Chapter 2 - Human Resource Strategy and Planning

strategy

A plan an organization follows for how to compete successfully, survive, and grow

Strategic planning

The process of defining organizational strategy, or direction, and allocating resources toward its achievement

organizational mission

The core reason for the existence of the organization and what makes it unique

organizational core values

Principles that create the operating philosophy for organizational decisions

VUCA

An acronym standing for volatile, uncertain, complex, and ambiguous

triple bottom line

Considers the organization’s impact on three major areas—economic, social, and environmental

Strategic HR management

The appropriate use of HR management practices to gain or keep a competitive advantage

Multinational corporation (MNC)

An organization that has facilities and other assets in at least one country other than its home country

Offshoring

A company’s relocation of a business process or operation from one country to another

Human resource planning

The process of analyzing and identifying the need for and availability of people so that the organization can meet its strategic objectives

environmental scanning

The assessment of external and internal environmental conditions that affect the organization

Succession planning

The process of identifying a plan for the orderly replacement of key employees

Forecasting

Using information from the past and present to predict future conditions

Severance benefits

Temporary payments made to laid-off employees to ease the financial burden of unemployment

Outsourcing

Transferring the management and performance of a business function to an external service provider

Alternate work arrangements

Nontraditional schedules that provide flexibility to employees

Due diligence

A comprehensive assessment of all aspects of the business being acquired

Effectiveness

The ability of a program, project, or task to produce a specific desired effect or result that can be measured

Efficiency

The degree to which operations are carried out in an economical manner

HR metrics

Specific measures of HR practices

HR analytics

An evidence-based approach to making HR decisions on the basis of quantitative tools and models

Benchmarking

The process of comparing an organization’s business results to industry standards or best practices

balanced scorecard

A framework that organizations use to report on a diverse set of performance measures

total cost of workforce (TCOW)

A comprehensive measure that takes into account the full cost for all people that contribute work to the organization

return on investment (ROI)

Calculation showing the value of investments in human capital

Human capital value added (HCVA)

Calculated by subtracting all operating expenses except labor expenses from revenue and dividing by the total full-time head count

Human capital return on investment (HCROI)

Directly shows the amount of profit derived from investments in labor

Human economic value added (HEVA)

Wealth created per employee

HR audit

A formal research effort to assess the current state of an organization’s HR practices