Strategic Human Resource Management

Strategic Human Resource Management - 15.660 Strategic...

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15.660 Strategic Human Resource Management Professor M. Diane Burton MIT Sloan School of Management
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Our Goal for SHRM: To understand the strategic issues in using Human Resources for sustainable competitive advantage and how to implement the changes necessary to achieve this. This requires that we be able to: • Think systematically and strategically about managing human assets • Understand what really needs to be done to implement these policies.
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HR Creating Value Employees Customers Investors Morale Commitment Productivity Competence Satisfaction Loyalty Commitment How does HR affect profitability, cost, growth, cash flow, and margin? Human Resource Management Practices Adapted from: David Ulrich, Human Resource Champions, p.247
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“The War for Talent” “In the new economy, competition is global, capital is abundant, ideas are developed quickly and cheaply, and people are willing to change jobs often. In that kind of environment… all that matters is talent… superior talent will be tomorrow’s prime source of competitive advantage.” Chambers, E. et al. (1998) “The War for Talent.” McKinsey Quarterly, 2-15
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Extraordinary People, Ordinary Performance? Performance Extraordinary Ordinary ? ? Extraordinary Quality of People Ordinary
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Case Studies z Southwest Airlines z Portman Hotel z Morgan Stanley z Slade Company z NUMMI z Saturn z ServiceMaster z John Snow Institute z Eastern Airlines z Safelight Autoglass z Visionary Design Systems z SAS Institute z Harrah’s Entertainment z Springfield ReManufacturing z Nordstrom
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Ordinary People, Extraordinary Performance? Performance Extraordinary Ordinary ± ± Extraordinary Quality of People Ordinary
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Two Mysteries z How have these companies achieved extraordinary performance with people who are no different from those employed by the competition? z If what they are doing is so understandable, why haven’t their competitors simply replicated them and achieved similar competitive advantages?
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Several Integrative Themes z The role of HR in the execution of strategy
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HR is about the Execution of Strategy “The competitive difference is not in deciding what to do, but in how to do it. Execution becomes paramount.” Larry Bossidy CEO Allied-Signal “I could leave our strategic plan on a plane and it wouldn’t make any difference. No one could execute it. Our success has nothing to do with planning. It has to do with execution.” Dick Kovacevich CEO Norwest “I spend a lot of time talking about values rather than trying to figure out business strategies. .. Execution is what spells the difference between success and failure.” Lew Platt CEO HP
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Competitive Advantage through People z A worldwide study of the automobile industry showed that people-centered practices were associated with almost twice the productivity and quality as conventional mass production.
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This note was uploaded on 03/26/2010 for the course HRD 15.660 taught by Professor M.dianeburton during the Spring '10 term at MIT.

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Strategic Human Resource Management - 15.660 Strategic...

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