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t e n t h e d i t i o n

GaryGary

DesslerDessler

PartPart 11 IntroductionIntroductionChapter Chapter 33

Strategic Human ResourceStrategic Human Resource

Management and the HR ScorecardManagement and the HR Scorecard


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HR’s Strategic Challenges

• Strategic plan – A company’s plan for how it will match its

internal strengths and weaknesses withexternal opportunities and threats in order to

maintain a competitive advantage.• Three asic challenges

– The need to support corporate productivityand performance improvement e!orts.

– That employees play an expanded role inemployers’ performance improvement e!orts. – HR must e more involved in designing"not

#ust executing"the company’s strategic plan.

© 2005 Prentice Hall Inc. All rightsreserved.

3–2


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The Strategic $anagement%rocess

• Strategic management – The process of identifying and executing the

organi&ation’s mission y matching itscapailities with the demands of itsenvironment.

• Strategy – A strategy is a course of action.

– The company’s long'tem plan for how it willalance its internal strengths and weaknesseswith its external opportunities and threats tomaintain a competitive advantage.


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(verview of Strategic $anagement


3–4

igure 3–1


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HR and CompetitiveAdvantage

• Competitive advantage

– Any factors that allow an organi&ation todi!erentiate its product or service from

those of its competitors to increasemarket share.

– Superior human resources are an

important source of competitiveadvantage


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Strategic Human Resource$anagement

• Strategic Human Resource $anagement

– The linking of HR$ with strategic goals ando#ectives in order to improve usiness

performance and develop organi&ationalcultures that foster innovation and )exiility.

– *ormulating and executing HR systems"HRpolicies and activities"that produce the

employee competencies and ehaviors thecompany needs to achieve its strategic aims.


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+inking Corporate and HR Strategies


3–"

igure 3–!Source: © 2003, Gary Dessler, PhD


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HR’S Strategic Roles

• HR professionals should e part of the ,rm’sstrategic planning executive team.

– -dentify the human issues that are vital to

usiness strategy. – Help estalish and execute strategy.

– %rovide alternative insights.

– Are centrally involved in creating responsiveand market'driven organi&ations.

– Conceptuali&e and execute organi&ationalchange.


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HR’s Strategy xecutionRole

• The HR department’s strategies/policies/ and activities must makesense in terms of the company’s

corporate and competitive strategies/and they must support thosestrategies.


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HR’s Strategy *ormulationRole

• HR helps top management formulatestrategy in a variety of ways y.

– Supplying competitive intelligence that may e

useful in the strategic planning process. – Supplying information regarding the

company’s internal human strengths andweaknesses.

– 0uild a persuasive case that shows how"inspeci,c and measurale terms"the ,rm’s HRactivities can and do contriute to creatingvalue for the company.


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Creating a Strategy'orientedHR System

• Components of the HR process

– HR professionals who have strategic andother skills

– HR policies and activities that comprisethe HR system itself

– mployee ehaviors and competencies

that the company’s strategy re1uires.


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The 0asic Architecture of HR


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igure 3–#Source: !da"ted #rom $rian $ec%er et al, The HR Scorecard: Linking People,

Strategy, and Performance &$oston' Har(ard $usiness School Press, 200)*, " )2


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The High'%erformance 2orkSystem

• High'performance work system 3H%2S4practices.

– High'involvement employee practices 3such as

#o enrichment and team'ased organi&ations4/ – High commitment work practices 3such as

improved employee development/communications/ and disciplinary practices4

– *lexile work assignments. – (ther practices include those that foster skilled

workforces and expanded opportunities to usethose skills.


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0asic $odel ofHow to AlignHR Strategyand Actions

with 0usinessStrategy


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igure 3–$

Source: !da"ted #rom Garrett +al%er and Randal MacDonald,

-Designing and .m"lementing an HR Scorecard,/ Human

Resources Management 0, no &200)*, " 310

Translating

Strategyinto HR%olicy and

%ractice


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The HR Scorecard Approach

• HR scorecard

– $easures the HR function’s e!ectiveness ande5ciency in producing employee ehaviorsneeded to achieve the company’s strategic goals.

• Creating an HR scorecard

– $ust know what the company’s strategy is.

– $ust understand the causal links etween HR

activities/ employee ehaviors/ organi&ationaloutcomes/ and the organi&ation’s performance.

– $ust have metrics to measure all the activitiesand results involved.


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Strategic HR Relationships


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igure 3–10

H%H%

ActivitiesActivities

&'ergent&'ergent

&'plo(ee&'plo(ee

)ehaviors)ehaviors

*trategicall(*trategicall(

%elevant%elevant

+rgani,ational+rgani,ational+utco'es+utco'es

+rgani,ational+rgani,ational

Per-or'ancePer-or'ance

AchieveAchieve

*trategic*trategic

oalsoals


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The HRScorecardApproach

to*ormulatingHR %olicies/Activities/

and

Strategies


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igure 3–11Source: o"yright © Gary Dessler, PhD


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6sing the HR ScorecardApproach

• Step 78 9e,ne the 0usiness Strategy

• Step :8 (utline the Company’s ;alue Chain

• Step 8 -dentify the Strategically Relevant HRSystem %olicies and Activities

• Step ?8 9esign the HR Scorecard $easurementSystem

• Step @8 %eriodically valuate the $easurementSystem


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