HUMAN

RESOURCE
MANAGEMENT

Prof. S. Pattnaik
 Evolution of the HR Function

• Commodity concept
• Factor of Production concept
• Goodwill concept
• Paternalism
• Humanitarian concept
• Human resource concept
• Partnership concept
Prof. S. Pattnaik
 Other things being equal……

Perf
Perf == ff (A,M,E)
(A,M,E)

MOTIVATION
MOTIVATION ABILITY
ABILITY
••Job
Job ••Recruitment
Recruitment
enrichment ENVIRONMENT
enrichment ENVIRONMENT ••Selection
Selection
••Promotions
Promotions ••Management ••Training
Management Training
••Coaching
Coaching philosophy
philosophy ••Development
Development
••Feedback
Feedback ••Culture
Culture
••Rewards
Rewards ••Empowerment
Empowerment

Prof. S. Pattnaik
 The Bottomline

• Getting results
– The bottom line of managing

• HR creates value by engaging

in activities that produce
the employee behaviors
the company needs to
achieve its strategic
goals.

Prof. S. Pattnaik
The Strategic Role of Human
Resource Management
 Strategy
n
ti o
ni
efi

• Strategy is deciding where to go

D

and the means to get there.

• Strategy is a declaration of intent.

Prof. S. Pattnaik
 Some Organisational Strategies

Company Strategic Principle

General Be number one or number two in

Electric every industry in which we
compete, or get out

Wal-Mart Low prices, every day

3M Foster innovation

Prof. S. Pattnaik
 Strategic Planning
There are three levels
of strategic planning -

Corporate
Strategy

Business Business Business

Strategy Strategy Strategy

Functional
Strategies
Prof. S. Pattnaik
 Types of Strategic Planning
• Corporate-level strategy
– Identifies the portfolio of businesses that, in
total, comprise the company and the ways
in which these businesses relate to each
other.
• Diversification strategy
• Vertical integration strategy
• Consolidation strategy
• Geographic expansion strategy

Prof. S. Pattnaik
 Types of Strategic Planning (cont’d)

• Business-level/competitive strategy
– Identifies how to build and strengthen the
business’s long-term competitive position
in the marketplace.
• Cost leadership
• Differentiation
• Focus

Prof. S. Pattnaik
 Types of Strategic Planning (cont’d)

• Functional strategies
– Identify the basic courses of action
that each department will pursue in
order to help the business attain its
competitive goals.

Prof. S. Pattnaik
Business Strategy = Overall Cost Leadership
Common Organizational HR Strategies
Characteristics

• Intense supervision of • Detailed work planning

labor • Emphasis on technical
• Tight cost control qualifications and skills
requiring frequent, • Emphasis on job-specific
detailed control reports training
• Low-cost distribution • Emphasis on job-based
system pay
• Structured organization • Use of performance
and responsibilities appraisal as a control
• Products designed for device
ease in manufacture
Prof. S. Pattnaik
 Business Strategy = Differentiation

Common Organizational HR Strategies

Characteristics
• Strong marketing
• Emphasis on innovation
abilities and flexibility
• Product engineering
• Broad job classes
• Corporate reputation for • Loose work planning
quality or technological
• External recruitment
leadership
• Team-based training
• Amenities to attract
highly skilled labor, • Emphasis on individual-
scientists, or creative based pay
people.
Prof. S. Pattnaik
 Business Strategy = Focus
Common Organizational HR Strategies
Characteristics

Combination of cost-
Combination of HR
leadership and
differentiation strategies of the
strategy directed at a other two strategies.
particular strategic
target.

Prof. S. Pattnaik
 Achieving Strategic Fit

• Michael Porter
– Emphasizes the “fit” point of view that all of
the firm’s activities must be tailored to or fit its
strategy
• Gary Hamel and C. K. Prahalad
– Argue for “stretch” in leveraging resources—
supplementing what you have and doing more
with what you have

Prof. S. Pattnaik
 STRATEGIC HUMAN RESOURCE
MANAGEMENT
• Linking HRM with strategic goals and
objectives to improve business performance
and develop organizational cultures fostering
innovation and flexibility.
• Defines the organisation’s intentions and
plans on how its business goals should be
achieved through people.

Prof. S. Pattnaik
 Linking Corporate and HR Strategy

External Formulate Business Internal

environment Strategy Strengths &
Weaknesses

Identify Employee Competencies and

Behaviors that HR must deliver to achieve the
strategy

Formulate HR Policies & Activities that will lead

to these Employee Competencies and Behaviors
Prof. S. Pattnaik
 HR’s Strategic Roles

• Identify the human issues that are vital to

business strategy.
• Help establish and execute strategy.
• Provide alternative insights.
• Are centrally involved in creating responsive
and market-driven organizations.
• Conceptualize and execute organizational
change.

Prof. S. Pattnaik
 HR’s Strategy Formulation Role
• HR helps top management formulate
strategy in a variety of ways by.
– Supplying competitive intelligence regarding
the external environment
– Supplying information regarding the
company’s internal human strengths and
weaknesses.
– Showing how the firm’s HR activities can and
do contribute to creating value for the
company.
Prof. S. Pattnaik
 HR’s Strategy Execution Role

• The HR department’s strategies, policies, and

activities must make sense in terms of the
company’s corporate and competitive
strategies, and they must support those
strategies.

Prof. S. Pattnaik
 Implications of SHRM
• Successful SHRM efforts begin with
identification of strategic needs.
• Employee participation is critical to linking
strategy and HR practices.
• Strategic HR depends on a systematic and
analytical mindset.
• Corporate HR departments can have an
impact on their organization’s efforts to
launch strategic initiatives.
Prof. S. Pattnaik
 Cost of HR vs Value added by HR

HR ACTIVITY VALUE
COST
ADDED
Strategic
10% (Planning) 60%

Operational
30% (Service delivery) 30%

Administrative
60% (Record keeping 10%
and Compliance)
Prof. S. Pattnaik
 Human Resource Competencies
BUSINESS MASTERY
• Business acumen
• Customer orientation
• External relations
HR MASTERY CHANGE MASTERY
Knowledge of policies • Problem solving skills
and mastery of practice • Innovation &
in HR systems Creativity
PERSONAL CREDIBILITY
• Trust
• Courage
Prof. S. Pattnaik • Lived values
 Harvard model of HR
Stakeholder
Interests

Long-term
HR HR Outcomes Consequences
strategy • Commitment
for
and policy • Congruence
• Cost Individual,
choices Organisation,
effectiveness
Society

Situational
factors
Prof. S. Pattnaik
 Things to Remember as We Move
through the course

• HR management: the responsibility of

every manager
• HR practices today must address
several basic issues including
– Improving competitiveness
– Globalizing
– Technology and internet-based
advances
– Contributing to strategic success

Prof. S. Pattnaik