In Colloboration with

6518YPCBSC
STRATEGIC HRM
Lecture 8:
Strategic Evaluation and impact
Learning Outcomes

By the end of this session, you should be able to:

❑ Review strategy evaluation and the process of evaluating
strategies.
❑ Analyse the impact of strategy evaluation on employees
and organisations.
Strategic HRM or People Strategy - defined

❑ Strategic HRM provides a framework linking people management and

development practices to long-term business goals and outcomes.

❑ It focuses on longer-term resourcing issues within the context of an

organisation's goals and the evolving nature of work.

❑ It also informs other HR strategies, such as reward or performance,

determining how they are integrated into the overall business
strategy.

CIPD 2021
People strategy Roadmap
Evaluation

❑ Although strategic HR is shaped by the development of

long-term strategies, it also involves the evaluation and
implementation of strategies that will further the
achievements of an organisation’s mission.

❑ How then can strategic thinkers ensure the quality

of the strategy?
▪ It would seem worthwhile to have some way of evaluating
it before it is implemented.
▪ As Youndt et al. (1996) said, risky strategic decisions can
inflict serious consequences and can be extremely difficult,
if not impossible, to reverse.
Strategic management process

and evaluation
So…what is strategy evaluation?
▪ Strategic evaluation is a way for organisations to evaluate the health and productivity of their company and their
future endeavours.
▪ Ideally, strategic evaluations attempt to see beyond factors that influence short-term plans, and seek dynamic
study of the trends that will dictate the future success or failure of the company (Hasting, 1996).

Strategy Strategy Strategic

formulation implementation evaluation

❑ Strategic evaluation and control is the process of determining the effectiveness of a given strategy in achieving
the organisational objectives and taking corrective actions whenever required.

❑ Control can be exercised through formulation of contingency strategies, usually developed by strategic managers.
Strategy evaluation and control systems help
managers to find out;
❑ whether the implementers of strategy are making decisions
consistent with the organisational policies;
❑ adequate resources have been allocated and they are being
used wisely;
❑ the events in the external environment are, occurring as
anticipated;
❑ the long-term and short-term goals are being met; and the
strategy-implementers are on the right track.
❑ The evaluation process alerts the implementers to any
unexpected events in the above issues. Thus, they can take
corrective action either to get back to the track or change
the track or make changes in other relevant aspects of
strategy.
Rumelt’s criteria for evaluating strategies
❑ Before we discuss the evaluation model, it is important to note that
there are principles of strategy evaluation that guide how the
process is undertaken. Glueck (1980) identified four principles of strategy
evaluation. They are:
1. Consistency: The strategy should be consistent with the
organisations goals and policies.
2. Consonance: The strategy must be flexible to adapt to the external
environment and to the critical changes occurring within it.
3. Advantage: It is essential that the strategy provides a competitive
advantage in the market or industry.
4. Feasibility: Without question, the strategy must not overuse Image: Business+Strategy (2017)

available resources or create unsolvable sub-problems.

R. Rumelt, The Evaluation of Business Strategy, McGraw-Hill, Nueva York, NY, USA, 1980
Strategy Evaluation activities

Three basic activities:

1. Examine the underlying bases of a firms strategy.
(SWOT / PEST analysis).
2. Compare expected results with actual results.
(KPI’s, dashboard, etc)
3. Take corrective action to ensure that performance conforms to
plans.
(Review the objectives, the strategy itself, organization structure,
human resources deployed on strategy implementation, policies,
resource allocation)

Strategic Management: A competitive advantage approach. David and David 2017.

Evaluation
evidence
wheel
 Bad strategies – examples……
▪ Blackberry’s smartphones were built specifically for the use of the
corporate world.
▪ BlackBerry was blindsided with the boom in ‘app economy’, it failed to
innovate its design in the rapidly evolving smartphone industry.
▪ Unforeseeable market change, technological advancements, failure to
adapt and be receptive to changing consumer needs saw to the downfall of
this once premium selling smartphone and in 2016
▪ BlackBerry officially stepped down from the smartphone arena.

▪ McDonald's in 2005 launched their 'healthy' salad range.

▪ Healthy living was becoming an increasingly prominent topic, and
McDonald's wanted to capitalise on their powerful brand to cash-in.
▪ But the salads didn't sell and only accounted for 2% overall sales revenue.
▪ McDonald's started to innovate on the flavours of their salads - adding
dressings, sauces and things like fried chicken.
▪ Sales increased to around 3%, but quickly stalled. It emerged that
McDonald's range of salads was actually worse for you health-wise
than their traditional fast-food menu.
The importance of strategy evaluation process
The strategic evaluation process:-
❑ identifies the corrective steps and actions to achieve business efficiency and
effectiveness.
▪ is not only focused to measure the result but also provides the right paths and directions to
achieve desired organisational goals.

❑ provides feedback on outputs, which then provides data and insights on

essential inputs for the future strategic decisions or plans and polices of the
organisation.
▪ is also linked to the performance management (appraisal) systems for reward and
recognitions which can lead to the motivation of employees and boosts the morale.is
beneficial for all organisations whether small, medium, or large.
Techniques of strategy evaluation
Gap Analysis: This technique can identify the gap SWOT Analysis: This technique
between the actual achieved performance and expected allows managers to synthesise insights obtained from an
performance of the organisation as per the management internal analysis of the organisations strengths and
strategy. weaknesses with those from an analysis of external
opportunities and threats.
PEST Analysis: This is a strategic tool for understanding
market growth or decline, business position, potential Benchmarking: This technique
and direction for operations. is defined as the process of measuring products, services,
and processes against those of organisations known to be
leaders in one or more aspects of their operations.
VRIO framework: is the tool used to analyse a firm’s
internal resources and capabilities to find out if they
can be a source of sustained competitive advantage.

Balanced scorecard: looks at your organisation from 4 different perspectives to

measure its health. (Financial, Learning and Growth, Internal processes and Customer)
Each of these perspectives focuses on a different side of your company, creating a
balanced view of your organisation.
A strategy evaluation process involves
answering questions such as:-
❑ How much progress have we made towards our Vision?
▪ Are our Strategic Focus Areas still relevant?

❑ Which of our Objectives have we completed?

▪ Which Objectives are no longer needed?

❑ Do we have sufficient Projects to deliver incomplete Objectives?

▪ Are our KPIs still effective for measuring progress towards our Objectives?

❑ Where we fell short of our targets, why did this happen?

Impact of strategy evaluation on employees
❑ Facilitates organisational direction setting as it ensures compliance to organisational vision, streamline
operations to specific objectives, targets correcting strategic directions and establishes common tactics
and purpose.
▪ strategy evaluation results helps in inspiring and motivating employee as it enables employees measure their
performance; helps employees in determining the nature of adjustments needed; helps employees relate their objectives
to that of the organisation; good results inspires hard work; and the information inspires better work.

❑ Can be used as a tool for benchmark with other industry players, thus supporting motivation of
employees.
▪ Results legitimise management’s actions in the eyes of the shareholders; customers; government and the general public.
 Additional Reading

❑CIPD Factsheet – Strategic HRM 2021 (see workshop 1)

❑Wirral Met College People Strategy 2019 – 2021

❑Sage People - Changing face of HR

References
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FARNHAM, D. (2015) Human resource management in context. 4th ed. London: Chartered Institute of Personnel and
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KEW, J. and STREDWICK, J. (2016) Human resource management in a business context. 3rd ed. London: Chartered Institute of
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Chanel (2019) Chanel. [online] https://www.chanel.com/en_GB/ (Accessed 26 October 2020).
David, F.R and David, F.R. (2017) Strategic management: Concepts and cases. A competitive advantage approach. 16th Edition.
Pearson Education.
Glueck, W. (1980) Business policy and strategic management. 3rd Edition. McGraw Hill Publishing.
Hastings, S. (1996) A strategy evaluation model for management. Management Decision, 34(1), pp.25-34.
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Primark (2019) About us. [online] https://www.primark.com/en/about-us/about-primark (Accessed 26 October 2020).
R. Rumelt, The Evaluation of Business Strategy, McGraw-Hill, Nueva York, NY, USA, 1980
Youndt, M., Snell, S., Dean, J. and Lepak, D. (1996) Human resource management, manufacturing strategy, and firm
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