Strategic Human Resource Management
Introduction to Strategic HR
Strategic Human Resource Management Introduction 1990s
there has been an increased focus on the
strategic role of human resource management The
strategic approach to HRM refers to the
relationship between human resource (HR)Practices and the strategic objectives that is the long term goals of the organization
Strategic Human Resource Management With
the increasing recognition of the potential of
human resources in providing competitive advantage Organizations s Organization
have begun to consider employees
as valuable assets or investments Todays
knowledge economy depends on the skill
and knowledge of the workforce From
being routine administrative and reactive
function the HR function today has evolved to being proactive and strategic
Strategic Human Resource Management In
order to bring about a transformation from the fire fighting role the HR manager has to don the garb of professionalism A
true professional with proper qualification and training to meet the expectations of society and the organization in particular HR
professionals need to know their organizations business thoroughly not only in terms of people but also in terms of economic ,financial,environmental ,financial,environmental and technological forces affecting it
Strategic Human Resource Management As
a strategic partner HR needs to participate and help the top management in framing the organizational strategy There
is a paradigm shift from traditional HR function to strategic HR functions Example-strategic
IR brings out the need to take the Trade Unions along to meet the global competitions without the traditional mutual distrust HR
system need re-engineering
Once
performance performan ce standards s tandards fixed for HR professional need for evaluation,audited evaluation,audited and benchmarked for constant improvement
Strategic Human Resource Management In the past HR researchers and practitione practitioners rs directed their attention to important questions What
is HR strategy?
What
factors determine determine whether an organization adopts a
strategic approach to HRM? Is
there a relationship between the characteristic of the
organization and the adoption of a particular strategic human resource managem management(SHRM)approach? ent(SHRM)approach? Does
an organization achieve competitive advantage by
linking HR strategy with business strategy?
Strategic Human Resource Management
Human Resource management(HRM) management(HRM) is concerned with the holistic approach towards the management of people working in an organization who contribute to the achievementt of organizational objectives achievemen
Effective and efficient use of human talent for accomplishing the goals of an organization
To achieve organizational objectives each organizations need to develop a well ±defined HR strategy
Strategic Human Resource Management Contd of HRM
Orga Or ganiz nizat atio ion n has has no now w to to focu focus s on it its s thr three ee co core re ar area eas s
PEOPLE
PROCESS
PERFORMANCE
Called the 3 Ps
People Peop le-- Kn Know own n fact fact that that the the core core str stren engt gth h of an an orga organi nisa satio tion n lie lies s on its people(human resource ) all other resources can be replaced but not people
Proces Proc esss-Wit With h the the fast fast chan changin ging g worl world d empha emphasi sis s is laid laid on flexibility and adaptability. In an IT enabled environment reengineering of process can be done
Contd of HRM
PERFORM PERFO RMANC ANCE: E: th the e exis existe tenc nce e of of an org organ anisa isati tion on is pri primar marily ily dependent on its ability to create vale and continously increase the rate of return on investment
The two pillars supporting the performance perform ance of an organisation are PEOPLE AND IT(technology)
The integration of these two factors plays the pivotal role in improving the performance of an organization at both individual i ndividual and organizational levels
IT helps in documenting the knowledge pool in the organisation and making it available to the employees through intranet etc
Management of knowledge workers is different from that of conventional employees-intelligence and maturity higher and they expect greater levels of flexibility f lexibility and freedom in their work area in the case of knowledge workers
A Model of the Shift to HRM
Hard HRM The The 'har 'hard' d' app approa roach ch roo rooted ted in the the manp manpow ower er planning approach is concerned with aligning human resource strategy with business strategy
Soft HRM The The 'sof 'soft' t' appr approac oach h is root rooted ed in the the hum human an relations school, with concern for workers' outcomes and encourages commitment commitment to the organisation by focussing on workers' concerns.
Strategic Human Resource Management Human Resource Strategy Human resources-valuable resources-valuable resources that help an organization organizatio n to achieve its objectives(this depicts the centrality of human resources for achievement of organizational goals) Financial capital Processes
Technology
People utilization People
Organizational goals
Contd of HRM
Personnel policies and principles
Policies are plans of action
Organisations need to evolve HR policies as they ensure consistency and uniformity in treating people
They help motivate and build loyalty
Policies become benchmarks to compare and evaluate performance -policy on terms of hiring people -policy with regard to medical assistance -policy regarding housing allowance etc -policy regarding training and development -policy regarding IR-trade union recognition/CB/grievance/Participative recognition/CB /grievance/Participative Mgmt/communication
Principles
If pol polici icies es is a guide guide for for mana manage geri rial al decis decisio ions ns an and d action actions s
Principl Princ iple e is the the fundam fundamen enta tall trut truth h establi establish shme ment nt by resea researc rch h /investigation and analysis
Many prin Many principl ciples es hav have e been been estab establish lished ed thr throug ough h practi practice/ ce/expe experien rience ce and observation
Princip Pri nciples les are univ univers ersal al truth truths s genera generally lly appli applicabl cable e to to all orga organisa nisation tions s
Policies Poli cies on the the other other han hand d vary vary from from orga organisa nisation tions s to to organi organisati sations ons
Principles Princip les guid guide e manag managers ers in formu formulati lating ng poli policies cies pro progra gramm mmes es procedures and practices
Com Co me hand handy y in in solv solvin ing g any any vex vexin ing g pro probl blem em
Some pr principles ar are:-
Principle of individual development-equal opportunity for development
Principle of scientific selection
Principle of free flow of communication etc
HRM Models
To und underst erstand and the theo theoret retical ical per perspec spectiv tives es on HRM HRM we we have have to know the models
Four maj Four major or mod models els hav have e iden identifie tified d and all the these se ser serve ve as man many y purposes
1.They provide an analytical framework for studying HRM(situational factors /stakeholders/strategic choice levels/competence) 2.They legitamise certain HRM practices: a key issue i ssue here being the distinctiveness of HRM practices(it is not the presence presenc e of selection or training but a distinctive approach to selection sele ction or training) 3.They provide a characteristics of HRM that establishes es tablishes variables and relationship to be researched 4. Serve as heuristic device-something to help us discover and understand the world for explaining the nature and significance of key HR practices
HRM Models
The four models are:
1. The Fombrun 2.The Harvard 3.The guest 4. The Warwick
Fombrun Model Model Of HRM
HRD
Selection
Appraisal
Rewards
Organisational effectiveness
The Harvard Model of Human Resource Management
Guest Reflects
view that a core set of integrated HRM practices can achieve superior individual and organizational performance.
Guest¶s
Model of HRM
Guest
Warwick Extends Maps
the Harvard framework.
the connections between the outer and inner contexts and explores how HRM adapts to changes in conte xt.
Warwick
Strategic Human Resource Management
The tra transfo nsformed rmed HR depar departmen tmentt perf performs orms the follo followin wing g funct function ions s
partic par ticipa ipatin ting g in the the strat strategi egizin zing g sessi sessions ons of busin business ess pol policy icy
Prepar Pre paring ing the HR HR strateg strategies ies in in coordina coordinatio tion n with with the the corpora corporate te strat strategi egies es
Impleme Impl ementi nting ng the var variou ious s HR pol policie icies s and and prac practic tices es incl includin uding g
HR planning,
recruitment and induction
compensation structuring,
career planning,
competence mapping,
performance management
Strategic Human Resource Management
Overallll the Overa the HR depart department ment has outg outgrow rown n its mere mere func functio tional nal rol role e and has come to assume the responsibility of building the brand of the company to:
Attrac Att ractt bes bestt ava availa ilable ble tal talent ent in the marke markett and ret retain ain the them m
This Thi s helps helps in the the recr recruit uitmen mentt cost cost and and repl replac aceme ement nt co cost st
Redu Re duci cing ng th the e attr attrit itio ion n rat rates es
This Thi s helps helps th the e organ organis isat atio ion n to comp comple lete tes s its its proje project ct
Strategic Human Resource Management
Holistic Facet Of Of HR HRM
HR pers personn onnel el are incr increas easing ingly ly exp expect ected ed to to involv involve e themsel themselves ves in business planning and execution
to under understa stand nd the busin business ess req requir uiremen ements ts and tune tune the the HR stra strateg tegies ies to the emerging business realities
Any Holi Holisti stic c HRM HRM appr approac oach h woul would d includ include e the the follo followin wing g dimen dimensio sion n
Participation in business strategies planning
Tuning HR strategies to business strategy requirements
Undertaking change management programmes programmes to bring in cultural transformation
Coordination with the business heads to implement impl ement HR strategies and policies
Promotion of active ownership of HR policies by business heads to improve credibility of the policies and also for their successful implementation
Strategic Human Resource Management Holistic Facet Of HRM-contd
HR funct function ion has the therefo refore re beco become me more dema demandi nding ng and is is no long longer er restricted to be just a personnel training or administrative function
It is is a hybri hybrid d of all all these these funct function ions s which which cal calls ls for for new new skills skills and and atti attitud tude e from the HR personnel
Strategic Human Resource Management
ESSE ES SENT NTIA IAL L SK SKIILL LLS S FO FOR AN AN HR HR MAN MANA AGER
HR manag manager er has to to reorie reorient nt him him self self to to addres address s the the organ organiza izatio tional nal challenges
The Th e ski skillls re required ar are:
Strategic pl planning:
The global human resource development ±participating in strategic planning process suggests that strategic planner is the emerging role in HR
Strategic planning determines where an organization is headed for over the next year or more -How it is going to get there -How would it know if it got there or not
An HR strategic plan helps in defining goals and strategies for achieving Them/beyond day to day work/
Strategic Human Resource Management
Chandler (1962) defined strategy as the determination of the long term goals and objectives of an organization and the allocation of resources necessary for carrying out these goals
Like
strategy HR strategy is concerned with two key
elements (Richardson and Thompson 1999) 1.Determining the Strategic objectives(What goals is the 1.Determining strategy supposed to achieve?-example high productivityreduced accidents etc 2.Developing a plan of action (How will the human resources be organized and allocated to accomplish the objectives of the
Strategic Human Resource Management
Human resource strategy involves the planned and effective use of human resources by an organization to help it to gain or maintain an edge over its competitors
Gain
competitive advantage-organizations advantage-organizations achieve
competitive advantage when it is able to gain and maintain an edge over its competitors by differentiating its products and services from those of its competitors thereby increasing its market share The
centrality of the people evident in knowledge based
organizations-where organizati ons-where success s uccess and failure depends on the skills and knowledge of its workforce rather than the technology
Strategic Human Resource Management
Definition and Components
Given
the increasingly significant role of human resources in an organization HRM has become strategic in nature Strategic
human resource management(SHRM) is concerned c oncerned with the relationship between HRM and strategic management in an organization Strategic
human resource management is an approach which relates to decisions about the nature of employment relationship,recruitment, relationship ,recruitment, training ,development ,performance management, reward and employee relations
Strategic Human Resource Management
Definition and Components contd
Wright
and McMahan (1992) defined SHRM as ³the pattern of planned human resource deployment and activities intended to enable the firm to achieve its goals´ This
definition implies the following four components of definition
SHRM 1.It focuses on an organization¶ organization¶s s human resources(people)competitive advantage of the organization 2.The activities highlight the HR programmes ,policies and practices as the means through which the people of the organization can be deployed to gain competitive advantage
Strategic Human Resource Management
Definition and Components contd
3.The pattern and plan imply that there is a fit between HR strategy and the organization¶s business strategy(vertical fit)and between all of the HR activities (horizontal fit) 4.The people practices, and planned pattern are all purposeful that is directed towards the achievement of the goals of the organization
Strategic Human Resource Management
Definition and Components contd
SHRM
is concerned with people issues and practices that affect or are affected by the strategic plan of the organization The
critical issues facing an organization today are mainly human issues such as -ensuring the availability of people -retaining -motivating -developing -developin g these resources Today
organizations organizati ons competes less on products or markets and more on people
Strategic Human Resource Management Definition and Components contd An
organization uses a combination of several resourcesorganization
-Tangible -Intangible in the pursuit of its objectives These
resources can be grouped into three basic types
1.Physical capital resources-plant ,equipment and finances 2.Organizational capital resources-the organization¶s structure 2.Organizational planning, HR systems, history and organizational culture 3.human capital resources ±the skills ,knowledge , judgement and intelligence of the organization¶s employee
Strategic Human Resource Management Definition and Components contd An
organization may have huge capital and the most advanced machinery but if it does not have capable ,motivated and high performing employees the organization is not likely to demonstrate sustained levels of high performance
Strategic Human Resource Management Defined
as ³the linking of HR with strategic goals and objectives in order to improve business performan performance ce and develop organization culture that fosters innovation and flexibility
