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Learning Outcomes
 Explain how human resources planning and a firm’s
mission, vision, and values are integrally linked to its
strategy
 Understand how an organization’s external
environment influences its strategic planning
 Understand why it is important for an organization to
do an internal resource analysis
 Explain the linkages between competitive strategies
and HR
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Learning Outcomes
 Understand what is required for a firm to successfully
implement a strategy and assess its effectiveness
 Describe how firms evaluate their strategies and HR
implementation
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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 providing for the movement
of people into, within, and out of an organization
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Strategic Human Resources
Management (SHRM)
 Pattern of human resources deployments and activities
that enable an organization to achieve its strategic
goals
 Combines strategic planning and HR planning
 Strategy formulation - Provides input as to what is
possible given the types and numbers of people available
 Strategy implementation - Makes resource allocation
decisions to implement the devised strategy
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5
Alignment of HRP and Strategic Planning
 Two-way process
 A firm’s HR strategy follows the business strategy and
helps implement it
 People, culture, and climate of a company constrain a
firm’s ability to achieve strategically
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전략적 계획과 인적자원관리와의 관계
2–7
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Cengage Learning. All rights
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reserved.
Step One: Mission, Vision, and Values
 Mission
 Basic purpose of the organization and its scope of
operations
 Strategic vision
 Clarifies the long-term direction of the company and its
strategic intent
 Core values
 Strong and enduring beliefs and principles that the
company uses as a foundation for its decisions
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8
Step One: Mission, Vision, and Values
 Developing a mission statement
 Factors to be considered

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Organization’s reason of existence
Need fulfilled by the organization in comparison to the
competitors
Knowledge of the need and methods for fulfilling them
Knowledge of market and the customers
Core values of the firm that will be practiced by the employees
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Step One: Mission, Vision, and Values
 HR’s role
 Communicates mission, vision, and values frequently
informally and formally
 Recruit and hire employees whose values are consistent
with the organization
 Translate mission, vision, and values into:



Specific on-the-job behaviors
Job descriptions
Basis of employee rewards
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Step Two: External Analysis
 Environmental scanning: Systematic monitoring of
major external forces influencing the organization
 Business environment: Factors that a firm cannot
directly control but can affect its strategy
 Remote environment: Forces that generally affect
specific firms

Economy and ecological, technological, social, demographic,
and legal and regulatory changes
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Step Two: External Analysis
 Competitive environment: Consists of a firm’s specific
industry

Includes the industry’s customers, rival firms, new entrants,
substitutes, and suppliers
 HR’s external analysis

Changes in a firm’s remote and competitive environments are
monitored and analyzed
 Affect hiring plans, recruitment and replacement polices
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Figure 2.2 - Five Forces Framework
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Step Three: Internal Analysis
 Core capabilities: Integrated knowledge sets within
an organization
 Distinguish the organization from its competitors and
deliver value to customers
 Value creation: What the firm adds to a product or
service by virtue of making it

Value = benefits – costs
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14
Step Three: Internal Analysis
 Resources of core capabilities
 Processes - Standard routines for how work will be done
and results will be accomplished
 Systems - Information systems, databases, and
proprietary technologies
 People - Includes knowledge, skills, and abilities of
employees used to create value for customers
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Step Three: Internal Analysis
 Criteria for sustaining competitive advantage
 Resources should be:


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Valuable
Rare
Difficult to imitate
Organized
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Step Three: Internal Analysis
 Trends of employment relationships and HR practices
 Strategic knowledge workers

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Hold unique skills directly linked to the company’s strategy
Difficult to replace
 Core employees


Skills are transferable
Managers invest less in training and development
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Step Three: Internal Analysis
 Supporting workers


Scope of duties is limited
Employment relationships are transaction-based and focused
on rules and procedures
 External partners


Hold skills that are unique and specialized
Skills are not related to the company’s core strategy
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Figure 2.3 - Mapping Human Capital
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Step Three: Internal Analysis
 Cultural audits: Audits of the culture and quality of
work life in an organization
 Firm surveys its employees on how they feel about a
number of issues
 Identifies groups with different views about the nature
of work and how it should be done

Clan culture - Employees are closely knit and exhibit concern
for one another
 Values their customers, loyalty, and cohesion
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Step Three: Internal Analysis


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Adhocracy culture - Characterized by risk-taking, innovation,
and a spirit of entrepreneurship
Market culture - Encourages competitive, result-oriented
behaviors
Hierarchical culture - Characterized by formal structures and
procedures
 Values efficiency and stability
 Value-based hiring: Outlining behaviors that
exemplify a firm’s corporate culture and hiring people
who are a fit for them
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Step Three: Internal Analysis
 Forecasting - Key elements
 Forecasting demand for labor
 Forecasting supply of labor
 Balancing supply and demand considerations
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Figure 2.4 - Model of HR Forecasting
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Step Three: Internal Analysis
 Forecasting a firm’s demand for employees
 Quantitative approaches

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Trend analysis: Forecasts labor demand based on an
organizational index such as sales
Modeling or multiple predictive techniques - Combine several
factors to predict employment levels
 Qualitative approaches


Management forecasts: Opinions of supervisors,
department managers, or experts, knowledgeable about the
organization’s future employment needs
Delphi technique - Solicits and summarizes judgments of a
preselected group of individuals
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Step Three: Internal Analysis
 Forecasting the supply of employees
 Staffing tables: Graphic representations of all
organizational jobs

Contains numbers of employees currently occupying those
jobs and future employment requirements
 Markov analysis: Tracks the pattern of employee
movements through various jobs

Quality of fill: Metric designed to measure how well new
hires are performing on the job
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Step Three: Internal Analysis
 Skill inventories: Files of personnel education,
experience, interests, and skills

Allow managers to quickly match job openings with employee
backgrounds
 Management inventories - Data gathered on managers
 Replacement charts: Listings of current jobholders
and potential replacements if an opening occurs, used
for succession planning

Succession planning: Identifying, developing, and tracking
key individuals for executive positions
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Step Three: Internal Analysis
 Human capital readiness: Evaluating the availability
of critical talent in a company and comparing it to the
firm’s supply
 Difference between the quantity and quality of
employees required and available represent the gap that
needs to be remedied
 Provides managers a foundation to establish future
strategy and specific requirements for developing talent
to implement it
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Step Four: Formulating Strategy
 SWOT analysis: Comparison of strengths,
weaknesses, opportunities, and threats for strategy
formulation purposes
 Strategy formulation builds on SWOT analysis to
devise a coherent course of action
 Corporate strategy
 Growth and diversification
 Mergers and Acquisitions
 Strategic alliances and joint ventures
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Step Four: Formulating Strategy
 Business strategy
 Low-cost strategy
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Focuses on efficiency, productivity, and minimizing waste
Linked to HR planning through productivity and outsourcing
activities
 Differentiation strategy

Based on delivering high-quality products, innovative
features, speed to market, or superior service
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Step Four: Formulating Strategy
 Functional Strategy
 Vertical fit/alignment

Focuses on the connection between the business objectives
and the major initiatives in HR
 Horizontal fit/alignment

Aligning HR practices with one another internally to establish
a configuration that is mutually reinforcing
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Step Five: Strategy Implementation
 Organizations strive for balance between demand and
supply considerations
 Demand is based on forecasted trends in business
activities
 Supply depends on locating required human resource
 To meet human resources demands, organizations
have staffing options
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Figure 2.9 - The 7-S Model
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Step Five: Strategy Implementation
 If labor shortage is acute, company develops talent from
ground up
 Firms restrict hiring, reduce their employees’ work
hours, and consider layoffs when forecasts project
surplus employees
 Organizations have to be prepared to exit and enter new
lines of business, restructure, outsource, offshore and
downsize
 HR managers should ensure no laws are violated while
downsizing
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Step Six: Evaluation
 Benchmarking: Looking at an organization’s
practices and performances in an area and comparing
them with those of other companies
 Gathering competitive information
 HR metrics


Human capital metrics assess aspects of the workforce
HR metrics assess the performance of the HR function
 Managers can gather informal information on
competitors through certain legal means
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Figure 2.11 - Building the Metrics
Model
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Step Six: Evaluation
 Measuring a firm’s strategic alignment
 Balanced scorecard (BSC): Helps managers translate
strategic goals into operational objectives

Related cells - Financial, customer, processes and learning
 Measuring horizontal fit
 Managers identify key workforce objectives they look to
achieve
 Identify HR practices used to elicit or reinforce the
objectives
 Evaluate each HR practice
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Step Six: Evaluation
 Successful HRP helps increase organizational
capability
 Organizational capability: Capacity of the
organization to act and change in pursuit of sustainable
competitive advantage
 Flexibility
 Coordination flexibility - Ability to rapidly reallocate
resources to new or changing needs
 Resource flexibility - Result from having adaptable
people and resources that can be used different ways
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