STRATEGIC HRM

Mr. Asaad Ali Karam (M.B.A) & Studying PhD Business Management

Listen to This Video About 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

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

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

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

Strategic HRM: A Key to Success

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

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

Linking Corporate and HR Strategies

Strategic Management Process

Environmental Scanning

Strategy FormulationCorporate levelBusiness unit levelFunctional level

Strategy Implementation

Strategy Evaluation

HR Role in Strategic Management

In strategy formulation HR manager supplies competitive intelligence that is

useful

In strategy implementation Encouraging proactive behavior Explicit communication goals Stimulate critical thinking Productivity Quality and Service Proficient strategic management

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

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

A Model to Organize HRM

Taking a Diagnostic Approach to HRM

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

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

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

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

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

Internal Environmental Influences

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

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)

Organization Culture

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

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

Work Group

An employee’s experiences are largely influenced by the work groupA 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

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