William J. Rothwell, Ph.D., SPHR Human Resource Management Core Module Copyright 2004 by William J. Rothwell. All rights reserved. March 2004 in Shanghai Part I: Introduction to the Core Module 3 Facilitator Introduction William J. Rothwell, Ph.D., SPHR Professor of Human Resource Development at Penn State University President of Rothwell and Associates, Inc. (see ) Contact him at 4 William J. Rothwell, Ph.D., SPHR Author of numerous books. A few examples: 5 William J. Rothwell, Ph.D., SPHR Author of numerous books. A few examples: 6 Module Purpose This core module describes the strategic importance of human resource management (HRM). 7 Module Objectives Upon completing this module, participants will be able to discuss: The strategic importance of human resource management within the organization How human resource management contributes to business strategy How to implement appropriate motivation and reward systems and strategies 8 Module Objectives How to evaluate the performance of the team and individuals How to plan training and development programmes 9 Module Organization and Structure Day 1 Introduction to the Core Module The Strategic Importance of Human Resource Management Within the Organization Day 2 How Human Resource Management Contributes to Business Strategy How to Implement Appropriate Motivation and Reward Systems and Strategies 10 Module Organization and Structure Day 3 How to Evaluate the Performance of the Team and Individuals Day 4 How to Plan Training and Development Programmes Evaluation of Your Competence Conclusion 11 Instructional Approach: What Are Experiential Learning Methods, and Why Are they Used? This session uses experiential learning methodsand not pure lecture In experiential learning methods, participants use the results of small group activities, role plays, case studies, or other active learning techniques as a basis for learning 12 Icebreaker Tell us: Your name Your job title Your companys name What you do at the company Why you are here 13 Icebreaker Stand up Introduce yourself to another participant in the session and trade business cards Find out what the other person most wants to learn in the session Be prepared to share what you learn in about 3 minutes 14 Opening Activity Form small groups of 3-5 people each Appoint a spokesperson for your group who will provide your groups answers Spend about 15 minutes to answer this question: What is human resource management, and why should organizational leaders care about it? When you finish, your group spokesperson should be prepared to volunteer your answer to the group 15 Debrief of the Activity Would your group spokesperson please provide your answer for the large group? Part II: The Strategic Importance of Human Resource Management Within the Organization 17 Overview of This Part What is strategy, and why is it important? How does strategy relate to purpose and mission? How is strategy determined? Who determines strategy, and why is that important? What are the range of business strategies, and how are they determined? How does the strategic planning process work? Activity: How does the strategic planning process work? Debrief of the activity 18 What Is Strategy? Strategy is: The process of achieving competitive advantage Originated from a word used by the Ancient Greeks around 400 B.C. and pertained to the art and science of directing military forces An outline of the steps that management plans to take to achieve objectives A means to an end 19 What Is Competitiveness? Competitiveness is a multidimensional concept. It can be looked at from three different levels: country, industry, and firm level. Competitiveness originated from the Latin word, competer, which means involvement in a business rivalry for markets. It has become common to describe economic strength of an entity with respect to its competitors in the global market economy in which goods, services, people, skills, and ideas move freely across geographical borders (Murths, 1998). Source: Ambastha, A., & Momaya, K. (2004). Competitiveness of firms: Review of theory, frameworks, and models. Singapore Management Review, 26(1), 45ff. 20 What Is Competitiveness? Firm level competitiveness can be defined as the ability of firm to design, produce and or market products superior to those offered by competitors, considering the price and non-price qualities (DCruz, 1992). Source: Ambastha, A., & Momaya, K. (2004). Competitiveness of firms: Review of theory, frameworks, and models. Singapore Management Review, 26(1), 45ff. 21 What Is Competitiveness? Competitiveness processes identify the importance and current performance of core processes such as strategic management processes, human resources processes, operations management processes and technology management processes. The competitiveness process is a balancing process that complements traditional functional processes such as operations management and human resources management. It enhances the ability of an organization to compete more effectively. Source: Ambastha, A., & Momaya, K. (2004). Competitiveness of firms: Review of theory, frameworks, and models. Singapore Management Review, 26(1), 45ff. 22 How Does HR Contribute to Competitiveness? Source: Ambastha, A., & Momaya, K. (2004). Competitiveness of firms: Review of theory, frameworks, and models. Singapore Management Review, 26(1), 45ff. 23 Why Is Strategy Important? Strategy is important because it: Provides competitive advantage Gives focus to the organizations use of resources Helps build employee enthusiasm about the organizations direction Provides guidance for setting priorities for resource allocation Yields a positive relationship between planning and profitability Other reasons? 24 How Does Strategy Relate to Purpose And Mission? Vision Purpose/Mission Goals & Objectives Strategy What do we see our organization to be? Why do we exist? How do we measure our achievement? How do we achieve our goals and objectives and realize our purpose and vision? 25 How Is Strategy Determined? Strategy is formulated based on a rational approach to a process that entrepreneurs use intuitively 95% of all strategy is informal； only 5% of strategy is formal and is written down Strategy is formulated by the chief leaders of the organization, and they determine the organizations strategic direction 26 Who Determines Strategy, and Why Is That Important? Strategy is determined by the organizational leaders The organizations structure (organization chart) determines the leadership That leads to the most famous question in strategic planning: Which comes first, structure or strategy? 27 How Does The Strategic Planning Process Work? Clarify Vision, Purpose, Goals and Objectives Assess Present Strengths and Weaknesses Scan Future Threats and Opportunities Conduct SWOT Analysis Consider Range of Strategies and Select One Implement and Evaluate Strategy 28 How Is Strategy Determined in Your Organization? Form teams of 3-5 people Spend about 10 minutes In your teams, discuss the process used in your organizations to formulate, implement and evaluate strategy and discuss how HR is handled in that process. Be sure to describe your organizations strategic objectives, if you know them, and (if possible) explain how HR is aligned with them 29 How Is Strategy Determined in Your Organization? When you finish, be prepared to explain how the process is handled in your organization 30 Debrief: How Is Strategy Determined in Your Organization? Could I have some volunteers to discuss how organizational strategy is formulated, implemented and evaluated in your organization Could I have some volunteers to discuss how HR is handled in the strategic planning process? 31 Organizational Strategy and Appropriate HR Practices Based on their study of organizations, Miles and Snow (1978) identified three generic strategic types: Defenders have a relatively stable product market domain and therefore a narrow focus. Defender characteristics include: (1) a limited product line； (2) single capital intensive technology； (3) a functional structure； and (4) skills in production efficiency, process engineering, and cost control. Source: Sumita, R., and Arvey, R. (1994). Business strategy links with staffing and training practices. Human Resource Planning, 17(3), 55-73. 32 Organizational Strategy and Appropriate HR Practices Prospectors continually search for new product and market opportunities, and regularly experiment with emerging environmental trends. These organizations often create change to which their competitors must respond. However, because of their strong concern for product and market innovation, they are usually not completely efficient. Prospector characteristics include: (1) diverse product lines, (2) multiple technologies, (3) a product or geographically divisionalized structure, and (4) skills in product research and development, market research, and product engineering. 33 Organizational Strategy and Appropriate HR Practices Analyzers operate in two market domains, one relatively stable and the other changing. In their stable areas, they use formalized structures and processes to operate routinely and efficiently. In their more innovative areas, their key managers watch their competitors closely for new ideas； they then rapidly adopt those that appear to be promising. Analyzer characteristics include: (1) a limited basic product line, (2) search for a small number of related products and/or market opportunities, (3) cost-efficient technology for stable products and project technologies for new products, and (4) skills in production efficiency, process engineering and marketing. 34 Organizational Strategy and Appropriate HR Practices There is a stronger relationship between the prospect dimension of strategy and staffing and training practices than between the defense dimension of strategy and staff/training practices. Questions that may be relevant here are: Do HRM managers play the role of strategy formulators or strategy implementors? Do these roles vary with strategic orientation? A comprehensive answer to these questions will lie in examining issues such as: (1) the speed with which HRM practices and strategic orientation are aligned, and (2) organizational structures that facilitate alignments under different strategic orientations. Part III: How Human Resource Management Contributes to Business Strategy 36 Overview of This Part What are the functions of HR, and how do they relate to business strategy? Why is HR strategically important? Activity: What is the strategic importance of HRM, and how does HRM contribute to business strategy? Debrief of the activity 37 What Is Human Resource Management (HRM)? Human Resource Management is the process of bringing together different kinds of people in organizational settings to achieve a common purpose. 38 How Can HRM Be Conceptualized? Human Resource Management (HRM) includes, among other things, all of the following: Human Resource Planning Employee Recruitment Employee Selection Training Career Development 39 How Can HRM Be Conceptualized? Employee Performance Appraisal Compensation Benefits Health and Safety Employee Discipline Labor Relations Other issues influencing people in organizational settings 40 Why Is This Important? Why do you think it might be important to have a way of thinking about (conceptualizing) HR? What would happen if you did not have a way of thinking about HR? 41 How Can HRM Be Conceptualized? HRM can be viewed as all activities associated with bringing people into the organization, keeping them, managing and developing them, and ensuring their effective eventual departure from the organization 42 How Can HRM Be Conceptualized? One way to think of HRM focuses around its relationship to organizational strategic business plans Another way to think of HRM focuses around its relationship to individual recruitment, selection, hiring, orientation, development, retention and rewards, job design and movement, wellness, and eventual individual departure from the organization 43 How Can HRM Be Conceptualized? HRM can be focused around the work that people do (work-based) HRM can be focused around the people who do the work (competency-based) Most HRM programs in multinational companies are competency-based； most HRM programs in other organizations are work-based 44 Large Group Discussion: How Does Culture Affect HR? Culture refers to the unspoken assumptions made about the way things should be done in the organization, and culture governs how people behave How might different strategies affect HR? culture? 45 Activity Assemble in groups of 3-5 people each and appoint a spokesperson Spend about 30 minutes to create a presentation to explain to managers what HRM is and provide a model of HRM that can be used to present how it relates to people in organizations Explain what you believe should be role of HR in achieving business strategy 46 Debrief Could I have a volunteer from the small groups to present the groups views? 47 Four Ways to Think of the Key Components of HR The divisional approach: HR is organized according to how it is positioned geographically and organizationally The worker lifecycle approach: HR is organized according to how it interacts with individual workers 48 The Divisional Approach L o c a t i o n - B a s e d H R( R e p o r t s t o t h e P l a n t M a n a g e r o r S i t e M a n a g e r )D i v i s i o n a l H R( R e p o r t s t o D i v i s i o n D i r e c t o r )C o r p o r a t e H R49 The W