CH-3-4 Human Resource Management Strategy and Analysis – Human Resource Management : Book Guide

This Document Contains Chapters 3 to 4 PART ONE INTRODUCTION CHAPTER T Three Human Resource Management Strategy and Analysis 3 Strategic Overview The Strategic Management Process Goal-Setting and the Planning Process Strategic Planning Improving Productivity Through HRIS Types of Strategies The Top Manager’s Role in Strategic Planning Departmental Managers’ Strategic Planning Roles Department Managers’ Strategic Planning Roles in Action Strategic Human Resource Management Defining Strategic HR Management Human Resource Strategies and Policies Strategic Human Resource Management Tools HR Metrics and Benchmarking Types of Metrics Improving Productivity Through HRIS Benchmarking in Action Strategy and Strategy-Based Metrics Workforce/Talent Analytics and Data Mining What are HR Audits? Evidence-Based HR and the Scientific Way of Doing Things What are High-Performance Work Systems? High-Performance Human Resource Policies and Practices In Brief: This chapter explains how to design and develop an HR system that supports the company’s strategic goals. It explains the strategic management process, how to develop a strategic plan, and the HR manager’s role in the process of strategy execution and formulation. The chapter explains why metrics are essential for identifying and creating high-performance human resource policies and practices. Interesting Issues: The Human Resource function today continues to play an increasingly visible role in the strategic planning and management process, requiring a new level of skill and competency among HR professionals. HR managers must develop measureable strategies that convincingly showcase HR’s impact on business performance. Successful Human Resource managers have adopted a perspective that focuses on how their departments can play a central role in implementing the organization’s strategy.   LEARNING OUTCOMES 1. Explain why strategic planning is important to all managers. 2. Explain with examples each of the seven steps in the strategic planning process. 3. List with examples the main generic types of corporate strategies and competitive strategies. 4. Define strategic human resource management and give an example of strategic human resource management in practice. 5. Briefly describe three important strategic human resource management tools. 6. Explain with examples why metrics are essential for managing human resources. ANNOTATED OUTLINE I. The Strategic Management Process Goal-Setting and the Planning Process - Strategic planning is important because in a well-run organization the goals from the top of the organization downward should form an unbroken chain, or hierarchy, of goals. These goals, in turn, should guide everyone in the organization in what they do. Strategic Planning - A strategic plan is the company’s plan for how it will match its internal strengths and weaknesses with external opportunities and threats in order to maintain a competitive advantage. Figure 3-2 sums up the strategic management process in seven steps as follows: 1. Define the current business and mission. 2. Perform external and internal audits. Formulate a new direction. Translate the mission into goals. Formulate strategies to achieve the strategic goal. Implement the strategy. Evaluate performance. Improving Productivity through HRIS: Using Computerized Business Planning Software − Business planning software packages are available to assist the manager in writing strategic and business plans. D. Types of Strategies – Managers develop three types of strategies. 1. Corporate-level strategy – Identifies the portfolio of businesses that comprise the company and the ways in which these businesses are related to each other. Concentration, diversification, vertical integration, consolidation, and geographic expansion are all examples of corporate-level strategies. 2. Competitive strategy – Managers endeavor to achieve competitive advantages for each of their businesses. Competitive advantages enable a company to differentiate its product or service from those of its competitors to increase market share. Examples of competitive strategies include cost leadership, differentiation, and focus. 3. HR as a Competitive Advantage – Human capital is one of the best competitive advantages because it is hard to duplicate a company’s personnel. 4. Functional strategies – These strategies identify the basic course of action that each department will pursue in order to help the business attain its competitive goals. 5. Strategic Fit – Strategic planning experts have different views on fitting capabilities to the opportunities and threats vs. stretching beyond capabilities to take advantage of an opportunity. The “fit” point of view, as purported by Michael Porter, states that all of the firm’s activities must be tailored to or fit its strategy by ensuring that the firm’s functional strategies support its corporate and competitive strategies. The Top Manager’s Role in Strategic Planning - Devising a strategic plan is top management’s responsibility. Because the consequences of a poor choice can be dire, few top managers delegate the job of deciding how the company should match internal strengths and weaknesses with external opportunities and threats to maintain a competitive advantage. Departmental Manager’s Strategic Planning Roles - It would be reckless for any top executive to formulate a strategic plan without the input of his or her lower-level manager. Few people know as much about the firm’s competitive pressures, vendor capabilities, and concerns than do the company’s department managers. Departmental Manager’s Strategic Planning Roles in Action: Improving Mergers and Acquisitions – When mergers and acquisitions fail, it is usually due to personnel issues. Functional managers help top management to plan and execute the firm’s strategy. When mergers and acquisitions do fail, it’s often not due to financial or technical issues but to personnel-related ones. These may include, for example, employee resistance, mass exits by high-quality employees, and declining morale and productivity. As one study concluded some years ago, mergers and acquisitions often fail due to a lack of adequate preparation of the personnel involved and a failure to provide training which fosters self-awareness, cultural sensitivity, and a spirit of cooperation. Due Diligence Stage - Before finalizing a deal, it is usual for the acquirer (or merger partners) to perform “due diligence” reviews to assure they know what they’re getting into. For the human resource teams, due diligence includes reviewing things like organizational culture and structure, employee compensation and benefits, labor relations, pending employee litigation, human resource policies and procedures, and key employees. Employee benefits are one obvious example. For example, do the target firm’s health insurance contracts have termination clauses that could eliminate coverage for all employees if you lay too many off after the merger? Integration Stage - There are critical human resource issues during the first few months of a merger or acquisition. These include choosing the top management team, ensuring top management leadership, communicating changes effectively to employees, retaining key talent, and aligning cultures. II. Strategic Human Resource Management Defining Strategic HRM – Every company needs its human resource management policies and activities to make sense in terms of its broad strategic aims. Strategic human resource management means formulating and executing human resource policies and practices that produce the employee competencies and behaviors the company needs to achieve its strategic aims. Figure 3-7 demonstrates the relationship between human resource strategy and the company’s strategic plans. The following steps demonstrate linking company-wide and HR strategies: Evaluate Company’s Competitive Environment Formulate Business Strategy Identify Workforce Requirements Formulate HR Strategic Policies and Activities Develop Detailed HR Scorecard Measures Human Resources Strategies and Policies - Managers call the specific human resource management policies and practices they use to support their strategic aims human resource strategies. The Shanghai Portman’s human resource strategy was to produce the service-oriented employee behaviors the hotel needed to improve significantly the hotel’s level of service. Its HR policies therefore included installing the Ritz-Carlton Company’s human resource system, having top management personally interview each candidate, and selecting only employees who cared for and respected others. Strategic HRM Tools - Managers use several tools to help them translate the company’s broad strategic goals into specific human resource management policies and activities. Three important tools include the strategy map, the HR Scorecard, and the digital dashboard. Strategy Map - The strategy map shows the “big picture” of how each department’s performance contributes to achieving the company’s overall strategic goals. It helps the manager understand the role his or her department plays in helping to execute the company’s strategic plan. HR Scorecard - Many employers quantify and computerize the map’s activities. The HR Scorecard helps them to do so. The HR Scorecard is not a scorecard. It refers to a process for assigning financial and nonfinancial goals or metrics to the human resource management–related chain of activities required for achieving the company’s strategic aims and for monitoring results. Digital Dashboards - A digital dashboard presents the manager with desktop graphics and charts. It is a computerized picture of where the company stands on all those metrics from the HR Scorecard process. III. HR Metrics and Benchmarking Types of Metrics – Figures 3-11 and 3-12 present examples of broad and more focused measures organizations can use to measure HR effectiveness. Improving Productivity through HRIS: Tracking Applicant Metrics for Improved Talent Management – There are a number of metrics that can be used to collect and assess the quality of different recruitment sources. Many companies choose to use an applicant tracking system. There are two basic steps in this process: 1) deciding how to measure performance of new hires and 2) tracking sources that result in superior hires. Benchmarking in Action - Benchmarking occurs when an organization compares the practices of high performing organizations with their own in order to understand what they can do to improve. Strategy and Strategy-Based Metrics – Benchmarking is only part of the process. HR must also use strategy-based metrics to determine how HR is helping the organization reach its goals. Workforce/Talent Analytics and Data Mining – Many companies are using workforce analytics to analyze and track HR data to help improve performance and increase job satisfaction. Another technique, data mining, involves statistical analysis to find hidden or new relationships among different variables such as tracking when and who is more likely to buy a certain product. This can help a company better manage its marketing money by targeting certain groups of people with advertising. What are HR Audits? These audits are a way for an organization to measure its current policies and practices and identify areas where improvements can be made based on company goals. Evidence-Based HR and the Scientific Way of Doing Things – Evidence-based HR is the use of data, facts, etc. to support HR proposals, decisions, practices, and conclusions. This requires managers to be more scientific in making organizational decisions. This approach requires objectivity, experimentation, quantification, explanation, prediction, and replication. IV. What are High-Performance Work Systems? A high-performance work system (HPWS) is a set of HR policies and practices that together produce superior employee performance. A. High-Performance Human Resource Policies and Practices – These policies and practices illustrate the importance of HR metrics and how they help to assess HR performance. They also reveal what HR systems must do to be successful, such as help workers aspire to manage themselves. HR practices also highlight measureable differences between HR systems in high and low performing companies. Ø NOTES Educational Materials to Use DISCUSSION QUESTIONS: 1. Give an example of hierarchical planning in an organization. Answer: Top management approves a long-tem or strategic plan. Then each department, working with top management, creates its own budgets and other plans to fit and contribute to the company’s long-term plan. 2. What is the difference between a strategy, a vision, and a mission? Give one example of each. Answer: A strategy identifies a course of action to get the company from where it is today to where it wants to be tomorrow. One example of a company’s strategy given in the text is Dell Computer’s strategy to be a “low cost leader” by using the Internet and phone to sell PCs directly to end users at prices competitors cannot match. A vision is a general statement of the company’s intended direction that evokes emotional feelings in employees. It is a “mental image” of a possible and desirable future state for the organization that articulates a view of a realistic, credible, and attractive future of the organization that is better than what now exists. For example, the vision for the California Energy Commission is “for Californians to have energy choices that are affordable, reliable, diverse, safe, and environmentally acceptable.” The mission is a more specific and shorter term statement which lays out what is supposed to be now and communicates “who we are, what we do, and where we’re headed.” Following the vision for the California Energy Commission, their mission is to “assess and act through public/private partnerships to improve energy systems that promote a strong economy and a healthy environment.” 3. Define and give at least two examples of the cost leadership competitive strategy and the differentiation competitive strategy. Answer: The cost leadership competitive strategy means that the enterprise aims to become the low-cost leader in an industry. For example, stores such as Staples and Office Max maintain their competitive advantage by selling large quantities of office products at low prices. Airlines such as Southwest offer low fares in addition to quick turnarounds at the gate. In a differentiation competitive strategy, a firm seeks to be unique in its industry along dimensions that are widely valued by buyers. For example, Ocean Spray Cranberries charges a premium price for its juices, stressing premium high-quality ingredients. Visa differentiates itself by being accepted as a form of payment universally where other credit cards are not. 4. Explain how human resources management can be instrumental in helping a company create a competitive advantage. Answer: Human Resources is regarded in a growing number of organizations as a source of competitive advantage, through recruiting, selecting, retaining, and developing human capital that enables organizations to compete on a number of different levels to be flexible, capable, and responsive, demonstrating creativity and innovation in order to produce products and services of high quality. 5. What is a high-performance work system? Provide several specific examples of the typical components in a high-performance work system. Answer: High Performance Work Systems are characterized by high involvement organizational practices, (such as job enrichment and team-based organizations), high-commitment work practices (such as improved employee development, communications, and disciplinary practices), and flexible work assignments. The evidence suggests that companies that employ HPWS practices experience improved productivity, quality, sales, and financial performance. What makes the HPWS unique is the quality, quantity, and specific features of the HR policies and practices. Each element is designed to maximize the overall quality of human capital throughout the organization. Several characteristics of high performance work organizations include multi-skilled work teams; empowered frontline workers; more training; labor management cooperation; commitment to quality; and customer satisfaction. INDIVIDUAL AND GROUP ACTIVITIES 1. With three or four other students, form a strategic management group for your college or university. Your assignment is to develop the outline of a strategic plan for the college or university. This should include such things as mission and vision statements, strategic goals, and corporate, competitive, and functional strategies. In preparing your plan, make sure to show the main strengths, weaknesses, opportunities, and threats the college faces, and which prompted you to develop your particular strategic plans. Answer: Look for students to prepare a well-developed mission and vision statement, making sure that they are clearly differentiated from each other with the vision being future focused, articulating the desired state, with the mission supporting the vision, describing “who we are, what we do, and where we are headed.” Use this exercise as an opportunity to discuss the problems that may be created by not clearly defining the mission, vision, as well as the strengths, weaknesses, opportunities, and threats. 1. Mission Statement: Provide accessible, high-quality education that fosters intellectual growth and prepares students for success in a global society. 2. Vision Statement: To be a leading institution renowned for innovation, inclusivity, and excellence in education. 3. Strategic Goals: Enhance academic programs, increase enrollment, improve campus facilities, and strengthen community partnerships. 4. SWOT Analysis: Strengths—strong academic reputation; Weaknesses—limited funding; Opportunities—growing demand for online learning; Threats—competitive higher education market. 5. Strategies: Corporate—expand funding sources; Competitive—develop unique programs; Functional—upgrade technology and infrastructure. 2. Using the Internet or library resources, analyze the annual reports of at least five companies. Bring to class examples of how those companies say they are using their HR processes to help the company achieve its strategic goals. Answer: In class, facilitate a discussion on how effective the HR processes at each company appear to support strategic goals. Challenge students to come up with additional ideas for other approaches for using the HR processes and how they would go about implementing them, noting the specific difficulties of each. 1. Google: Emphasizes employee innovation and creativity through robust talent management and continuous learning programs to drive strategic growth. 2. Apple: Focuses on attracting top talent and fostering a collaborative culture to enhance product development and maintain market leadership. 3. Microsoft: Implements comprehensive performance management and leadership development initiatives to align with its goal of digital transformation. 4. Amazon: Uses data-driven HR strategies for optimizing workforce productivity and improving customer experience, supporting its growth objectives. 5. Tesla: Invests in cutting-edge recruitment and employee engagement practices to drive innovation and meet its ambitious production targets. 3. Interview an HR manager and write a short report on the topic: “The strategic roles of the HR manager at XYZ Company.” Answer: Instruct students to follow the model outlined in this chapter for the steps in the strategic management process, and HR’s role in strategy execution and strategy formulation. Report: The Strategic Roles of the HR Manager at XYZ Company Introduction The role of an HR manager at XYZ Company is crucial in aligning human resources practices with the company's strategic goals. This report outlines the key strategic roles of the HR manager based on an interview conducted with the HR manager. Key Strategic Roles 1. Talent Acquisition and Management The HR manager develops and implements strategies to attract and retain top talent, ensuring the company has the right skills to achieve its business objectives. This includes creating robust recruitment processes and succession planning. 2. Organizational Development The HR manager plays a vital role in shaping the company’s organizational culture and structure. They design training and development programs to enhance employee skills and leadership capabilities, aligning workforce competencies with strategic priorities. 3. Performance Management The HR manager oversees performance management systems to ensure alignment with strategic goals. This involves setting clear performance metrics, providing feedback, and fostering a culture of continuous improvement. 4. Employee Relations and Engagement Strategic HR management includes improving employee engagement and satisfaction. The HR manager addresses workplace issues, fosters a positive work environment, and implements initiatives to enhance employee morale and productivity. 5. Compliance and Risk Management The HR manager ensures that the company complies with labor laws and regulations, mitigating legal risks. They also develop policies and practices to safeguard the organization against potential HR-related issues. Conclusion The HR manager at XYZ Company plays a strategic role in supporting the organization’s goals through effective talent management, organizational development, performance management, employee engagement, and compliance. These efforts are integral to driving the company’s success and achieving its long-term objectives. 4. Using the Internet or library resources, bring to class and discuss at least two examples of how companies are using an HR Scorecard to help create HR systems that support the company’s strategic aims. Do all managers seem to mean the same thing when they refer to “HR Scorecards”? How do they differ? Answer: For each example, ask students to comment on how effective they believe the measures that were selected by the company are in terms of allowing the company to assess HR’s performance objectively and quantitatively, as well as serving as a tool for the HR manager to build a measurable and persuasive business case for how HR is contributing to achieving the company’s strategic financial goals. Challenge students to critique the scorecard and how it could be improved to measure strategically relevant organizational outcomes, workforce competencies and behaviors, and HR system policies and activities 1. IBM: Uses an HR Scorecard to align HR metrics with business goals, focusing on employee performance and leadership development to drive innovation and competitive advantage. 2. Caterpillar: Employs an HR Scorecard to measure the effectiveness of its talent management and development programs, ensuring they support strategic objectives like global expansion and operational efficiency. Managers may differ in their interpretation of HR Scorecards, with some focusing on performance metrics and others emphasizing strategic alignment and value creation. These variations reflect different organizational priorities and approaches to integrating HR with business strategy. 5. In teams of 4–5 students, choose a company for which you will develop an outline of a strategic HR plan. What seem to be this company’s main strategic aims? What is the firm’s competitive strategy? What would the strategic map for this company look like? How would you summarize your recommended strategic HR policies for this company? Answer: Company Chosen: Netflix Main Strategic Aims: 1. Expand global market presence. 2. Innovate content delivery and production. 3. Enhance user experience and personalization. Competitive Strategy: Netflix’s competitive strategy focuses on content differentiation through original programming, a user-friendly interface, and leveraging data analytics to personalize recommendations. Strategic Map: 1. Customer Perspective: Increase subscriber base globally, improve customer satisfaction through personalized content. 2. Internal Processes: Streamline content production, enhance content recommendation algorithms, and optimize streaming technology. 3. Learning and Growth: Invest in talent development, promote a culture of innovation, and utilize cutting-edge technology. 4. Financial: Achieve revenue growth through subscription increases and reduce content production costs. Recommended Strategic HR Policies: 1. Talent Acquisition: Attract top talent in content creation and technology through competitive compensation and creative work environments. 2. Training and Development: Implement continuous learning programs to foster innovation and keep pace with industry changes. 3. Performance Management: Align employee goals with strategic objectives, emphasizing creativity and productivity. 4. Employee Engagement: Develop initiatives to maintain a high level of employee satisfaction and retention, enhancing overall organizational performance. 6. The HRCI “Test Specifications” appendix at the end of this book lists the things someone studying for the HRCI certification exam needs to know in each area of human resource management (such as in Strategic Management, Workforce Planning, and Human Resource Development). In groups of 4-5 students, do four things: (1) review that appendix now; (2) identify the material in this chapter that relates to the required knoweldge the appendix lists; (3) write four multiple-choice exam questions on this material that you believe would be suitable for inclusion in the HRCI exam; and 4) if time permits, have someone from your team post your team’s questions in front of the class, so the students on other teams can take each other’s exam questions. Answer: Material in this chapter that could be covered in the HRCI certification exam include: Under Strategic Management, the formulation of HR strategies to support the company’s overall strategic plan; HR’s role in helping companies to build a competitive advantage, strategic HR management, role in strategy executiion and formulation; high performance work system concepts and supporting HR systems/practices; the HR Scorecard and all the steps involved in developing it. EXPERIENTIAL EXERCISES & CASES Experiential Exercise: Developing an HR Strategy for Starbucks Purpose: The purpose of this exercise is to give students experience in developing an HR strategy, in this case, by developing one for Starbucks. Students should be familiar with the material in this chapter. Instructions: Set up groups of three or four students for this exercise. You are probably already quite familiar with what it’s like to have a cup of coffee or tea in a Starbucks coffee shop, but if not, spend some time in one prior to this exercise. Meet in groups and develop an outline for an HR strategy for Starbucks Corp. Your outline should include four basic elements: a basic business/competitive strategy for Starbucks, workforce requirements (in terms of employee competencies and behaviors) this strategy requires, specific HR policies and the activities necessary to produce these workforce requirements, and suggestions for metrics to measure the success of the HR strategy. Ask each group to present their strategy to the rest of the class. At the end of each presentation, ask the class to provide feedback on the strategy, commenting on how effectively the strategy highlights the following: 1) their basic business/competitive strategy for Starbucks, 2) the workforce requirements (in terms of employee competencies and behaviors) this strategy requires, 3) the specific HR policies and activities necessary to produce these workforce requirements, and 4) any suggestions for metrics to measure the success of the HR strategy Application Case: Siemens Builds a Strategy-Oriented HR System 1. Based on the information in this case, provide examples for Siemens of at least four strategically required organizational outcomes and four required workforce competencies and behaviors. Answer: Strategically required organizational outcomes would be the following: 1) An employee selection and compensation system that attracts and retains the human talent necessary to support global diversification into high-tech products and services; 2) A “learning company” in which employees are able to learn on a continuing basis; 3) A culture of global teamwork which will develop and use all the potential of the firm’s human resources; 4) A climate of mutual respect in a global organization. Workforce competencies and behaviors could include: 1) openness to learning; 2) teamwork skills; 3) cross-cultural experience; 4) openness, respect, and appreciation for workforce diversity. 2. Identify at least four of the strategically relevant HR system policies and activites that Siemens has instituted in order to help HR contribute to achieving Siemens’ strategic goals. Answer: 1) Training and development activities to support continuous learning through a system of combined classroom and hands-on apprenticeship training to support technical learning; 2) Continuing education and management development to develop skills necessary for global teamwork and appreciation for cultural diversity; 3) Enhanced internal selection process which includes pre-requisites of cross-border and cross-cultural experiences for career advancement; 4) Organizational development activities aimed at building openness, transparency, fairness, and diversity support. 3. Provide a brief illustrative strategy map for Siemens. Answer: Student answers will vary but the strategy map should answer the following questions: 1) What overall goals does Siemens want to achieve? 2) What must Siemens do operationally to achieve its goals? and 3) What employee attitudes and behaviors will produce these operational outcomes? Strategy Map for Siemens 1. Customer Perspective: Deliver innovative, high-quality solutions in automation and digitalization to meet diverse customer needs. 2. Internal Processes: Enhance operational efficiency and R&D capabilities to drive technological advancements and product development. 3. Learning and Growth: Foster a culture of continuous learning and innovation by investing in employee training and development. 4. Financial: Achieve sustainable revenue growth and profitability through increased market share and operational excellence. Continuing Case: The Carter Cleaning Company 1. Would you recommend that the Carters expand their quality program? If so, specifically what form should it take? Answer: Most students will agree that there are opportunities to expand the quality program. The employee meeting approach is a good start in terms of utilizing high-involvement organizational practices. There are opportunities to maximize the overall quality of their human capital. For example, training seems to be an obvious area to improve in terms of educating and building awareness about basic standards and procedures. Yes, I would recommend that the Carters expand their quality program. They should implement a comprehensive quality management system (QMS) that includes continuous improvement processes, regular quality audits, and employee training. This could involve adopting industry-standard frameworks like Six Sigma or ISO 9001 to enhance product quality and operational efficiency. Engaging in customer feedback loops and quality control measures will also help maintain high standards. 2. Assume the Carters want to institute a high performance work system as a test program in one of their stores. Write a one-page outline summarizing important HR practices you think they should focus on. Answer: Students should include some of the following ideas in their outline: The types of HR practices they would implement to improve quality, productivity, financial performance; methods for job enrichment; strategies for implementing and leveraging a team-based organization; ways to implement and facilitate high commitment work practices; employee development and skill building activities to foster increased competency and capability in the workforce; a compensation program which provides incentives (for example, profit sharing, pay for performance) for achieving major goals and financial targets. Outline: High-Performance Work System for Carters 1. Talent Acquisition and Onboarding: Recruit skilled employees who align with company values and provide thorough onboarding to integrate them effectively into the store's culture and operations. 2. Training and Development: Implement continuous training programs focused on customer service, product knowledge, and sales techniques to enhance employee skills and performance. 3. Performance Management: Establish clear performance metrics, regular feedback sessions, and a structured evaluation process to drive employee accountability and improvement. 4. Employee Engagement: Foster a positive work environment through recognition programs, team-building activities, and open communication channels to boost morale and motivation. 5. Incentives and Rewards: Design a competitive compensation and benefits package, including performance-based bonuses and career advancement opportunities, to attract and retain top talent. TRANSLATING STRATEGY INTO HR POLICIES AND PRACTICES: THE HOTEL PARIS CASE Questions. 1. Draw a simple strategy map for the Hotel Paris. Specifically, summarize in your own words an example of the hierarchy of links among the hotel’s HR practices, necessary workforce competencies and behaviors, and required organizational outcomes. Answer: • What overall goals does the Hotel Paris want to achieve? • What does the Hotel Paris do operationally to achieve its goals? • What employee attitudes and behaviors will produce the desired operational outcomes? The above strategy map for the Hotel Paris succinctly lays out the hierarchy of main activities required for the Hotel Paris to succeed. For example, the Hotel Paris could endeavor to improve workforce competencies and behaviors by instituting an improved recruitment process, and measure the latter in terms of the number of qualified applicants per position. 2. Using Table 3-1, list at least five specific metrics the Hotel Paris could use to measure its HR practices Answer: • Number of qualified applicants per position • Percentage of jobs filled from within • Number of hours of training for each employees • Percentage of the workforce eligible for incentive pay • Percentage of the workforce routinely working in a self-managed, cross functional, or project team KEY TERMS: PART TWO RECRUITMENT, PLACEMENT & TALENT MANAGEMENT CHAPTER T Four Job Analysis & the Talent Management Process 4 Lecture Outline Strategic Overview The Talent Management Process What is Talent Management? The Basics of Job Analysis Uses of Job Analysis Information Conducting a Job Analysis Job Analysis Guidelines Methods of Collecting Job Analysis Information The Interview Questionnaires Observation Participant Diary/Logs Quantitative Job Analysis Techniques Internet-based Job Analysis Writing Job Descriptions Job Identification Job Summary Relationships Responsibilities and Duties Standards of Performance & Working Conditions Duty: Accurately Posting Accounts Payable Using the Internet for Writing Job Descriptions Writing Job Specifications Specifications for Trained Versus Untrained Personnel Specifications Based on Judgment Job Specifications Based on Statistical Analysis Using Task Analysis Profiles in Talent Management Competencies & Competency-Based Job Analysis How to Write Job Competencies-Based Job Descriptions In Brief: The human resource management process really begins with deciding what the job entails. The uses of job analysis information and the methods of conducting a job analysis are detailed. The tasks of writing job descriptions and job specifications are also outlined, and Internet resources are examined. Strategies to make the organization more responsive to competition, including enriching and competency-based job analysis are discussed. And finally, explaining job analysis in a “worker-empowered” world is covered in this chapter. Interesting Issues: Technology and the Internet can serve as a resource for companies to streamline their job analysis processes. Some organizations have shifted to HR systems that don’t use job descriptions. Competency-based analysis can support the flexibility needed by high performance organizations. LEARNING OUTCOMES 1. Explain why talent management is important. 2. Discuss the nature of job analysis, including what it is and how it’s used. 3. Use at least three methods of collecting job analysis information, including interviews, questionnaires, and observation. 4. Write job descriptions, including summaries and job functions, using the Internet and traditional methods. 5. Write a job specification. 6. Explain competency-based job analysis, including what it means and how it’s done in practice. ANNOTATED OUTLINE I. The Talent Management Process What is Talent Management? Talent management is the goal-oriented and integrated process of planning, recruiting, developing, managing, and compensating employees. Five things set talent management apart from other recruiting, training, etc. activities. Talent management tasks are parts of a single interrelated process. Talent management decisions are goal-directed. Consistently use the same “profile” of competencies, traits, knowledge and experience for formulating recruitment plans for a job as you do for making selection, training, appraisal, and payment decisions for it. Actively segment and manage employees. Integrate/coordinate all the talent management functions. II. The Basics of Job Analysis Job analysis – The procedure for determining the duties and skill requirements of a job and the kind of person who should be hired for the job by collecting the following types of information: work activities; human behaviors; machines, tools, equipment, and work aids; performance standards; job context; and human requirements. Job description – A list of a job’s duties, responsibilities, reporting relationships, working conditions, and supervisory responsibilities – one product of a job analysis. Job specification – A list of a job’s “human requirements”: the requisite education, skills, knowledge, and so on – another product of a job analysis. A. Uses of Job Analysis Information 1. Recruitment and Selection – Job descriptions and job specifications are formed from the information gathered from a job analysis, and help management decide what sort of people to recruit and hire. 2. EEO Compliance – The U.S. Federal Agencies’ Uniform Guidelines on Employee Selection stipulate that job analysis is a crucial step in validating all major personnel activities. 3. Performance Appraisal – Managers use job analysis to determine a job’s specific activities and performance standards. 4. Compensation – The estimated value and the appropriate compensation for each job is determined from the information gathered from a job analysis. 5. Training – Based on the job analysis, the job description should show the job’s required activities and skills. B. Conducting a Job Analysis 1. Decide how the information will be used because that will determine what data will be collected and how it should be collected. 2. Review relevant background information, such as organization charts, process charts, and job descriptions. 3. Select representative positions to analyze because there may be many similar jobs, and it may not be necessary to analyze all of them. 4. Analyze the job by collecting data on job activities, required employee behaviors, working conditions, and human traits and abilities needed to perform the job. 5. Verify the job analysis information with job incumbents and supervisors to confirm that it is factually correct and complete. 6. Develop a job description and job specification from the information. Increasingly, these steps are being streamlined through the use of collaboration software. C. Job Analysis Guidelines Make the job analysis a joint effort by a human resources specialist, the worker, and the worker’s supervisor. Make sure the questions and process are clear to the employees. Use several different tools for job analysis.  NOTES Educational Materials to Use III. Methods for Collecting Job Analysis Information An HR specialist (an HR specialist, job analyst, or consultant), a worker, and the worker’s supervisor usually work together in conducting the job analysis. Job analysis data is usually collected from employees and supervisors familiar with the job (subject matter experts) using interviews and questionnaires. The data is then averaged, taking into account the departmental context of the employees, to determine how much time a typical employee spends on each of several specific tasks. It is important to make sure that surveys and questions are clear and understandable, and that respondents are observed and questioned early in the process to allow time for adjustments, if needed. A. The Interview - The three types of interviews managers use to collect job analysis data are: individual (to get the employee’s perspective on the job’s duties and responsibilities, group (when large numbers of employees perform the same job), and supervisor (to get his/her perspective on the job’s duties and responsibilities). 1. Typical Questions – “What is the job being performed?” “In what activities do you participate?” “What are the health and safety conditions?” Figure 4-3 gives an example of a job analysis questionnaire for developing job descriptions. 2. Structured Interviews – You can also use a structured or checklist format to guide the interview. Figure 4-3 presents an example of a job analysis information sheet. Pros & Cons –Interviews are simple, quick, and more comprehensive because the interviewer can unearth activities that may never appear in written form. The main problem is distortion, which may arise from the jobholder’s need to impress the perceptions of others. Interviewing Guidelines – Several techniques to keep in mind when conducting interviews are discussed. B. Questionnaires - Structured or unstructured questionnaires may be used to obtain job analysis information (see Figure 4-3). Questionnaires can be a quick, efficient way of gathering information from a large number of employees. But, developing and testing a questionnaire can be expensive and time consuming. C. Observation - Direct observations are useful when jobs consist of mainly observable physical activity as opposed to mental activity. A potential problem with direct observations is reactivity, which is where workers change what they normally do because they are being watched. Managers often use direct observation and interviewing together. D. Participant Diary/Logs - In a diary or log, the employee records every activity he/she engages in, along with the amount of time to perform each activity in order to produce a complete picture of the job. Pocket dictating machines can help remind the worker to enter data at specific times and eliminate the challenge of trying to remember at a later time what was done. E. Quantitative Job Analysis Techniques 1. Position Analysis Questionnaire (PAQ) is a questionnaire used to collect quantifiable data concerning the duties and responsibilities of various jobs, (see Figure 4-5) on five basic activities: 1) having decision-making/communication/social responsibilities, 2) performing skilled activities, 3) being physically active, 4) operating vehicles/equipment, and 5) processing information. 2. Department of Labor Procedure (DOL) is a standardized method for rating, classifying, and comparing virtually every kind of job based on data, people, and things. Table 4-1 shows a set of basic activities, and Figure 4-6 gives a sample summary. F. Internet-Based Job Analysis - Standardized questionnaires are frequently distributed, with instructions, via the Internet or intranet. The danger is that important points may be missed or misunderstood, clouding results. The Department of Labor’s O*NET method can help overcome these difficulties. Figure 4-7 shows selected general work activities.  NOTES Educational Materials to Use III. Writing Job Descriptions Figures 4-7 and 4-8 present a sample form of a job description. A. Job Identification – contains the job title, the FLSA status, date, and possible space to indicate who approved the description, the location of the job, the immediate supervisor’s title, salary, and/or pay scale. B. Job Summary – should describe the general nature of the job and include only major functions or activities. C. Relationships – occasionally a relationships statement is included. It shows the jobholders’ relationships with others inside and outside the organization. D. Responsibilities and Duties – The job analysis itself will provide information about what employees are doing on the job. The DOL’s Dictionary of Occupational Titles or other online sources can be used for itemizing the job’s duties and responsibilities. Standards of Performance and Working Conditions – states the standards the employee is expected to achieve under each of the job description’s main duties and responsibilities. Duty: Accurately posting Accounts Payable – Post all invoices received on the same working day, route all invoices to proper department for approval and there should be no more than 3 errors per month. G. Using the Internet for Writing Job Descriptions – Internet sites such as www.jobdescription.com and O*NET found at http://online.onetcenter.org/ are useful Web tools for developing job descriptions.  NOTES Educational Materials to Use IV. Writing Job Specifications A. Specifications for Trained Versus Untrained Personnel - Writing job specifications for trained employees is relatively straightforward because they are likely to focus on traits like length of previous service, quality of relevant training, and previous job performance. Writing job specifications for untrained employees is more complex because they are more likely to specify qualities such as physical traits, personality, interests, or sensory skills that imply some potential for performing or being trained to perform on the job. B. Specifications Based on Judgment - Job specifications may come from educated guesses or judgments, or from competencies listed in Web-based job descriptions like those listed at www.jobdescription.com or O*Net online (http://online.onetcenter.org). C. Job Specifications Based on Statistical Analysis 1. Basing job specifications on statistical analysis is more defensible, but it is a more difficult approach than the judgmental approach. 2. The aim of the statistical approach is to determine statistically the relationship between 1) some predictor or human trait, such as height, intelligence, or finger dexterity, and 2) some indicator or criterion of job effectiveness. 3. The five steps in statistical analysis are: a) analyze the job and decide how to measure job performance; b) select personal traits like finger dexterity that you believe should predict successful performance; c) test candidates for these traits; d) measure these candidates’ subsequent job performance; and e) statistically analyze the relationship between the human trait and job performance. D. Using Task Statements – Traditionally, organizations use job descriptions and job specifications, but task statements are becoming more popular.  NOTES Educational Materials to Use VI. Profiles in Talent Management The aim of creating profiles (or “competency” or “success” profiles) is to create detailed descriptions of what is required for exceptional performance in a given role or job, in terms of required competencies (necessary behaviors), personal attributes (traits, personality, etc.), knowledge (technical and/or professional), and experience (necessary educational and work achievements). Each job’s profile then becomes the anchor for creating recruitment, selection, training, and evaluation and development plans for each job. Competencies and Competency-Based Job Analysis - Employers are shifting towards newer approaches for describing the behaviors required for successful completion of the job, Competencies are usually skills that are observable. How to Write Job Competency-Based Job Descriptions – Defining and writing the job’s competencies involves a process similar to traditional job analysis and includes interviewing incumbents and their supervisors, identifying job responsibilities and Activities, accomplish their goals. This interesting shift should be one that could generate discussion in the class. Ask class members questions such as: “So how do you know if you are doing your job?” “How would performance appraisals be done?” “How do you ensure fairness between employees?” “How do you keep your employee doing what he or she should? DISCUSSION QUESTIONS 1. Why, in summary, should managers think of staffing-training-appraising and paying employees as a talent management process? Answer: Student answers may vary but all answers should include something related to the importance of maintaining and fostering quality employees. These different HR areas can be used to select employees with high performing potential and continuously grow and develop them. Managers should view staffing, training, appraising, and paying employees as a talent management process because it aligns workforce capabilities with organizational goals. Effective talent management ensures that the right people are hired, continuously developed, and properly motivated. It fosters a culture of performance and accountability, leading to improved productivity and employee satisfaction. Integrating these components helps optimize the overall talent strategy, driving organizational success. 2. Explain to the head of a company how he or she could use the talent management approach to improve his or her company’s performance. Answer: The answers here will be similar to the previous question. The important thing to look for in student responses is a thorough understanding of the advantages of keeping employees happy and productive through quality selection, appraisal and development processes. To improve company performance using a talent management approach, focus on: 1. Strategic Staffing: Hire individuals with the right skills and cultural fit to drive business goals. 2. Ongoing Training: Invest in employee development to enhance skills and keep pace with industry trends. 3. Performance Appraisal: Regularly assess and provide feedback to align employee performance with company objectives. 4. Reward and Recognition: Implement incentive programs to motivate and retain top talent. 5. Career Development: Offer clear advancement paths to build a committed and capable workforce. 3. What items are typically included in the job description? Answer: A job description is a written statement of what the jobholder actually does, how he or she does it, and under what conditions the job is performed. There is no standard format for writing job descriptions, but most descriptions include sections on: •job identification •job summary •relationships, responsibilities, and duties •authority of incumbent •standards of performance •working conditions •job specifications 4. What is job analysis? How can you make use of the information it provides? Answer: Job analysis is the procedure through which you determine the duties and nature of jobs and the kinds of people who should be hired for them. You can utilize the information it provides to write job descriptions and job specifications, which are then used in recruitment and selection, compensation, performance appraisal, and training. 5. We discussed several methods for collecting job analysis data—questionnaires, the position analysis questionnaire, and so on. Compare and contrast these methods, explaining what each is useful for and listing the pros and cons of each. Answer: Interviews are probably the most widely used method of collecting information for job analysis. The interview allows the incumbent to report activities that might not otherwise come to light (mental activities and activities that occur only occasionally). Observation is useful for jobs that consist mainly of physical activity that is clearly observable. Questionnaires are a quick and efficient way of obtaining information from a large number of employees; however, development costs can be high. Participant diary/logs can provide a comprehensive picture of a job, especially when supplemented with interviews; however, many employees do not respond well to the request to record all their daily activities. Quantitative job analysis techniques, such as PAQ, DOL, and Functional Job Analysis, are more appropriate when the aim is to assign a quantitative value to each job so that jobs can be compared for pay purposes. 6. Describe the types of information typically found in a job specification. Answer: It should include a list of the human traits and experience needed to perform the job. These might include education, skills, behaviors, personality traits, work experience, sensory skills, etc. 7. Explain how you would conduct a job analysis. Answer: There are six major steps in a well-conducted job analysis: 1) Determine how the job analysis information will be used and how to collect the necessary information; 2) Collect background information such as organization charts, process charts, and job descriptions; 3) Select representative positions to be analyzed; 4) Collect job analysis information; 5) Review the information with the participants; 6) Develop job descriptions and job specifications. 8. Do you think companies can really do without detailed job descriptions? Why or why not? Answer: Either side is an acceptable position to take. The key to grading this answer is the quality of the “why or why not” explanations. Look for students to clearly explain their position in terms of the effects of the lack of job descriptions on the performance, motivation, and capabilities of the people doing the job. In light of the Americans with Disabilities Act, discussions should also touch upon how an organization can adequately identify the “essential functions” of jobs without job descriptions. No, companies should not do without detailed job descriptions. They provide clarity on roles and responsibilities, which helps in recruiting the right talent, setting performance expectations, and ensuring compliance with legal standards. Detailed descriptions also aid in training, performance evaluations, and career development, contributing to overall organizational efficiency and effectiveness. Without them, companies risk misunderstandings and misalignment in job roles. 9. In a company with only 25 employees, is there less need for job descriptions? Why or why not? Answer: It is clearly more difficult to write job descriptions for positions that may have broad responsibilities because of the organization’s size. This does not, however, mean that it is less important. Look for sound arguments and reasoning. Again, the ADA applies to companies with as few as 15 employees. What other ways can a small employer successfully document the “essential functions” of a job? Even in a company with 25 employees, job descriptions are still important. They provide clarity on roles and responsibilities, prevent overlap, and ensure that everyone understands their specific duties. While roles in smaller companies may be more flexible, having job descriptions helps maintain structure, support career development, and align individual contributions with company goals. It also aids in performance evaluations and recruitment, even in smaller teams. Teaching Tip: Small and large employers are often willing to speak to a class about their experiences, for example, how they develop and use job descriptions within their organizations. If you do not know an employer to call, the local Chamber of Commerce in your community can be a resource. INDIVIDUAL AND GROUP ACTIVITIES 1. Working individually or in groups, obtain copies of job descriptions for clerical positions at the college or university where you study, or the firm where you work. What types of information do they contain? Do they give you enough information to explain what the job involves and how to do it? How would you improve on the descriptions? Answer: Job descriptions for clerical positions typically include job title, key responsibilities, required skills and qualifications, reporting relationships, and working conditions. They generally provide an overview of the job but may lack detailed guidance on specific tasks or procedures. To improve them, I would include more detailed descriptions of daily duties, performance expectations, and examples of key tasks to offer clearer guidance on how to perform the job effectively. 2. Working individually or in groups, use O*Net to develop a job description for your professor in this class. Based on that, use your judgement to develop a job specification. Compare your conclusions with those of other students or groups. Were there any significant differences? What do you think accounted for the differences? Answer: The students should go to the O*Net Web site at http://online.onetcenter.org to find sample job descriptions in order to create a job description for you. Once they create a job description, they should develop a job specification. Using ONet, a job description for a professor might include responsibilities such as teaching courses, conducting research, and advising students, with requirements for advanced degrees, research experience, and strong communication skills. A job specification would detail required qualifications, experience, and competencies. Differences among students' descriptions could arise from varying interpretations of the professor's role, specific institutional needs, and emphasis on different aspects of the job. These differences are likely due to personal perspectives and varying priorities in job responsibilities. 3. The HRCI “Test Specifications” appendix at the end of this book lists the knowledge someone studying for the HRCI certification exam needs to know in each area of human resource management (such as in Strategic Management, Workforce Planning, and Human Resource Development). In groups of 4-5 students, do four things: (1) review that appendix now; (2) identify the material in this chapter that relates to the required knowledge the appendix lists; (3) write four multiple-choice exam questions on this material that you believe would be suitable for inclusion in the HRCI exam; and (4) if time permits, have someone from your team post your team’s questions in front of the class, so the students on other teams can take each other’s exam questions. Answer: Topics covered in this chapter would include job analysis to write job descriptions and develop job competencies; identification and documentation of essential job functions for positions; and establishing hiring criteria based on the competencies needed. 1. Review Appendix: Identify key knowledge areas required for HRCI certification, such as Strategic Management and Workforce Planning. 2. Relate Material: Match the chapter content to these areas, focusing on relevant theories, practices, and examples. 3. Write Questions: Develop four multiple-choice questions based on the chapter’s content related to HRCI requirements. 4. Class Activity: Post the questions for peer review and discussion, allowing other students to engage with and answer them. EXPERIENTIAL EXERCISES & CASES Experiential Exercise: The Instructor’s Job Description Purpose: The purpose of this exercise is to give you experience in developing a job description by developing one for your instructor. Required Understanding: Students should understand the mechanics of job analysis and be thoroughly familiar with the job analysis questionnaires (see Figure 4-3 and the job description questionnaire, Figure 4-9) How to Set Up the Exercise/Instructions: •First, set up an even number of groups, preferably with each group consisting of four to six students. The groups should be separated and should not converse with each other. Half the groups in the class will develop a job description for the instructor’s position using the job analysis questionnaire (Figure 4-3), and the other half of the groups will develop it using the job description questionnaire (Figure 4.10). Each student should first review the appropriate questionnaire. •Next, each group will develop its own job specification for the instructor. •Next, each group should choose a partner group, one that developed the job description and job specification using the alternate method. (i.e., a group that used the job analysis questionnaire should be paired with a group that used the job description questionnaire) •Finally, within each of these new combined groups, compare and critique each of the two sets of job descriptions and job specifications. Did each job analysis method provide different types of information? Which seems superior? Does one seem more advantageous for some types of jobs than others? Application Case: The Flood 1. Should Phil and Linda ignore the old timers' protests and write up the job descriptions as they see fit? Why? Why not? How would you go about resolving the differences? Answer: In all likelihood, the old timers are accurate in their descriptions. There are several of them, and it appears that all of their descriptions agree. Also, since they were the ones actually doing the work, it is likely that they were the only ones who knew what was actually being done. One way to resolve the differences would be to examine the specific items that Phil and Maybelline feel the old timers are padding their jobs with. Ask for evidence from the old timers that they did these functions, and ask for evidence from Phil and Maybelline that someone else carried out those tasks. 2. How would you have conducted the job analysis? What should Phil do now? Answer:Other options may have been to conduct personal interviews instead of using the questionnaires. However, it is unlikely that the resulting disagreement would have been avoided by using another method. The method they used was a good one. Phil has several courses of action available to him. The best may be to allow the process to go on with the old timers’ job descriptions. Continuing Case: Carter Cleaning Company - The Job Description 1. What should be the format and final form of the store manager’s job description? Answer: The format noted in Figure 4-7 could be a reasonable format to use. Students may recommend that Jennifer include a standards of performance section in the job description. This lists the standards the employee is expected to achieve under each of the job description’s main duties and responsibilities, and would address the problem of employees not understanding company policies, procedures, and expectations. In addition, students may recommend that Jennifer instead take a competency-based approach, which describes the job in terms of the measurable, observable, and behavioral competencies that an employee doing that job must exhibit. Because competency analysis focuses more on “how” the worker meets the job’s objectives or actually accomplishes the work, it is more worker-focused. The store manager’s job description should be clear and structured, including: 1. Job Title: Clearly state the position. 2. Responsibilities: List key duties and tasks. 3. Qualifications: Detail required skills, experience, and education. 4. Reporting Relationships: Specify who the manager reports to and supervises. 5. Working Conditions: Describe work environment and any physical requirements. The final form should be concise, easy to read, and formatted for quick reference. 2. Is it practical to specify standards and procedures in the body of the job description, or should these be kept separately? Answer: They do not need to be kept separately, and in fact both Jennifer and the employees would be better served by incorporating standards and procedures into the body of the description. The exception to this would be if the standards and procedures are so complex or involved that it becomes more pragmatic to maintain a separate procedures manual 3. How should Jennifer go about collecting the information required for the standards, procedures, and job description? Answer: She should first conduct the job analysis by collecting information about the work activities, human behaviors, machines, tools, equipment, and work aids, performance standards, job context, and human requirements. The best methods for collecting this information in this case are through interviews, questionnaires, observations, and employee diaries/logs. In addition, she should ensure that she is identifying the essential functions of the job, and that the descriptions are ADA compliant. 4. What, in your opinion, should the store manager’s job description look like and contain? Answer: The store manager’s job description should include a list of the job’s significant responsibilities and duties. For example, the following duties should include quality control, store appearance and cleanliness, customer relations, bookkeeping and cash management, cost control and productivity, damage control, pricing, inventory control, etc. The job description should also include any educational requirements as well as information regarding working conditions. Translating Strategy into HR Policies and Practice Case: The Hotel Paris Job Descriptions – The continuing case study of Hotel Paris is discussed here. In this example, students develop a job description for the front desk clerk position and identify important employee behaviors for Hotel Paris’ staff based on hotel strategy. 1. Based on the hotel’s stated strategy, list at least four important employee behaviors for Hotel Paris’ staff. Answer: Student answers will vary. Important employee behaviors might include: •The ability to project a positive attitude and put the customer’s needs first, even if the customer is curt •Showing tact and discretion in responding to personal requests from a hotel guest •Being aware of the reactions of others and responding to those reactions in an appropriate way •Being able to handle multiple priorities without getting “flustered” •The ability to resolve billing issues with discretion and a positive demeanor Based on Hotel Paris’ strategy, important employee behaviors should include: 1. Exceptional Customer Service: Providing personalized and attentive service to enhance guest satisfaction. 2. Professionalism: Maintaining a polished and courteous demeanor at all times. 3. Attention to Detail: Ensuring accuracy in room preparations and handling guest requests. 4. Team Collaboration: Working effectively with colleagues to ensure smooth operations and a cohesive guest experience. 2. If time permits, spend some time prior to class observing the front desk clerk at a local hotel. In any case, develop a job description for a Hotel Paris front desk clerk. Answer: Use of O*NET is recommended. A full description of tasks and responsibilities is located under the job title “Hotel, Motel, and Resort Desk Clerks.” Job Description: Front Desk Clerk - Hotel Paris Job Title: Front Desk Clerk Responsibilities: • Greet and check-in/check-out guests with professionalism. • Handle reservations, process payments, and manage room assignments. • Address guest inquiries and resolve complaints promptly. • Maintain accurate records and ensure a clean and organized front desk area. Qualifications: • Strong communication and customer service skills. • Proficiency in reservation systems and basic computer applications. • Ability to work flexible hours, including weekends and holidays. KEY TERMS Solution Manual for Human Resource Management Gary Dessler 9780132668217, 9780134235455, 9780135172780