Strategic Human Resource Management

Farhad Idrees BS (CS -3)

What is strategic human resource management?

1. Strategic human resource management is a complex process which is constantly evolving and being studied and discussed by academics and commentators.

2. Strategic Human Resources Management Organizational use of employees to gain or keep a competitive advantage against competitors.

More Definitions

3. All those activities affecting the behaviour of individuals in their efforts to formulate and implement the strategic needs of business.

4. Involves aligning initiatives involving how people are managed with organizational mission and objectives

Exact DefinitionExact Definition

•Strategic HRM is the key to improved

business performance

SHRM Critical Competencies

• HR’s success as true strategic business partner dependent on five specific competencies:

1. Strategic contribution - development of strategy

2. Business knowledge - understanding nuts and bolts of organization

Cont……

3. Personal credibility - measurable value demonstrated in programs and policies

4. HR delivery - serving internal customers through effective and efficient programs

5. HR technology - using technology to improve organization’s management of people

Strategic Management

Strategic Management Process

1. Determining what needs to be done to achieve corporate objectives, often over 3 - 5 years

2. Examining organization and competitive environment

3. Establishing optimal fit between organization and its environment

4. Reviewing and revising strategic plan

Process of Strategic Management

Model of Strategic HR Management

Strategic HRM and business strategy

1. A good business strategy, one which is likely to succeed, is informed by people factors.

2. In the majority of organisations people are now the biggest asset.

3. knowledge, skills and abilities have to be deployed and used to the maximum effect if the organisation is to create value.

Important PointImportant Point

• It is therefore too simplistic to say that

strategic human resource management

stems from the business strategy.

Strategic HRM and human capital management

• A number of writers have argued that strategic HRM

and human capital management (HCM) are one and the same thing.

Reason………..Reason………..

• Organisational level - because strategies involve decisions about key goals, major policies and the allocation of resources.

• Focus - strategies are business-driven and focus on organisational effectiveness

• This argument has been based on the fact that both HRM in its proper sense and HCM rest on the assumption that people are treated as assets rather than costs and both focus on the importance of adopting an integrated and strategic approach.

Contd…..

• Human capital management (HCM)

therefore informs and in turn is shaped by strategic

HRM but it does not replace it.

Traditional HR Versus Strategic HR

Establishing Goals & Objectives

• Goals should be:

i. Specific

ii. Measurable

iii. Flexible

The Five P’s Model of SHRM

1. Philosophy Statements of how organization values and treats

employees; essentially culture of the organization

2. PoliciesExpressions of shared values and guidelines for

action onemployee-related business issues.

3. ProgramsCoordinated and strategized approaches to

initiate, disseminate, and sustain strategic

organizational change efforts necessitated by

strategic business needs.

Contd….

4. Practices– HR practices motivate behaviors that

allow individuals to assume roles consistent with organization’s strategic objectives.

5. Processes– Continuum of participation by all

employees in specific activities to facilitate formulation and implementation of other activities.

Benefits of a Strategic Approach to HR

• Facilitates development of high-quality workforce through focus on types of people and skills needed

• Facilitates cost-effective utilization of labor, particularly in service industries where labor is generally greatest cost

• Facilitates planning and assessment of environmental uncertainty, and adaptation of organization to external forces

• There is not single HRM strategy that will deliver success in all situations. Organisations need to define a strategy which is unique to their own situation in terms of context, goals, and the demands of organisational stakeholders.

Any Question?

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