© 2001 by Prentice Hall 1-1

Key HR Challenges for Today’s Managers

Environment• Rapid Change• Workforce Diversity• Globalization• Rise of Internet

• Legislation• Evolving Work and Family Roles• Skill Shortages and the Rise

of the Service Sector

Organization• Competitive Position: Cost,

Quality, Distinctive Capabilities• Decentralization• Downsizing• Organizational Restructuring

• Self-Managed Work Teams• Small Businesses• Organizational Culture• Technology• Outsourcing

Individual• Matching People and Organization• Ethical Dilemmas and Social Responsibility• Productivity• Empowerment• Brain Drain• Job Insecurity

© 2001 by Prentice Hall 1-2

Effective HR Strategy Formulation and Implementation

OrganizationalStrategies

OrganizationalStrategies

OrganizationalCharacteristics

OrganizationalCharacteristics

OrganizationalCapabilities

OrganizationalCapabilities

EnvironmentEnvironment

HR Strategies

Consistency

Consistency

Co

nsi

sten

cy

Co

nsisten

cy

ImprovedFirm

Performance

ImprovedFirm

Performance

FitFit

FitFit

FitFit

FitFit

© 2001 by Prentice Hall 1-3

Selected HR Strategies That Fit Porter’s Three Major Types of Business Strategies

BusinessStrategy

Common OrganizationalCharacteristics HR Strategies

Overallcostleadership

• Sustained capital investment and access to capital• Intense supervision of

labor• Tight cost control

requiring frequent, detailed control reports• Low-cost distribution

system• Structured organization

and responsibilities• Products designed for

ease in manufacture

• Efficient production• Explicit job descriptions• Detailed work planning• Emphasis on technical

qualifications and skills• Emphasis on job-specific

training• Emphasis on job-based

pay• Use of performance

appraisal as a control device

© 2001 by Prentice Hall 1-4

Selected HR Strategies That Fit Porter’s Three Major Types of Business Strategies (cont.)

BusinessStrategy

Common OrganizationalCharacteristics HR Strategies

Differ-entiation

•Strong marketing abilities•Product engineering•Strong capability in basic research•Corporate reputation forquality or technologicalleadership•Amenities to attract highly skilled labor, scientists, or creative people.

• Emphasis on innovationand flexibility• Broad job classes• Loose work planning• External recruitment• Team-based training• Emphasis on individual-

based pay• Use of performance

appraisal as development tool

© 2001 by Prentice Hall 1-5

Selected HR Strategies That Fit Porter’s Three Major Types of Business Strategies (cont.)

BusinessStrategy

Common OrganizationalCharacteristics HR Strategies

Focus •Combination of cost-leadership and differentiation strategy directed at a particular strategic target.

• Combination of HR strategies above.