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Strategic Management & Planning

Chapter 2 & 5a. Strategic Management & Planning. Strategic HR Management. The use of employees to gain or keep a competitive advantage, resulting in greater organizational effectiveness. Part 1. Productivity & HR. Productivity.

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Strategic Management & Planning

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  1. Chapter 2 & 5a Strategic Management & Planning

  2. Strategic HR Management • The use of employees to gain or keep a competitive advantage, resulting in greater organizational effectiveness. Chapter 2 & 5a

  3. Part 1 • Productivity & HR Chapter 2 & 5a

  4. Productivity • A measure of the quantity and quality of work done, considering the cost of the resources used. • A ratio of the inputs and outputs that indicates the value added by an organization. • Unit labor cost: computed by dividing the average cost of workers by their average levels of output Chapter 2 & 5a

  5. Improving Organizational Productivity • Organizational restructuring • Re-designing work • Aligning HR Activities • Outsourcing analyses and assistance Chapter 2 & 5a

  6. Organizational Culture & Effectiveness • Organizational Culture • The shared values and beliefs in an organization • Strategy and culture must be compatible. • Culture affects recruitment and retention of employees. • Culture can enhance or constrain organizational performance. Chapter 2 & 5a

  7. Part 2 • HR Planning Chapter 2 & 5a

  8. Human Resource Planning • Process of anticipating and making provision for the movement (flow) of people into, within, and out of an organization. • Purpose of HR Planning • right people with right skills at right place at right time Chapter 2 & 5a

  9. Types of Workers Needed • Core knowledge workers • Traditional job-based employees • Contract labor • Alliance/partners Chapter 2 & 5a

  10. 1. Core knowledge workers • Employees who have firm-specific skills that are directly linked to the company’s strategy. • Example: Senior software programmer Chapter 2 & 5a

  11. 2. Traditional Job-based workers • Employees with skills to perform a predefined job that are quite valuable to a company, but not unique. • Example: Security guard Chapter 2 & 5a

  12. 3. Contract Labor • Employees whose skills are of less strategic value and generally available to all firms. • Example: General electrician Chapter 2 & 5a

  13. 4. Alliance/Partners • Individuals and groups with unique skills, but those skills are not directly related to a company’s core strategy. • Example: Independent product label designer Chapter 2 & 5a

  14. HR Planning Model • Forecast Demand • Forecast Supply • Find balance • Shortage – recruit: full-time, part-time, recalls • Surplus – Layoffs, terminations, demotions, retirements Chapter 2 & 5a

  15. Forecasting Work Requirements • Determine expected production for department for specific time period • 10,000 T-shirts per month • Determine how many labor hours it will take to meet production goal • Each worker makes 10/hr 10,000/10 = 1000 hours Chapter 2 & 5a

  16. Forecasting Work Requirements • Convert work hours to work days • With 8 hr shifts  1000/8 = 125 days • Divide needed workdays by workdays-per-period • With 20 workdays/month  125/20 = 6.25 people Chapter 2 & 5a

  17. Forecasting Work Requirements • Make allowances for absences, training, and leaves • Round up to 7 people • Search for other ways to meet your schedule • i.e. overtime, transfers, borrow employees, temps • instead of 7 line workers to do 6.25 work, hire 6 & work a little overtime Chapter 2 & 5a

  18. Your Goal: • Make sure employees on hand matches workload Chapter 2 & 5a

  19. Overstaffing • Having more workers than minimum necessary • Costs & flexibility increase • Efficiency drops • Coaching & training opportunities may be taken Chapter 2 & 5a

  20. Understaffing • Having fewer workers than minimum necessary • Can get you behind schedule • Costs may end up higher as you try to make up the difference • Can bring out creativity Chapter 2 & 5a

  21. Effective Staffing • The right number & kinds of workers on the right jobs at the right times Chapter 2 & 5a

  22. Forecasting Internal Labor Supply Chapter 2 & 5a

  23. Forecasting Internal Labor Supply • Staffing Tables • Graphic representations of all organizational jobs, along with the numbers of employees currently occupying those jobs and future (monthly or yearly) employment requirements. • Markov Analysis • A method for tracking the pattern of employee movements through various jobs Chapter 2 & 5a

  24. Sample Markov Analysis: Retail Chapter 2 & 5a

  25. Internal Supply Forecasting Tools • Skill Inventories • Files of personnel education, experience, interests, skills, etc., that allow managers to quickly match job openings with employee backgrounds. • Replacement Charts • Listings of current jobholders and persons who are potential replacements if an opening occurs. Chapter 2 & 5a

  26. Internal Supply Forecasting Tools • Succession Planning • The process of identifying, developing, and tracking key individuals for executive positions Chapter 2 & 5a

  27. Factors influencing external labor supply • Demographic changes in the population • National and regional economics • Education level of the workforce • Demand for specific employee skills • Population mobility • Governmental policies Chapter 2 & 5a

  28. Part 3 • Managing a HR Surplus Chapter 2 & 5a

  29. WARN Act • Workforce Reductions and the Worker Adjustment and Retraining Notification • Sets out employer requirements for advance notice of a layoff or facility closing. • 60-day notice to employees and the local community before a layoff or facility closing involving more than 50 people. • Does not cover part-time or seasonal workers. • Imposes fines for not following notification procedure. • Has hardship clauses for unanticipated closures or lack of business continuance capabilities. Chapter 2 & 5a

  30. Workforce Realignment • “Downsizing” • “Rightsizing” • “Reduction in Force” (RIF) • all mean reducing the number of employees in an organization Chapter 2 & 5a

  31. Realignment Causes • Economic • weak product demand, loss of market share to competitors • Structural • technological change, mergers and acquisitions Chapter 2 & 5a

  32. Realignment Positives • Increase competitiveness • Increased productivity Chapter 2 & 5a

  33. Realignment Negatives • Cannibalization of HR resources • Loss of specialized skills and experience • Loss of growth and innovation skills Chapter 2 & 5a

  34. Managing Realignment Survivors • Provide explanations for actions and the future • Involve survivors in transition/regrouping activities Chapter 2 & 5a

  35. How to Downsize • Attrition and hiring freezes • Not replacing departing employees and not hiring new employees • Voluntary Separation Programs • Early retirement buyouts. Chapter 2 & 5a

  36. How to Downsize • Layoffs • Employees are placed on unpaid leave until called back to work when business conditions improve. • Employees are selected for layoff on the basis of their seniority or performance or a combination of both. Chapter 2 & 5a

  37. How to Downsize • Outplacement services provided to displaced employees: • Personal career counseling • Resume preparation and typing services • Interviewing workshops • Referral assistance • Severance payments • Continuance of medical benefits • Job retraining Chapter 2 & 5a

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