempt to use the firm’s strengths to capitalize on
environmental opportunities and to cope with environmental
threats . Strengths are used to offset weaknesses within the
organization.
*Human resources play a fundamental role in SWOT analysis
because the nature and type of people that work within an
organization and the organization’s ability to attract new talent
represent significant strengths or weaknesses .

Accomplish the strategy by exploiting opportunities with strengths ,

correcting weaknesses and building defenses against threats.
 The levels of strategy
Organizations formulate strategy at three basic levels:

Corporate strategy :
The set of strategic alternatives that an organization chooses when
managing operations across several industries and diverse
markets.

Business strategy :
The set of strategic alternatives that an organization selects form in
order to most effectively compete in a particular industry or market.

Functional strategy :
Consider how the firm will manage each of its major functions, such
as marketing, finance, and human resources .
 Corporate strategy
Most organization develop a corporate strategy from
one of two perspectives:
Grand strategy
•Growth
•Retrenchment
•stability
Diversification strategy
•Related
•Unrelated
Corporate strategy
Grand strategy : is a single overall
framework for action that the top
management team develops as the
corporate level.
growth strategy: Identifying a unique niche
and is successfully expanding aggressively
within that particular market niche.

focuses on growth and expansion of the

corporation.
Corporate strategy:

challenges for Human resource managers

under growth strategy:
To successfully recruit and train a large
numbers of qualified employees to help
operate growing operations.
To merge two existing workforces into a
single cohesive and integrated unit.
Corporate strategy
Retrenchment strategy:
 it happens when an organization finds that its current operations are less
than effective.

•Downsizing or “rightsizing”
To close operation ,shut down factories, terminate employees,
and take other actions to scale back current operations and
reduce their workforce.Thier ultimate goal is to be able to take
the resources that are generated as a result of these steps and
reinvest them into other promising products and markets.
Corporate strategy
challenges for Human resource managers
during this period:

To manage the process so that employees feel attached

to and committed to the organization.

To optimize the transition process for displaced workers

through severance packages and outplacement
counseling.
Corporate strategy
Stability strategy: focuses on maintaining the status
quo.
•The strategy’s goals are to stay in its current
businesses and to protect itself from external
threats.
•Stability strategy is used after a period of
retrenchment or after a period of growth.
•Challenges for HR managers of the stability strategy:
•To retain the firm’s existing employees when the
firm can offer little in the way of advancement
opportunities ,salary, increases.
Corporate strategy
Diversification strategy:
is used by companies that are adding new products, product
lines , or businesses to their existing core products, product
lines, or businesses.
Related strategy :
relatedness of businesses is used to achieve synergy among the
various businesses it owns.

This type of organization often adopts a policy of rotating managers

across the various businesses in order for them to develop an overall
managerial perspective on the whole firm.
Corporate strategy
Unrelated strategy : the diversity of
businesses is used to expand products
or markets that are unrelated to its
current ones.
HR managers function during this
period are customized and
decentralized to the particular business
units.
 Business strategy
There are two approaches used to develop business strategy:

The adaptation model

Competitive strategy
Business strategy
The adaptation model :this model suggest that
managers in an organization should try to match its
strategy with the basic conditions of its environment .

The three basic strategy :

•Defender strategy
•Prospector strategy
•Analyzer strategy
Business strategy
Defender strategy :

work in very stable environment with little uncertainty and risk .

The goals of defender are to identify for itself a relatively narrow

niche in the market and to direct a limited set of products or services at
that niche.

Prospector strategy : work in a dynamic and growing environment

characterized by high uncertainty and risk.
Business strategy:

Prospector seeks new ideas and opportunities.

Analyzer strategy: work in a moderately stable

environment with some uncertainty and risk.

Analyzer tries to identify and take advantage of new

markets and products while maintaining a nucleus of
traditional core products and customers .
Business strategy

Reactor strategy : is seen as a strategic failure .

A reactor is a firm that either improperly ignores its environment
or attempt to react to its environment in inappropriate ways.

Competitive strategies : suggests that three basic strategies are

appropriate for a wide variety of organization in diverse industries:

•Differentiation strategy :attempt to develop an image or

reputation for its product or services that sets it apart from the
competition.

•HR managers activities focus on recruiting and retaining

employees who can perform high-quality work and can provide
exemplary customer service.
Business strategy
A cost leadership strategy:
focuses on minimizing costs , a firm can offer the
lowest prices and gain high revenues .

HR managers focus on recruiting and

training employees who can work as
efficiently and productively as possible.

Focus strategy: tries to target a specific

segment of the marketplace for its products
or services.
HR managers recruit and retain
employees who understand the focal
market.
Functional strategy:
the third level of strategy concerns with how a company will
manage its basic functional activities such as marketing, finance
m operations ,research and development and human resources.

HR strategy formulation should be integrated with corporate

,business, and other functional strategies .
 Strategic Human Resources Management
(SHRM)
• Strategic HRM: is the process by which
managers seek to link human assets to the
strategic needs of the organization.
 
• HR strategy: is discussed in terms of an
‘outcome’ – the pattern of decisions relating
to HR policies and practices.
Human Resources Strategy formulation

• HR strategy formulation should be integrated with

corporate, business, and other functional strategies.
 Human Resource Strategies
Human
Humanresource
resource
strategy
strategy formulation
formulation

Staffing
Staffingstrategy
strategy Development
Developmentstrategy
strategy Compensation
Compensationstrategy
strategy
••HR
HRPlanning
Planning ••Performance
Performancemanagement
management ••Wage/salary
Wage/salarystructure
structure
••Recruiting
Recruiting ••Training
Training ••Employee benefits
Employee benefits
••Selection
Selection ••Development
Development ••Incentives
Incentives
••Placement
Placement ••Career
Careerplanning
planning
Important components that affects the formulation &
implementation of the strategies:

1. Organization design
2. Corporate Culture
3. Technology
4. Work/Labor force
 Organization design

Organization Design: the framework of jobs,

positions, clusters of positions & reporting
relationships among positions that are used to
construct an organization.
The Impact of Organization Design
Functional Design ●

●
basic functional groups (marketing, finance & operations)
requires coordination
(U-Form)Unitary ●
Single HR department

Conglomerate Design ●

●
used at unrelated diersification strategy
Corporate -level HR Staff & each of the unrelated businesses have an HR
(H-Form) Holding department

Divisional Design (M- ●

●
used when businesses are closly related
popular for synergies resulted from related business groupings
Form) Multidivisional ●
decentrelized coordination& may have corporate-level HR staff

●
reduce bureaucracy
Flat Organization ●
relay on teamwork
●
highly flixable& fewer managers
(horizontal corporation) ●
smaller HR staff
 The impact of corporate culture
Organization Culture: the set of values that help its
members understand what the organization stands
for, how it does things & what it considers important

Importance of culture
1. Determining how well the organization will be able
to achieve its goals & how well the members of the
organization will be able to function together
2. Affects virtually every aspect of individual
behaviors within an organization
Determinants of Corporate Culture
Fo es
Vi und nc
si o e rie
n r’s xpe
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red
a
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Culture
(values)

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e ies
H re
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 Managing Culture
Changing culture for current employees through:
1. Training
2. Consistent behavior
3. Other Organizational activities
Changing culture for new comers through:
4. Orientation
5. Training
6. Telling & retelling stories
 The Impact of Technology through
1. Manufacturing: is a form of business that
combines & transforms resources into tangible
outcomes that are then sold to others
2. Service: Transforms resources into intangible
outputs & creates time or place utility for its
customers
3. Automation: the process of designing work so
that it can be completed or almost completely
performed by machines
 How HR functions differs from manufacturing
business to service business
1. Criteria used for hiring employees
2. Methods used for training employees
3. Reward system used to compensate
employees
4. Labor relations with unionized employees
 The Impact of the work force
Workforce trends & issues
– Age
– Gender
– Ethnicity
– Disabilities
– Lifestyles
 
Unionization & Collective bargaining issue

Labor relations: the process of dealing with employees who r represented by

an employee association usually called a union

– Union membership
– Organizing drives
– Strikes
 Human Resource Strategy Implementation

Human
Human resource
resource
strategy
strategyimplementation
implementation

Individual
Individual Organizational
Organizational Interpersonal
Interpersonal
processes
processes systems/processes
systems/processes processes
processes
••Psychological
Psychological ••Single-use
Single-useplans
plans ••Group
Groupdynamics
dynamics
Contracts
Contracts ––programs
programs ••Leadership
Leadership
••Personality
Personalitytraits
traits ––projects
projects ••Communications
Communications
••Attitudes
Attitudes ••Standing
Standingplans
plans
••Motivation
Motivation ––policies
policies
Equity
EquityTheory
Theory ––standard
standardoperating
operating
Expectancy
ExpectancyTheory
Theory procedures
procedures
Reinforcement
Reinforcement ––rules
rules
••Stress
Stress
 Individual Processes & HRM
• Psychological contracts: is the overall set of expectations held by an individual with
respect to what he or she will contribute to the organization & what the organization,
in turn, will provide to the individual

• Personality traits: is the relatively stable set of psychological attributes or traits that
distinguish one person from another

• Attitudes: through developing attitude surveys, administering the surveys to workers,

interpreting & evaluating the results

• Motivation : is the set of forces that cause people to behave in certain ways & is a
major determinant of individual performance

• Stress: is a person’s adaptive response to a stimulus that places excessive

psychological or physical demands on that person
 Perspectives on Motivation
• Equity theory of motivation suggests that a key ingredient in
employee motivation is the extent to which people perceive
that they are being treated equitably by their organizations,
especially relative to other people

• Expectancy theory suggests that motivation depends on how

much we want something & how likely we think we are to get it

• Reinforcement suggests that behavior that results in pleasant

consequences is more likely to be repeated & the behavior that
results in unpleasant consequences is less likely to be repeated
 Interpersonal processes & HRM
• Leadership – effective leadership is important
to organizational success

• Communication: is the process by which two

or more parties exchange information & share
meaning
Evaluating the human resource function in
organizations
– Evaluating HR functions by attempting to measure
costs & benefits of a specific function

– Evaluating entire systems of HR activities

(practices)
Human Resource Practices That may lead to
improved firm performance
• Attitude surveys
• Information sharing (e.g. newsletters)
• Contingent pay
• Favorable selection ratio (many applicants for
each opening)
• Formal performance appraisal
• Social events