CHAPTER 5 HUMAN RESOURCE PLANNING PowerPoint Presentation by Charlie Cook Copyright © 2002 South-Western. All rights reserved

CHAPTER 5

HUMAN RESOURCE PLANNING

PowerPoint Presentation by Charlie CookCopyright © 2002 South-Western. All rights reserved

5–2

5–3

Human Resource Planning (HRP)Human Resource Planning (HRP)Human Resource Planning (HRP)Human Resource Planning (HRP)

• Is the first component of HRM strategyIs the first component of HRM strategy• All other functional HR activities are derived All other functional HR activities are derived

from and flow out of the HRP process.from and flow out of the HRP process.• Has its basis in considerations of future HR Has its basis in considerations of future HR

requirements in light of present HR capabilities requirements in light of present HR capabilities and capacities.and capacities.

• Is proactive in anticipating and preparing flexible Is proactive in anticipating and preparing flexible responses to changing HR requirements.responses to changing HR requirements.

• Has both an internal and external focus.Has both an internal and external focus.

• Is the first component of HRM strategyIs the first component of HRM strategy• All other functional HR activities are derived All other functional HR activities are derived

from and flow out of the HRP process.from and flow out of the HRP process.• Has its basis in considerations of future HR Has its basis in considerations of future HR

requirements in light of present HR capabilities requirements in light of present HR capabilities and capacities.and capacities.

• Is proactive in anticipating and preparing flexible Is proactive in anticipating and preparing flexible responses to changing HR requirements.responses to changing HR requirements.

• Has both an internal and external focus.Has both an internal and external focus.

MacTemps-Building Commitment in MacTemps-Building Commitment in the Interim Workforcethe Interim Workforce

MacTemps-Building Commitment in MacTemps-Building Commitment in the Interim Workforcethe Interim Workforce

Commitment Matters?Commitment Matters?

To Temp Agency too?To Temp Agency too?

Commitment Matters?Commitment Matters?

To Temp Agency too?To Temp Agency too?

5–5

Principles behind new vs. old career Principles behind new vs. old career ParadigmParadigm

Principles behind new vs. old career Principles behind new vs. old career ParadigmParadigm

New Career Paradigm Old Career Paradigm Discrete Exchange Mutual Loyalty Occupational Excellence One-employer Focus Organizational Empowerment Top-down Firm Regional Advantage Fortress Firm Project Allegiance Corporate Allegiance

5–6

What is the “Perfect Temp” for What is the “Perfect Temp” for MacTemps?MacTemps?

What is the “Perfect Temp” for What is the “Perfect Temp” for MacTemps?MacTemps?

• Skills in demandSkills in demand• LoyalLoyal• Low in turnoverLow in turnover• Low demand in benefitsLow demand in benefits

• Skills in demandSkills in demand• LoyalLoyal• Low in turnoverLow in turnover• Low demand in benefitsLow demand in benefits

5–7

Why Loyalty Matters to MacTemps?Why Loyalty Matters to MacTemps?Why Loyalty Matters to MacTemps?Why Loyalty Matters to MacTemps?

• Reduce the cost of recruitment and selectionReduce the cost of recruitment and selection– Gross MarginGross Margin

• Retention of skills that are in high demandRetention of skills that are in high demand• Enables better matchesEnables better matches• Clients value temp loyalty-when it comes around, Clients value temp loyalty-when it comes around,

it turns around.it turns around.

• Reduce the cost of recruitment and selectionReduce the cost of recruitment and selection– Gross MarginGross Margin

• Retention of skills that are in high demandRetention of skills that are in high demand• Enables better matchesEnables better matches• Clients value temp loyalty-when it comes around, Clients value temp loyalty-when it comes around,

it turns around.it turns around.

5–8

Evaluating the Temp SegmentsEvaluating the Temp SegmentsEvaluating the Temp SegmentsEvaluating the Temp Segments

• StudentsStudents• Rent PayersRent Payers• Job SeekersJob Seekers• FreelancersFreelancers• Career TempsCareer Temps

• Skills, Loyalty, Turnover? Strategies for each?Skills, Loyalty, Turnover? Strategies for each?

• StudentsStudents• Rent PayersRent Payers• Job SeekersJob Seekers• FreelancersFreelancers• Career TempsCareer Temps

• Skills, Loyalty, Turnover? Strategies for each?Skills, Loyalty, Turnover? Strategies for each?

5–9

Building LoyaltyBuilding LoyaltyBuilding LoyaltyBuilding Loyalty

• Deepening Informal TiesDeepening Informal Ties– Increasing social interaction is inexpensive, but building real Increasing social interaction is inexpensive, but building real

relationships takes time and is hard to measurerelationships takes time and is hard to measure– Challenges: Difficult to measure success; need to develop Challenges: Difficult to measure success; need to develop

strategy to reduce turnoverstrategy to reduce turnover– Audience?Audience?

• Deepening Informal TiesDeepening Informal Ties– Increasing social interaction is inexpensive, but building real Increasing social interaction is inexpensive, but building real

relationships takes time and is hard to measurerelationships takes time and is hard to measure– Challenges: Difficult to measure success; need to develop Challenges: Difficult to measure success; need to develop

strategy to reduce turnoverstrategy to reduce turnover– Audience?Audience?

5–10

Building Loyalty (cont’d)Building Loyalty (cont’d)Building Loyalty (cont’d)Building Loyalty (cont’d)

• Enhancing the Benefits (frequent flyer program)Enhancing the Benefits (frequent flyer program)– Already has leading benefits program; may simply incur Already has leading benefits program; may simply incur

more costs without increasing loyaltymore costs without increasing loyalty– Challenges: Determining what new benefits would be Challenges: Determining what new benefits would be

attractive to tempsattractive to temps– Audience?Audience?

• Enhancing the Benefits (frequent flyer program)Enhancing the Benefits (frequent flyer program)– Already has leading benefits program; may simply incur Already has leading benefits program; may simply incur

more costs without increasing loyaltymore costs without increasing loyalty– Challenges: Determining what new benefits would be Challenges: Determining what new benefits would be

attractive to tempsattractive to temps– Audience?Audience?

5–11


• Training and DevelopmentTraining and Development– Temps want it; may increase value of skills, which benefits Temps want it; may increase value of skills, which benefits

clients, MacTemps, and tempsclients, MacTemps, and temps– Challenges: Need to develop curriculum, and a means of Challenges: Need to develop curriculum, and a means of

establishing eligibility for the training; difficult to determine establishing eligibility for the training; difficult to determine which skills should be emphasized; must minimize free-rider which skills should be emphasized; must minimize free-rider problemsproblems

– Audience?Audience?

• Training and DevelopmentTraining and Development– Temps want it; may increase value of skills, which benefits Temps want it; may increase value of skills, which benefits

clients, MacTemps, and tempsclients, MacTemps, and temps– Challenges: Need to develop curriculum, and a means of Challenges: Need to develop curriculum, and a means of

establishing eligibility for the training; difficult to determine establishing eligibility for the training; difficult to determine which skills should be emphasized; must minimize free-rider which skills should be emphasized; must minimize free-rider problemsproblems

– Audience?Audience?

5–12


• Exclusive Short-term RetainersExclusive Short-term Retainers– Ensures that certain high skill workers would always be Ensures that certain high skill workers would always be

available; eliminates multi-agency relationships; potential available; eliminates multi-agency relationships; potential incurs large cost if down-time occursincurs large cost if down-time occurs

– Challenges: Requires a different infrastructure at Challenges: Requires a different infrastructure at MacTemps – managing people directly and ensuring MacTemps – managing people directly and ensuring utilizationutilization

– ““If they are under-utilized for just a fraction of their working If they are under-utilized for just a fraction of their working time, we incur huge costs”time, we incur huge costs”

– Audience? Audience?

• Exclusive Short-term RetainersExclusive Short-term Retainers– Ensures that certain high skill workers would always be Ensures that certain high skill workers would always be

available; eliminates multi-agency relationships; potential available; eliminates multi-agency relationships; potential incurs large cost if down-time occursincurs large cost if down-time occurs

– Challenges: Requires a different infrastructure at Challenges: Requires a different infrastructure at MacTemps – managing people directly and ensuring MacTemps – managing people directly and ensuring utilizationutilization

– ““If they are under-utilized for just a fraction of their working If they are under-utilized for just a fraction of their working time, we incur huge costs”time, we incur huge costs”

– Audience? Audience?

5–13

Does Commitment Matter?Does Commitment Matter?Does Commitment Matter?Does Commitment Matter?

• Does Commitment matter…………..to you?Does Commitment matter…………..to you?

• ““I think there is, at the heart of this, a basic I think there is, at the heart of this, a basic question about obligation: what are the question about obligation: what are the individual’s obligations to a company? What are individual’s obligations to a company? What are the company’s obligations to individuals? What the company’s obligations to individuals? What can we give our employees to build a sustained, can we give our employees to build a sustained, mutually beneficial relationship besides the mutually beneficial relationship besides the promise of full-time permanent work?”promise of full-time permanent work?” (Chung, (Chung, p.13)p.13)

• Does Commitment matter…………..to you?Does Commitment matter…………..to you?

• ““I think there is, at the heart of this, a basic I think there is, at the heart of this, a basic question about obligation: what are the question about obligation: what are the individual’s obligations to a company? What are individual’s obligations to a company? What are the company’s obligations to individuals? What the company’s obligations to individuals? What can we give our employees to build a sustained, can we give our employees to build a sustained, mutually beneficial relationship besides the mutually beneficial relationship besides the promise of full-time permanent work?”promise of full-time permanent work?” (Chung, (Chung, p.13)p.13)

5–14

Does Commitment Matter? To You?Does Commitment Matter? To You?Does Commitment Matter? To You?Does Commitment Matter? To You?

• Employability SecurityEmployability Security– The knowledge that today’s work will enhance the person’s The knowledge that today’s work will enhance the person’s

value in terms of future opportunitiesvalue in terms of future opportunities

• Transferable knowledge is more important to a Transferable knowledge is more important to a career than firm-specific knowledge.career than firm-specific knowledge.

• Employability SecurityEmployability Security– The knowledge that today’s work will enhance the person’s The knowledge that today’s work will enhance the person’s

value in terms of future opportunitiesvalue in terms of future opportunities

• Transferable knowledge is more important to a Transferable knowledge is more important to a career than firm-specific knowledge.career than firm-specific knowledge.

5–15

Five Major Objectives of HRPFive Major Objectives of HRPFive Major Objectives of HRPFive Major Objectives of HRP

5–16

HR Planning ProcessHR Planning Process HR Planning ProcessHR Planning Process

5–17

Types of PlanningTypes of PlanningTypes of PlanningTypes of Planning

• Aggregate PlanningAggregate Planning– Anticipating the needs for groups of employees in specific, Anticipating the needs for groups of employees in specific,

usually lower level jobs and the general skills employees will usually lower level jobs and the general skills employees will need to ensure sustained high performance.need to ensure sustained high performance.

• Succession PlanningSuccession Planning– Focuses on ensuring that key individual management Focuses on ensuring that key individual management

positions in the organization remain filled with individuals positions in the organization remain filled with individuals who provide the best fit for these critical positions.who provide the best fit for these critical positions.

• Aggregate PlanningAggregate Planning– Anticipating the needs for groups of employees in specific, Anticipating the needs for groups of employees in specific,

usually lower level jobs and the general skills employees will usually lower level jobs and the general skills employees will need to ensure sustained high performance.need to ensure sustained high performance.

• Succession PlanningSuccession Planning– Focuses on ensuring that key individual management Focuses on ensuring that key individual management

positions in the organization remain filled with individuals positions in the organization remain filled with individuals who provide the best fit for these critical positions.who provide the best fit for these critical positions.

5–18

Aggregate Planning: Forecasting Aggregate Planning: Forecasting DemandDemand

Aggregate Planning: Forecasting Aggregate Planning: Forecasting DemandDemand

• Forecasting the demand for employeesForecasting the demand for employees– Considers the firm’s strategic plan’s effects on increases or Considers the firm’s strategic plan’s effects on increases or

decreases in the demand for the firm’s products or services.decreases in the demand for the firm’s products or services.– Assumptions on which the forecast is predicated should be Assumptions on which the forecast is predicated should be

written down and revisited when conditions change.written down and revisited when conditions change.– Unit forecastingUnit forecasting (bottom-up planning) involves “point of (bottom-up planning) involves “point of

contact” estimation of the future demand for employees.contact” estimation of the future demand for employees.– Top-down forecastingTop-down forecasting involves senior managers allocating a involves senior managers allocating a

fixed payroll budget across the organizational hierarchy.fixed payroll budget across the organizational hierarchy.– The demand for employee skills requirements must also be The demand for employee skills requirements must also be

considered.considered.

• Forecasting the demand for employeesForecasting the demand for employees– Considers the firm’s strategic plan’s effects on increases or Considers the firm’s strategic plan’s effects on increases or

decreases in the demand for the firm’s products or services.decreases in the demand for the firm’s products or services.– Assumptions on which the forecast is predicated should be Assumptions on which the forecast is predicated should be

written down and revisited when conditions change.written down and revisited when conditions change.– Unit forecastingUnit forecasting (bottom-up planning) involves “point of (bottom-up planning) involves “point of

contact” estimation of the future demand for employees.contact” estimation of the future demand for employees.– Top-down forecastingTop-down forecasting involves senior managers allocating a involves senior managers allocating a

fixed payroll budget across the organizational hierarchy.fixed payroll budget across the organizational hierarchy.– The demand for employee skills requirements must also be The demand for employee skills requirements must also be

considered.considered.

5–19

Aggregate Planning: Forecasting Aggregate Planning: Forecasting SupplySupply

Aggregate Planning: Forecasting Aggregate Planning: Forecasting SupplySupply

• The level and quantities of abilities, skills and The level and quantities of abilities, skills and experiences can be determined using a experiences can be determined using a Skills Skills InventoryInventory..

• A human resource information system (HRIS), A human resource information system (HRIS), especially computerized databases, updated at especially computerized databases, updated at least annually, is a dynamic source of HR least annually, is a dynamic source of HR information.information.

• Markov analysis can be used to create a transition Markov analysis can be used to create a transition probability matrix that predicts the mobility of probability matrix that predicts the mobility of employees within an organization.employees within an organization.

• The level and quantities of abilities, skills and The level and quantities of abilities, skills and experiences can be determined using a experiences can be determined using a Skills Skills InventoryInventory..

• A human resource information system (HRIS), A human resource information system (HRIS), especially computerized databases, updated at especially computerized databases, updated at least annually, is a dynamic source of HR least annually, is a dynamic source of HR information.information.

• Markov analysis can be used to create a transition Markov analysis can be used to create a transition probability matrix that predicts the mobility of probability matrix that predicts the mobility of employees within an organization.employees within an organization.

5–20

Forecasting Forecasting MethodsMethods

Forecasting Forecasting MethodsMethods

5–21

5–22

Estimating Internal Labor Supply for a Estimating Internal Labor Supply for a Given UnitGiven Unit

Estimating Internal Labor Supply for a Estimating Internal Labor Supply for a Given UnitGiven Unit

5–23

Balancing HR Supply and DemandBalancing HR Supply and DemandBalancing HR Supply and DemandBalancing HR Supply and Demand

5–24

Succession PlanningSuccession PlanningSuccession PlanningSuccession Planning

• Involves identifying key management positions Involves identifying key management positions the organization cannot afford to have vacant.the organization cannot afford to have vacant.

• Purposes of Succession PlanningPurposes of Succession Planning– Facilitates transition when an employee leaves.Facilitates transition when an employee leaves.– Identifies the development needs of high-potential Identifies the development needs of high-potential

employees and assists in their career planning.employees and assists in their career planning.

• In actual practice, many organizations fail to In actual practice, many organizations fail to implement succession planning effectively.implement succession planning effectively.

– Qualified successors may seek external career Qualified successors may seek external career advancement opportunities if succession is not forthcoming.advancement opportunities if succession is not forthcoming.

• Involves identifying key management positions Involves identifying key management positions the organization cannot afford to have vacant.the organization cannot afford to have vacant.

• Purposes of Succession PlanningPurposes of Succession Planning– Facilitates transition when an employee leaves.Facilitates transition when an employee leaves.– Identifies the development needs of high-potential Identifies the development needs of high-potential

employees and assists in their career planning.employees and assists in their career planning.

• In actual practice, many organizations fail to In actual practice, many organizations fail to implement succession planning effectively.implement succession planning effectively.

– Qualified successors may seek external career Qualified successors may seek external career advancement opportunities if succession is not forthcoming.advancement opportunities if succession is not forthcoming.

5–25


• ““Replacement chart” identifiesReplacement chart” identifies– Key positionsKey positions– Possible successors for each of these positionsPossible successors for each of these positions– Whether each potential successor currently has the Whether each potential successor currently has the

background to assume the job responsibilitiesbackground to assume the job responsibilities– The expected amount of time it will take for the The expected amount of time it will take for the

potential successor to be readypotential successor to be ready

• ““Replacement chart” identifiesReplacement chart” identifies– Key positionsKey positions– Possible successors for each of these positionsPossible successors for each of these positions– Whether each potential successor currently has the Whether each potential successor currently has the

background to assume the job responsibilitiesbackground to assume the job responsibilities– The expected amount of time it will take for the The expected amount of time it will take for the

potential successor to be readypotential successor to be ready

5–26

Succession Planning (cont’d)Succession Planning (cont’d)Succession Planning (cont’d)Succession Planning (cont’d)

Objective measuring— Specific skills, competencies, and experiences are missing

5–27


• However, traditional succession planning However, traditional succession planning (replacement charting) has become too time-(replacement charting) has become too time-consuming and inflexible to meet the leadership consuming and inflexible to meet the leadership continuity needs when facing:continuity needs when facing:

– Continual corporate restructurings, reengineeringContinual corporate restructurings, reengineering– The increasing use of team-based work systemsThe increasing use of team-based work systems– M&AsM&As– More partnerships, JVs, and strategic alliancesMore partnerships, JVs, and strategic alliances– Continual massive downsizing in middle management Continual massive downsizing in middle management

ranks.ranks.

• However, traditional succession planning However, traditional succession planning (replacement charting) has become too time-(replacement charting) has become too time-consuming and inflexible to meet the leadership consuming and inflexible to meet the leadership continuity needs when facing:continuity needs when facing:

– Continual corporate restructurings, reengineeringContinual corporate restructurings, reengineering– The increasing use of team-based work systemsThe increasing use of team-based work systems– M&AsM&As– More partnerships, JVs, and strategic alliancesMore partnerships, JVs, and strategic alliances– Continual massive downsizing in middle management Continual massive downsizing in middle management

ranks.ranks.

5–28

Reading 5.2: Succession Planning Design Reading 5.2: Succession Planning Design ShiftsShifts

Reading 5.2: Succession Planning Design Reading 5.2: Succession Planning Design ShiftsShifts

• Key design shifts for succession systems:Key design shifts for succession systems:– Identify core strategic capabilities/competencies related to Identify core strategic capabilities/competencies related to

key positions and develop a leadership model.key positions and develop a leadership model.– Place initiative and responsibility for individual development Place initiative and responsibility for individual development

in the hands of candidate employees.in the hands of candidate employees.– Have a development process that aligns mastery of Have a development process that aligns mastery of

competencies with the firm’s strategic goals and mission.competencies with the firm’s strategic goals and mission.– Create a succession process that is more open and less Create a succession process that is more open and less

exclusive and secretive.exclusive and secretive.– Design the succession process for ongoing and frequent Design the succession process for ongoing and frequent

(quarterly rather than annual) review.(quarterly rather than annual) review.

• Key design shifts for succession systems:Key design shifts for succession systems:– Identify core strategic capabilities/competencies related to Identify core strategic capabilities/competencies related to

key positions and develop a leadership model.key positions and develop a leadership model.– Place initiative and responsibility for individual development Place initiative and responsibility for individual development

in the hands of candidate employees.in the hands of candidate employees.– Have a development process that aligns mastery of Have a development process that aligns mastery of

competencies with the firm’s strategic goals and mission.competencies with the firm’s strategic goals and mission.– Create a succession process that is more open and less Create a succession process that is more open and less

exclusive and secretive.exclusive and secretive.– Design the succession process for ongoing and frequent Design the succession process for ongoing and frequent

(quarterly rather than annual) review.(quarterly rather than annual) review.

5–29

Reading 5.2: Other Succession Design Reading 5.2: Other Succession Design IssuesIssues

Reading 5.2: Other Succession Design Reading 5.2: Other Succession Design IssuesIssues

• A succession system must:A succession system must:– Make sense for and be usable by different business units, Make sense for and be usable by different business units,

each having unique needs.each having unique needs.– Have a process to focus and guide the development of Have a process to focus and guide the development of

executives to meet strategic purposes.executives to meet strategic purposes.– Be aligned with other HR processes also in transition.Be aligned with other HR processes also in transition.– Assure the the pool of potential leaders is being prepared Assure the the pool of potential leaders is being prepared

for executive positions.for executive positions.– Be owned by the senior management.Be owned by the senior management.– Deal with diversity issues and changing demographics.Deal with diversity issues and changing demographics.– Measurably add value and contribute to business success.Measurably add value and contribute to business success.

• A succession system must:A succession system must:– Make sense for and be usable by different business units, Make sense for and be usable by different business units,

each having unique needs.each having unique needs.– Have a process to focus and guide the development of Have a process to focus and guide the development of

executives to meet strategic purposes.executives to meet strategic purposes.– Be aligned with other HR processes also in transition.Be aligned with other HR processes also in transition.– Assure the the pool of potential leaders is being prepared Assure the the pool of potential leaders is being prepared

for executive positions.for executive positions.– Be owned by the senior management.Be owned by the senior management.– Deal with diversity issues and changing demographics.Deal with diversity issues and changing demographics.– Measurably add value and contribute to business success.Measurably add value and contribute to business success.

5–30

Reading 5.3: Strategic Levels of HRReading 5.3: Strategic Levels of HRReading 5.3: Strategic Levels of HRReading 5.3: Strategic Levels of HR

• Long-termLong-term– Is the active conceptualized Is the active conceptualized

as long-term as opposed to as long-term as opposed to short-term value?short-term value?

• ComprehensiveComprehensive– Does it cover the entire Does it cover the entire

organization or isolated organization or isolated components?components?

• PlannedPlanned– Is it thought out ahead of Is it thought out ahead of

time and is it well time and is it well documented or does it occur documented or does it occur on an ad hoc basis?on an ad hoc basis?

• Long-termLong-term– Is the active conceptualized Is the active conceptualized

as long-term as opposed to as long-term as opposed to short-term value?short-term value?

• ComprehensiveComprehensive– Does it cover the entire Does it cover the entire

organization or isolated organization or isolated components?components?

• PlannedPlanned– Is it thought out ahead of Is it thought out ahead of

time and is it well time and is it well documented or does it occur documented or does it occur on an ad hoc basis?on an ad hoc basis?

• IntegratedIntegrated– Does it provide a basis for Does it provide a basis for

integrating multifaceted integrating multifaceted activities that might activities that might otherwise be fragmented and otherwise be fragmented and disconnected?disconnected?

• High value-addedHigh value-added– Does it focus on issues that Does it focus on issues that

are critical for business are critical for business success or does it focus on success or does it focus on thing that must be done but thing that must be done but are not critical to financial are not critical to financial and market success?and market success?

• IntegratedIntegrated– Does it provide a basis for Does it provide a basis for

integrating multifaceted integrating multifaceted activities that might activities that might otherwise be fragmented and otherwise be fragmented and disconnected?disconnected?

• High value-addedHigh value-added– Does it focus on issues that Does it focus on issues that

are critical for business are critical for business success or does it focus on success or does it focus on thing that must be done but thing that must be done but are not critical to financial are not critical to financial and market success?and market success?

5–31

Reading 5.3: Reactive and Proactive HRReading 5.3: Reactive and Proactive HRReading 5.3: Reactive and Proactive HRReading 5.3: Reactive and Proactive HR

• Operationally Reactive HROperationally Reactive HR– Focuses on implementing the day-to-day demands for HR.Focuses on implementing the day-to-day demands for HR.

• Operationally Proactive HROperationally Proactive HR– Improves upon the design and deliver of the existing HR Improves upon the design and deliver of the existing HR

basics before problems set in.basics before problems set in.

• Strategically Reactive HRStrategically Reactive HR– Focuses on supporting the successful implementation of the Focuses on supporting the successful implementation of the

business strategy.business strategy.

• Strategically Proactive HRStrategically Proactive HR– Focuses on creating strategic alternatives.Focuses on creating strategic alternatives.

• Operationally Reactive HROperationally Reactive HR– Focuses on implementing the day-to-day demands for HR.Focuses on implementing the day-to-day demands for HR.

• Operationally Proactive HROperationally Proactive HR– Improves upon the design and deliver of the existing HR Improves upon the design and deliver of the existing HR

basics before problems set in.basics before problems set in.

• Strategically Reactive HRStrategically Reactive HR– Focuses on supporting the successful implementation of the Focuses on supporting the successful implementation of the

business strategy.business strategy.

• Strategically Proactive HRStrategically Proactive HR– Focuses on creating strategic alternatives.Focuses on creating strategic alternatives.

5–32

Reading 5.3: Strategically Reactive HRReading 5.3: Strategically Reactive HRReading 5.3: Strategically Reactive HRReading 5.3: Strategically Reactive HR

• HR becomes strategically reactive in business HR becomes strategically reactive in business strategy implementation through:strategy implementation through:

– Supporting the execution of tactics that drive the long-term Supporting the execution of tactics that drive the long-term strategies.strategies.

– Developing the cultural and technical capabilities necessary Developing the cultural and technical capabilities necessary for long-term success.for long-term success.

– By providing change management support for tactical By providing change management support for tactical activities.activities.

• HR becomes strategically reactive in business HR becomes strategically reactive in business strategy implementation through:strategy implementation through:

– Supporting the execution of tactics that drive the long-term Supporting the execution of tactics that drive the long-term strategies.strategies.

– Developing the cultural and technical capabilities necessary Developing the cultural and technical capabilities necessary for long-term success.for long-term success.

– By providing change management support for tactical By providing change management support for tactical activities.activities.

5–33

Reading 5.3: Creating a Strategy-Focused Reading 5.3: Creating a Strategy-Focused CultureCulture


1.1. Define the business unit for which the HR Define the business unit for which the HR practices are being designed.practices are being designed.

2.2. Specify the key trends in the external business Specify the key trends in the external business environment.environment.

3.3. Identify and prioritize the firm’s sources of Identify and prioritize the firm’s sources of competitive advantagecompetitive advantage

4.4. Define the required culture and technical Define the required culture and technical knowledge and skill areas required to support the knowledge and skill areas required to support the sources of competitive advantage.sources of competitive advantage.

1.1. Define the business unit for which the HR Define the business unit for which the HR practices are being designed.practices are being designed.

2.2. Specify the key trends in the external business Specify the key trends in the external business environment.environment.

3.3. Identify and prioritize the firm’s sources of Identify and prioritize the firm’s sources of competitive advantagecompetitive advantage

4.4. Define the required culture and technical Define the required culture and technical knowledge and skill areas required to support the knowledge and skill areas required to support the sources of competitive advantage.sources of competitive advantage.

5–34



5.5. Identify cultural characteristics that the firm Identify cultural characteristics that the firm should reduce or eliminate if it is to optimize should reduce or eliminate if it is to optimize competitive advantage.competitive advantage.

6.6. Design HR practices that will have greatest Design HR practices that will have greatest impact on creating the desired culture.impact on creating the desired culture.

7.7. With these decisions made, the firm should With these decisions made, the firm should establish action plans for detailed design of the establish action plans for detailed design of the HR processes.HR processes.

8.8. The final step specifies the means by which The final step specifies the means by which effectiveness of the entire process is measured.effectiveness of the entire process is measured.

5.5. Identify cultural characteristics that the firm Identify cultural characteristics that the firm should reduce or eliminate if it is to optimize should reduce or eliminate if it is to optimize competitive advantage.competitive advantage.

6.6. Design HR practices that will have greatest Design HR practices that will have greatest impact on creating the desired culture.impact on creating the desired culture.

7.7. With these decisions made, the firm should With these decisions made, the firm should establish action plans for detailed design of the establish action plans for detailed design of the HR processes.HR processes.

8.8. The final step specifies the means by which The final step specifies the means by which effectiveness of the entire process is measured.effectiveness of the entire process is measured.

5–35

Reading 5.3: Strategically Proactive HRReading 5.3: Strategically Proactive HRReading 5.3: Strategically Proactive HRReading 5.3: Strategically Proactive HR

• Becomes proactive by:Becomes proactive by:– learning enough about other functional areas to allow HR to learning enough about other functional areas to allow HR to

contribute to the businesscontribute to the business– expanding/enriching parameters of HR agendas through expanding/enriching parameters of HR agendas through

which strategic alternatives are define and created.which strategic alternatives are define and created.

• Creates a culture of of creativity and innovation.Creates a culture of of creativity and innovation.• Is involved in the full breadth of mergers and Is involved in the full breadth of mergers and

acquisition activities.acquisition activities.• Creates internal capabilities based on future Creates internal capabilities based on future

external environmental requirements.external environmental requirements.

• Becomes proactive by:Becomes proactive by:– learning enough about other functional areas to allow HR to learning enough about other functional areas to allow HR to

contribute to the businesscontribute to the business– expanding/enriching parameters of HR agendas through expanding/enriching parameters of HR agendas through

which strategic alternatives are define and created.which strategic alternatives are define and created.

• Creates a culture of of creativity and innovation.Creates a culture of of creativity and innovation.• Is involved in the full breadth of mergers and Is involved in the full breadth of mergers and

acquisition activities.acquisition activities.• Creates internal capabilities based on future Creates internal capabilities based on future

external environmental requirements.external environmental requirements.

Documents

CHAPTER 5 HUMAN RESOURCE PLANNING PowerPoint Presentation by Charlie Cook Copyright © 2002 South-Western. All rights reserved