STRATEGIC HUMAN RESOURCE

MANAGEMENT

BASIC BOOKS:
1. Jeffrey A Mello, Strategic Human Resource Management, Thompson
2. Michael Armstrong, Strategic Human Resource Management – A Guide to
Action, Kogan Page.
3. Charles Greer, Strategic Human Resource Management, A general
managerial approach, Pearson Education.
4. Peter Boxal and John Purcell, Strategy and Human Resource
Management, Palgrave, Macmillan
 STRATEGIC HUMAN
RESOURCE MANAGEMENT
ISSUE I
STRATEGIC HUMAN
RESOURCE PLANNING
Please see separate notes
provided
 STRATEGIC HUMAN
RESOURCE MANAGEMENT
ISSUE II
DESIGN AND REDESIGN OF
WORK
Model for Design of Work Systems
Redesign of Work Systems
⚫ Current and future work systems more broadly defined,
and more closely related to strategic choices
⚫ Workers becoming more involved in design and
reengineering of jobs
⚫ Cross-function teams strategically beneficial
 Also create challenges in effectively managing themselves
⚫ Employees raised in individualistic cultures need
training to be effective team members
Outsourcing
⚫ Involves contracting out some of organization’s
noncore work activities to outside specialists
Can do work more effectively
Often for less than cost of doing work in-house
⚫ Areas frequently outsourced:
Payroll
Benefits
Technological support
⚫ More than 75% of renowned organizations
outsource at least one HR function
Outsourcing
⚫Can free up HR staff to focus on more
strategic issues
⚫General Considerations:
Cost savings
Whether contractor can deliver
Compliance with laws
Impacts on employees whose jobs might be
lost
Impacts on morale of remaining employees
 HRM Outsourcing: Specific
considerations

⚫Five competitive forces driving

organizations to outsource HR
activities:
Downsizing
Rapid growth or decline
Globalization
Increased competition
Restructuring
HRM Outsourcing: Specific
considerations/ Operational
rationales for outsourcing
Small firms lack resources; large firms gain
economies of scale
Specialized HR expertise and objectivity
⚫Reduced liability and risk in legally sensitive HR
areas
Innovations and economies of scale in HRIS
technology used by outside vendors
⚫Simplify transactions
⚫Reduce HR costs
⚫Specific guidelines/ Operational rationales
for outsourcing (continued):
Time-sensitive issues better handled by
outsourcing
Temporary or cyclical increases in HR needs
Efficient vendor management practices drive
costs down more than economies of scale
Specialized vendors offer activities as their
core business and strategic focus
⚫Strategic rationales/strategic guidelines for
outsourcing:
Outsourcing nonstrategic activities permits
HR to move away from administration toward
strategic role
Decentralization of HR function through
redeployment of some of assets to operating
units
Develop less bureaucratic HR departments
Downsizing may require HR to reduce staff,
eliminating specialized in-house expertise
Outsourcing provides “big picture” perspective
HRM Outsourcing
⚫Positive outcomes
Lower HR costs
Higher service quality
Realignment or redeployment of internal
HR expertise
Development of negotiation and broker
skills
Enhanced credibility of HR function
Risk and uncertainty absorption by HR
vendor
COMPANY EXAMPLE: TEAMLEASE
⚫Hiring: Temp Staffing as well as on rolls
hiring; non technical as well as technical
hiring.
⚫Hygiene: Managing Payroll, Compliances
and HR Administration for temp
employees; Payroll Process Outsourcing;
and comprehensive Regulatory and
Labour Law support services
⚫Productivity: A well crafted platform for
Assessments, Training and certification to
ensure a productive workforce.
STRATEGIC HUMAN RESOURCE
MANAGEMENT
ISSUE III
STAFFING
Strategic Issues in Staffing
⚫Person-Organization Fit
⚫SEE THE ARTICLE AND CLASSNOTES
Teamlease Example Revisited
⚫ Globally temporary staffing is an important part of an efficient labour
market because most temporary employees go onto permanent jobs
with the improved employability that comes with experience.
⚫ TeamLease Services provides a variety of Temporary and
Permanent manpower solutions to over 1000 clients
⚫ The Temporary staffing group establishes a co-employment
relationship with clients and takes responsibility for all compliance,
HR and administrative of employees on assignment.
⚫ The Permanent staffing group undertakes turnkey and recruitment
mandates for permanent fulfillment. We view ourselves as a liquidity
provider that enables better matching of demand and supply in
labour markets.
⚫ Teamlease established linkages with public policy at the state and
central level to suggest solutions that will make the labour markets
more efficient.
⚫ Partnerships and acquisitions in the employability space that will
allow us to manufacture our own employees.
⚫ We are also entering into public private partnerships with state
STRATEGIC HUMAN RESOURCE
MANAGEMENT
ISSUE IV
TRAINING AND DEVELOPMENT
Training & Development
⚫ Training & development
Represents ongoing investment in employees, and
recognition that employees are assets
⚫ Strategic importance of training & development
Rapid technological changes cause skill obsolescence
Redesign of work brings need for new skills
Mergers and acquisitions have increased need for
integrating employees into different cultures
Employees are moving between employers more often,
necessitating training
Globalization of business requires new knowledge and
skills
Strategizing Training
 Training & Development Framework:
Best Practices Elements

⚫ Plan ⚫ Do
Strategic role of T&D Contents of T&D
T&D value and T&D methods and
administrative policies approaches
Establishing T&D ⚫ Check
needs T&D evaluation
Building transfer into strategy
T&D
⚫ Act
Sustaining and
advancing T&D
Tying T&D to Strategic Business Plans

⚫T&D goals and processes reviewed

and updated annually around
changing strategic needs
⚫T&D executives integrated into
strategic planning process
⚫Intimate and structured linkage
between strategic mission and goals
of T&D program
Linking Business Strategy with T&D
⚫Establishment of T&D needs driven
most often by mission and strategy
⚫Build transfer into T&D
Overlap T&D and job contexts
Integrate T&D & other elements of HR
management system
Integrate management into T&D
process
 Determining Content of T&D
⚫ Derive content from:
 Strategic objectives
 Culture and values
 Present and predicted competency and skill needs
⚫ Most commonly addressed T&D area is leadership
training
⚫ Training Content Decision-Making Equation
UC = PC - C
UC = usable content
PC = potential content
C = constraints
SEE THE ARTICLE AND CLASSNOTES
STRATEGIC HUMAN RESOURCE
MANAGEMENT
ISSUE V
PERFORMANCE MANAGEMENT
Strategic Importance of Performance
Management
⚫ Organizations need broader performance
measures to insure
Performance deficiencies addressed in timely
manner through employee development programs
Employee behaviors channeled in appropriate
direction toward performance of specific objectives
Employees provided with appropriate and specific
feedback to assist with career development
Focus on both “core” and “citizenship” employee
behaviors
Strategic Choices in Performance
Management
•Integrated in four senses: 1) vertical integration –
linking or aligning business, team and individual
objectives; 2) functional integration – linking
functional strategies in different parts of the
business; 3) HR integration – linking different
aspects of human resource management, especially
organizational development, human resource
development and reward, to achieve a coherent
approach to the management and development of
people; and 4) the integration of individual needs
with those of the organization, as far as this is
possible.
Reciprocal Relationship Between T&D
and Performance Management
Strategic Performance Appraisal in
Team Organizations

⚫Effective performance-appraisal
systems require careful consideration
of team contingencies
Team membership configuration
Team task complexity
Nature of interdependencies among
team and external groups
Strategic Performance Appraisal IN
Network Teams
⚫ Virtual
Potential membership not constrained by time or space
⚫ Work is extremely nonroutine
⚫ Rapid-response units charged with strategically
important activities needed for responding to
market challenges
⚫ Performance of whole team often not assessed
formally
⚫ Appraisal focused on
Developing individual capacity to initiate, participate,
and lead improvisational action, rather than on past
STRATEGIC HUMAN RESOURCE
MANAGEMENT
ISSUE VI
COMPENSATION
Key Strategic Issues in Compensation

⚫ Determining compensation relative to market

⚫ Balance between fixed and variable
compensation
⚫ Deciding whether or not to utilize team-based
versus individual pay
⚫ Creating appropriate mix of financial and non-
financial compensation
⚫ ALL THESE IN THE LIGHT OF
⚫ Developing a cost-effective compensation
program resulting in high performance
Strategic approaches to make
compensation systems more effective

Pay the person for individual worth (knowledge, skills

and competencies), rather than for value of job they
perform
Reward excellence through pay for performance
compensation that establishes clear relationship
between significant amount of pay and attainment of
organizational objectives
Individualize pay system to give employees choices in
how they are rewarded and what reward they receive
STRATEGIC HUMAN RESOURCE
MANAGEMENT
ISSUE VII
EMPLOYEE RELATIONS
EMPLOYEE RELATIONS STRATEGY
• Intentions of the organization about what needs to be done and what needs
to be changed in the ways in which the organization manages its
relationships with employees and their trade unions
• Employee relations strategy will be concerned with how to:
• build stable and cooperative relationships with employees that minimize
conflict;
• achieve commitment through employee involvement and communications
processes;
• develop mutuality – a common interest in achieving the organization’s goals
through the development of organizational cultures based on shared values
between management and employees
• Employee relations strategies will flow from the business strategy but will
also aim to support it
• For example, if the competitive strategy is to concentrate on achieving
competitive edge through innovation and the delivery of quality to its
customers, the employee relations strategy may emphasize processes of
involvement and participation, including the implementation of programmes
for continuous improvement and total quality management.
• If, however, the competitive strategy is cost reduction, the employee
relations strategy may concentrate on how this can be achieved by
maximizing cooperation with the unions and employees and by minimizing
detrimental effects on those employees and disruption to the organization
STRATEGIC DIRECTIONS
⚫ The intentions expressed by employee relations strategies may direct the
organization towards any of the following:
⚫ changing forms of recognition, including single union recognition, or
derecognition;
⚫ changes in the form and content of procedural agreements;
⚫ new bargaining structures, including decentralization or single-table
bargaining;
⚫ the achievement of increased levels of commitment through involvement
⚫ or participation – giving employees a voice;
⚫ deliberately bypassing trade union representatives to communicate
⚫ directly with employees;
⚫ increasing the extent to which management controls operations in such
areas as flexibility;
⚫ generally improving the employee relations climate in order to produce more
harmonious and cooperative relationships;
⚫ developing a ‘partnership’ with trade unions, recognizing that employees are
stakeholders and that it is to the advantage of both parties to work together
(this could be described as a unitarist strategy aiming at increasing mutual
commitment).
STRATEGIES FOR IMPROVING ORGANIZATIONAL
EFFECTIVENESS
⚫ Strategies for improving organizational effectiveness will focus on
developing processes that support the achievement of business goals and a
positive culture.
⚫ ‘What is important is not how responsibilities are divided but how peoplecan
pull together to pursue new opportunities.’
Why Employees Organize

⚫Employees seek to form unions because

of the perceived economic, social and
political benefits of organization:
Higher or more equitable wages
Better or expanded benefits
Greater job or employment security (contracts)
Affiliation and sense of community
(brotherhood)
Sense of power/influence in numbers
(solidarity/voice)
Copyright © 2002 South-Western. 12–43
All rights reserved.
Emerging dimensions
Workers have become disenfranchised from
their unions
Many unionized firms have moved their
operations outside the areas of union
dominance.
Change in the nature of work and technology
have eliminated many traditionally unionized
manual labor jobs.
Unions required to be flexible enough to allow
their organizations to grow and adapt to
changes in their industries.
Copyright © 2002 South-Western. 12–44
All rights reserved.
Strategic Challenges of Organized
Labor
⚫ Organized labor can have a significant impact
on organizational performance:
When workers unionize, the employee/management
power balance within the organization is redistributed.
The process of unionization involves bringing in
“outside players,” union representatives who then
become an additional constituency whose support
must be gained for any new and ongoing
management initiatives.
A unionized work setting can greatly impact an
organization’s cost structure, particularly raising
payroll expenses and affecting the efficiency of work
processes.