human resource management strategic human resource management chapter no. 8
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STRATEGIC HUMANRESOURCE MANAGEMENT
CHAPTER NO. 8
AFTER STUDYING THIS CHAPTER YOU SHOULD BE ABLE TO:
Describe the level of strategy and types of integration.
Explain the role of HRM in strategy formulation.
The process and components of strategic management
Describe HR strategic formulation and implementation
Differentiate between traditional and strategic HRM
Link of HR Plan and Strategy with Organizational objectives and goals.
Illustrate and explain each of the seven steps in the HR Scorecard approach to creating HR systems.
The direction and scope of an organization over the
long term, which achieves competitive advantage for
the organization through its configuration of
resources within a changing environment and to fulfill
LEVELS OF STRATEGY1. CORPORATE LEVEL
Relates to the overall scope of the organization, its structures and financing, and the distribution of resources
between its different constituent parts.
2. BUSINESS/COMPETITIVE LEVEL STRATEGY
Refers how the organization competes in a given market, its approaches to product development and to customers .
3. OPERATIONAL LEVEL STRATEGY
It is concerned with how the various subunits-marketing, finance, manufacturing and so on – contribute to the higher
THREE LEVELS OFSTRATEGY IN ORGANIZATIONS
1. Corporate-Level Strategy
What business are we in?
2. Business-Level Strategy
How do we compete?
3. Functional-Level Strategy
How do we support the business-level
LEVELS OF STRATEGY
Implies that the firm will expand by adding new
Means the firm expands by, perhaps, producing its own raw materials, or selling its products
STRATEGYReduces the company’s size
d.GEOGRAPHIC EXPANSION STRATEGY
Takes the company abroad.
LEVELS OF STRATEGY Cont . . .
A firm seeks to be unique in its industry along
dimensions that are widely valued by buyers.
A firm seeks to carve out a market niche, and compete by providing a product or
service customers can get in no other way.
The enterprise aims to become the low-cost leader
in an industry.
2. BUSINESS LEVEL/
LEVELS OF STRATEGY Cont . . .
Identify the basic courses of action that each department will pursue in order to help the business attain its competitive
It is the heart of HRM. It takes two forms:
This is a general qualitative estimate of the extent to which HR’s activities and objectives are aligned with the overall objectives & strategy of the enterprise
as a whole.
Overall Objectives & Strategy of
The extent to which the component activities of an HR
function are integrated and relate to each other.HORIZONTAL
T & D
HR STRATEGY: STRATEGIC FIT
THE ROLE OF HRM INSTRATEGY FORMULATION
• Lowest level of integration; HRM function's attention is focused on
day-to-day activities. No input from the HRM function to the
company's strategic plan is given.
• The strategic business planning function develops the plan and then
informs the HRM function of the plan. HRM then helps in the implementation.
• Allows for consideration of human resource issues during the strategy
formulation process. The HRM function is expected to provide input
to potential strategic choices and then help implement the chosen
• Is based on continuing, rather than sequential, interaction. The HR
executive is an integral member of the strategic planning team.
THE ROLE OF HRM INSTRATEGY FORMULATION Cont . . .
Strategic Management is a process for analyzing a company's competitive situation,
developing the company's strategic goals, and devising a plan of action and allocation
of resources that will help a company achieve its goals.
COMPONENTS OF THE STRATEGICMANAGEMENT PROCESS
Strategic planning groups decide on a strategic direction by defining the company's mission and goals, its external opportunities and threats, and its internal strengths and
The organization follows through on the strategy that has been chosen. This includes
structuring the organization, allocating resources, ensuring that the firm has skilled employees in place, and developing reward systems that align employee behavior with
the strategic goals.
MODEL OF THE STRATEGICMANAGEMENT PROCESS
HR PRACTICES• Recruiting • Training• Performance Management • Labor relations • Employee • Job analysis• Job design • Selection• Development • Pay structure • Incentives• Benefits
• Skills• Behavior• Culture
Mission Goals StrategicChoice
STRATEGY FORMULATION Cont . . .
A mission is a statement of the organization's reasons for being.
Goals are what the organization hopes to achieve in the medium-to long-term future.
External analysis consists of examining the organization's operating environment to identify
strategic opportunities and threats.
Internal analysis attempts to identify the organization's strengths and weaknesses.
Strategic choice is the organization's strategy, which describes the ways the organization will attempt to fulfill its mission and achieve its long term goals.
Five Components of the Strategic Management Process:
HRM NEEDS IN STRATEGIC TYPES
Different strategies require different types of employees.
Role behaviors are the behaviors required of an individual in his or her role as a jobholder in a
social work environment.
Cost strategy firms seek efficiency and therefore carefully define the skills they need in employees and use worker participation to seek cost-saving
Differentiation firms need creative risk takers.
Strategic human resource management is the pattern of planned human resource deployments and activities
intended to enable an organization to achieve its goals.
Human Resource Managers Should:
Have input into the strategic plan. Have specific knowledge of the organization’s strategic goals. Know what types of employee skills, behaviors, and attitudes are needed to support the strategic plan, and Develop programs to ensure that employees have those skills, behaviors, and attitudes.
SEQUENCE OF HR STRATEGIC FORMULATION
Conclusion & Recommendations:What alternative strategies are available
Analyze:What are the Issues/problem/business needs
Resource Planning:What resource will we need
How will we obtain these resource
Action Planning:What problems may occur and how we will
Benefits:How do they satisfy the business needs
How do they benefit individual employees
Diagnose:Why issues occur/Causes
What factors are influencing the situation
STRATEGIC IMPLEMENTATION OF HRM
Strategic Performance Management
TRADITIONAL Vs. STRATEGIC HRM
DIMENSION TRADITIONAL HR STRATEGIC HR
Accountability HR Specialists. Line Managers & HR Specialists.
Managing people to facilitate
HR strategy formulation &
implementation in alignment with organizational
Role of HRCustodian of HR policy
implementation & compliance.
Strategic Business Partners.
Ritualistic, Reactive Activities.
Proactive, Business-oriented Results.
Major Function People Development.
People and Organization’s
Development in line with the Business
THE HR SCORECARD APPROACH
Measures the HR function’s effectiveness and efficiency in producing employee behaviors
needed to achieve the company’s strategic goals.
CREATING AN HR
Must know what the company’s strategy is. Must understand the causal links between HR activities, employee behaviors, organizational outcomes, and the organization’s performance. Must have metrics to measure all the activities and results involved.
STRATEGIC HR RELATIONSHIPS
Achieve Strategic Goals
Emergent Employee Behaviors
THE HR SCORECARD APPROACH TOFORMULATING HR POLICIES,ACTIVITIES, AND STRATEGIES
USING THE HR SCORECARD APPROACH
Define the Business Strategy.
Outline the Company’s Value Chain.
Identify the Strategically Required Organizational Outcomes.
Identify the Required Workforce Competencies and Behaviors.
Identify the Strategically Relevant HR System Policies and Activities.
Design the HR Scorecard Measurement System.
Periodically Evaluate the Measurement System.
Corporate Level Strategy
Components of the StrategicManagement
Sequence Of HR Strategic
Strategic Human Resource
Traditional Vs. Strategic HRM
Strategic HR Relationships
CHAPTER : 10
Management Quality Circle
Operational Level Strategy
Geographic Expansion Strategy
Cost Leadership Strategy
Role of HRM inStrategy
2. Diagnose 3. Conclusion & Recommendation
5. ResourcePlanning 6. Benefits
Strategic Performance Management
Strategic Compensation Management
Accountability Importance Role of HR Approach Orientation Major Function
HR Activities Emergent Employee Behaviors Strategically Relevant Organizational Outcomes Organizational Performance Achieve Strategic Goals
THOUGHT OF THE DAY
“If an HR person is trying to choose people for an organization, knowing their values is very important-if they are not consistent with the organization’s values they are not likely to stay very long.”
Professor, Roger Collins.