Ch.

2 Strategy and Human Resources

Strategic Planning and HR

- Michael Porter: Unique competitive advantage or position
- Kryscynski:
o Where do we compete?
o What unique value do we bring in those markets?
o What resources and capabilities do we utilize?
o How do we sustain our ability to provide that unique value?
- Strategic planning: Procedures for making decisions about the orgs long-term goals and
strategies
o Needs to be linked with HR planningintegrated into the strategic planning process.
- HR Planning (HRP): The process of anticipating and providing for the movement of people into,
within, and out of an organization.
o Strategic HR Management: Combines both of those: The process of forecasting future
HR needs to ensure that the org will have the reqd number and type of employees to
meet its strategic objectives.

Forecasting
- 3 key elements
o Forecasting the demand for labour
o Forecasting the supply of labour
o Balancing supply and demand

Forecasting the Firms Demand for Employees

- Quantitative Approach: Trend Analysis
o Forecasting a firms employment requirements based on an organizational index:
Select a factor that is a good predictor of HR needs (ie. Past sales, number of
hours of operation)
Plot a historical trend of the factor in relation to # of employees
Calculate productivity ratio (ie. Sales per employee)
Calculate HR demand by multiplying the factor by the productivity ratio (ie.
Sales/employee * estimated sales for next year)
- Qualitative Approach: Management Forecasts
o Experienced personnel (managers, experts, etc) making informed forecasts/estimates
about the firms future employment needs.
o E.g. Nominal group technique
o Delphi Technique: Attempts to decrease the subjectivity of forecasts by getting the
judgements of a preselected group of individuals.
Forecasting the Supply of Employees (Internal)
- Whether sufficient numbers and types of employees are available to staff the openings it
anticipates having.
- Staffing tables: Graphic representations of all organizational jobs, along with the # of employees
currently occupying those jobs.
- Markov Analysis: Shows the percentage of employees who remain in each of a firms jobs form
one year to the next, and those who are promoted, transferred, or exit. (tracks the movement of
employees through various jobs)
- Skills Inventories and Management Inventories
o Skills inventories are files of employees education, experience, interests, and skills,
compensation history, etc that let managers quickly match job openings with employee
backgrounds.
o Management inventories are the same, but with data on managers.
o Used to develop Replacement Chartsa visual representation of potential candidates to
fill job openings
o Used to perform Succession Planning
Process of Identifying, developing, and tracking key individuals for executive
positions
- Forecasting the Supply (External)
o To project the supply of outside candidates, employers assess:
General economic conditions
National labour market conditions
Local labour market conditions
Occupational market conditions

Determining Human Capital Readiness

- The process of evaluating the availability of critical talent in a company and comparing it to the
firms supply.
- Gap Analysis = Demand for employees (quant and qual) - Supply of employees (quant and qual)
o This info feeds into the strategic plan
Addressing the Gap
- A labour surplus exists when the internal supply of employees exceeds the orgs
demandEmployers may respond with
o Hiring freeze - firm stops recruiting
o Attrition natural turnover within an org (quits, retirements, death, etc)
o Early retirement buyout programs
o Job sharing or part-time work
o Reduced work weeks, or furloughing
o Transfer employees to alternative jobs within the org
o Temporary layoffs
o Supplemental unemployment benefits
o Termination with a severance package (Firing is where employee is released for poor
behaviour, etc. But termination is to downsize)
- A labour shortage exists when the internal supply of human resources cannot meet the orgs
needsEmployers may respond with
o Overtime
o Hiring temporary employees
o External recruitment (ie. Always looking to hire new people)
o Transfer and train employees (internally)
o Promotion