Post on 06-Apr-2018
8/2/2019 Strategic HRM- 01
1/40
Strategic Human ResourceManagement
Fareha Zafar Saeed
An Introduction
8/2/2019 Strategic HRM- 01
2/40
Strategy?
Way of doing something
A game plan for action
Includes:
Formulation of a goal Set of action plans for accomplishment
Implies:
Consideration of competitive forces(internal) Impact of outside environment on
organization actions
8/2/2019 Strategic HRM- 01
3/40
Strategy - Mintzberg
A plan, or something equivalent adirection, a guide, a course of action.
A pattern, that is, consistency in
behaviour over time. A perspective, an organizations
fundamental way of doing things.
A ploy, a specific maneuvre intended tooutwit an opponent or a competitor.
8/2/2019 Strategic HRM- 01
4/40
Management By Objective (MBO)
MBO essentially involves three steps:
Setting a mission or purpose
Setting goals or objectives
Determining action plans to achievethe goals or objectives
8/2/2019 Strategic HRM- 01
5/40
MBO & Strategy (2/2)
The strategic focus accepts these threebasic ideas of MBO but goes beyondthem by giving explicit recognition toboth the outside and competitive
environment.
The actions and reactions are the heartof the modern approach to strategy.
8/2/2019 Strategic HRM- 01
6/40
Defining: STRATEGY
The formulation of organizationalmissions, goals, and objectives, as wellas action plans for achievement, thatexplicitly recognize the competition andthe impact of outside environmentalforces.
8/2/2019 Strategic HRM- 01
7/40
Defining: STRATEGY
The direction and scope of anorganization over the longer term, whichideally matches its resources to itschanging environment, and in particular,to its markets, customers and clients tomeet stakeholder expectations.
Johnson & Scholes
8/2/2019 Strategic HRM- 01
8/40
Strategy determine direction of organization in
relation to its environment
defines intentions strategic intentStrategic intent is a high-level statement of the meansby which your organization will achieve its vision. It is astatement of design for creating a desirable future(stated in present terms). Putting it simple, a strategicintent is your company's vision of what it wants toachieve in the long term.
allocates / matches resources toopportunities and needs resource basedstrategy
achieves competitive advantage
8/2/2019 Strategic HRM- 01
9/40
Strategy is about implementation,which includes the management of
change, as well as planning. Animportant aspect of strategy is the needto achieve strategic fit.
This is used in three senses:1. matching the organizations capabilities and
resources to the opportunities available inthe external environment;
2. matching one area of strategy, eg human
resource management, to the businessstrategy; and
3. ensuring that different aspects of astrategy area cohere and are mutually
supportive.
8/2/2019 Strategic HRM- 01
10/40
Effective organizational strategies arerequired for the organization toaccomplish its mission while being guided
by an investment perspective. Afterscanning the environment foropportunities and threats and theintrospective process of evaluating
strengths and weaknesses, theorganization is ready for strategyformulation.
8/2/2019 Strategic HRM- 01
11/40
Importance of Human Resourcesto Strategy
HRMs importance as a result of: its role in providing competitive
advantage
the rush to competitiveness an awareness of the demands of the
technologically advanced environmentof the future
8/2/2019 Strategic HRM- 01
12/40
There is greater recognition thatdistinctive competencies are obtainedthrough:
highly developed employee skills
distinctive organizational cultures
management processes, and systems
8/2/2019 Strategic HRM- 01
13/40
Increasingly, it is being recognized thatcompetitive advantage can be obtainedwith a high-quality workforce, which
enables organizations to compete on thebasis of market responsiveness, productand service quality, differentiatedproducts, and technological innovation,
instead of reliance on low costs
8/2/2019 Strategic HRM- 01
14/40
Aside from its role in providingcompetitive advantage through a quality
workforce, the necessity of controllinglabor costs also has elevated the role ofhuman resource management (impact ofinefficient use of human resources).
Managers need look no further thanunderutilized workers, lack of trust,resistance to change, antagonistic labormanagement relations, motivational
problems, and restrictive work practicesto find causes of lower productivity.
8/2/2019 Strategic HRM- 01
15/40
better utilization of human resourcesmay prove to be more cost efficientthan investments in plant and equipment.
Because of potential cost efficiencies,improved human resource managementcan play a key role in the organizations
competitive strategy and in thedevelopment of distinctive competencies.
8/2/2019 Strategic HRM- 01
16/40
Economic Turbulence & HRM
Turbulence, globalization, technology,dramatically changing demographics, anddifferences in workforce values havecreated almost unprecedentedenvironmental uncertainty.
Strategic human resource management
and the sub-process of human resourceplanning are increasingly being seen asmeans of buffering environmentaluncertainty
8/2/2019 Strategic HRM- 01
17/40
Human resource management is becomingintegrated into the strategy formulationand planning process.
HRM is becoming companys competitivestrategy, therefore general managementhas an incentive to ensure alignment and
consistency between strategy and humanresource practices and policies
8/2/2019 Strategic HRM- 01
18/40
The first alignment challenge comes withfinding the answer to the followingquestion: What kinds of people will beneeded to lead the organization in theyears to come?
The expectation is that people and
practices, which are aligned with futurestrategic needs, produce superiororganizational performance.
8/2/2019 Strategic HRM- 01
19/40
The expectation is that people andpractices, which are aligned with futurestrategic needs, produce superiororganizational performance.
8/2/2019 Strategic HRM- 01
20/40
Human Resource Management
Human Resource Management is a
process of attracting, developing, andretaining capable and willing humanresources (employees) to achieve theorganizational goals.
8/2/2019 Strategic HRM- 01
21/40
Human Resource Management
Attracting Staffing (recruitment, selection, and
orientation)
Developing Training & Development
Retaining Compensation & Benefits Individual growth opportunities
8/2/2019 Strategic HRM- 01
22/40
The operational HRM tasks should beperformed in a way that helps thecompany deal effectively with anyenvironmental forces and competition andensures the companys long-termachievementof its goals and objectives.
HRM: Strategic Focus
8/2/2019 Strategic HRM- 01
23/40
Why Human ResourceManagement (1/3)
Success comes from successfullyimplementing strategy and the ability to
implement strategy comes from theorganizations people.
(The Human Equation, Jeffery Pfeffer)
8/2/2019 Strategic HRM- 01
24/40
Human Resource Strategy (1/2)
Explicitly recognizes the impact of theoutside environment
Explicitly recognizes the impact of
competition and the dynamics of thelabor market.
Has a long range focus (3-5 years)
8/2/2019 Strategic HRM- 01
25/40
Human Resource Strategy (2/2)
Focuses on the issues of choice anddecision making
Considers all personnel, not just hourlyor operational employees
Is integrated with overall corporate
strategy and functional strategies
8/2/2019 Strategic HRM- 01
26/40
Strategic HRM Defined
Strategic HRM is an approach to makingdecisions on the intentions and plans ofthe organization in the shape of thepolicies, programs and practicesconcerning the employment relationship,resourcing, learning and development,performance management, reward, and
employee relations.
8/2/2019 Strategic HRM- 01
27/40
The concept of Strategic HRM comesfrom strategy and HRM.
It takes the HRM model with its focuson strategy, integration and coherenceand adds to that the key notions ofstrategy, namely, strategic intent,
resource-based strategy, competitiveadvantage, strategic capability andstrategic fit.
8/2/2019 Strategic HRM- 01
28/40
Strategic Choices
When formulating a corporate strategy,
managers must consider several strategicchoices.
8/2/2019 Strategic HRM- 01
29/40
To make appropriate choice, thefollowing should be addressed:
1) Choosing strategy that the company
should adopt to maintain or improve itsposition in the marketplace.
2) Ensuring continued sales growth andmaintenance of its workforce to avoid
retrenchment and layoff.
Strategic Choices
8/2/2019 Strategic HRM- 01
30/40
3) Adopting to its ever-changingenvironment.
4) Collecting the information it needs tounderstand and influence itsenvironment.
Strategic Choices
8/2/2019 Strategic HRM- 01
31/40
Human Resource Planning (1/4)
Once the organizations objectives arespecified, communicated, and understood
by all affected, the human resource unitshould specify its objectives with regardto human resource utilization in theorganization.
8/2/2019 Strategic HRM- 01
32/40
Human Resource Planning (2/4)
Strategic Choices:
Shall we attempt to fill positionsfrom within or by hiring individualsfrom the labor market?
Can we meet our commitments toaffirmative action?
How do our training and developmentobjectives interface with our humanresource planning objectives?
8/2/2019 Strategic HRM- 01
33/40
What union constraints do we face inHR Planning, and what policies should wedevelop to effectively handle these
constraints? What is our policy toward providing
everyone in the organization with a
meaningful, challenging job (jobenrichment)? Will we continue to havesome boring, routine jobs, or should weeliminate them?
Human Resource Planning (3/4)
8/2/2019 Strategic HRM- 01
34/40
Can some positions and jobs beeliminated so that we can becomemore competitive?
To what extent can we automateproduction and operations, and whatshall we do about those displaced?
How do we ensure that we have acontinuously adaptive and flexibleworkforce.
Human Resource Planning (4/4)
8/2/2019 Strategic HRM- 01
35/40
Recruitment & Selection
Strategic Choices:
Make or Buy
Budgets
Untapped labor sources
Internal Vs External Recruiting
Whether to develop a plan to retain
qualified workers
8/2/2019 Strategic HRM- 01
36/40
Training & Development (1/2)
Strategic Choices:
Compliance of rules or challenging therules and search for more productive
ways to perform their jobs.
Developing human resources or hirealready developed
8/2/2019 Strategic HRM- 01
37/40
Training & Development (2/2)
Find ways to improve the performanceof managerial workers, or shouldreplace them
How well does the organizationsdevelopment strategy match theorganizations overall strategy?
8/2/2019 Strategic HRM- 01
38/40
Performance Appraisal System
Strategic Choices:
Purpose of performance appraisal(corrective, reward determination,
individual or group based)
Formal or informal
Objectivity Vs. Subjectivity
Frequency of Performance Appraisal Who will conduct?
8/2/2019 Strategic HRM- 01
39/40
Compensation System (1/2)
Strategic Choices:
Importance of external equity to theorganization
How closely the compensation plan willbe linked to the organizations overallstrategic plan.
8/2/2019 Strategic HRM- 01
40/40
Compensation System (2/2)
Merit pay raises or across-the-boardraises
Level of pay secrecy
Internal Equity (job worth) How to mix intrinsic rewards (rewards
that come from performing the job)
and extrinsic rewards (rewards thatcomes from a person outside the job)