Chapter 1

Meeting Present and

Emerging Strategic Human
Resources Challenges

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Chapter Challenges
1. Understand the major challenges
affecting HR
2. Develop competence in planning and
implementing strategic HR policies
3. Develop competence in selecting HR
strategies to increase firm performance
4. Become aware of HR best practices

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Chapter Challenges
4. Understand the need to establish a close
partnership between the HR department
and managers
5. Recognize career opportunities in various
human resources management subfields

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Types of Employees
Managers
Line employees Junior employees

Staff employees Exempt employees

Nonexempt
Senior employees
employees

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 Human Resources
Strategy

Human resources strategy refers to a

firm’s deliberate use of human resources to
help it gain or maintain an edge against
competitors in the marketplace

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Key HR Challenges

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Organizational Culture
Organizational culture refers to the
basic assumptions and beliefs shared by
members of an organization

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 Key Elements of
Organizational Culture
• Observed behavioral regularities
• Norms
• Dominant values
• Philosophy
• Rules of the game
• Feeling of climate

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 Strategic HR Policies:
Benefits
• Encouraging Proactive Behavior
• Communicating Company Goals
• Stimulating Critical Thinking and Examination of
Assumptions
• Identification of Gaps Between Current Situation
and Future Vision
• Encouragement of Line Managers’ Participation
• Identification of HR Constraints and Opportunities
• Creating Common Bonds

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 Strategic HR Policies:
Challenges
• Maintaining a Competitive Advantage
• Reinforcing Overall Business Strategy
• Avoiding Excessive Concentration on Daily
Problems
• Develop HR Strategies Suited to Unique
Organizational Features
• Coping with Environment
• Securing Management Commitment
• Translating the Strategic Plan into Action
• Combining Intended and Emergent Strategies
• Accommodating Change
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 Strategic HR: Choices
• Work Flows
• Staffing
• Employee Separations
• Performance Appraisal
• Training and Career Development
• Compensation
• Employee Rights
• Employee and Labor Relations
• International Management

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 Selecting HR Strategies
• To increase firm performance
• HR strategies should fit with other organizational
aspects

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HR Fit with Organizational
Strategies
Corporate Strategies
Evolutionary Business
Steady State

Porter’s Business Unit Strategies

Cost Leadership
Differentiation
Focus

Miles & Snow’s Business

Strategies
Defender
Prospector
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Miles & Snow’s Business
Strategies

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 HR Fit with Environment
• Degree of Uncertainty
• Magnitude of Change
• Volatility
• Complexity

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HR Fit with Environment

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 HR Fit with Organizational
Characteristics
• Production Process
• Firm’s Market Posture
• Firm’s Overall Managerial Philosophy
• Firm’s Organizational Structure
• Firm’s Organizational Culture

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HR Fit with Organizational
Capabilities
• Distinctive Competencies
o Competitive edge
• HR Strategies should
o Help firm exploit its competencies
o Assist the firm to help use its HR skills

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 HR Department Managers:
An Important Partnership
To foster effective partnerships, companies
should:
• Analyze the people side of productivity
• View HR roles as consultants
• Instill a shared sense of common fate
• Require HR training to include managerial
experience
• Actively involve top corporate and divisional
managers in HR plans

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 HR Audit
Periodic HR Audits should ask:
Is the turnover rate exceptionally low or high?

Are employees who quit good employees or marginal?

What is the firm’s ROI regarding recruitment, training,

and performance plans?

Is the firm complying with government regulations?

How well is the company managing employee

diversity?

Are HRM policies and procedures helping the firm

reach long-term goals?

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 Summary and
Conclusions
• HR Challenges Facing Managers
o Environmental Challenges
o Organizational Challenges
o Individual Challenges
• Planning and Implementing Strategic HR
Policies
o Policies and procedures should be congruent
• Selecting HR Strategies to Increase Firm
Performance
• The Important Partnership of HR and
Managers
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