strategic hrm- 01

8/2/2019 Strategic HRM- 01

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Strategic Human ResourceManagement

Fareha Zafar Saeed

An Introduction


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Strategy?

Way of doing something

A game plan for action

Includes:

Formulation of a goal Set of action plans for accomplishment

Implies:

Consideration of competitive forces(internal) Impact of outside environment on

organization actions


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Strategy - Mintzberg

A plan, or something equivalent adirection, a guide, a course of action.

A pattern, that is, consistency in

behaviour over time. A perspective, an organizations

fundamental way of doing things.

A ploy, a specific maneuvre intended tooutwit an opponent or a competitor.


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Management By Objective (MBO)

MBO essentially involves three steps:

Setting a mission or purpose

Setting goals or objectives

Determining action plans to achievethe goals or objectives


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MBO & Strategy (2/2)

The strategic focus accepts these threebasic ideas of MBO but goes beyondthem by giving explicit recognition toboth the outside and competitive

environment.

The actions and reactions are the heartof the modern approach to strategy.


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Defining: STRATEGY

The formulation of organizationalmissions, goals, and objectives, as wellas action plans for achievement, thatexplicitly recognize the competition andthe impact of outside environmentalforces.


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Defining: STRATEGY

The direction and scope of anorganization over the longer term, whichideally matches its resources to itschanging environment, and in particular,to its markets, customers and clients tomeet stakeholder expectations.

Johnson & Scholes


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Strategy determine direction of organization in

relation to its environment

defines intentions strategic intentStrategic intent is a high-level statement of the meansby which your organization will achieve its vision. It is astatement of design for creating a desirable future(stated in present terms). Putting it simple, a strategicintent is your company's vision of what it wants toachieve in the long term.

allocates / matches resources toopportunities and needs resource basedstrategy

achieves competitive advantage


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Strategy is about implementation,which includes the management of

change, as well as planning. Animportant aspect of strategy is the needto achieve strategic fit.

This is used in three senses:1. matching the organizations capabilities and

resources to the opportunities available inthe external environment;

2. matching one area of strategy, eg human

resource management, to the businessstrategy; and

3. ensuring that different aspects of astrategy area cohere and are mutually

supportive.


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Effective organizational strategies arerequired for the organization toaccomplish its mission while being guided

by an investment perspective. Afterscanning the environment foropportunities and threats and theintrospective process of evaluating

strengths and weaknesses, theorganization is ready for strategyformulation.


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Importance of Human Resourcesto Strategy

HRMs importance as a result of: its role in providing competitive

advantage

the rush to competitiveness an awareness of the demands of the

technologically advanced environmentof the future


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There is greater recognition thatdistinctive competencies are obtainedthrough:

highly developed employee skills

distinctive organizational cultures

management processes, and systems


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Increasingly, it is being recognized thatcompetitive advantage can be obtainedwith a high-quality workforce, which

enables organizations to compete on thebasis of market responsiveness, productand service quality, differentiatedproducts, and technological innovation,

instead of reliance on low costs


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Aside from its role in providingcompetitive advantage through a quality

workforce, the necessity of controllinglabor costs also has elevated the role ofhuman resource management (impact ofinefficient use of human resources).

Managers need look no further thanunderutilized workers, lack of trust,resistance to change, antagonistic labormanagement relations, motivational

problems, and restrictive work practicesto find causes of lower productivity.


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better utilization of human resourcesmay prove to be more cost efficientthan investments in plant and equipment.

Because of potential cost efficiencies,improved human resource managementcan play a key role in the organizations

competitive strategy and in thedevelopment of distinctive competencies.


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Economic Turbulence & HRM

Turbulence, globalization, technology,dramatically changing demographics, anddifferences in workforce values havecreated almost unprecedentedenvironmental uncertainty.

Strategic human resource management

and the sub-process of human resourceplanning are increasingly being seen asmeans of buffering environmentaluncertainty


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Human resource management is becomingintegrated into the strategy formulationand planning process.

HRM is becoming companys competitivestrategy, therefore general managementhas an incentive to ensure alignment and

consistency between strategy and humanresource practices and policies


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The first alignment challenge comes withfinding the answer to the followingquestion: What kinds of people will beneeded to lead the organization in theyears to come?

The expectation is that people and

practices, which are aligned with futurestrategic needs, produce superiororganizational performance.


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The expectation is that people andpractices, which are aligned with futurestrategic needs, produce superiororganizational performance.


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Human Resource Management

Human Resource Management is a

process of attracting, developing, andretaining capable and willing humanresources (employees) to achieve theorganizational goals.


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Human Resource Management

Attracting Staffing (recruitment, selection, and

orientation)

Developing Training & Development

Retaining Compensation & Benefits Individual growth opportunities


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The operational HRM tasks should beperformed in a way that helps thecompany deal effectively with anyenvironmental forces and competition andensures the companys long-termachievementof its goals and objectives.

HRM: Strategic Focus


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Why Human ResourceManagement (1/3)

Success comes from successfullyimplementing strategy and the ability to

implement strategy comes from theorganizations people.

(The Human Equation, Jeffery Pfeffer)


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Human Resource Strategy (1/2)

Explicitly recognizes the impact of theoutside environment

Explicitly recognizes the impact of

competition and the dynamics of thelabor market.

Has a long range focus (3-5 years)


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Human Resource Strategy (2/2)

Focuses on the issues of choice anddecision making

Considers all personnel, not just hourlyor operational employees

Is integrated with overall corporate

strategy and functional strategies


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Strategic HRM Defined

Strategic HRM is an approach to makingdecisions on the intentions and plans ofthe organization in the shape of thepolicies, programs and practicesconcerning the employment relationship,resourcing, learning and development,performance management, reward, and

employee relations.


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The concept of Strategic HRM comesfrom strategy and HRM.

It takes the HRM model with its focuson strategy, integration and coherenceand adds to that the key notions ofstrategy, namely, strategic intent,

resource-based strategy, competitiveadvantage, strategic capability andstrategic fit.


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Strategic Choices

When formulating a corporate strategy,

managers must consider several strategicchoices.


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To make appropriate choice, thefollowing should be addressed:

1) Choosing strategy that the company

should adopt to maintain or improve itsposition in the marketplace.

2) Ensuring continued sales growth andmaintenance of its workforce to avoid

retrenchment and layoff.

Strategic Choices


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3) Adopting to its ever-changingenvironment.

4) Collecting the information it needs tounderstand and influence itsenvironment.

Strategic Choices


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Human Resource Planning (1/4)

Once the organizations objectives arespecified, communicated, and understood

by all affected, the human resource unitshould specify its objectives with regardto human resource utilization in theorganization.


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Strategic Choices:

Shall we attempt to fill positionsfrom within or by hiring individualsfrom the labor market?

Can we meet our commitments toaffirmative action?

How do our training and developmentobjectives interface with our humanresource planning objectives?


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What union constraints do we face inHR Planning, and what policies should wedevelop to effectively handle these

constraints? What is our policy toward providing

everyone in the organization with a

meaningful, challenging job (jobenrichment)? Will we continue to havesome boring, routine jobs, or should weeliminate them?



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Can some positions and jobs beeliminated so that we can becomemore competitive?

To what extent can we automateproduction and operations, and whatshall we do about those displaced?

How do we ensure that we have acontinuously adaptive and flexibleworkforce.



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Recruitment & Selection

Strategic Choices:

Make or Buy

Budgets

Untapped labor sources

Internal Vs External Recruiting

Whether to develop a plan to retain

qualified workers


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Training & Development (1/2)

Strategic Choices:

Compliance of rules or challenging therules and search for more productive

ways to perform their jobs.

Developing human resources or hirealready developed


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Training & Development (2/2)

Find ways to improve the performanceof managerial workers, or shouldreplace them

How well does the organizationsdevelopment strategy match theorganizations overall strategy?


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Performance Appraisal System

Strategic Choices:

Purpose of performance appraisal(corrective, reward determination,

individual or group based)

Formal or informal

Objectivity Vs. Subjectivity

Frequency of Performance Appraisal Who will conduct?


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Compensation System (1/2)

Strategic Choices:

Importance of external equity to theorganization

How closely the compensation plan willbe linked to the organizations overallstrategic plan.


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Compensation System (2/2)

Merit pay raises or across-the-boardraises

Level of pay secrecy

Internal Equity (job worth) How to mix intrinsic rewards (rewards

that come from performing the job)

and extrinsic rewards (rewards thatcomes from a person outside the job)

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