Human Resource

Management
ELEVENTH EDITION

GARY DESSLER

Chapter 3

Strategic Human Resource Management

and the HR Scorecard

The Strategic Management Process

Strategic Management
The process of identifying and executing the

organizations mission by matching its capabilities

with the demands of its environment.

Strategy
A chosen course of action.

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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The Strategic Management Process

Analysis of
internal
strengths and
weaknesses

Formulate new
business &
Mission
statement

Define the
Current
business

Analysis of
external
opportunities
and threats

Translate
Mission into
Strategic goals

Formulate
strategies

Implement
strategies

Evaluate
performance

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Strategic Management Process

Step 1: Define the current business
mission - basic purpose and values of the organization
defines

the scope of operations

states the organizations reason to exist
written in terms of the general clients served by the organization

strategic vision a general statement of its intended

direction that evokes emotional feelings in organization

members
moves

beyond the mission statement

strategic goals - evolve from the mission and vision of

the organization
need

to be communicated to everyone who has contact with the

organization
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Strategic Management Process (cont.)

Step 2: perform external & internal Audit (SWOT)
successful strategic management depends on an

accurate and thorough evaluation of the environment

stakeholders - groups and individuals who affect and
are affected by the achievement of the organizations
mission, goals, and strategies
forecasting future trends is critical
must develop a clear sense of market opportunities
identify

potential threats as well

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Elements Of Environmental Analysis

Industry and
market analysis
Technological
analysis

Macroeconomic
analysis

Competitor
analysis

Environmental
Analysis

Human resources
analysis

Political and
regulatory analysis

Social
analysis

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Internal Resource Analysis

Financial
analysis
Other internal
resource analysis

Operations
analysis

Internal
Resource
Analysis

Human resource
assessment

Marketing audit
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Strategic Management Process (cont.)

SWOT analysis - comparison of strengths, weaknesses,

opportunities, and threats

helps

summarize the major facts and forecasts derived from

external and internal analyses
used as the basis for identifying primary and secondary strategic
issues confronting the organization

Step 3: formulate new business & Mission

statement
Step 4: Translate the Mission into strategic goals.
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Strategic Management Process (cont.)

Step 5: strategy formulation (cont.)
Bridge between present & future

Step 6: strategy implementation

Translating strategies into action & results.
Applying all the management functions

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Strategic Management Process (cont.)

Step 7: Evaluate performance
designed to support managers in evaluating the

organizations progress with its strategy

when discrepancies are identified, corrective action is
taken
encourage efficient operations that are consistent with
the plan
Strategic control keeps the strategy up to date.

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Types of Strategies
Corporate-Level
Strategies

Diversification
Strategy

Integration
Strategy

Consolidation
Strategy

Geographic
Expansion
Strategy

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Types of Strategies (contd)

Business-Level/
Competitive
Strategies

Cost Leadership

Differentiation

Focus/Niche

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Achieving Strategic Fit

The Fit Point of View (Porter)
All of the firms activities must be tailored to or fit

the chosen strategy such that the firms functional

strategies support its corporate and competitive
strategies.

Leveraging (Hamel and Prahalad)

Stretch in leveraging resourcessupplementing

what you have and doing more with what you have
can be more important than just fitting the strategic
plan to current resources.

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Strategic Human Resource Challenges

Basic Strategic
Challenges

Corporate
productivity and
performance
improvement
efforts

Expanded role of
employees in the
organizations
performance
efforts

Increased HR
team involvement
in design of
strategic plans

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HR and Competitive Advantage

Competitive advantage
Any factors that allow an organization to differentiate

its product or service from those of its competitors to

increase market share.
Superior human resources are an important source
of competitive advantage

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Strategic Human Resource Management

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.
Formulating and executing HR systemsHR policies

and activitiesthat produce the employee

competencies and behaviors the company needs to
achieve its strategic aims.

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Linking Corporate and HR Strategies

Source: 2003, Gary Dessler, Ph.D.

Figure 36
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HRS Strategic Roles

HR professionals should be part of the firms
strategic planning executive team.
Identify the human issues that are vital to business

strategy.
Help establish and execute strategy.
Provide alternative insights.
Are centrally involved in creating responsive and

market-driven organizations.
Conceptualize and execute organizational change.

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Human Resource Managements

Strategic Roles

Strategic
Planning
Roles

Strategy
Execution
Role

Strategy
Formulation
Role

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HRs Strategy Execution Role

The HR departments strategies, policies, and
activities must make sense in terms of the
companys corporate and competitive
strategies, and they must support those
strategies.

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HRs Strategy Formulation Role

HR helps top management formulate strategy in
a variety of ways by.
Supplying competitive intelligence that may be useful

in the strategic planning process.

Supplying information regarding the companys
internal human strengths and weaknesses.
Build a persuasive case that shows howin specific
and measurable termsthe firms HR activities can
and do contribute to creating value for the company.

321

Creating a Strategy-oriented HR System

Components of the HR process
HR professionals who have strategic and other skills
HR policies and activities that comprise the HR

system itself
Employee behaviors and competencies that the
companys strategy requires.

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The Basic Architecture of HR

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

Figure 38
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The High-Performance Work System

High-performance work system (HPWS)
practices.
High-involvement employee practices (such as job

enrichment and team-based organizations),

High commitment work practices (such as improved
employee development, communications, and
disciplinary practices)
Flexible work assignments.
Other practices include those that foster skilled
workforces and expanded opportunities to use those
skills.

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Translating
Strategy
into HR
Policy and
Basic Model of
Practice
How to Align
How to Align
HR Strategy
and Actions
with Business
Strategy

Source: Adapted from Garrett Walker and J. Randal MacDonald,

Designing and Implementing an HR Scorecard, Human
Resources Management 40, no. 4 (2001), p. 370.

Figure 39
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