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There is a growing recognition of the relationship between companies overall strategies and their human resource practices.

--------Cha rles Greer---------

INTRODUCTION: Many factors determine whether an organization will be effective; Human resources are only one of them. Competitiveness, ability to adapt to changes in the market, and many other issues are involved too. Effective management decides where the organization needs to go, how to get there, and then regularly evaluate to see whether the organization is on track. Strategic objectives, the external environment, internal business processes, and determining how effectiveness will be defined and measured are all issues in this process. HR is (or should be) involved with all these points by aidentifying how it can aid in increasing organizational productivity, help deal effectively with foreign competition, or enhance innovativeness in the organization. This kind of thinking is indicative of strategic thinking. Strategic HR management refers to organizational use of employees to gain or keep a competitive advantages against competitors. It does so through the HR department formally contributing to company wide planning efforts, or by simply being knowledgeable about issues facing the organization. The development of specific business strategies must be based on the areas of strength that an organization has. Referred to as CORE COMPETENCIES, those strengths are the foundation for creating a competitive advantage for an organization. A Core Competency is a unique capability that creates high value and differentiates the organization from its competition. In some organizations, human resource can be a core competency.


What Is Effectiveness:
Effectiveness is the measure of success of something. If a new business were to implent a new policy, the effectiveness would be measured by how well it actually helped the company. What Is Organizational Effectiveness: Organizational effectiveness is the evaluation of how the company is doing in regards to their goals and the outcome or execution of its results. OR Organizational effectiveness means aligning your workforce to the strategic business initiatives that drive growth and earnings. It means ensuring business agility, enabling your workforce to be adaptable and respond swiftly to changing market conditions. Organizational effectiveness also means fostering innovation and workforce productivity by making it easier for people to find, reach and collaborate with each other, and with the right information at the right time and place. And all of this must be done while optimizing costs and delivering return on investment. Becoming a Highly Effective Organization To become more effective, Organizations need to improve across five organizational dimensions: leadership, decision making and structure, people, performance measures and initiatives, and culture. How can this be done? Here we focus only on people i.e. HR for our discussion.

Strategic Human Resources:

Strategic Human Resources or Strategic HR is not just an empty HR buzzword. Strategic HR is a way of the operation of the HRM Function in the organization. The Strategic Human Resources generally operate the way to support the strategic goals and objectives of the organization, with the full responsibility of the HRM Function for particular goals from the business strategy.

What is Strategic HR?

The strategic HR can be described from many different angles, but generally the Strategic HR involves the following:

HRM Function fully responsible for the strategic decisions about employees in the organization HRM Function measures the main HR related critical success factors influencing the performance of the whole organization and prepares the initiatives to reach the defined goal values for the individual HR related critical success factors HRM Function defines the set of basic KPIs to measure its quality and efficiency of the services HRM Function does not search for the excuses, but it fully implements agreed initiatives HRM Functions provides high quality consulting services to the Top Management based on the deep knowledge of employees and processes in the organization

What are the common Strategic HR critical success factors?

The Critical Success Factors have to be defined on several layers, at least two basic layers. The general layer connects the Strategic HR critical success factors to the business objectives and the business strategy and the concrete layer explains the real meaning of the critical success factors. The main areas to cover in the beginning of the implementation of the Strategic HR are:

Leadership High Performance Corporate Culture Talents Strategic Planning

The implementation of the Strategic HR is a long project, with many ups and downs on the way and it needs a patience from the organization and the HRM Function. HUMAN RESOURCES AS A CORE COMPETENCY: Certainly many organizations have voiced the idea that their human resources differentiate them from their competitors. Organizations as widely diverse as Fed Ex, Nordstroms Department Stores, and Dell Comuters have focused on human resources as having special strategic value for the organization. Some ways that human resources become a core competency are through attracting and retaining employees with unique professional and technical capabilities, investing in training and development of those employees, and compensating them in ways that retain and keep them competitive with their counterparts in other organizations. For example, Smaller, communityoriented banks have picked up numerous small- and medium-sized commercial loan customers because they emphasize that You can talk to the person, rather than having to call an automated service center in another state. The focus is on their human resources as an advantage.

ORGANIZATIONAL STRATEGIES BASED ON HUMAN RESOURCES: Recognition has been growing that, under certain conditions, human resources contribute to a competitive advantage for organizations. Figure shows some possible areas where human resouces may become part of a core competency. People can be an organizational core competency when they have special capabilities to make decisions and be innivative in ways that competitors cannot easily imitate. Having those capabilities requires selection, training and retentionof good employees. An employee group without those special abilities would not be as strong a basis for competitive advantage. The shared values and beliefs of a workforce is called Organizational Culture. For people to be a core competency managers must consider the culture of the organization because otherwise excellent strategies can be negated by a culture incompatible wih those strategies. Further, the culture of the organization, as viewed by the people in it, affects attraction and retention of competent employees. Numerous examples can be given of key technical, professional, and administrative employees leaving firms because of corporate cultures that seem to devalue people and create barriers to the use of individual capabilities. Productivity as an HR-Based Strategy The more productive


A Strategy is a way of doing something. It is a game plan for action. It usually includes the formulation of a goal and a set of action plans for accomplishment. Or Strategy defines the direction in which an organization intends to move and establishes the framework for action through which it intends to get there. Definition of SHRM: Strategic human resource management can be defined as the linking of human resources with strategic goals and objectives in order to improve business performance and develop organizational culture that foster innovation, flexibility and competitive advantage. In an organization SHRM means accepting and involving the HR function as a strategic partner in the formulation and implementation of the company's strategies through HR activities such as recruiting, selecting, training and rewarding personnel. How SHRM differs from HRM In the last two decades there has been an increasing awareness that HR functions were like an island unto itself with softer people-centred values far away from the hard world of real business. In order to justify its own existence HR functions had to be seen as more intimately connected with the strategy and day to day running of the business side of the enterprise. Many writers in the late 1980s, started clamoring for a more strategic approach to the management of people than the standard practices of traditional management of people or industrial relations models. Strategic human resource management focuses on human resource programs with long-term objectives. Instead of focusing on internal human resource issues, the focus is on addressing and solving problems that effect people management programs in the long run and often globally. Therefore the primary goal of strategic human resources is to increase employee productivity by focusing on business obstacles that occur outside of human resources. The primary actions of a strategic human resource manager are to identify key HR areas where strategies can be implemented in the long run to improve the overall employee motivation and productivity. Communication between HR and top

management of the company is vital as without active participation no cooperation is possible. The changing role of HRM:
The role of human resource management is changing & is changing very fast, to help companies achieve their goals. HRM has gone through many phases from hiring & firing to relationship building, from there to legislation role, & now its role is shifting from protector & screener to strategic partner & as a change agent.

As HRM becomes more business oriented and strategically focused, four key roles for HR managers can be identified: Strategic partner Administration expert Employee champion Change agent

Key Features of Strategic Human Resource Management The key features of SHRM are

There is an explicit linkage between HR policy and practices and overall organizational strategic aims and the organizational environment There is some organizing schema linking individual HR interventions so that they are mutually supportive Much of the responsibility for the management of human resources is devolved down the line

Trends in Strategic Human Resource Management

Human Resource Management professionals are increasingly faced with the issues of employee participation, human resource flow, performance management, reward systems and high commitment work systems in the context of globalization. Older solutions and recipes that worked in a local context do not work in an international context. Cross-cultural issues play a major role here. These are some of the major issues that HR professionals and top management involved in SHRM are grappling with in the first decade of the 21st century:

Internationalization of market integration. Increased competition, which may not be local or even national through free market ideology Rapid technological change. New concepts of line and general management. Constantly changing ownership and resultant corporate climates. Cross-cultural issues The economic gravity shifting from 'developed' to 'developing' countries

SHRM also reflects some of the main contemporary challenges faced by Human Resource Management: Aligning HR with core business strategy, demographic trends on employment and the labour market, integrating soft skills in HRD and finally Knowledge Management.

STRATEGIC ORGANIZATION AND STRATEGIC HRM OBJECTIVES: Because they define the main issues to be worked on and determine policies and priorities, strategies HRM objectives must accurately reflect the strategic objectives and values of the organization. Schuler, Galante and Jackson indicate that organizations can improve their environment for success by making choices about HR planning, staffing appraisal, compensation, training and development and labour relations that are consistent with and support the corporate strategy. This means that HR objectives, policies and plans must be integrated with the organizations strategic business objectives. When this happen, HRM becomes a true business partner in boosting the organizations competitive advantage by helping achieve strategic objectives and employee growth.

HR objectives, policies and plans must be judged by how well they help achieve the organizations strategic business objectives. The HR manager must ask: do they work? Are they easy to understand and implement? Do they add value? Do they create a competitive advantage? Do they build the capacity for change? Do they promote a volunteer mindset? Do they reinforce the organizations culture? Do they support the organizations long-term business strategy? These questions are critical because research reveals that policies and practices are often inconsistent with strategy or implemented in a piece-meal fashion. Without such a strategic view, HRM will remain a set of independent activities, lacking in central purpose and coherent structure. It will be reactive rather than proactive in shaping a relationship between the organization and its employees. It will fail to optimize opportunities for the organizations survival and growth. 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 Successful SHRM efforts begin with identification of strategic needs Employee participation is critical to linking strategy and HR practices Strategic HR depends on systematic and analytical mindset

Corporate HR departments can have impact on organization's efforts to launch strategic initiatives.

Human Resources Life Cycle:

The above diagram is divided into four different colours each indicating a separate stage of HR life cycle. Each stage has specific actions or steps that

form respective stage for e.g. in third stage there are six different steps involved such as step 3 to step 8. These four stages cover all actions or functions pertaining to HR manager's job and they are related with strategic plan of the organisation. The cycle starts with laying down a strategic plan, linking HR functions in it, and it provides the basis for Manpower planning and internal mobility. The Manpower planning will lead to the function of acquiring right people for the right job and in accordance recruitment as well as selection exercise will be designed and tools selected. For e.g. if a automobile company decides to launch a new four-wheel model in the time to come their focus will be on Research and Development and then on Market Testing and last but foremost production and after sales. This new plan will act as the guideline for the company and will help in determining how many people do we need and what qualifications they should posses and how many of them can be kept on full-time rolls and as permanent employees. The next Stage is for sustaining and retaining those who are hired and making sure that they work efficiently and help the company move in the selected direction. They should also facilitate the smooth movement of the company in the desired direction and should result in achievement of corporate goals and objectives effectively and efficiently. Employee's performance should be rated and compared with the benchmarks, recorded deviations are to be corrected, and precautionary measures for the future are implemented. In last stage the separation or farewell to those who are non-performing or may be to those who have completed their job or task i.e. project teams, is bided. Factor Linkages of HR Plans and Strategies:

Given diagram presents various factors that have an impact on HR plans and Strategy and how are they interlinked with each other. Their interactions and impact on each element and the resulting change in HR Plan and policy is also indicated clearly.

The table given above takes into consideration two of the generic strategies and the strategic focus required to generate each of these competitive advantages along with HR strategy and activities needed to be done by HR Department to help the organization in generating these strategic advantages and to move successfully towards desired goals and objectives.

To understand these linkages we can look at them as tasks and steps needed to be taken in order to complete the tasks. The selected strategic focus should be very clear and well integrated into organizational policy and clearly communicated to HR Department to help in drafting suitable HR strategy and last in carrying out all activities.