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Introduction
STRATEGIC HUMAN
RESOURCE MANAGEMENT
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Much of life now looks like [a] doughnut. Organisations
as well as individuals have come to realise that they
have an essential core, a core of necessary jobs and
necessary people, a core which is surrounded by anopen flexible space, which they fill with flexible
workers and flexible supply contracts. The strategic
issue for organisations, nowadays, is to decide what
activities and which people to put in which space. Itis not always obvious (CHARLES HANDY, British
academic, business consultant and author).
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WHAT IS HUMAN RESOURCE
MANAGEMENT?
Managing people within the employer-
employee relationship. It involves the productive use of people in
achieving the organisations strategic
business objectives and the satisfactionof individual employee needs.
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HRM is either a part of the problem or part ofthe solution in gaining the productivecontribution of people.
The HR manager, as with any other functionalmanager in marketing, production or finance, isresponsible for performance.
His or her position exists foremost to helpachieve the strategic business objectives of theorganisation.
The HR function is recognised for contributingto the bottom line (which refers to a final result
such as net profit after taxes).
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HRM AND MANAGEMENT
HRM is management, but management is more
than HRM.
HRM is that part of management dealing directly
with people, whereas management also includes
marketing research and development, and
accounting and finance.
Because the purpose of HRM is to improve the
productive contribution of people, it is intimately
related to all other aspects of management.
Organisations needing to trim overheads or
reduce corporate flab cut HRM.
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Who is responsible for HR?
It should be quite clear that human resource
management functions are not necessarily
executed by a human resource specialist or
department.
Precisely how the human resource management
functions are divided between the human
resource departments specialists and the
organisations other managers varies from
situation to situation and is contingent upon avast number of circumstantial factors.
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Circumstantial Factors
Internal factors:
organisational history,
size,
structure and location, the values, philosophies and management
styles of top management,
the nature of the workforce,
the type of industry.
External factors:
economic conditions,
legislative requirements,
industrial relations.
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Myths that keep HR from being a profession
Old Myths People go into HR
because they like people.
Anyone can do HR.
New Realities
HR departments are notdesigned to provide corporatetherapy or to act as social or
health-and-happiness retreats.HR professionals must createthe practices that makeemployees more competitive,not more comfortable.
HR activities are based ontheory and research. HRprofessionals must master boththeory and practice.
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Old Myths HR deals with the soft
side of business andtherefore is not
accountable.
HR focuses on costs,
which must becontrolled.
New Realities
The impact of HR practices on
business results can and must be
measured. HR professionals
must learn to translate their workinto financial performance.
HR practices must create value by
increasing the intellectual capital
within the firm. HR professionalsmust add value, not only reduce
costs.
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Old Myths HRs job is to be the policy police
and the health-and-happiness
patrol.
HR is full of fads.
New Realities
The HR function does not owncompliance.
HR practices have evolvedover time. HR professionalsmust see their current work aspart of an evolutionary chain
and explain their work withless jargon and moreauthority.
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Old Myths
HR is staffed by nice
people.
HR is HRs job.
New RealitiesAt times, HR practices should force
vigorous debates. HR professionals
should be confrontative and
challenging as well as supportive.
HR work is as important to line
managers as are finance, strategy,
and other business domains. HR
professionals should join withmanagers in championing HR
issues.
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APPROACHES TO HRM Instrumental HRM (hard approach): stresses the
rational, quantitative and strategic aspects of
managing human resources.
Humanistic HRM (soft approach): whileemphasising the integration of HR practices with
strategic objectives, it stresses competitive
advantage is achieved by employees with superior
know-how, commitment, job satisfaction,adaptability and motivation.
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The New Role of HR ManagersSTRATEGIC PARTNER
HR professionals play a strategic role when they have the ability totranslate business strategy into action. This facilitating role allows the
HR manager to become part of the business team.
ADMINISTRATIVE EXPERT
To become administrative experts HR professionals must be able to re-
engineer HR activities through the use of technology, process
engineering and total quality management.
EMPLOYEE CHAMPION
The HR professional must be able to relate to and meet the needs of
employeesCHANGE AGENT
The HR manager needs to serve as a catalyst for change within the
organisation. This can be achieved by leading change in the HR
function and by developing problem-solving communication and
influence skills. In short, the HR manager must know how to managechange.
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HRM ACTIVITIES
Job analysis defines a job in terms of specific tasks andresponsibilities and identifies the abilities, skills and qualifications
needed to perform it successfully.
Human resource planning oremployment planning is the process
by which an organisation attempts to ensure that it has the right
number of qualified people in the right jobs at the right time.
Employee recruitment is the process of seeking and attracting a
pool of applicants from which qualified candidates for job vacancies
within an organisation can be selected.
Employee selection involves choosing from the available candidatesthe individual predicted to be most likely to perform successfully in the
job.
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HRM ACTIVITIES (cont)
Performance appraisal is concerned with determining how wellemployees are doing their jobs, communicating that information tothe employees and establishing a plan for performanceimprovement.
Training and development activities help employees learn how to
perform their jobs, improve their performance and preparethemselves for more senior positions.
Career planning and development activities benefit bothemployees - by identifying employee career goals, possible futurejob opportunities and personal improvement requirements - and
the organisation - by ensuring that qualified employees areavailable when needed.
Employee motivation is vital to the success of any organisation.Highly motivated employees tend to be more productive and havelower rates of absenteeism, turnover and lateness.
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HRM ACTIVITIES (cont)
Compensation refers to the cash rewards, such as the basesalary, bonus, incentive payments and allowances whichemployees receive for working in an organisation.
Benefits are sometimes referred to as indirect or non-cashcompensation.
Industrial relations is concerned with the relationship betweenan organisation and its employees.
Effective health and safety programs help guarantee thephysical and mental wellbeing of employees.
Management of diversity and successfully integrating
Australias multi-cultural population into the work forcemaximises the contribution of all employees.
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WHAT IS STRATEGY
Defines the direction in which an
organisation intends to move andestablishes the framework for action
by which it intends to get there.
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STRATEGIC INTENT Companies that have achieved global
leadership, have created a sustained
obsession to achieve a challenging long-
term objective. This obsession is calledstrategic intent.
Achieve this requires organisations to move
from their traditional conscript mindset
(externally motivated) to a volunteermindset internally motivated).
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Establish a mission and key objectives
Analyse the environment
Analyse and select business strategies
Implement the strategies
Monitor and evaluate performance
F
E
E
D
BA
C
K
Strategic Intent
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BHP
Charter
To survive and prosper, we must create a
high performance organisation in which
every individual accepts responsibility
and is rewarded for results.
Business
strategy
We have adopted a portfolio business
asset model to compete in a clearly
defined and targeted approach.
People
strategyWe are committed to providing a great
company to work for, with great jobs and
attractive rewards.
Remunera-tion
strategy
Our executives will be able to see the linkbetween the results they produce and the
level of reward they achieve through a
flexible remuneration delivery model.
Link between organisation and HRM objectives and strategies
Source: BHP, Coming out of a tight corner;Report to Shareholders, 2000, p. 31.
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TYPES OF STRATEGIES
Growth
Retrenchment
Stability
Combination
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HRM STRATEGY AIMS TO ENABLE
ORGANISATION TO ACHIEVE STRATEGIC
OBJECTIVES BY:
Ensuring all business processes recognise the value ofpeople
Seeing that all concerned appreciate the HR implications oftheir proposals
Achieving a close match between corporate businessobjectives and objectives of the HR function
Designing a culture, climate and organisational processesconducive to optimal performance of staff
Identifying the firms distinctive competencies and the typesof people that match these competencies.
Assessing the performance requirements
Reviewing levels of commitment throughout the organisation
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STRATEGIC HRM OBJECTIVES CAN BE
LINKED TO STRATEGIC OBJCTIVES
SUCH AS:
Cost containment
Customer service
Social responsibility
Organisational effectiveness
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ASSESSMENT OF
INFLUENCES
Where are we now?
Where do we want to be in the future?
What path is best for us?
How and when can we implement it?
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EXTERNAL INFLUENCES
Political
Legal
Environmental
Technological
Cultural
Demographic
Social
Business Economic
Industrial relations
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INTERNAL INFLUENCES
Organisational mission and purpose
Objectives and strategies
Organisational culture
Organisational structure
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OUTCOMES IN EVALUATING HRM
STRATEGIES AND POLICIES
Commitment
Competence
Cost-effectiveness
Congruence
Adaptability
Performance
Job satisfaction Employee motivation
Trust
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THE HRM CHALLENGE
Strategic HRM demands HR
professionals who have competencies
at a general management level andwho are willing to accept responsibility
for organisational performance outside
HRM Davidson
S
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Summary
In the current turbulent environment HR managersneed to adopt a strategic approach, be part of thetop management team, be involved in corporate
planning and develop a vision for HRM. HRM activities must be part of a coordinated effort
to improve the productive contribution of people inmeeting the organisations strategic business
objectives. Inability to do so means that the organisation will
ultimately stagnate and fail.