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Terms in this set (31)
No single best practice works in every situation.
organizations and businesses may have different strategic goals
some experts suggest that organizations not adopt best practices, but focus on fit. They argue that aligning HR practices with an organization's strategy (influenced by its environment) will result in greater performance than the method of copying other HR strategies (best practices and benchmarking)
Strategy is the formulation of organizational objectives, competitive scopes, and action plans for gaining advantage. Strategy is the plan for how the organization intends to achieve its goals. The means it will use, the courses of action it will take, and how it will generally operate and compete constitute the organization's strategy
The top management team determines strategy through a process of environmental analysis and discussions.
The top management team determines strategy through a process of environmental analysis (which is discussed in Chapter 3) and discussions. The strategy and objectives developed by senior management are then approved by the board, and negotiated and revised as they filter throughout the organization. The organization then develops plans, which include HRM programs, to achieve those goals. This does not suggest, however, that strategic planning is a unilateral or one-time process. Various organizational outcomes provide a feedback loop to the strategic planning process led by senior management, who will also continuously monitor the dynamic environment to make adjustments to the strategy.
emergent strategy The plan that changes incrementally due to environmental changes
Strategic planning requires thinking about the future. Planning for the long term (i.e., more than 10 years) is difficult and would be more appropriately judged as a best guess.
Because of the unpredictability of trigger events, many planners look at a relatively shorter period of time, a more predictable term of three to five years.
The process of subtly redirecting strategy to accommodate these changes is called logical incrementalism. Rather than calling for a straight path to the goal, this strategy calls for a series of actions to react to changes in competitor actions or new legislation. Another name for this reactive process is emergent strategy
Writers on strategy sometimes distinguish between intended strategy and realized strategy. The intended strategy is the one that was formulated at the beginning of the period. The realized strategy is, of course, what actually happened.
Think of strategy as a game plan or a flight plan.
To be effective, strategic management anticipates future problems, provides an alignment with external contingencies and internal competencies, recognizes multiple stakeholders, and is concerned with measurable performance6—just like the flight plan.
The general rule is that, unless there is a crisis, it should not be necessary to make quantum leaps in strategies. Thus, these strategies should withstand the test of time and be durable for several years.
We look at two types of internal fit: a fit with other functional areas, such as marketing, and a fit among all HR programs. Fit with other functional areas is important.
HR programs must also be consistent with each other. That is, training, selection, and appraisal must work together to support a strategy.
The "best practices" approach, in which bundles of HR practices are internally consistent, suggests that there is a direct relationship between an internally consistent bundle of HR practices and firm performance.
If an organization adopts one best practice, such as structured interviewing, without adopting bundles of best practices that align with it, it will not increase the impact in a synergistic manner. However, there is disagreement as to what, exactly, these best practices are
When developing strategies and determining their likely impact on an organization, HR professionals rely on many sources of information. These include publications, professional associations, conferences and seminars, and professional consultants.
PUBLICATIONS HR professionals actively scan Canadian newspapers, business publications, and HR magazines, journals, and newsletters
PROFESSIONAL ASSOCIATIONS Canadian HR professionals and executives belong to a number of organizations that publish newsletters and updates on current events.
Another significant trend in Canada is the continuing growth of contingency workers (part-time, temporary, seasonal, and contract workers). These workers may or may not voluntarily choose to pursue contingency employment and experience different work-life challenges than traditional workers
For example, research shows that seasonal workers experience fewer developmental opportunities at work and are often treated as "costs" rather than "assets" in organizations. Not surprisingly, they report lower commitment to the organization and focus only on completing their assigned tasks.
Generic human capital The competencies, knowledge, skills, and abilities that are held by individual employees and that are useful to the firm
It is called generic human capital because these types of skills are of equal value to most any company, and so this value can be priced in the labour market. For example, most firms benefit from the skills of a chartered accountant, and because these skills are of equal value across almost any company, a chartered accountant is able to price that value, and to require payment for those skills at their full value.
The ability to determine a market cost for labour limits the amount of value that the firm can acquire from these skills, since the value that is captured for the firm through the deployment of that human capital flows almost completely to the employee
Firm-specific human capital, on the other hand, represents the kind of knowledge that employees have that benefits the firm, and that requires a deep understanding of the firm's systems, social structure, or customers.
Firm-specific human capital represents the skills that employees have based on their tacit knowledge and learned from experience in the firm and through mentorship. An example of firm-specific human capital could be using one's knowledge of the processes and people involved in making a change to a data entry screen to cut the time required to implement the change from one week to one day.
firm-specific human capital is valuable to the firm, but cannot be easily transferred across organizations, it is very difficult for the employee to determine this value in the labour market.
Firm-specific human capital The competencies, knowledge, skills, and abilities that employees possess based on their tacit knowledge, and learned from experience and through mentorship in the organization
It takes time for generic human capital to develop into firm-specific human capital, forecasting must take into account not just the stock of human capital, but also its flow.
Human capital stock refers to the amount of human capital within the firm at any given time, whereas human capital flow represents how human capital stock changes over time.
Forecasting human capital requires that planners consider not just how many employees may be required at a given time (i.e., the stock of human capital), but also whether the requisite level of firm-specific human capital will be available for the firm to compete (i.e., the flow of human capital).
Human capital stock The amount of any specific form of human capital that is available to the firm at any given time
human capital flow -The change in the stock of human capital over time. Factors that affect the flow of human capital include terminations, promotions, lateral movements, and demotion
The consideration of stock and flows will depend on the type of human capital required.
Forecasting tools that are dependent on succession management, and that integrate turnover rates and employee movement such as promotions, including Markov analysis, are more focused on human capital flows.
Delphi technique- A process in which the forecasts and judgments of a selected group of experts are solicited and summarized in an attempt to determine the future HR demand
The Delphi technique, named after the Greek oracle at Delphi and developed by N.C. Dalkey and associates at the Rand Corporation in 1950, is another useful qualitative method for deriving detailed assumptions of long-run HR demand. This forecasting technique is "a carefully designed program of sequential, individual interrogations (usually conducted through questionnaires) interspersed with feedback on the opinions expressed by the other participants in previous rounds." Its key feature is that once a group of experts is selected, the experts do not meet face to face.
The advantage of the Delphi technique is that it avoids many of the problems associated with face-to-face groups, namely reluctance on the part of individual experts to participate due to (1) shyness, (2) perceived lower status or authority, (3) perceived communication deficiencies, (4) issues of individual dominance and groupthink
There are disadvantages associated with the Delphi technique, as there are with all forecasting techniques. In particular, because of the series of questionnaires administered to derive a forecast, the time and costs incurred when using the Delphi technique can be higher than those incurred when using alternative forecasting methods. Another deficiency is that since the results cannot be validated statistically, the process is greatly dependent on the individual knowledge and commitment of each of the contributing experts.
HR budgets are quantitative, operational, or short-run, demand estimates that contain the number and types of jobs or positions required by the organization as a whole and for each subunit, division, or department
These HR budgets, prepared by the HR staff in conjunction with line managers, take into consideration information from historical company staffing trends, competitor staffing practices, industry and professional associations, and Statistics Canada.
The HR budget process produces a staffing table, which contains information related to a specific set of operational assumptions or levels of activity (e.g., maintain the current organization structure, increase the sales level by 5 percent over last year's level). The staffing table presents the total HR demand requirement, laid out in terms of the number of people required by level (e.g., vice-presidents) and function (e.g., marketing).
Staffing table- Total HR demand requirement for operational or short-run time periods-In this way, HR planners can determine short-run future demand requirements for subunits and the organization as a whole. This enables budgeting processes to incorporate changes in compensation costs linked to the level of future human capital demand.
Simulation is a powerful blend of quantitative and qualitative analysis. It is based on the creation of a set of assumptions around the variables or inputs that are expected to affect demand followed by a quantitative representation of those assumptions and their interactions.
The assumptions that are used to build a simulation model employ mathematical algorithms that reflect how variables are expected to react dynamically with the other variables in the model.
If a job requires a lengthy training or mentoring period, then the flow of employees may be suitable, but stocks of suitably skilled employees may be low or high for the firm's needs depending on where employees are in the training cycle. These types of delays and accumulation processes lead to relationships with other demand characteristics such as revenues or production that are not linear.
the main benefit of simulation in forecasting demand (and supply) is not in arriving at a more accurate forecast, but in developing a better understanding of what factors influence demand and supply, and what processes may be causing bottlenecks in the flow of human capital. In this sense simulation is considered to be more descriptive of processes than prescriptive
A model that determines the pattern of employee movement using a set of mutually exclusive states for movement into or out of a particular job
Markov models are the most popular technique used for contemporary supply-side HR planning applications in medium to large organizations
Organizational size is a factor in the decision to use Markov modelling because the process involves estimating the probability of moving from one job to another.
Estimates of employee movement can become highly unreliable in small firms. These models (markov) are widely used in both educational and human capital planning processes. Furthermore, they have been found to be most useful in stable work environments where career paths are better defined
A Markov model, also referred to as a probabilistic (using probabilities of various movement options) or stochastic model, determines the pattern of employee movement throughout an organization's system of jobs using a set of mutually exclusive states for movement into or out of a particular job.
When considering employee movement patterns in the organization, there are five mutually exclusive states in which an employee can reside:
1.Remaining in the current job 2.Promotion to a higher classified job 3.A lateral transfer to a job with a similar classification level 4.Exit from the job (e.g., termination, layoff, voluntary leaving by the employee) 5.Demotion (which is relatively rare
Markov models do not examine individual employees but instead examine overall rates of movement between various job levels, and this movement between jobs is based on historical movement patterns
How is core defined? There are four meanings
Activities traditionally performed internally •Activities critical to business success—core work contributes directly to the bottom line; non-core work doesn't •Activities creating current or potential competitive advantage •Activities that will influence future growth or rejuvenation
Non-core work is transactional work that is routine and standard and can easily be duplicated and replicated; core work is transformational and adds value to employees or customers.
A competency is a combination of technology, management, and collective learning. For Nike, that core competency is product design, and the company outsources nearly everything else
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