HR STRATEGY

1. HR STRATEGY MANA 3320 Dr. Jeanne Michalski

2. Strategic Planning and Human Resources • Strategic Planning • Procedures for making decisions about the organization’s long-term goals and strategies • Human Resources Planning (HRP) • Process of anticipating and making provision for the movement (flow) of people into, within, and out of an organization.

3. Strategic Planning and HR Planning • Strategic Human Resources Management (SHRM) • The pattern of human resources deployments and activities that enable an organization to achieve its strategic goals • Strategy formulation—providing input as to what is possible given the types and numbers of people available. • Strategy implementation—making primary resource allocation decisions about structure, processes, and human resources.

4. Mission, Vision, and Values • Mission • The basic purpose of the organization as well as its scope of operations • Strategic Vision • A statement about where the company is going and what it can become in the future; clarifies the long-term direction of the company and its strategic intent • Core Values • The strong and enduring beliefs and principles that the company uses as a foundation for its decisions

5. Changing Views of HR • Business strategies require specific skills and behaviors to be successful. • HR practices can be crafted to develop certain types of skills and encourage behaviors. • HR practices should support the “core competencies” and strategy of the organization.

6. HR Alignment

7. HR Alignment INTERNAL FIT

8. HR Alignment Strategy INTERNAL FIT

9. Business Strategy • Value Creation • What the firm adds to a product or service by virtue of making it; the amount of benefits provided by the product or service once the costs of making it are subtracted (value = benefits — costs). • Low-cost strategy: competing on productivity and efficiency • Keeping costs low to offer an attractive price to customers (relative to competitors). • Differentiation strategy: compete on added value • Involves providing something unique and distinctive to customers that they value.

10. Business Strategy (cont’d) • Functional Strategy: Ensuring Alignment • External Fit/Alignment • Focuses on the connection between the business objectives and the major initiatives in HR. • Internal Fit/Alignment • Aligning HR practices with one another to establish a configuration that is mutually reinforcing.

11. How do they compete? • Wal-Mart • Apple • McDonald’s • Starbucks

12. McDonalds’ vs. Starbucks

13. Rapid Growth Starbucks opens three new stores every day. 2006 = 12,440 2005 = 10,241 2004 = 8,337 2003 = 7,225 2002 = 5,886 2001 = 4,709 2000 = 3,501 1990 = 84 • 120,000 employees worldwide • The long-term goal is 30,000 around the world, including 15,000 in the U.S. • The company is adding people at the rate of 200 a day.

14. Starbucks Strategy • Price of a tall latte in the U.S. is around $3.00 • High-speed wireless Internet service – now available at Starbucks. • October 1, 2007 “Starting tomorrow at certain Starbucks stores, a person with an iPhone or iTunes software loaded onto a laptop can download the songs they hear over the speakers directly onto those devices.” • Rapid growth.

15. Howard Schultz on Starbuck’s Strategy 1997 Interview w/ Larry King: “So the question is: How could a company create retail stores where coffee was not previously sold, ... charge three times more for it than the local doughnut shop, put Italian names on it that no one can pronounce, and then have six million customers a week coming through the stores?”

16. Working at Starbucks The downside: • Salaries are low • Shift assignments are unpredictable • Number of working hours cannot be relied upon. The upside: • Flexibility • Company culture • Employee empowerment • Benefits package • Fortune magazine #16 best companies to work for in U.S.

17. Working at Starbucks Partners who work full time or part time (generally 20 hours or more per week) may participate in a variety of programs including: • Progressive Compensation • Healthcare Benefits (Medical, Prescription Drugs, Dental and Vision) • Retirement Savings Plan • Stock Options and Discounted Stock Purchase Plan “Bean Stock” • Income Protection Plan (Life and Disability Coverage) • Management Bonus Plan • Adoption Assistance Plan • Domestic partner benefits • Referral programs and support resources for child and eldercare • Employee involvement • A pound of coffee each week • http://www.starbucks.com/aboutus/jobcenter_thesbuxexperience.asp

18. “To Woo Europeans, McDonald’s Goes Upscale” McDonald’s in London NYT August 25, 2007

19. McDonald’s Goes Upscale • Aiming to create a more relaxed experience in a sophisticated atmosphere, McDonald’s is replacing bolted-down plastic yellow-and-white furniture with lime-green designer chairs and dark leather upholstery. • The changes are more than cosmetic. McDonald’s is introducing healthier foods and items that cater to regional tastes, like caffè lattes. • Hoping to attract more young adults and professionals, the chain is also adding amenities like Internet access and rental iPods. • The original impetus for the makeover was a European sales slump in the late 1990s, brought on by concerns about obesity and annoyance at unappealing décor and grumpy employees.

20. Competitive Advantage Technological Capability

21. Competitive Advantage Cap Technological Capability Financial Capability

22. Competitive Advantage Technological Capability M Financial Capability Marketing Capability

23. Competitive Advantage Technological Capability o Organizational Capability M Financial Capability Marketing Capability

24. Capabilities: People as a Strategic Resource • Core Capabilities • Integrated knowledge sets within an organization that distinguish it from its competitors and deliver value to customers. • Sustained competitive advantage through people is achieved if these human resources: • Are valuable. • Are rare and unavailable to competitors. • Are difficult to imitate. • Are organized for teamwork and cooperation.

25. Company Vision - Example • Provide transportation services that consistently meet customers expectations

26. Strategic Initiatives – Example • People • Growth • Efficiency • Ease of Doing Business • Service

27. Human Resources Vision • HR makes it happen for “Company” Great Company…... Great People…… Great Leaders….. …….Engaged in delivering extraordinary results

28. People Strategies • Drive Performance Ethic • Transform Leaders • Enhance Talent • Engage all Employees