Chapter Summary

• Human resource management was once called the personnel department. In the past, hiring people and working with hiring paperwork was this department’s job. Today, the HRM department has a much broader role, and as a result, HR managers must align their strategies with the company’s strategies.
• Functions that fall under HRM today include staffing, creation of workplace policies, compensation and benefits, retention, training and development, and working with regulatory issues and worker protection.
• Human resource strategy is a set of elaborate and systematic plans of action. The company objectives and goals should be aligned with the objectives and goals of the individual departments.
• The steps to creating an HRM strategic plan include conducting a strategic analysis. This entails having an understanding of the values and mission of the organization, so you can align your departmental strategy in the same way.
• The second step is to identify any HR issues that might impact the business.
• The third step, based on the information from the first and second steps, is to prioritize issues and take action. Finally, the HRM professional will draw up the HRM plan.
• The HRM plan consists of six steps. The first is to determine the needs of the organization based on sales forecasts, for example. Then the HR professional will recruit and select the right person for the job. HRM develops training and development to help better the skills of existing employees and new employees, too. The HR manager will then determine compensation and appraise performance of employees. Each of these parts of the HRM plan is discussed in its own separate chapter in greater detail.
• As things in the organization change, the strategic plan should also change.
• To make the most from a strategic plan, it’s important to write the goals in a way that makes them measurable.

Chapter Case

We Merged…Now What?

Earlier this month, your company, a running equipment designer and manufacturer called Runners Paradise, merged with a smaller clothing design company called ActiveLeak. Your company initiated the buyout because of the excellent design team at ActiveLeak and their brand recognition, specifically for their MP3-integrated running shorts. Runners Paradise has thirty-five employees and ActiveLeak has ten employees. At ActiveLeak, the owner, who often was too busy doing other tasks, handled the HRM roles. As a result, ActiveLeak has no strategic plan, and you are wondering if you should develop a strategic plan, given this change. Here are the things you have accomplished so far:

• Reviewed compensation and adjusted salaries for the sake of fairness. Communicated this to all affected employees.
• Developed job requirements for current and new jobs.
• Had each old and new employee fill out a skills inventory Excel document, which has been merged into a database.

From this point, you are not sure what to do to fully integrate the new organization.

1. Why should you develop an HRM strategic plan?
2. Which components of your HR plan will you have to change?
3. What additional information would you need to create an action plan for these changes?

Team Activities

1. Work in a group of three to five people. Choose a company and perform a SWOT analysis on that organization and be prepared to present it to the class.

2. Based on the SWOT analysis you performed in the first question, develop new objectives for the organization.