Human Resource Management

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STRATEGIC HRM

Introduction

A strategy: Indicates what an organization's key

executives hope to accomplish in the long run Is concerned with competition and aligning the

resources of the firm

Good HR strategy results in a fit between organizational strategy and HRM policies and programs Recruitment, selection, outsourcing,

telecommuting, performance evaluation, compensation

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Strategic human resource management formulating and executing HR systems that produce

the employee competencies and behaviors the company needs to achieve its strategic aims

Taking a strategic HRM approach means: Making human resources management a top priority Integrating HRM with the company’s strategy,

mission, and goals

HRM can make significant contributions if included in the strategic planning process from the outset The strategic management process helps determine:

What must be done to achieve priority objectives How they will be achieved

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Strategic HRM: A Key to Success

Three levels of strategy apply to HRM activities: Strategic (long term) Managerial (medium term) Operational (short term)

The HRM activities are: Employee selection/placement Rewards Appraisal Development

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Strategic HRM: A Key to Success

Strategic HRM planning leads to: Growth Profits Survival

Planning also: Expands awareness of possibilities Identifies strengths and weaknesses Reveals opportunities Points to the need to evaluate the impact of

internal and external forces

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Traditional HR vs. Strategic HR

Point of distinction

Focus

Role of HR

Initiatives

Time horizon

Control

Job design

Key investmentsAccountabilityResponsibility for HR

Traditional HR

Employee Relations

Transactional change follower and respondent

Slow, reactive, fragmented

Short-term

Bureaucratic-roles, policies, procedures

Tight division of labor; independence, specialization

Capital, products

Cost centre

Staff specialists

Strategic HR

Partnerships with internal and external customers Transformational change leader and initiatorFast, proactive and integratedShort, medium and long (as required)Organic-flexible, whatever is necessary to succeedBroad, flexible, cross-training teams

People, knowledgeInvestment centreLine managers

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Shifts in HR management in India

Emerging HR practice

Strategic role

Proactive

Key part of organizational

mission

Service focus

Process-based organization

Cross-functional teams,

teamwork most important

People as key investments/assets

Traditional HR practice

Administrative role

Reactive

Separate, isolated from

company mission

Production focus

Functional organization

Individuals encouraged,

singled out for praise,

rewards

People as expenses

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Linking Corporate and HR Strategies

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Strategic Management Process

Environmental Scanning

Strategy Formulation Corporate level Business unit level Functional level

Strategy Implementation

Strategy Evaluation

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HR Role in Strategic Management In strategy formulation

HR manager supplies competitive intelligence that is useful

In strategy implementationEncouraging proactive behaviorExplicit communication goalsStimulate critical thinkingProductivityQuality and ServiceProficient strategic management

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A Model to Organize HRM

ARDM means: Acquiring Rewarding Developing Maintaining and protecting

The goals of the ARDM model are: Socially responsible and ethical practices

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A Model to Organize HRM

The eventual success of any HRM activity is: The organization's employees are the best

qualified They perform jobs that suit their needs, skills,

and abilities

Matching people and activities in order to accomplish goals is easier with a diagnostic approach

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Taking a Diagnostic Approach to HRM

The ARDM model has four specific steps: Diagnosis Prescription Implementation Evaluation

Managers typically diagnose a work situation by observing and identifying key factors A prescription is then made to translate the

diagnosis into action Most human resource problems are too complex

to have a single correct prescription

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Taking a Diagnostic Approach to HRM

Implementing a solution is the next step, followed by evaluation Evaluation tells managers whether improvement

in the ARDM process is needed

If an organization teaches its members to focus on ARDM plus the environment, it is likely to achieve: Socially responsible, ethical behaviors Competitive, high-quality products and services

The ARDM model calls for thorough, timely, and systematic review of each situation

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External Environmental Influences

HRM processes are influenced by both the internal and external environments External influences include:

Government laws and regulations Union procedures and requirements Economic conditions The labor force

HR planning must operate within: Guidelines Limits of available resources Competencies

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Economic Conditions

Two economic factors affect HRM programs: Productivity The work sector of the organization

Productivity is: An important part of a nation's economic

condition Representative of an organization’s overall

efficiency The output of goods and services per unit of

input (resources) used in a production process

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Economic Conditions

Managers can influence productivity through sound HRM programs Diagnosis, prescription,

implementation, and evaluation Recruitment and selection Motivational and compensation

techniques Training and development

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Internal Environmental Influences

HRM programs are influenced by: Strategy Goals Organizational culture Nature of the task Work groups The leader’s style and experience

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Goals

Organizational goals differ within and among departments Most departments have similar goals Differences arise from the importance placed

on the goals In organizations where profits take

precedence, HRM goals receive little attention This results in effectiveness problems

(absenteeism, performance decrements, high grievance rates)

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Organization Culture

A firm's organizational culture is shown by: The way it does business How it treats customers and employees The autonomy or freedom that exists in the

departments or offices The degree of loyalty expressed by employees

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Organization Culture

Organization culture represents the perceptions held by the employees There is no one "best" culture for the

development of human resources

Culture can: Impact behavior, productivity, expectations Provide a benchmark for standards of

performance

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Work Group

An employee’s experiences are largely influenced by the work group A group is two or more people who:

Consider themselves a group Work interdependently to accomplish a

purpose Communicate and interact with one another

on a continuous basis In many cases, work next to each other

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Leader’s Style and Experience

The experience and leadership style of the operating manager directly affects HRM activities Orchestrating the skills, experiences,

personalities, and motives of individuals Facilitating interaction within work groups Providing direction, encouragement, and

authority to evoke desired behaviors Reinforcing desirable behavior

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