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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 investments

Accountability

Responsibility 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 initiator

Fast, proactive and integrated

Short, medium and long (as

required)

Organic-flexible, whatever is

necessary to succeed

Broad, flexible, cross-training

teams

People, knowledge

Investment centre

Line 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 implementation

Encouraging proactive behavior

Explicit communication goals

Stimulate critical thinking

Productivity

Quality and Service

Proficient 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

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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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