Strategic Alignment, Flexibility, and HR Practices
Strategic Fit and Flexibility
Strategic fit: Aligning a company’s strategy and its resources with the environment allows the company to achieve superior performance.
Strategic flexibility: The ability of the company to adjust to changes in the competitive environment.
Sustaining Strategic Fit with Flexibility
How can a company sustain strategic fit while enjoying flexibility in the competitive environment?
Provide system flexibility within the company, which allows it to create batches of unique products quickly, at a relatively low cost, as and when required. Transferability makes the flexible system a valuable resource. Strive to acquire flexible (knowledge) workers and organic structures in a hypercompetitive environment. The basis for this flexibility can be made possible by installing a company culture based on creativity and quick response.
HR Best Practices
The best practices paradigm: Deloite and Doty identified seven practices consistently considered to be strategic:
- Internal career opportunities
- Formal training systems
- Appraisal measures
- Profit sharing
- Employment security
- Voice mechanisms
- Job definition
Horizontal fit: Refers to the internal consistency of the organization’s HR policies and practices.
Vertical fit: Refers to the congruence of the HR system with other organizational characteristics, such as the company strategy.
The Learning Organization
A learning organization is an organization that has developed the capacity to continuously learn, adapt, and change through the practice of knowledge management by employees. Characteristics include:
- Open, team-based organization design that empowers employees
- Extensive and open information sharing
- Leadership that provides a shared vision of the organization’s future
- A strong culture of shared values, trust, openness, and a sense of community
Employee Selection Process
Steps in the selection process:
- Screening applications and résumés
- Testing and reviewing work samples
- Interviewing candidates
- Checking references and background
- Making the selection
(NPV= -(co+xot)+sum(st-xt)/(1+r)^t)
Performance Management and Measurement
Measuring performance management: Methods
- Making comparisons: Simple ranking, forced distribution, paired distribution.
- Rating individuals: Graphic rating scale, mixed-standard scale, critical-incident method, BARS (Behaviorally Anchored Rating Scales), behavioral observation scale, OBM (Organizational Behavior Modification).
- Measuring the results: MBO (Management by Objectives)
- Measuring quality: Total Quality Management (TQM): Performance measurement combines measurements of attributes and results.
Sources: 360-Degree Performance Appraisal: Performance measurement that combines information from the employees’ managers, peers, subordinates, self, and customers.
Performance Feedback
Giving performance feedback is very important. Annual feedback is not enough. It should be a regular, expected management activity. During the feedback session, managers can take any of these approaches: “Tell and sell,” “Tell and listen,” and “Problem-solving.”
Compensation
Compensation: All forms of financial returns and tangible services and benefits employees receive as part of an employment relationship.
Purpose of compensation for the employer: Attract candidates, motivate employees, retain talent, consistency in compensation. For the employee: Work-life balance, recognition, planning for a better quality of life.
Compensation Objectives: IBM
- Pay for performance: Pay our best performers like the best in the marketplace.
- Differentiate strongly: Give larger increases/bonuses to those who deserve more.
- Pay competitively: Attract, retain, and motivate, as well as enable competitive prices for IBM services and solutions.