UNIT1: STRATETGIC HR MANAGEMENT TABLE OF CONTENTS Preface... i Notice... i International HR Certification Exams... ii SPHRi TM Exam... ii PHRi TM Exam... ii About the Authors... iii Acknowledgement... iii 1.1 Strategic Human Resource Management... 1 1.1.1 Corporate Governance... 1 1.1.2 Business Strategy... 2 1.1.3 HR Functions... 2 Staffing/Employment... 3 Performance Evaluation... 3 Compensation and Benefits... 3 Training and Development... 4 Employee Relations... 4 Health, Safety, and Security... 4 HR Research... 4 1.1.4 HR Policies and Procedures... 5 HR policies... 5 Employee Handbooks and Policy Manuals... 5 1.1.5 HR Generalists and HR Specialists... 7 Human Resource Manager or Executive... 8 Human Resources Specialists... 8 Human Resources Support Jobs... 9 HR Education... 10 1.1.6 HR Roles... 10 Role1: Management of the Firm Infrastructure... 10 Role2: Management of employee Contributions... 11
Role 3: Management of Strategy HR... 11 Role4: Management of Transformational Change... 11 1.1.7 HR Competencies... 12 The HRCS Model... 12 The SHRM Competency Model... 13 1.1.8 Financial Knowledge... 14 Financial Statements... 14 Budgets... 15 1.2 Organizational Strategy... 17 1.2.1 Defining the Organization s Mission... 17 The value of Mission Statements... 17 Writing Mission Statement... 18 1.2.2 Selecting a Strategy... 19 The Role of Strategy... 19 Imperfect Competition... 20 Three Grand Strategies... 21 Four Strategic Types... 22 Competitive advantage and the value chain... 23 Strategy Formulation... 24 Strategy Alignment... 26 HR Practices and Organizational Capabilities... 27 1.2.3 Analyzing the Firm... 28 Aligning the Organization... 28 Firm Resources and Core Competencies... 30 1.2.4 Analyzing the Environment... 31 Industry Analysis... 31 Competitor Analysis... 33 1.2.5 Writing a Business Plan... 34 1.3 HR Control and Evaluation... 37 1.3.1 HR Budgeting Process... 37 1.3.2 HR Metrics: Evaluating HR Effectiveness... 37 Subjective Attitudinal Measures... 38
Statistical Benchmark Measures... 39 Human Resource Accounting... 41 Costing HR Activities... 42 1.3.3 Key Performance Indicators (KPI)... 43 Leading and Lagging Indicators... 43 Scorecards and Dashboards... 43 Primary HR Metrics... 44 1.3.4 Effects of HR Practices on Business Performance... 47 HR and the Balanced Scorecard... 47 1.3.5 Outsourcing the HR Function... 48 1.4 HR Technology... 51 1.4.1 Human Resources Information System (HRIS)... 51 Selecting an HRIS... 51 HRIS Implementation... 55 HRIS Maintenance and Evaluation... 56 1.4.2 HR Portals... 57 1.4.3 Employee Communications... 59 1.4.4 Virtual Teams... 60 1.5 Organizational Environments... 63 1.5.1 Environmental Sectors... 63 1.5.2 Environmental Scanning... 65 Economic Conditions... 65 Unemployment... 65 Inflation... 66 Competition... 66 Technological Advances... 66 Labor Force Trends... 67 Government and Regulatory Agencies... 68 1.5.3 Alignment HR Functions with Organizational Contexts... 68 Environmental Uncertainty... 68 Reducing Uncertainty... 70 1.6 Organizational Design and Development... 73
1.6.1 Functional Versus Product Departmentalization... 73 Functional Departmentalization... 73 Product Departmentalization... 74 1.6.2 Centralized Versus Decentralized Decision Making... 75 1.6.3 Formal versus Informal Rules and Control Mechanisms... 76 1.6.4 Division of Labor... 77 1.6.5 Span of Control... 78 1.6.6 Matrix Structures... 79 1.6.7 Evaluating the Effectiveness of an Organization s Structure... 80 Line versus Staff Functions... 80 Mechanistic Versus Organic Structures... 81 1.7 Organizational Culture... 83 1.7.1 Climate versus Culture... 83 1.7.2 Levels of Organizational Culture... 83 1.7.3 Development of Culture... 85 Expectations of Founders and leaders... 85 Member Contributions... 85 Historical Accommodations... 85 1.7.4 Maintaining Organizational Culture... 86 Employee Selection and Discipline... 86 Reward and Status Allocation... 86 Leader Reactions... 86 Rites and Ceremonies... 87 Stories and Symbols... 87 Reactions to problems... 87 1.7.5 Changing Organizational Culture... 88 1.7.6 Creativity and Innovation... 89 The Creative Process... 89 Stimulating creativity... 90 1.7.7 Developing a Culture of Inclusion... 91 1.8 Global HR Management... 95 1.8.1 Globalization of Business... 95
1.8.2 Stages of Global HR Management... 96 International import-export Firms... 96 Multinational Enterprises (MNEs)... 96 Global Firms... 97 1.8.3 Other Global HR Structures... 97 Born Global... 97 Off-shoring... 97 Global Outsourcing... 98 1.8.4 Approaches to Global HR... 99 Ethnocentric Approach... 99 Polycentric Approach... 99 Regiocentric Approach... 99 Geocentric Approach... 100 1.8.5 Impact of Globalization... 100 1.8.6 Managerial Styles... 101 1.8.7 Communication and Language... 102 1.8.8 International Cultural Differences... 102 1.8.9 Managing Global Employment... 104 Selection of Expatriates... 105 Adjustment of Expatriate s Spouse and Family... 105 1.11.1 Research Design and Methodology... 131 Scientific Method... 131 Developing and Testing Hypotheses... 133 Experimental Design... 134 Data-gathering Methods... 137 1.11.2 Quantitative Analysis... 139 Reliability and validity... 139 Inferential and Descriptive Statistics... 139 Correlation and Regression... 141 1.11.3 Qualitative Research... 142 1.11.4 Graphically Displaying HR Data... 142 Histogram... 143
Colum Chart... 143 Bar Chart... 143 Pie Chart... 144 Line Graph... 144 Dual-axis Chart... 144 Scatter Plot... 145 Venn Diagram... 145 Gantt Chart... 145 Key Terms... 147 PHRi TM Exam Content Outline... 153 SPHRi TM Exam Content Outline... 159 Endnotes... 165 Index... 171