Chapter 2: Strategic HR Management and Planning

1. Strategy: an organizations proposition for how to compete successfully and thereby

survive and grow
2. The strategy chosen by the organization will determine the number, nature, and
capabilities of people needed in the organization.
3. Strategic HR management: the use of employees to gain or keep a competitive
advantage
4. BNA study of HR strategic performance notes:
a. Top mgt. usually does not assess HR on its strategic contributions
b. Only about ¼ of firms monitor effectiveness/productivity statistics (measures
clearly tied to business strategic performance)
c. Around ½ of organizations don’t have an HR strategy
d. 40% of firms report weak or no links between HR and overall strategic planning
5. Companies that follow HR best practices have more than 50% higher market value than
those who do not. Some of those best practices are:
a. Employment security
b. Selective recruiting
c. High wages/incentives
d. Information sharing/participation
e. Training/Cross-training
f. Promotion from within
g. Measurement
6. How HR professionals provide the perspective and experience to be successful in
strategic planning?
a. Understand the business
b. Focus on the key business goals
c. Know what to measure
d. Prepare for the future
7. Organizational Culture: consists of shared values and beliefs that give members of an
organization meaning and provide them with rules for behavior
8. Strategic HR management plays a significant role in:
a. Organizational productivity
b. Customer service and quality
c. Financial Contributions
9. Productivity: a measure of the quantity and quality of work done, considering the cost of
the resources used
10. Unit Labor Cost: computed by diving the average cost of workers by their average levels
of output
11.