hr – strategy formulation

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    HR Strategy Formulation

    Unit II / S - 3

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    A strategy is the pattern or plan that

    integrates an organizations major goals,

    policies and action sequences to a coehsivewhole.

    It provides direction, coordinating andproviding decisional framework.

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    Rational / Comprehensive strategy

    planning

    1. Development of vision / mission mold

    2. Environmental scanning

    3. Analysis of SWOT

    4. Formulation of strategic objectives

    5. Generation of alternative strategies

    6. Evaluation and selection of strategies

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    Human Resource ContributionPerformance appraisal, staffing, trainingand compensation help towards

    organization strategy

    Competitive intelligence

    Resource re-allocation decision

    Dealing with labour shortages & surplus

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    Types of Strategies1. Club : Low cost quality producer

    Airlines, Banks , Utilities. (Dhabas - )

    Lincoln Electric, Wall Mart

    (stable staff)

    2. Baseball Team : Innovation Strategy

    H.P. (shampoo sachets mfrs.)Software developers, entrainment Cos,

    ( High turnover at lower level)

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    3. Academy: Innovators and competitors

    Pharmaceuticals, consumer products,

    automobiles

    (Make & buy human resource)

    4. Fortress : highly competitive mkts./

    environment dependantHotels, Retailing, textiles, publishing

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    Schools of thought(Prescriptive)Design schoolemphasizing the fit between

    SWOTmatching Internal and External

    environments

    Planning schoolA formal system of making

    SOPs to ensure consistency of action

    Positioning schoolleverages value chain,game

    theories,other ideas within analytical framework

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    Descriptive schoolsEntrepreneurial schoolCentral role of theleader-Intution and gut feeling

    Cognitive schoolMental process ofdeveloping frames,models or maps-creativeinterpretations than the reality

    Learning schoolLessons learned to be the

    basis of making new palns-is dependant onpeople and their learning

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    Descriptive schoolcontd--Power schoolnego between power

    holders of the company and external

    stakeholders-bargaining,political,confrontation among

    power holders

    Cultural schoolsocial process rooted inorganization culture-focusses on common

    interests

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    Descriptive schoolscontd--Environmental schoolContingencies

    theories-responses expected out of

    environmental issues and limits tostrategies-

    Configuration schooltransforming the

    organization-

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    Strategic compensation policiesForming a compensation committee-dveloping

    compenstaion policy framework,Job analysis,job

    evaluation,pay ranges,increment

    policy,monitoring the programme

    Basically, to aattract and retain employees,to

    reward employees,internal equity and

    fairness,consultation with all the deptts.

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    Strategic compensation designFlexible,competitive and performance oriented bytaking into account-------

    History of organization

    Using various workgroups

    Pay ranges,evaluation criteria,vacation pay,

    Matching with regulatory authorities

    Integration of entire processImplementation of new strategically designedcompensation plan

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    Schools of thought on compensationPrahald and Hamel-Only the employees of an organizationcan give sustainable competitive advantage

    Beckers Human capital theory-knowledge skills of people

    have an economic valueWilliamsons construction cost theory-Cost minimization

    by considering people as strategic resource

    Eisenhardts agency theoryAligning interests ofemployers and employees

    Institutional theory stresses stakeholders agreement andDependancy theory counters this as anti-employees

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    StrategiesA

    cross LevelsMarket competition startegies

    Product development strategies

    Strategies to meet customer needs

    Strategies for achievement of Cos long-

    term profitability,slaes growth,efficiency--

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    Tactics and StrategiesImplementation of a long term strategy requires

    identification of CSFs

    MarketingProduct,price,market,promotionFinanceCapital

    acquisition,allocation,dividend,working capital

    management

    R&DInnovation,development

    OB-managing cross cultural issues

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    Aligning strategies to transform

    peopleOrganizations transform employees by

    aligning strategies to

    processes,technology,systems,relationshipsCompetency development requires thrust on

    Knowledge,skills and attitudes of people

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    Strategic PlanningVISION-aspirations for the future

    MISSION-articulates the Vision

    GOALS

    OBJECTIVESoperational definition of

    GoalsKRAs,KPAs,KSOs,KPIs-basis

    for individual level of performance