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A strategic analysis looks at three aspects of the individual HRM department:
- Understanding of the company mission and values. It is impossible to plan for HRM if one does not know the values and missions of the organization. As we have already addressed in this chapter, it is imperative for the HR manager to align department objectives with organizational objectives. It is worthwhile to sit down with company executives, management, and supervisors to make sure you have a good understanding of the company mission and values. Another important aspect is the understanding of the organizational life cycle. You may have learned about the life cycle in marketing or other business classes, and this applies to HRM, too. An organizational life cycle refers to the introduction, growth, maturity, and decline of the organization, which can vary over time. For example, when the organization first begins, it is in the introduction phase, and a different staffing, compensation, training, and labor/employee relations strategy may be necessary to align HRM with the organization’s goals. This might be opposed to an organization that is struggling to stay in business and is in the decline phase. That same organization, however, can create a new product, for example, which might again put the organization in the growth phase. Table 2.2 "Lifecycle Stages and HRM Strategy" explains some of the strategies that may be different depending on the organizational life cycle.
- Understanding of the HRM department mission and values. HRM departments must develop their own departmental mission and values. These guiding principles for the department will change as the company’s overall mission and values change. Often the mission statement is a list of what the department does, which is less of a strategic approach. Brainstorming about HR goals, values, and priorities is a good way to start. The mission statement should express how an organization’s human resources help that organization meet the business goals. A poor mission statement might read as follows: “The human resource department at Techno, Inc. provides resources to hiring managers and develops compensation plans and other services to assist the employees of our company.” A strategic statement that expresses how human resources help the organization might read as follows: “HR’s responsibility is to ensure that our human resources are more talented and motivated than our competitors’, giving us a competitive advantage. This will be achieved by monitoring our turnover rates, compensation, and company sales data and comparing that data to our competitors.” 1 When the mission statement is written in this way, it is easier to take a strategic approach with the HR planning process.
- Understanding of the challenges facing the department. HRM managers cannot deal with change quickly if they are not able to predict changes. As a result, the HRM manager should know what upcoming challenges may be faced to make plans to deal with those challenges better when they come along. This makes the strategic plan and HRM plan much more usable.
Table 2.2 Lifecycle Stages and HRM Strategy
| Life Cycle Stage | Staffing | Compensation | Training and Development | Labor / Employee Relations |
|---|---|---|---|---|
| Introduction | Attract best technical and professional talent. | Meet or exceed labor market rates to attract needed talent. | Define future skill requirements and begin establishing career ladders. | Set basic employee-relations philosophy of organization. |
| Growth | Recruit adequate numbers and mix of qualifying workers. Plan management succession. Manage rapid internal labor market movements. | Meet external market but consider internal equity effects. Establish formal compensation structures. | Mold effective management team through management development and organizational development. | Maintain labor peace, employee motivation, and morale. |
| Maturity | Encourage sufficient turnover to minimize layoffs and provide new openings. Encourage mobility as reorganizations shift jobs around. | Control compensation costs. | Maintain flexibility and skills of an aging workforce. | Control labor costs and maintain labor peace. Improve productivity. |
| Decline | Plan and implement workforce reductions and reallocations; downsizing and outplacement may occur during this stage. | Implement tighter cost control. | Implement retraining and career consulting services. | Improve productivity and achieve flexibility in work rules. Negotiate job security and employment-adjustment policies |
Source: Seattle University Presentation, accessed July 11, 2011, http://fac-staff.seattleu.edu/gprussia/web/mgt383/HR%20Planning1.ppt.
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