2- introduction to strategic hrm

Strategic Human Resource Management

Introduction to Strategic HR


Introduction1990s there has been an increased focus on the

strategic role of human resource management

The strategic approach to HRM refers to the

relationship between human resource

(HR)Practices and the strategic objectives that is

the long term goals of the organization


With the increasing recognition of the potential of

human resources in providing competitive

advantage

Organizations have begun to consider employees

as valuable assets or investmentsTodays knowledge economy depends on the skill

and knowledge of the workforce

From being routine administrative and reactive

function the HR function today has evolved to

being proactive and strategic


In order to bring about a transformation from the fire fighting role the HR manager has to don the garb of professionalismA true professional with proper qualification and training to meet the expectations of society and the organization in particular

HR professionals need to know their organizations business thoroughly not only in terms of people but also in terms of economic ,financial,environmental and technological forces affecting it


As a strategic partner HR needs to participate and help the top management in framing the organizational strategy There is a paradigm shift from traditional HR function to strategic HR functions

Example-strategic IR brings out the need to take the Trade Unions along to meet the global competitions without the traditional mutual distrust

HR system need re-engineeringOnce performance standards fixed for HR professional need for evaluation,audited and benchmarked for constant improvement

Strategic Human Resource Management In the past HR researchers and practitioners directed their

attention to important questions

What is HR strategy?

What factors determine whether an organization adopts a

strategic approach to HRM?

Is there a relationship between the characteristic of the

organization and the adoption of a particular strategic

human resource management(SHRM)approach?

Does an organization achieve competitive advantage by

linking HR strategy with business strategy?

Strategic Human Resource Management Human Resource management(HRM) is concerned with

the holistic approach towards the management of people

working in an organization who contribute to the

achievement of organizational objectives

Effective and efficient use of human talent for

accomplishing the goals of an organization

To achieve organizational objectives each organizations

need to develop a well –defined HR strategy


Contd of HRM• Organization has now to focus on its three core areas• PEOPLE• PROCESS• PERFORMANCE

• Called the 3 Ps

• People- Known fact that the core strength of an organisation lies on its people(human resource ) all other resources can be replaced but not people

• Process-With the fast changing world emphasis is laid on flexibility and adaptability. In an IT enabled environment re-engineering of process can be done

• Contd of HRM• PERFORMANCE: the existence of an organisation is primarily

dependent on its ability to create vale and continously increase the rate of return on investment

The two pillars supporting the performance of an organisation are PEOPLE AND IT(technology)

The integration of these two factors plays the pivotal role in improving the performance of an organization at both individual and organizational levels

IT helps in documenting the knowledge pool in the organisation and making it available to the employees through intranet etc

Management of knowledge workers is different from that of conventional employees-intelligence and maturity higher and they expect greater levels of flexibility and freedom in their work area in the case of knowledge workers

A Model of the Shift to HRM

Hard HRM• The 'hard' approach rooted in the manpower

planning approach is concerned with aligning human resource strategy with business strategy

Soft HRM• The 'soft' approach is rooted in the human

relations school, with concern for workers' outcomes and encourages commitment to the organisation by focussing on workers' concerns.

Strategic Human Resource ManagementHuman Resource Strategy

Human resources-valuable resources that help an organization to achieve its objectives(this depicts the centrality of human resources for achievement of organizational goals)

Financial capital

Processes

Technology

People utilizationPeople

Organizational goals

Contd of HRM • Personnel policies and principles

Policies are plans of action Organisations need to evolve HR policies as they ensure consistency

and uniformity in treating people They help motivate and build loyalty Policies become benchmarks to compare and evaluate performance

-policy on terms of hiring people

-policy with regard to medical assistance

-policy regarding housing allowance etc

-policy regarding training and development

-policy regarding IR-trade union recognition/CB/grievance/Participative Mgmt/communication

Principles

• If policies is a guide for managerial decisions and actions

• Principle is the fundamental truth establishment by research /investigation and analysis

• Many principles have been established through practice/experience and observation

• Principles are universal truths generally applicable to all organisations

• Policies on the other hand vary from organisations to organisations

• Principles guide managers in formulating policies programmes procedures and practices

• Come handy in solving any vexing problem

• Some principles are:- Principle of individual development-equal opportunity for development Principle of scientific selection Principle of free flow of communication etc

HRM Models• To understand the theoretical perspectives on HRM we have to know

the models

• Four major models have identified and all these serve as many purposes

1.They provide an analytical framework for studying HRM(situational factors /stakeholders/strategic choice levels/competence)

2.They legitamise certain HRM practices: a key issue here being the distinctiveness of HRM practices(it is not the presence of selection or training but a distinctive approach to selection or training)

3.They provide a characteristics of HRM that establishes variables and relationship to be researched

4. Serve as heuristic device-something to help us discover and understand the world for explaining the nature and significance of key HR practices

HRM Models• The four models are:

1. The Fombrun

2.The Harvard

3.The guest

4. The Warwick

Fombrun Model Of HRM

Selection

HRD

Appraisal

Rewards

Organisationaleffectiveness

The Harvard Model of Human Resource Management

Reflects view that a core set of integrated HRM practices can achieve superior individual and organizational performance.

Guest

Guest’s Model of HRM

Extends the Harvard framework.

Maps the connections between the outer and inner contexts and explores how HRM adapts to changes in context.

Warwick

Warwick


• The transformed HR department performs the following functions

• participating in the strategizing sessions of business policy• Preparing the HR strategies in coordination with the corporate strategies• Implementing the various HR policies and practices including HR planning, recruitment and induction compensation structuring, career planning, competence mapping, performance management


• Overall the HR department has outgrown its mere functional role and has come to assume the responsibility of building the brand of the company to:

• Attract best available talent in the market and retain them

• This helps in the recruitment cost and replacement cost

• Reducing the attrition rates

• This helps the organisation to completes its project


• Holistic Facet Of HRM

• HR personnel are increasingly expected to involve themselves in business planning and execution

• to understand the business requirements and tune the HR strategies to the emerging business realities

• Any Holistic HRM approach would include the following dimension Participation in business strategies planning Tuning HR strategies to business strategy requirements Undertaking change management programmes to bring in cultural

transformation Coordination with the business heads to implement HR strategies and

policies Promotion of active ownership of HR policies by business heads to

improve credibility of the policies and also for their successful implementation


Holistic Facet Of HRM-contd

• HR function has therefore become more demanding and is no longer restricted to be just a personnel training or administrative function

• It is a hybrid of all these functions which calls for new skills and attitude from the HR personnel


• ESSENTIAL SKILLS FOR AN HR MANAGER• HR manager has to reorient him self to address the organizational

challenges• The skills required are:

• Strategic planning: The global human resource development –participating in strategic

planning process suggests that strategic planner is the emerging role in HR

Strategic planning determines where an organization is headed for over the next year or more

-How it is going to get there

-How would it know if it got there or not

An HR strategic plan helps in defining goals and strategies for achieving

Them/beyond day to day work/

Strategic Human Resource Management Chandler (1962) defined strategy as the determination of

the long term goals and objectives of an organization and

the allocation of resources necessary for carrying out

these goals

Like strategy HR strategy is concerned with two key

elements (Richardson and Thompson 1999)

1.Determining the Strategic objectives(What goals is the strategy supposed to achieve?-example high productivity-reduced accidents etc

2.Developing a plan of action (How will the human resources be organized and allocated to accomplish the objectives of the organization?)

Strategic Human Resource Management Human resource strategy involves the planned and effective

use of human resources by an organization to help it to gain

or maintain an edge over its competitors

Gain competitive advantage-organizations achieve

competitive advantage when it is able to gain and maintain an

edge over its competitors by differentiating its products and

services from those of its competitors thereby increasing its

market share

The centrality of the people evident in knowledge based

organizations-where success and failure depends on the

skills and knowledge of its workforce rather than the

technology

Strategic Human Resource Management Definition and Components

Given the increasingly significant role of human resources in an organization HRM has become strategic in nature

Strategic human resource management(SHRM) is concerned with the relationship between HRM and strategic management in an organization

Strategic human resource management is an approach which relates to decisions about the nature of employment relationship,recruitment, training ,development ,performance management, reward and employee relations

Strategic Human Resource Management Definition and Components contd

Wright and McMahan (1992) defined SHRM as “the pattern of planned human resource deployment and activities intended to enable the firm to achieve its goals”

This definition implies the following four components of SHRM

1.It focuses on an organization’s human resources(people)-competitive advantage of the organization

2.The activities highlight the HR programmes ,policies and practices as the means through which the people of the organization can be deployed to gain competitive advantage


3.The pattern and plan imply that there is a fit between HR strategy and the organization’s business strategy(vertical fit)and between all of the HR activities (horizontal fit)

4.The people practices, and planned pattern are all purposeful that is directed towards the achievement of the goals of the organization


SHRM is concerned with people issues and practices that affect or are affected by the strategic plan of the organization

The critical issues facing an organization today are mainly human issues such as

-ensuring the availability of people

-retaining

-motivating

-developing these resources

Today organizations competes less on products or markets and more on people

Strategic Human Resource Management Definition and Components contdAn organization uses a combination of several resources-

-Tangible

-Intangible in the pursuit of its objectivesThese resources can be grouped into three basic types

1.Physical capital resources-plant ,equipment and finances

2.Organizational capital resources-the organization’s structure planning, HR systems, history and organizational culture

3.human capital resources –the skills ,knowledge , judgement and intelligence of the organization’s employee

Strategic Human Resource Management Definition and Components contdAn organization may have huge capital and the most advanced machinery but if it does not have capable ,motivated and high performing employees the organization is not likely to demonstrate sustained levels of high performance

Strategic Human Resource ManagementDefined as “the linking of HR with strategic goals and objectives in order to improve business performance and develop organization culture that fosters innovation and flexibility

2- introduction to strategic hrm

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