After reading this chapter, you should be able to:

Human Resource
Management

2. Explain and give examples of each type of

companywide and competitive strategy.

TWELFTH EDITION

1. Outline the steps in the strategic management

process.

GARY DESSLER

3. Explain what a strategy-oriented human resource

management system is and why it is important.

BIJU VARKKEY
Part 1 | Introduction

4. Illustrate and explain each of the eight steps in the HR

Scorecard approach to creating human resource
management systems.

Chapter 3

The Managers Role in Strategic Human Resource

Management

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Resource Management, 12/e

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Authorized adaptation from the United States edition of Human
Resource Management, 12/e

The Strategic Management Process

Business Vision and Mission

Strategic Management

Vision

32

A general statement of an organizations intended

The process of identifying and executing the

organizations mission by matching its capabilities

with the demands of its environment.

direction that evokes emotional feelings in

organization members.

Strategy

Mission

A chosen course of action.

Spells out who the company is, what it does, and

where its headed.

Strategic Plan
How an organization intends to balance its internal

strengths and weaknesses with its external

opportunities and threats to maintain a competitive
advantage over the long-term.
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Resource Management, 12/e

33

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Resource Management, 12/e

34

FIGURE 35

The Strategic Management Process

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Resource Management, 12/e

FIGURE 38

FIGURE 37

35

A SWOT Chart

Strengths

Weaknesses

Example: Market leadership

Example: Large inventories

Opportunities

Threats

Example: New overseas markets

Example: Market saturation

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Resource Management, 12/e

Relationships Among Strategies in Multiple-Business Firms

36

Types of Strategies
Corporate-Level
Strategies

Diversification
Strategy

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Resource Management, 12/e

37

Vertical
Integration
Strategy

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Consolidation
Strategy

Geographic
Expansion
Strategy

38

Types of Strategies (continued)

Achieving Strategic Fit

Business-Level/
Competitive
Strategies

Cost Leadership

Differentiation

The Fit Point of View (Porter) consists of the

idea that each departments strategy needs to fit
the parent businesss competitive aims.
Focus/Niche

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Resource Management, 12/e

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Resource Management, 12/e

FIGURE 36

Strategic Human Resource Management

310

Linking Company-Wide and HR Strategies

Strategic Human Resource Management

The linking of HRM with strategic goals and

objectives in order to improve business performance

and develop organizational cultures that foster
innovation and flexibility.

Involves formulating and executing HR systemsHR

policies and activitiesthat produce the employee
competencies and behaviors that the company needs
to achieve its strategic aims.

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Resource Management, 12/e

311

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Resource Management, 12/e

312

FIGURE 310
Strategy
Map for
Southwest
Airlines

Creating the Strategic Human Resource

Management System
Components of a
Strategic HRM System

Human Resource
Professionals

Human Resource
Policies and
Practices

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Resource Management, 12/e

Employee
Behaviors and
Competencies

313

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Resource Management, 12/e

Source: Adapted from Creating a Strategy Map,

Ravi Tangri, Team@TeamCHRYSALIS.com.
314

Measuring HRs Contribution

FIGURE 312 Three Important Strategic HR Tools

The HR Scorecard
Shows the quantitative standards,

or metrics the firm uses to

measure HR activities.
Measures the employee behaviors

resulting from these activities.

Measures the strategically relevant

organizational outcomes of those

employee behaviors.

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Resource Management, 12/e

Source: Adapted from Brian Becker et al., The HR Scorecard: Linking People,
Strategy, and Performance (Boston: Harvard Business School Press, 2001), p. 12.
315

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Resource Management, 12/e

316

FIGURE 314

Creating an HR Scorecard

Simple Value Chain for The Hotel Paris

The 10-Step HR Scorecard Process

1

Define the business strategy

Identify required HR policies

and activities

Outline value chain activities

Choose HR Scorecard
measures

Outline a strategy map

Identify strategically required

outcomes

Identify required workforce

competencies and behaviors

Summarize Scorecard
measures on digital dashboard
and monitor, predict, and
evaluate

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Resource Management, 12/e

HR Metric*
Absence rate

317

Five Sample HR Metrics

How to Calculate It
100

Advertising + agency fees + employee referrals + travel cost of

applicants and staff + relocation costs + recruiter pay and benefits
Number of hires

HR expense
factor

Time to fill

HR expense
Total operating expense
Total days elapsed to fill job requisitions
Number hired

Turnover rate

Number of separations during month

Average number of employees during month

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318

KEY TERMS

# of days absent in month

Average # of employees during month # of workdays

Cost per hire

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100

Sources: Robert Grossman, Measuring Up, HR Magazine, January 2000, pp. 29

35; Peter V. Le Blanc, Paul Mulvey, and Jude T. Rich, Improving the Return on
Human Capital: New Metrics, Compensation and Benefits Review,
January/February 2000, pp. 1320; Thomas E. Murphy and Sourushe Zandvakili,
Data and Metrics-Driven Approach to Human Resource Practices: Using
Customers, Employees, and Financial Metrics, Human Resource Management
39, no. 1 (Spring 2000), pp. 93105; [HR Planning, Commerce Clearing House
Incorporated, July 17, 1996;] SHRM/BNA 2000 Cost Per Hire and Staffing Metrics
Survey; www.shrm.org. See also, SHRM Research 2006 Strategic HR
319
Management Survey Report, Society for Human Resource Management..

strategic plan
strategic management
vision
mission
SWOT analysis
strategy
strategic control
competitive advantage
strategic human resource management
HR Scorecard
metrics
value chain analysis
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Resource Management, 12/e

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