HRM textbook

72 PART 1 INTRODUCTION
1 Explain why strategic
planning is important
to all managers.
THE STRATEGIC MANAGEMENT PROCESS
As in the following Strategic Context feature, we can use the Shanghai Portman example
to get a bird's eye view of the strategic human resource management process.
THE STRATEGIC CONTEXT
The Shanghai Portman Hotel
In Chapter 1, we said that strategic human resource management means formulating
and executing human resource policies and practices that produce the
employee competencies and behaviors the company needs to achieve its strategic
aims. At the Shanghai Portman, the strategic human resource management
process involved taking these steps:
Strategically, they set the goal of making the Shanghai Portman outstanding
by offering superior customer service.
To achieve this, Shanghai Portman employees would have to exhibit new skills and
behaviors, for instance, in terms of how they treated and responded to guests.
To produce these employee skills and behaviors, management formulated new
human resource management plans and policies. For example, they introduced
the Ritz-Carlton Company s human resource system to the Portman.
Thus, the hotel s new head and his managers personally interviewed each job
candidate. They probed each candidate s values, selecting only employees
who cared for and respected others: Our selection focuses on talent and
personal values because these are things that can t be taught . . . it s about
caring for and respecting others. 1
Management s efforts paid off. Their new human resource plans and practices
produced the employee behaviors required to improve the Portman s level of
service, thus attracting new guests. Travel publications were soon calling it the
best employer in Asia, overall best business hotel in Asia, and best business
hotel in China. Profits soared, in no small part due to effective strategic human
resource management.
In this chapter we look more closely at how managers formulate and implement
plans, and how they analyze and evaluate their results. We will start with some basic
planning-related definitions.
Goal-Setting and the Planning Process
Whether the manager is planning to boost a hotel s profitability or something more
mundane, the basic planning process is the same. It involves setting objectives, making
basic planning forecasts, reviewing alternative courses of action, evaluating which
options are best, and then choosing and implementing your plan. A plan shows the
course of action for getting from where you are to where you want to go in other
words, to the goal. Planning is always goal-directed (in this case, to improve the
hotel s level of service significantly ).
THE HIERARCHY OF GOALS In companies, it is traditional to view the goals
from the top of the firm down to front-line employees as a chain or hierarchy of goals.
Figure 3-1 illustrates this. At the top, the president sets long term or strategic goals
(such as Double sales revenue to $16 million in fiscal year 2011 ). His or her vice
presidents then set goals, such as add one production line at plant, which flow from
and make sense in terms of accomplishing the president s goal. (In other words, What
must I as production head do to help make sure that the company accomplishes its
double sales goal? ) Then the vice presidents subordinates set their own goals, and so
on down the chain of command. The planning process thus traditionally starts with
formulating top-level, long-term strategic plans and goals.