Human Resource Management

Fifteenth Edition

Chapter 3
Human Resource
Management
Strategy and
Analysis
Dania AL.falah
DR. AlA’aldin Al-Rowwad
26.july.2021

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 Learning Objectives (1 of 2)
3-1. Explain each of the seven steps in the strategic
management process.
3-2. List the main types of strategies.

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 Learning Objectives (2 of 2)
3-3. Define strategic human resource
management.
3-4. Describe how you would execute a program to
improve employee engagement.

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 I. Explain each of the seven
steps in the strategic
management process.

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 The Strategic Management Process (1 of 2)

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 The Management Planning Process
• The Hierarchy of Goals
• Policies and Procedures

Figure 3-1 Sample Hierarchy of Goals Diagram for a Company

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 What is Strategic Planning?

A strategic plan is the company’s overall plan for

how it will match its internal strengths and
weaknesses with its external opportunities and
threats in order to maintain a competitive position.
The strategic planner asks, “Where are we now as a
business, and where do we want to be?” He or she
then formulates a strategic plan to help guide the
company to the desired destination.

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 The Strategic Management Process (2 of 3)

Figure 3-2 The Strategic Management Process

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 The Strategic Management Process (2 of 3)
Its seven steps include:
(1) ask, “Where are we now as a business?”
(2)evaluate the firm’s internal and external strengths,
weaknesses, opportunities, and threats,
(3) formulate a new business direction,
(4) decide on strategic goals, and
(5) choose specific strategies or courses of action.
(6)and (7) are to implement and then evaluate the
strategic plan.
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 II. List the main types of
strategies.

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 Types of Strategies

1. Corporate Strategy
2. Competitive Strategy
3. Functional Strategy

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 Corporate Strategy
• Identifies the portfolio of businesses that, in total,
comprise the company and how these businesses relate
to each other
• Asks: “What businesses will we be in?”

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 Corporate-level Strategies
1. Concentration (scope is narrow)
2. Diversification (e.g. adding new product lines,
broadening scope)
3. Vertical Integration (produces its own raw
materials or selling its products directly)
4. Consolidation (company reduces its size)
5. Geographic expansion (enters new territorial
markets)

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 Competitive Strategy
• A strategy that identifies how to build and
strengthen the business’s long-term competitive
position in the marketplace, which is also known as
business-level competitive strategy.

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 The Three Standard Competitive
Strategies >>
1. Cost Leadership
2. Differentiation
3. Focus

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 The Three Standard Competitive
Strategies >>
1.Cost leadership – this competitive strategy means becoming
the low-cost leader in an industry. (e.g. Walmart)
2.Differentiation – for this competitive strategy, the firm seeks
to be unique in its industry along the dimensions that are widely
valued by buyers.
(e.g. Volvo stresses the safety of its cars, and Papa John’s
stresses fresh ingredients).
3.Focusers – for this competitive strategy, the company
carves out a market niche.
Bugatti cars is an example. They offer a product or service that
their customers cannot get from generalist competitors, such as
Toyota.
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 Functional Strategy
• A strategy that identifies the broad activities that
each department will pursue in order to help the
business accomplish its competitive goals.

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 Manager’s Role in Strategic Planning

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 III. Define strategic human
resource management.

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 Strategic Human Resource
Management

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 What is Strategic Human Resource
Management?
Strategic human resource management –
means formulating and executing human resource
policies and practices that produce the employee
competencies and behaviors the company needs to
achieve its strategic aims.

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 Sustainability and Strategic Human
Resource Management

Today’s emphasis on sustainability has important consequences for

human resource management. Strategic human resource
management means having human resource policies and practices
that produce the employee skills and behaviors that are necessary to
achieve the company’s strategic goals, and these include
sustainability goals.

For example, PepsiCo wants to deliver “Performance with

Purpose.” This means achieving financial performance while also
achieving human sustainability, environmental sustainability, and
talent sustainability.

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 Strategic Human Resource
Management Tools>>
• Strategy map
• The HR scorecard
• Digital dashboards

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 Strategic Human Resource
Management Tools>>
• Strategy map – this shows the “big picture” of how
each department’s performance contributes to achieving
the company’s overall strategic goals. It also
summarizes how each department’s performance
contributes to achieving the company’s overall strategic
goals. It helps the manager and each employee
visualize and understand the role his or her department
plays in achieving the company’s strategic plan.

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 Strategic Human Resource
Management Tools>>
• The HR Scorecard – is not a scorecard. It does
however refers to a process for assigning financial and
nonfinancial goals or metrics to important human
resource management–related chain of activities. That
chain is required in order to achieve the company’s
strategic aims and for monitoring results.Many
employers quantify and computerize the strategy map’s
activities by utilizing the HR Scorecard.

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 Strategic Human Resource
Management Tools>>
• Digital Dashboard – presents the manager with
desktop graphics and charts, showing a computerized
picture of how the company is doing on all the metrics
from the HR Scorecard process.

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 HR Metrics, Benchmarking, and Data
Analytics
Human resource metrics – is the quantitative
gauge of a human resource management activity, such
as employee turnover, hours of training per employee,
or qualified applicants per position.
Benchmarking – means comparing the practices of
high-performing companies results to your own, in order
to understand what they do that makes them better.
Data Analytics – means using statistical and
mathematical analysis and algorithms to find
relationships and make predictions.

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 Benchmarking
Benchmarking means comparing the practices of
high-performing companies results to your own, in
order to understand what they do that makes them
better.
Just measuring how one is doing (for instance, in terms
of employee productivity) is rarely enough for deciding
what (if anything) to change. Instead, most managers
want to know “How are we doing?” in relation to
something.
For example, are our accident rates rising or falling?
Similarly, the manager may want to benchmark the
results.
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Hr audit

An analysis by which an organization measures where it

currently stands and determines what it has to accomplish to
improve its HR functions.
high-performance work system (HPWS) A set of
human resource management policies and practices that
promote organizational effectiveness.
 VI. Describe how you would
execute a program to improve
employee engagement.

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 Employee Engagement Guide for
Managers: Employee Engagement
and Performance

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 What Can Managers Do to Improve
Employee Engagement?
1. Provide supportive supervision
2. Ensure employees understand how their
departments contribute.
3. See how their efforts contribute to achieving the
company’s goal.
4. Ensure employees get a sense of
accomplishment from working at the firm.
5. Ensure employees are highly involved.
6. Employers should hold managers responsible for
employee engagement.