CHAPTER 4 HR Planning for Alignment and Change
Chapter 4
HR PLANNING FOR ALIGNMENT AND CHANGE
Opening Case: Managing Human Resources at Weyerhaeuser
Company
Due to increased competition from smaller, customer-focused firms,
Weyerhaeuser had to adapt or go out of business. One of the keys to their
turnaround was a new HRM system to change employee behaviors, enhance
values, and restructure the organization to focus on environmental responsibility,
the customer, and teamwork.
CHAPTER OUTLINE
I. THE STRATEGIC IMPORTANCE OF HR PLANNING FOR ALIGNMENT
AND CHANGE
A. Alignment
Changes to today’s organizations are constant. In order to succeed, a
firm must align its HRM system so that HR policies and practices facilitate
the behaviors and competencies needed for future organizational success.
Two components of alignment are:
1. Vertical Alignment
When the HRM system fits with all other elements of the organizational
2. Horizontal Alignment
When the HRM policies and practices are consistent with each other
so that they send a coherent message to employees, the HRM system
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B. Types of Organizational Change
1. Degree of Change
Radical change occurs when organizations make major adjustments
in the ways they do business. Radical change does not occur very
Incremental change refers to more of an evolutionary process in
which smaller changes may occur on a regular basis. Over time, the
2. Timing of Change
Reactive change occurs when an organization is forced to change in
response to an external or internal force. Reactive change can be
either incremental or radical. (Weyerhaeuser’s was radical.) It takes
place in response to factors such as a new strategic move by
competitors or performance problems of the firm.
Anticipatory change occurs when managers make organizational
changes in anticipation of upcoming events or early in the cycle of a
Teaching Note: Charles Schwab introduced incremental reactive change when its
financial performance dropped in 2000 and 2001. Instead of layoffs, it cut costs by
cutting executive salaries, freezing hiring, and limiting travel and entertainment
expenses. When the economy did not rebound, it was forced to layoff employees
but did so with generous severance packages.
C. Learning Organizations
Recently, many companies have identified organizational learning as an
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II. OVERVIEW OF THE HR PLANNING AND CHANGE PROCESS
Strategic change often involves chaos. Planning is the mechanism that
keeps chaos under control.
A. The Elements of Human Resource Planning
Exhibit 3.2 identifies the activities associated with HR planning. The three
elements are:
1. Scanning
The first phase of the planning process is to scan the external and
2. Objectives and Metrics
HR objectives state in quantitative or qualitative terms what is to be
3. Plans and Timetables
The last step is to develop an HR plan (i.e., a blueprint for action) and
the time in which each planned activity will be completed. This stage
addresses two key issues:
Teaching Note: Because of rapid environmental changes, HR managers may do
scenario planning, a process in which several different alternatives are generated
and the strategic issues associated with each scenario are identified.
B. Aligning Business Planning and HR Planning
Historically, HR planning involved getting the right people in the right jobs
environments changed. Exhibit 3.5 lists the six-step process that HP uses
in planning for future workforce needs.
C. The HR Triad
Exhibit 3.2 shows that the rate of participation of HR managers in the
III. SCANNING AND ASSESSING THE EXTERNAL AND ORGANIZATIONAL
ENVIRONMENTS
The first phase of planning for change involves gathering data to learn about
and understand all aspects of the environment. Details were discussed in
Chapter 2.
HR expertise is valuable here in terms of assessing relevant labor market
conditions, making predictions about how new employment laws and
regulations might affect the organization, and alerting managers to relevant
trends in union activity or labor relations. The effect of environmental change
is firm-specific. For example, as the age of the work-force increases, this will
have different impacts on different firms, depending on where they are in the
firm’s life cycle and the make-up of its employee body.
A. Organization Analysis
An organization’s assessment of its internal and external environments is
called an organizational analysis. This analysis should precede any action
on the part of the organization. Reviewing a wide range of information is
B. HR Forecasts
HR forecasts estimate the firm’s future human resource needs—how
many, what skills, and when needed. The quality of any forecast depends
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1. Judgmental Forecasts
Judgmental forecasts rely on the opinions of informed experts who
provide their estimates of current and projected productivity levels,
2. Statistical Forecasts
Statistical forecasting methods rely heavily on objective data and
Teaching Note: Forecasters often rely on a combination of judgmental and
statistical forecasts. They also often develop contingency plans in the event that
a particular aspect of the environment does not happen as predicted.
C. Employee Opinions
Employee opinions about problems and potential solutions can be very
valuable when planning for organizational change. Three methods for
gathering this information are:
➢ Employee Surveys
D. Behavioral Cause-and-Effect Models
This approach provides insights into why employees behave as they do
and they identify the consequences of these behaviors for the
organization. These models are often called “strategy maps.” The
objective of a strategy map is to help managers understand the causal
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IV. DETERMINING HR OBJECTIVES AND METRICS
Successful strategic change is guided by clear objectives. The strategic
objectives of a change effort should be aligned with the corporate and
business-level strategies of the firm.
A. Linking HR Objective to Strategic Business Objectives
Strategic business objectives help an organization to focus on various
employee issues such as the number of employees needed given the
growth or decline of the firm, new competencies or skills needed to
B. Developing Metrics to Match the Objectives
Metrics assess progress and improvement. Different examples are:
1. “Bottom–line” HR Metrics
Measures such as HR ROI, HR Valued Added, HR Expense Ratio and
2. HR Metrics for SunTrust Bank
Exhibit 3.9 highlights SunTrust Bank’s metrics for evaluating its staffing
system.
3. HR Metrics for Deutsche Bank
Teaching Note: Have your students develop a set of metrics for evaluating one
aspect of the HR process—recruiting, retention, training and development, etc.
V. DEVELOPING HR PLANS AND TIMETABLES
Strategic plans can be quite complex, especially if all departments or
business units are involved. To be effective the HR plan must be fully
integrated with the strategic plan.
A. Considering Alternatives
The list of alternative ways to achieve a set of objectives is in many cases
quite extensive and diverse. Each alternative possesses different
B. Building a Complete HR Plan
A comprehensive HR plan should have several components such as:
1. Staffing Plans
Staffing plans are based on forecasts of future labor demand and
2. Talent Management Plans
Succession plans may be formalized by tracking talent pools and
creating replacement charts. (Exhibit 3.12 highlights some of the best
practices for succession planning.) A talent pool is a list of employees
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3. Training Plans
4. Leadership Development Plans
Leadership development plans need to identify who is qualified to
5. Plans for Changes in Benefits
HR plans for supporting strategic change frequently involve changes in
C. Timetables
Building in deadlines and scheduled check points into strategic change
initiatives help to facilitate the implementation process. The challenge is
to set deadlines that are challenging but achievable.
It is critical to have realistic expectation for how quickly change will occur.
Change may happen very quickly (1-2 years) or may take up to 10 years.
VI. IMPLEMENTING HR ACTION PLANS AND FACILITATING CHANGE
A. Involving Employees
HR professionals need to find ways to involve employees in planning for
strategic change. It is also important that HR professionals work to obtain
the support and commitment of employees to the change. HR can use
Teaching Note: Ask students what they think would be the differences in
employee involvement in large firms versus small firms.
CHAPTER 4 HR Planning for Alignment and Change
B. Establishing Accountability
It is important to state the objectives of a change initiative and who is
responsible for making the needed changes. That is, employees need to
C. Change Has Already Started
If change has been well-communicated, the change process will be
underway by the time plans have been fully developed. Resistance may
still be found, however.
D. Managing Resistance to Change
Resistance can take the form of criticism, defiance, sabotage, insincere
agreement, and other things. Fear, misunderstandings, and cynicism are
three common reasons for resistance.
1. Fear
Some employees fear change because they do not believe they can
2. Misunderstandings
Often leading to lack of trust, misunderstanding the implications of
3. Cynicism
Some employees become cynical about change efforts as a result of
managers implementing one management fad after another. This
Teaching Note: If you are in a company that has tried several different
“change program” fads, how do you avoid or control cynicism?
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4. Showing Respect in Difficult Times
During downsizing or other force reductions, it is important to pay
5. Review, Revise, And Refocus
Just as products and services are evaluated in the marketplace,
VII. CURRENT ISSUES
The two issues of prime concern to HR planning are global
workforce planning and the wholly sustainable enterprise.
A. Global Workforce Planning
The long-run survival of firms in the global marketplace requires that firms
must think in terms of planning and managing a global workforce. Can
local HR practices be used in overseas operations or must they be
developed to fit local conditions?
B. The Wholly Sustainable Enterprise
Firms also need to think about the impact (footprint) they have on the
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QUESTIONS FOR DISCUSSION AND REFLECTIVE THINKING
1. Review Chapter 2 which describes several aspects of the external and
organizational environments. Which aspects of the external
environment are more likely to stimulate change in the next 10 years?
Do you think these changes will be incremental or radical? Explain.
2. Now consider the HR implications of the changes you identified when
you answered question 1: Which HR policies and practices are most
likely to be affected by these changes (e.g., recruitment, training,
performance management, etc.)? Describe the consequences you think
are the most likely.
Depends on the students’ answers to Question 1, but for globalization, this
3. Deutsche Bank relies heavily on employee surveys to create its HR
metrics. What are some advantages and disadvantages of employee
surveys as a method for assessing progress toward HR objectives? For
each HR objective shown in Exhibit 3.10, describe one HR metric of
actual employee behavior that could be used.
If the survey is done appropriately, you can get open, honest feedback from
CHAPTER 4 HR Planning for Alignment and Change
4. Is it inevitable that employees will respond to change with feelings of
fear? If you believe the answer is yes, state the implications of this for
managing strategic change. If you believe the answer is no, describe
what managers can do to minimize such feelings during change.
5. A thorough approach to planning for change can take a great deal of
time. When time is short, which steps in the planning process can be
eliminated the most readily. What are the potential risks of skipping
these steps? Explain your logic.
6. Throughout your career you will often be expected to lead and facilitate
radical change initiatives. What can you personally do now to become
better prepared to be an effective change leader and facilitator?
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CASE STUDY: MANAGING HUMAN RESOURCES AT BARDEN
BEARINGS
DISCUSSION QUESTIONS:
1. Which of the HR objectives facing Mr. Brush are the most important to
the success of the business? Prioritize them and justify your list.
Although there can be varying opinions as to which is the most important HR
2. Consider this list of objectives in Question 1 from the perspective of
employees. How would you, as an employee, prioritize the list? What are
the implications of any differences in the two lists of priorities for Mr.
Brush?
To the extent that the employee views his or her future dependent on the
3. Choose two objectives. For each, describe the key roles and
responsibilities of the HR manager, the line managers, and other
employees.
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VIDEO CASE STUDY: GOLD + WILLIAMS
Instructors: The following video case can be found on the companion DVD. The
video can be used in class as an introductory activity or a post-lecture activity, as
well as an online assignment for those students using CourseMate.
DISCUSSION QUESTIONS:
1. Gold + Williams operates a factory in an area where many have beliefs
that would be contrary to the values of its leaders. In order to promote
diversity and harmony within its workforce, should it seek to employ
only those who share the firm’s values? Should it seek to change the
values of those people the firm hires?
Opinions will vary. However, the question might be asked as to whether
2. Bob Williams indicated that the Golden Rule was a basic part of its HR
policy. If all firms were to take that approach, would that eliminate the
need for legislation dealing with discrimination?
3. The firm is active not only in opposing discrimination but it is also into
other social and environmental issues. What are the HR risks and
benefits of its involvement in those issues?
4. The firm claims that people are judged only on their performance. Do
you think that most people can set aside their values and beliefs and
objectively and fairly evaluate ONLY in terms of their performance?
Opinions will vary.