Strategic HR Challenges

Transcription

1 Strategic HR Challenges Human Resource Management 1 Lecture Outline Human Resource Basic Concepts Human Resource Management challenges Environmental Challenges Organizational Challenges Individual Challenges Planning and Implementing Strategic HR Policies HR Planning Challenges of HR Planning Strategic HR Choices Selecting HR Strategy to Increase Firm Performance The HR Department and Managers: An important Partnership 2 Human Resources Human resource: The main driver in strategy execution process One of most difficult firm s capabilities to copy or imitate. Huselid (1995) found high performance work practices is significantly and economically linked to Intermediate employees outcomes (e.g., turnover and productivity) Short- and long-term corporate financial performance Even in tough economic times the need for talented employees is high 3 1

2 Basic Concepts Human Resource: People who work in an organization. Also called personnel. Some call associates, team members Starbucks call their employees Partners 4 Basic Concepts Human Resource Strategy: A firm s deliberate use of human resources to help it gain or maintain and edge against its competitors in the marketplace. Human Resource Tactic: A particular HR policy or program that helps to advance a firm s strategic goal. 5 Key HR Challenges for Managers 6 2

3 Environmental Challenges Forces external to a firm that affect the firm s performance but are beyond the control of management. Rapid change Rise of the Internet Workforce diversity Globalization Legislation Evolving work and family roles Skill shortages and the rise of the service sector Natural disaster 7 Environmental Challenges Rapid Change Environmental changes are constant in both general and specific external environment Organizations need to adapt to change quickly and effectively. HR are always at the HEART of an effective response Work force diversity Work force are more diversified in terms of ethnicities, genders, origins and ages Represent both a challenge and an opportunities Require firm to capitalize on employee diversity 8 Environmental Challenges Globalization Companies have to compete with foreign firms both domestically and abroad Vietnam integration to the world economy imposing not only a big challenge but also real opportunities for Vietnamese businesses. Major international exporting countries are from East and South East Asia. Some of the issues are: Worldwide companies culture, global alliances, global enterprises, worldwide recruiting, wage competition. Effective HR can help firm to gain worldwide competitive advantages 9 3

4 Environmental Challenges Legislation Firms must be concerned with potential liability resulting from personnel decisions. Vietnam legislation on HR still ambiguous, outdated, not applicable and reinforced. There will be an increasingly importance of HR legislation compliances for Vietnamese businesses. Formal policies on specific HR issues and internal administrative channels to deal with alleged incidents should be developed. 10 Environmental Challenges Evolving work and family roles Dual-career families is increasing Sandwich generation is expanding HR policies need to consider the balance between work and life to retain the best talents Skills shortage and the rise of the service sector in the US (manufacturing sector in Asia) Unskilled workers and unqualified graduates Vietnamese business overlook the necessity of training and development High demand for both manufacturing and service jobs. 11 Environmental Challenges Rise of the Internet Necessitating greater written communication skills Dealing with information overflow Breaking down labor market barriers Using online learning Enabling HR to focus on management Natural Disaster How company response to natural disaster How company support their employees in affected areas. 12 4

5 Vietnam-Specific Environmental Challenges Weak macroeconomic management Poor education and training system (both public and private) Poor basic economic infrastructures (e.g., roads, railways, ports, power and energy) Weak financial and banking system Unstable, outdated, and inapplicable legal framework. Widespread corruption problems in public (including the government) and private sectors Increasing deterioration of environmental conditions (e.g., pollution, deforestation) 13 Organizational Challenges Concerns or problems internal to a firm; often a byproduct of environmental forces Competitive positions: cost, quality and distinctive capabilities Decentralization Downsizing Organizational restructuring Self-managed work teams The growth of small businesses Organizational culture Technology Outsourcing 14 Organizational Challenges Cost, quality and distinctive capabilities Labor costs range from 36% in capital-intensive firms to 80% in labor-intensive firm Firms need to be able to utilize its work force skills and abilities HR policies is used to control costs, improve qualities and creating distinctive capabilities 15 5

6 Organizational Challenges Restructuring, Decentralization and Downsizing Organizations are moving from a tall structure to a flatter one with the cutting down of middle layers of managers Organizations are moving from a costly and inflexible structure (centralized) to a more decentralized one New organizational structures are emerging (e.g., SMT) Posing a ethical questions and creating a challenge for organization, potential employees, and governmental agencies HR strategies must play a crucial roles in the process 16 Organizational Challenges Organizational culture refers to basic assumptions and beliefs shared by members of an organization. It includes rules, norms behaviors philosophy dominant values feeling or climate 17 Organizational Challenges Technology The rise of the internet and telecommuting The ethics of proper data uses An increase in egalitarianism The arrival of human resource information systems Outsourcing: Employees may face layoffs Organization remains accountable for the actions of its subcontractors Overloaded subcontractor 18 6

7 Vietnam-Specific Organizational Challenges For a lot of Vietnamese firms, the ultimate challenge is to survive the current financial and economic crisis. Innovation capabilities Understanding international legal environment Understanding foreign markets Cost, quality, and productivity and organizational efficiency. 19 Individual Challenges HR issues that address the decisions most pertinent to individual employees Matching people and organizations Ethics and social responsibility Productivity Empowerment Brain Drain Job insecurity 20 Overcoming Challenges There are many challenges to overcome, but we will discuss how a good HR department works with managers to provide a working environment that meets and overcomes these challenges. Example: Use of the internet helps in recruitment by screening applicants and also assists in getting the right person in place by providing quick and reliable background checks. 21 7

8 Strategic HR Planning The process of formulating HR strategies and establishing programs or tactics to implement them Benefits of strategic HR planning Encouragement of proactive rather than reactive behavior Explicit communication of company goals. Stimulation of critical thinking and ongoing examination of assumptions Identification of gaps between current situation and future vision Encouragement of line managers participation Identification of HR constraints and opportunities Creation of common bonds 22 Strategic HR Planning Challenges of Strategic HR Planning Maintaining a competitive advantage Reinforcing overall business strategy Avoiding excessive concentration on day-to-day problems Developing HR strategies suited to unique organizational features Coping with the environment Securing management commitment Translating the strategic plan into action Combining intended and emergent strategies Accommodating Changes 23 Strategic HR Choices Work flows Staffing Employee separations Performance appraisal Training and development Compensation Employee relations Employee rights International management 24 8

9 Selecting HR strategies 25 Fit with Organizational Strategies Evolutionary Strategy needs HR strategy which Foster flexibility Quick response Entrepreneurship Risk sharing Decentralization Steady-state strategy needs HR strategy which Emphasize efficiency Detailed work planning Internal promotion Long-term career development Centralization 26 Porter s Business Strategies Overall Cost Leadership Differentiation Focus 27 9

10 Overall Cost Leadership Corporate Strategy Sustained capital investment and access to capital Intense supervision Tight cost control Low-cost dist. sys. Structured org. and responsibilities Simple product design for ease manufacturing HR strategy Efficient production Explicit job description Detail work planning Emphasis on tech. qualification and skills Job specific training Job-based pay Performance appraisal as a control device 28 Differentiation Corporate Strategy Strong marketing abilities Product engineering Strong capability in basic research Reputation for quality or technological leadership Amenities to attract highly skilled labor HR Strategy Focus on innovation and flexibility Broad job classes Loose working planning External recruitment Team-based training Individual-based pay Performance appraisal as a development tool 29 Miles and Snow s Business Strategies Defenders Prefer to maintain a secure position Protect market share from competitors Formalized and centralized Internally promoting, transferring and rewarding employees Long-term commitment Discourage risk taking 30 10

11 Miles and Snow s Business Strategies Prospectors Find and exploit new product and market opportunities Emphasize on growth and development Flexible and decentralization Encourage risk taking Selected HR strategies that fit defender and prospector strategies are summarized in Figure Fit with the environment Four major dimensions to be examined Degree of uncertainty: How much accurate info. available for decision making Volatility: How often the environment change Magnitude of change: How drastic the changes are Complexity: How many elements of the environment affecting the firm HR strategies suitable for the environment are summarized in Figure Fit with Organizational Characteristics Organizational personality is broken down into five categories The production process converting inputs to outputs (routine vs. nonroutine; structured vs. unstructured) The firm market posture The firm overall managerial philosophy The firm organizational structure The firm organizational culture 33 11

12 Fit with Organizational Capabilities HR strategies should help organizations in Exploiting its specific advantages or strengths while avoiding weaknesses Assisting the firm in better utilizing its own HR skills and assets 34 Important HR strategies and tactics need to be mutually consistent which they reinforced one another. 35 Establishing HR Dept. Managers Partnership Organizations should Train managers to have HR skills and knowledge (i.e. understand the legal environment) Train HR professionals to have managerial skills and experience View HR professionals as an internal consultants that provides advices and supports Instill a sense of common goals and win/win perspective Involvement of different levels and areas in formulating and implementing HR plan and strategies Require equal participation of HR senior managers

13 37 38 Summary and Conclusions Many challenges in HRM Plan and Implement HR in a strategic manner Policies and procedures should be congruent Select strategies that increase performance HR department and management share an important partnership 39 13