ia Conceptual Framework and Theme of Book This book titled “Strategic Human Resource Management—Winning Through People” deals with four basic themes (Figure 1). Ficure | Conceptual Framework of Book Winning Through People First, need for integration of HR strategy with organisation strategy. + Second, investment in people is valuable for competitive edge. Third, development and retention of talented managers is essential Fourth, understanding of trends and emerging challenges in HR. |. INTEGRATION OF HUMAN RESOURCE STRATEGY WITH ORGANISATION STRATEGY First theme is that Human Resource Management is key to competitive advantage. As such HRM strategy needs to be integrated with organisation, strategy. It is interaction between strategy and human resources. () Strategy provides direction to achieve competitive advantage Strategy is a statement of what organisation wants to become, where it wants to go. So strategy determines the direction in which organisation is going in relation to its favironment in order to achieve sustainable competitive advantage. Strategy is prospective ey ihe way in which critical issues or success factors can be addressed and strategic ““Sions aim to make a major and long-term impact on the success of the organisation.Statedic Human Reso a I 6 of strategic role of human resource management (i) Recognition aw Organisations are recognizing that their human resources proyig ra ist Michael Porter has found th 0 competitive advantage. Strategis| a id that hy, Ute Tranggement is 2 Key to obaining competitive advantage, This recogni”. tex, greater pressure 10 control costs" long te and cased environmental uncertainty, a regulation, economic turbulence, Have elevated the strategic td ing puree management. Tere i greater recognition that distinctive competencies, hin’™! trough highly developed skis, distinctive organisation culture, management «© Sigg gyems. AS 4 esl there # growing invelement of human resoaree ge a strategy formulation. (ii) Human resource linkage with organisational strategy Where Human resources are an organisation's source of competitive advan, resource management has a critical role of providing up-front input in the compe nay strategic planning process. Human resource planning provides an important linka, an organisational strategy by providing input on the availability of critical laboyy ¢* With adding lead time to deal with shortages and surpluses of employees. Other strate as of human resource function include environmental scanning, competitive inelige, in help align personnel practices and policies with strategy (e.g. innovation, we, enhancement, cost reduction). Most companies now provide stronger integration of lity resource planning with organisational strategy formulation. numa, 2. FOCUS ON INVESTMENT IN HUMAN RESOURCES IS VALUABLE Second conceptual framework of this book is the investment perspective for guid managerial strategic decisions regarding human resources. Employees should be viewed - valuable investments as they add value. So a focus solely on investment in physical resources, as opposed to human resources is shortsighted. Strategists have argued that maintainable advantage usually derives fron outstanding depth in selected human skills, logistics capabilities, knowledge bases, or other service strengths that competitors cannot reproduce. Thus, with this perspective, there is recognition of the importance of having superior human resources. Organisations will need to invest heavily in their human resource in order to be competitive during the twenty-first century. For strategic human resource investment decisions, several factors _ include © management's values, the economic rationale of investing in training, risk and return aspects, utility theory as a means for determining return on investments and alternatives to human resource investments such as outsourcing, etc. These decisions can help accomplish the strategic objectives of organisations. 3. STRATEGIC ROLE OF TALENTED AND COMPETENT MANAGERS AND THEIR DEVELOPMENT AND RETENTION g The third thrust area is the need for development and retention of talented managers 0 as play strategic role in organisation success. In order to meet competition, firms need (0 be advancing at a high speed in all areas: technology, processes, management, finance’,i and Thame of Book 1 Fe oe “ss 10 market excation, new prodtict inventories and above all i vy ooeiation md productivity on the part of the employes, Competing all incteased yatney ra orld have easy access 10 beat technologies, 8 organisations may P wenagement systems and pracices, high qualty eee - tation, brand d cost effective structures wil 5 ch circumstances, firms aT Ae people to sensitive and customer focused, quality centred, jecome more 1 Tomnagerialy ete. To achieve these, having compet re effective, mes inevitable. With competent managers aeielaaee eae ithout them, they cannot survive long. ya I oy ee postions and to perform thelr oe voy le nece' and fer oo day. This involves innovative development inder st ‘yen, markel nl manage jen ig an inescapab] ently i i ‘and retention progran of NDING OF TRENDS AND EMERGING CHALLENGES IN HR ‘ NDERSTAI ras in this volume is the examination of concerns, emerging tends in ractices such as—new work place, talent crisis du ent-latonship, paradigm shift in carer a aris erations Ot ey in the first decade of twenty-first century. Certain jpnovaive action steps, pall reaking approaches to meet these challenges are also pighlighted- Besides, certain strategies are needed by Strategic Human Resource Management (HRM) function to remain relevant, and proactive s0 as to succeed in turbulent era.of rapid Thanges. Several strategic approaches and ingenuity in practices of some leading cipmational corporations 2 delineated and shared. We hope appreciation of ‘these HI enable human resource professionals to face the challenges ahead ‘concerns and trends wil : cod innovately contribute 10 achievement of organisation strategies. In nutshell ‘winning inough people’ is the theme of this book. 5, STRATEGIC HRM Fourth area of foc san ese P ti gial_emp 7 ‘of the young Strategic HRM is a process that involves: (Linking HR practices to business strategy £0 as to accomplish the organisation's over all strategies. | (i. Integrating HR into strategic planning (ii) To provide direction to HR role towar strategic management process. (iv) People in the organisation are perceived as a “strategic of: () competitive advantage, (ii) adding value, and (ii) (v) Role of intellectual eapital is fundamental in strategic consists of the stocks and flow of knowledge, ability, ski (vi) Re organisation and their development). veloping a partnership with the line ‘management so that HR programmes meet the real needs of business and have impact on bottom-line performance. HR practitioner can be a business partner. process of business. ds the long-term people issues as part of resource” for the achievernent ) to total quality initiatives, IRM, (Intellectual capital II and competence availableSta Strategic " le Human Resou ce ree nay increasing the firm's strateg 4 strategic (vii) Dealing with methods of eval fi Deals ment of employees at all levels on ensuring tha mp Skilled, committed and well-motivated employees i the organisa th, sieve sition Boals t fe organisation. In brief, HR's all functional strategies such as resourcing, traini he rewards, employee relations, change in pean deve ANisati “Prey lon formance management, rgic HRM. ang pe te. add upto strate culture, el MyCHAPTER Strategic HRM: An Overview some people feel Strategic HRM (SHRM) is just persone The fact is otherwise. With the environment faced by bi tan ng turbulent and uncertain, and consequently HRM being mejor in strategic management, the term SHRM entered the discipline of management. SHRI is iso the bef that man rues ae aint impr te business secs, An organation gains competitive advange by wang ig effectively, graving on thet expertise and ingenuity to meet defined objective (Price 1997), The aim of SHRM is oersure thatthe culture, se and sue of he atin, eed te guaty, commitment and motcatin ofits employes contrute fully te he achievement of business objectives (Armstrong, 1992). Iti blending of SHRM stages. The corporat strategies and HR strategies are develop coherent and comprehensive. There is emphasis on developing competencies. Thus, as organisations are adopting different strategic steps to meet environment challenges, HR is also adopting strategic measures so. that these ate linked wih orgarisation’s business strategy. We shall discuss the topic of strategic HRM under following headings: Management (PM) with a usiness firms increasingly considered as an ‘important strategies with organisation ed simultaneously. They are AR skills and capitalisng on the (1) Strategic perspective in human resource management. @) Human resource as a competitive advantage. (3) Linkage between business strategy and HRM. (@) ‘Strategic HRM system: (a) Strategic HRM practices, and (b) ‘Strategic HRM facilitators, | (8) Role and Practices of strategic HRM. pS10 Stratogle Human Resource 4, ana Mh 1, STRATEGIC PERSPECTIVE IN HUMAN RESOURCE MANAGEMENT t Organisations respond with vari external environment. Likewise it is vil strategic perspective that HR strategy s! Kandula has highlighted that HR strategy not only serves to attain the organisationa competitive advantage. (Figure 1) cha ous strategic measures to cope with th tal human resource management has tg. 4c"™"8h hhould integrate with business strategy, level's ‘embedded in business strategy of the ont | objectives but also grows up as a key reanlsat ott MT Ce fy Figure | Human Resource Management A Strategic Perspective Changing environment of organisations Strategic responses of organisations Strategic human resource management Companies are beginning to recognise the importance of people to the success of business. Hitman resource issues are, in fact, business-related issues as they influence the essence of business—profitability, survival, competitiveness, adaptability and flexibility. Tony Grundy has appropriately written that in the Fysence of HR strategy clearly linked with busines strategy, HRM programmes may easily Tack direction, clarity, coherence and critical marks to add real value. 2, HUMAN RESOURCES AS A COMPETITIVE ADVANTAGE People can provide organisations with an important source of sustainable competitive advantage in various ways: stem can conti ee 38 yurces are the human resource sy: gh facilitating the development tional knowledge man res0 (a) The resource-based view suggests that sustained competitive advantage throu; that are firm specific and generate tacit organisa DeFillipp, 1, 1990, Barney, 1992). Thus, investments in hu potential source of competitive advantage. (b) Human resource management can help a firm attain comp’ Towering costs, by increasing sources of product and service vetitive advantage by differentiation orpn overview "1 a Achieving competitive advantage through valves are iio fron a strategic Pape sania point that econom e growth and Intprovement in pray (1989) also mat simi in fauna resource development, Productivity depend on ie ld (185) Have epi a tem Me © Gockpile human resources during periods of econo a is able to tetsin fature iS likely to achieve competitive advantage over the ma for tise in the in hire and fire practices. It has also been argued that pro ‘Ompetitors who indulge result in a firm to build and sustain competitive advaniage Wt Practices could @ Achieving competitive success through people involves funday Tight and Snel, 1951), Ack about the workforce and the employment relat premtly altering how we yori ith pple, at by ring hm, by ini I means achieving sue It ental seeing the workorce asa sure of state aed tt sei oat to be minimized or avoided (flr, 198), Bic advantage, not just TWEEN BUSINESS STRATEGY AND HRM oe 65 fequites that these 5, uNKaGe B several writers including Tichy, 1982 have stressed a close relationshi oa tn a ema Pee eae fman Resource PANNING has to be carried out at the same time as Strategic Business ring in a. parallel proces 2s shown in Figure 2. ag mpetitive strategy influences the current organisation poston and its stages of evelopment (See Figure 3). It also shows the linkages between strategic human eee planing and evelopment with competitive strtegy. The absence of a clear HR strategy finked to corporate strategy may thus adversely impact the organisational effectiveness. This vrai though lack of attention fo crucial HR issues, or through wasted effort on pootly implemented HRM. In the absence of a robust HR strategy clearly linked with corporate ammes may easily lack direction, clarity, coherence and critical marks to strategy, HRM progr ideal value, especially where there isa high element of emergence in HR strategy. wntribute to Organisational Performance among HR professionals that organisational human figured, provide a direct and economically significant contribution to a firm's performance. Substantial amount of evidence suggests that individual human resource practices, as well as internally consistent systems can indeed directly influence organisational performance. Srinivas R. Kandula states that research studies have dearly established the linkages between HR Planning and Development and Business Stalegy, Economic benefits too have been reported following @ linkage between HR and business strategy. Moreover, HRD has a direct bearing on organisational performance. The vital tle of human resource in an organisation's success has been ws sched, established ell reset and acknowledged. HRM Strategies Co There is a growing consensus resource policies can, if properly con 4. STRATEGIC HRM SYSTEM ted set of arrangements Strategic HR} is shensive and integral 5 gic HRM system consists of comprehensive PCTs cated a system since t whi ich are called as SHRM practices and SHRM aclStrategie Human Ro, Te ,. Ficure 2 eR Linking HRM with Stratogic Business Planning Business Planning Steps Starting point mission statement + Human Resource Plannin Statement of business i 1 Stop, thrust Macro-environmental analysis, t HR environmental analysig =z Macro-resource analysis HR resource analysis ¥ ¥ Key business assumptions ¥ ¥ Key implications HR implications ¥ ¥ Critical business issues. Critical HR issues ¥ HR assumptions ¥ Strategy development and evaluation in strategic business plan ¥ Approval HR strategies and evaluation for inclision | Source: Nininger, James, R. (1982), Managing Human Resources: A Strategic Perspective, Ottawa: The Conference ' Board of Canada. As quoted by Srinivas R. Kandula in Strategic HRD: SHRM practices and facilitators are interdependent and change in one affects the other Strategic HRM consists of two broad components, ie., strategic HRM practices that directly affect the development of human resources and strategic HRM facilitators which contribute fr salutary HRM practices. (Figure 4) (a) Strategic HRM Practices Strategic HRM.,, Practices (SHRMP) is a holistic framework encompassing developmental fundamentals and initiatives as shown in Figure 5. For any activity to be successful, certain fundamental conditions have to exist before they can yield desired resulls SHRM fundamentals are those components of HRM, which have to be strong enough ensure a congenial atmosphere in an organisation for implementation of SHRD initiatives. = are akin to the hygiene factors suggested by Herzberg (1968). Developmental intatives on the other hand, similar to the motivating factors and help in the success of stale HRM. The presence of fundamentals may not Relp the success, whereas their presence adversely affect the developmental initiatives.Ficure 3 ourcos Planning and D one 8 jevelopinent, Organisational Strategy Strategle HR Planning and Development Competitive Strategy sos: Gundy, Tony (1977): Human Resource Management A Strategic Approach, Long Range Plannin, 30, pp 507 0. () Strategic HRM Facilitators Sinegc HRM faitators whic include: () concms Of aagenet (cen ft wis (i) concerns of Heres supers.) cones Of worker, accep enene oeral Tobour statutes, vi) taiabity, (vi employment Sat and (p) manpower downsizing, e : Salita ee player ot only in realising the business. goss Miser eee potential resources for giting competitive advantage Weenie tectiveness can be cnereased by systematically melding IR practices with competitive strategy—RS. Schuler ‘and S.E. Jackson.14 Stiatogic Human Rosourc 4, a —= nay ro oe Practices and Facilitators Strategic HRM System: Changing Environment of Organisations Strategic Responses of Organisations Strategic HRM Practices Strategic HRM Facilitators Fioure § Strategic HRM Practices ‘SHRD fundamentals SHRO initiatives Training Performance Appraisal Job Enrichment Career Planning Communication Involvement and Empowerment + Compensation + Working Conditions + Family Welfare + HRD Department/Function 5, ROLE OF HRM IN STRATEGIC MANAGEMENT ‘The role of HRM in formulating and implementing strategies is crucial. It is the people who formulate and implement strategies and the people are supplied by HRM. Shategy fornuiation is preceded by environmental scanning. Scanning helps identify threats and opportunities prevailing in the external environment. HRM is of grent help in locating opportunities and threats. HRM is in a unique position to supply competitive intelligence that may be useful in strategy formulation. Details regarding advanced incentive plans being used by competitor, opinion-survey data from employees that elicit information about customer complaints and | information about pending legislation like labour laws or mandatory health insurance are’ | some examples. The strengths and weaknesses of a company's human resources can have a determining effect on the viability of a company’s strategic options. Unique HR capabilities serve a driving force in strategy formulation. A company may build its new strategy around 2) competitive advantage stemming from ils human‘ resource. HRM supplies the company witStrategic HRM: An Overview Ficunt 6 HR Practice Choices Related to Strategic Outcomes Staffing Choices Internal Sources <> Narrow Career Paths <> Single Career Ladder <———> Explicit Criteria <> Limited Socialisation <———> Closed Procedures <————> External Sources Broad Career Paths Multiple Career Ladders Implicit Criteria Extensive Socialisation Open Procedures Appraising Choices Behavioural Criteria <———_» (Purpose: Development, Remedial, Maintenance) Low Employee Participation <———» Short-term Criteria <———> Individual Criteria <———> Results Criteria High Employee Participation Long-term Criteria Group Criteria Compensating Choices Low Base Salaries <> Internal Equity <> Few Perks <> Standard, Fixed Package <———> Low Participation <———> No Incentive <————> Short-term Incentives <————> No Employment Security <> Hierarchical <———» High Base Salaries Extemal Equity Many Perks Flexible Package High Participation Many Incentives Long-term Incentives High Employment Security High Participation Training and Development Short-term <————»> Narrow Application

Spontaneous, Unplanned <————> Individual Orientation <> Low Participation <———> ‘Long-term Broad Application Quality Emphasis Planned, Systematic Group Orientation High Participation Employee Influence Collective Bargaining <———> Formal Due Process <————> No Employee Input <————> No Employee Ownership <———> Employee Empowerment <————> Work Systems Job Simpliication <————> Explicit Job Analysis <———> Team Orientation <———> Narrowly Defined Jobs € > Paricipative Management <————> Specialise Jobs <> Close Supervision <—————> Source: Cynthia D. Fisher, et'al., op. cit, p. 60. Individual Bargaining Informal (or no) Due Process Broad Employee Participation Partial or Complete Employee Ownership Employee Compliance dJob Enrichment Implicit Job Analysis Individual Orientation Broadly Defined Jobs Directive Management Rotation Among Jobs Self or Peer Supervision16 = a ny sind-willing workforce which is responsible for executing sty a competent are manufacturing cars, essentially using. jee Layo a Hr oie re of Maral ie workpre,* eae The su pore sre inplementaon in OlNer Ways, 10. For example, hangs 8 ie eavly involved in the exeution of the company’s downsizing and M2” yg tod fs through outlacing employees, insiuling performancesinked pay pytttue Aefeoe costs and retaining employees. And, in an increasingly compen, erket place, instituting HR practices that build employee commitment can heyy t® isation’s responsiveness. ‘firm has, before it, a number of practice choices (Figure 6) to produce des, HR practice choices may be categorised into six types. The Figure defines opr’ i each practice continuum such as promoting entirely from within versus filing all, S of from the external labour market. Clearly, an intermediate choice is also poss 8s majority of the practices. ible for It is important to remember that linking strategy and HRM effectively requ than selection from a series of practice choices, The challenge is to develop a cody HR practice choices that help implement the organisation's strategy and nmin competitiveness. ee ig A well-designed strategy can fail if sufficient attention is not paid to the dimension. HR problems that arise when executing strategies may be traced to one three causes: (1) disruption of social and political structures; (2) failure to match indivingt aptitudes with implementation tasks; and (3) inadequate top-management supporto implementation activities. Part fo Strategy implementation poses a threat to many managers and employees in ay organisation. New power and status relationships are anticipated and realised. New fomy and informal groups are formed whose values, beliefs and priorities may be unknom Managers and employees may engage themselves in resistance behaviours as thei role prerogatives and power in the organisation change. Disruption of social and politcal structures that accompany strategy execution must be anticipated and considered during strategy formulation and managed during strategy implementation. Guidelines which help ensure that human relationships facilitate but not disup strategy implementation include open communication, co-opting as many managers and employees in the strategic management process and matching managers with strategies through transfers, promotions, job enlargement and job enrichment. The role of HRM is significant in the strategic management process, particularly in formulating and implementing strategies. HRM makes strategic management highly effective by supplying human resources who are competent and committed. Bes, tical tech today 'p improve a organi REFERENCES, Srinivas R. Kandula, Strategic HRD, Prentice-Hall of India, New Delhi. Gratefully acknowledged. SK. Bhatia, Boost Your Professional Career, Deep and Deep Publications Pvt. Ltd., New Delhi SK. Bhatia, Human Resource Management: A Competitive Advantage, Deep and Deep Publications Pvt. Lid, New Delhi za iCTY Strategic HRM: The Concept Human Resource Management has undergone radical change during the last decade or so, It has acquired a central position in the overall management of organisations, and is now increasingly becoming an integral part of management strategy for developing and sustaining competitive advantage. _ The criticality of superior human resource management policies and practices— specially in the emerging knowledge driven economy can be hardly overemphasized. Knowledge resource has become a vital asset in most organisations, and therefore, attracting, retaining, developing and effectively utilizing human talent has. a direct impact on profitability and growth. Human Resource Management has acquired status of strategic human resource management. In this chapter following aspects of strategic HRM are discussed: Definition of strategic HRM. . Meaning of strategic HRM. Strategic HRM is concerned with. . Strategic HRM and HR strategies. . Aims of strategic HRM. . Models of strategic HRM. Characteristic features of strategic HRM: NOUR ONE |. DEFINITION OF STRATEGIC HRM (SHRM) Strategic human resource management is defined as covering: * All those activities affecting the behaviour of individuals in their efforts to formulate and implement the strategic needs of the business. (Schuler, 1992) + The patter of planned human resource deployments and activities intended to enable the firm to achieve its goals. (Wright and McMahan, 1992)Strategic Human Rey Nurce Mana neler et ing decisions on the inten ach to me lons on tentions and M ia ar joyment relationship and its recruitment dit 1 formance ‘management, reward, and employee relations «ing per eential component of the organisation’s corporate gy busine + Strategic HRI organisation © development, and practices. It is an e' strategy: 2. MEANING OF STRATEGIC HRM Meaning of strategic HRM relates to: tivities and policies to some explicit business strategy, (a) Matching HRM ac nisation as a‘stntegic resource’ for the achievement y (b) Seeing the people of the orga “ itive advantage’. : arr Sr ogaisatinalsuces should be managed in away that congruent with organisational strategy. In other words, they emphasized yo importance of strategic fit. 3, STRATEGIC HRM IS CONCERNED WITH (a) Strategic HRM is concerned with the relationship between human resource managenent and strategic management in the firm. Strategic HRM refers to the overall direction the organisation wishes to pursue in achieving its objectives through people. (b) It is argued that, because human capital is a major source of competitive advantage, and in the last analysis it is people who implement the strategic plan, top management must take these key considerations fully into account in developing corporate strategies. Strategic HRM is an integral part of those corporate strategies. Strategic HRM addresses broad organisational concerns relating to changes in structure and culture, organisational effectiveness and performance, matching resources to future requirements, the development ‘of distinctive capabilities, and the management of change. (d) SHRM is concerned with both human capital requirements and the development of process capabilities, i.e. the ability to get things done effectively. (c) SHRM considers carefully all major human issues that affect the strategic plan of the organisation. also covers formation of postive patterns of labour relations which are strategic in the Firm. © (p 4, STRATEGIC HRM AND HR STRATEGIES The terms ‘strategic HRM’ and ‘HR 4 i Tt a strate yO distinction can be made between them. eee ee (~) States HRM can be regarded as a general approach to the strategic management of dan esources in accordance withthe intentions of the organisation on the future es ‘ants to take. It is concerned with longer-term people issues as part of the strategic management processes of the organisation.Strategic HRM: The Concept 19 (b) HR strategies define ‘ the mantr i ae oe Which HR practices, programmes, policies and ned to obtain conssteney wi sation’ sti acy withthe organisation's overall strategies HY manageen pros det of HR department Hi aategy cae Brg He role in developing the organisation’ ompeliv avanage Te omer helpline ane icf Executive Officer. HR has to play the meaningful role in rm proactively in optimising the human resources, See also Bo) 5. AIMS OF STRATEGIC HRM (i) The fund: i The a ent aim of strategic HRM is to generate strategic eapability by ensuring peat @ nisation has the skilled, committed and well motivated employees it Car '0 achieve sustained competitive advantage. rE aa isto prove a sense of direction in an often turbulent environment so that ae ss needs of the organisation and the individual and collective needs of its ployees can be met by the development and implementation of coherent and __ practical HR policies and programmes. (it) It aims for developing approackes to managing people in the longer term in business and achieving competitive advantage through HRM. 6. MODELS OF STRATEGIC HRM () The business-oriented model In a business-oriented model, strategic HRM deals with ‘those HR activities used to support the firm's competitive strategy’. (ii) The strategic fit model Strategic HRM is defined as ‘the means of aligning the management of hnuman resources with the strategic content of the business’. This is concept of strategic fit. In HRM terms, strategic fit means developing HR strategies that are integrated with the business strategy and support its achievement (vertical integration or fit), and also with the use of an integrated apptoach to the development of HR practices such as resourcing, employee development, reward and employee relations, so that they complement one another (horizontal integration or fit). 7, CHARACTERISTIC FEATURES OF STRATEGIC HRM ‘The most characteristic features of strategic HRM in action in some companies indicated that: 5 corporate or business strategy exists. ‘A clear and purposeful Dal re fully integrated and owned by the whole of the (oP The HR strategies in most cases a management team. + The HR strategies are people in it. Most if not al (ie. they believes very much concerned with developing the organisation and the bed as ‘unitarist’ in their approach isations could be descril Saeanntels ‘of management and 4 in the commonality of the interestslia Strategic Human Re, 8oUurca I, lana a 20 employees), and they are all striving to develop a ‘commitment-orienteg, in many cases they have still taken pains to involve the trade unions ie cult strategies on a partnership basis. In their gt ta + HR strategies relate to the critical success factors of the organisation a t high-quality and committed people can make on the delivery of the the tong | result | fey organisation is expected to achieve. + The fundamental concept of strategic HRM is based on the assumption | at hum | ty OF this buna resource strategy can contribute to the business strategy. The validi depends on the extent to which it is believed that people are : | Sc evesentcH competitive advantage and create aide Sa re he bas ie | be treated as a critical strategic resource. Uhetefor | * HR philosophy, policies and practices have to be at the forefront to ensu | firm enjoys a competitive advantage over its peers. HR’s main task now tate | a stmntegic partner's role in actualizing business vision of an enterprise. HR has 10 PY human resource objectives and strategies with business strategic plans, It als (¢® perform a leadership role in employee management through process’ communication, optimizing human resource productivity, creativity and innova? competencies mapping and development, and making their organisations “employer of choice.” More specifically, HR function has to become the advoen innovative HR policies and practices that employees across the organisation ig attractive. + The role of HR is not only becoming central for building a competitive organisation, but is also a source for providing expert professional services, and a key resource fo, organisational transformation. Box Example of HR Strategy HR Strategy Factors Strategy is the direction of an organisation over long-term, matching its activities to its changing environment, to achieve expectations of stakeholders. HR strategy factors encompass those areas which are instrumental for the success of an organisation. We can classify such factors as under: (i) HRP Developing an Human Resource Information System, aligning HRP with corporate strategies, skills,and competence mapping are important aspects of strategic HRP. I, mmuilti-skill | (ii) Recruitment and Selection Outsourcing or direct recruitment, contractual or on permanent payrol attributes or specialisation are some of the issues considered at this level. (iii) Career Development A i Career mapping, succession planning and management development, integrating career development with OD initiatives are the factors considered in this area. z got He icyatgic HRM: The Concept 24 fa) Peformance Appia Designing Sppropriate tools and aligning such appraisal with traning, needs, promotior y telocation are the issues that deserve attention at this stage. (i) Tesning and Development Developing in-house training, R ae oH save considered at ths 108; ROI models for evaluating taining, traning budgets (v) Compensation Designing Designing compensation. and inc 3 entive sch i and retain them, el. are the crucial factors. wemes, suitable to attract talen Example of HR Strategy The sale for HRM for a hypothetical organisation is explained here, by isting the details in the Tight of vision, mission, goal, objectives, strategies. Vision (a) We are committed to provide an enjoyable work environment to our employees to promote teamwork, quality improvement and excellence. (b) Our employees are our valued customers and most important stakeholders. We are committed to achieve financial growth of our organisation fostering growth and creativity for our valued employees. Mission To achieve excellence in human resource management, fostering growth and creativity. Goals () To promote teamwork, (ji) To ensure quality improvement, and (iii) To foster growth and creativity. Objectives Goal-l © Achieve group cohesiveness by inculcating participative management * Reduce dissonance in managerial decisions * Zero mandays loss and increased productivity Goal-2 * Achieve increased quality consciousness in the organisation * Reduce costs of quality to zero by next 5 years | * Provide error-free product and services to customers to increase their | retention and to increase further marketshare | Goal-3 « Promote creativity in the organisation | * Provide opportunities for growth of the employees Increase retention of employees so as to reduce current employee turnover by 80% in the next 5 years2 Strategic Human Resoureg fr la "28h HR Strategies (a) Improve participative management. (b) Initiate organisation-wide quality improvement. (c) Develop culture to promote growth and creativity. Thus HR strategy and its alignment with organisation wide: strategies i, bei practiced. HR strategy factors give more emphasis on HRP like strategy at ¢o, eing fovel (including business) and operational level, HR strategy can be like that, part® a predetermined established guideline towards the attainment of accepted goals, objectives. Policy is not a strategy. Policy is different from procedure. Procegi’ prescribes the details for carrying out policy. lure HR programme consists of the entire course of action governing employees at levels in a firm. It is stable plan of action that continues over an extensive periog time. It is the end product of philosophy, values, concepts, policies and procedures, REFERENCES Dave Ulrich, Human Resource Champions, Harvard Business School Press, Boston. Michael Armstrong, Strategic HRM. SK. Bhatia, Training and Development, Deep & Deep Publications Pvt. Ltd.; New Delhi.TT strategic Roles of Human Resource Management and HR Competencies HR professionals can collaborate to create an organisatic ; ion that can chat move sn act aster than the competitor. We shall deal this aspect under allowing ae (a) HR roles in building a competitive organisation; (b) Human resource competencies for a competitive organisation; and (0) Strategic role of HR head in the corporation. Dave Ultich, ("Human Resource Champions", Harvard Business School Pres), sts that as management of human resource is key to future success ER professional's mentality tan ahilt from_—’What I can Do” to “What 1 Deliver” and identifies in distinct roles that human resources staff must assume in order to make the transition: (i) becoming a strategic partner, (ii) becoming an administrative expert, (ii) becoming an employee champion, and (iv) becoming a change agent. (A) STRATEGIC HR ROLES IN BUILDING A COMPETITIVE ORGANISATION imented with HR roles in USA has experi rary Prat he calls "Pete Peterson’ Pele Peterson, V.P. (HR), Hewlett ct ier this he has tried with what Mee ear Pete organisation, For iple Role HR Model.” ' mre A Under this he “created. the environment for the HP (, by pe a er we A for employees and utilising. human resourees, OTE efeivly. He si PYolessionals to deliver value to a firm, they must fulfil multiple FTESStrategic Human Reso, e ane Ue tp, na Me er omteomes to the firm from each of their roles, and snoy nnust specify outcomes a cir roles. the results pertaining to the “ile for theit results while building the shared , Ply, e ti They have to be accoun Hs weal at st . achieve those resulls. Key HR roles in building a competitive ran iy ACL to ace needed to achi presented in Figure 1. Ficure | HR Key Roles in Building a Competitive Organisation Future/Strategic Focus () Strategic Partner (Wv) Agent of Transformation ang Change (i) Administrative Expert (ii) Employee Champion Day-to-day operational focus ‘Source: Case Study of Application of the Multiple and Role Model at Hewlett-Packard by Pete Peterson, V.P. (HR), Why _| ‘made Dramatic Changes in HP. These key four roles of strategic partner, administrative expert, employee champion and change manager are explained as under: () Strategic Partner + The strategic HR role focuses on aligning HR strategies and practices with business strategy in playing this role. * As strategist, HR professional to address major long-term issues concerning the management and development of people and the employment relationship. * Helping to ensure the achievement of business strategies. * In fulfilling this role, HR professional has to increase the capabilities and make best use of human resources in terms of the required core competencies. * Share responsibility with line management for the success of the enterprise—they diagnose issues facing, the organisation and their HR implications. (ii) An Administrative Expert HR as an administrative expert to provide professional services by hiring, training and rewarding managers. Also re-engineering organisation processes to innovate new procedures to increase organisational effectiveness. |source Management and HR Competencia: auman, Resource 9 Wd HR Competencies % champion it yee Fe np com ment and competence, HR to pay attention to employee es eral responding 0 employees and train them). To plead the cause of 8 her management increasing employee commitment and capability -ansormation and Change renewed organisation transformation entails to bring fundamental cultural py being change agent, His HR team can do by identifying problems, ving problems anc implementing change strategies. ke change happen; they understand and ensure that change in me ft hips, $0 ,, who are change agents help mal fessionals, i i pil Hk ce for change, build commitment to those processes, 00 «stl E intended 18 ‘a a esoURCE COMPE @ wu wR Champions”, ol pave ture HR competencies. The comp: for fut rote Min Fignze > ope TENCIES FOR A COMPETITIVE ORGANISATION Harvard Business School Press, 2001) has presented 2 etencies /capacities of HR professionals are Figure 2 Model for Future HR Competencies 4, Business Mastery 4, Personal Creditabilty 3, Change and Process Mastery 2. Human Resource MasteryStrategic Human Ro, SOURCE ty, ‘ans 26 OO CE eT technological capability and strategie ¢ To acquire financial capability, “Pai 2. Human Resource Mastery ; Knowledge of HR practices, te. staffing, development, performance appragy organisation planning, communication. iy 3. Change and Process Mastery It refers to knowledge of change processes, change. skills as change agent, abit Y ability to gy Me diagnosis of organisation, building relationships with clients, articulate vision, leader change agent, solve problems (proactive), implement goals. 4. Personal Creditability To have: Accuracy in HR work. Consistency. Meeting commitment. Good comfortable with peers, subordinates’ and superiors. * Confronting—willing to disagree and challenge at appropriate setting and manner * Integrity—behaving ethically. : + Thinking outside the box. > Find out alternative solutions. + Listening to focusing on problems. STRATEGIC ROLE OF HR HEAD IN THE CORPORATION HR head in the corporation to be on the board and has a key role in strategic HRM. He is to visualise how HR strategies can be integrated with business strategy. He is to play a major part in organisational development and change management and in the achievement of coherence in the different aspects of HR policy. He will be member of the top management team and involved in various activities: (a) involved in business planning and the integration of human resource plans with business plans; well placed to exert influence on the way in which the enterprise is organized, managed and staffed—all with a view to helping it achieve its strategic objectives; professionally competent in HR techniques; however, their contribution an credibility will depend mainly on their business awareness and skills and thei ability to play a full part as members of the top team; (b) (0gyretegic Roles of Human Resource Management and HR Competencies (a) ) ) (8) ) @ 0 Dave U! jchael Armstrong, Michat ti, Training and Development, XK. Bhatia, Jkich, Human Resource Champions, 7 involved in resourcin; : ig at top and seni to improve organisati Senior level: is i ii oe ore orgmssona effectiveness and, ee be ast os y S of the need f . , bottom-line performance; as effective ch: ange agents; for change and to act as champions of change and fully on fapig corporate culture and values; vare of the need to develop.a vi i" define its mission, to provide arta Rat UF rao eats 0 function (without getting over-i tship and guidance to the members of the the quality of the suppor ore involved in day-to-day HR matters) and to maintain enablers and Jaciltato t the HR function provides to line managers; SOaTARUEGN to enn aoe ones who are well placed to make a ‘significant sults by adopting an innovatory approach to the improvement of organisational effectiveness i F (ot make ieee essentially pragmatists who know about the theory of HRM but also know what is right for their organisation and what will work there; and good at defining and achieving deliverables. E REFERENCES. Harvard Business School Press, Boston. Strategic HRM. Deep & Deep Publications Pvt. Ltd, New Delhi(f) (8) (h) @ pave Ulrich, Huma Michael ArmstronB, gk. Bhatia, Training * i need fc bottom-line performance; as effective change agents, Change and to act as champions of change 20d involved in shaping corporate culture and val alues; fully aware of the need 2 ica to devel isi define its mission, to provide te zen of what the HR function exists to do, to function (without getting over-invoh pat Riga b tama the quality ofthe support thatthe HR tancton pores eens aaa octet, tat Ce HR function provides olne manages enablers and ficitinirs, but ones who are well placed to make a sigan of organisational effectiveness oe an teat Peach eee neni interven there ae HR implications that will affect ae comil on any matters where essentially pragmatists who know about the theory of HI i right for their organisation and what will oe ee ma good at defining and achieving delivenbles. REFERENCES, sn Resource Champioris, Harvard Business School Press, Boston. Strategic HRM. *T Development, Deep & Deep Publications Pvt. Lid, New DelhiCCT 5 Aligning HR Strategies with Business Strategies In this crucial chapter following aspects are covered: 1. What is human resource strategy? 2. Importance of HR strategy. 3. Role of HR strategy. 4. Aligning HR strategies with business strategies, 5. Contribution of HR’ strategies. |. WHAT IS HUMAN RESOURCE (HR) STRATEGY? HR strategy is defined as being “the plans, programmes, intentions of developing an organisation to meet its present and future competitive challenges in order to generate superior economic value.” Strategic HRM is to accomplish the organisation’s overall strategies. (Charles R. Greet) HR ‘strategies define the manner in which the organisation's HR practices, Programmes, policies and activities will be aligned to obtain consistency with the organisation's overall strategies. This is explained through Figure 1, 2. IMPORTANCE OF HR STRATEGY HR strategy is now recognised as being an important and perhaps essential—way of developing organisations to meet increased competitive challenges. HR strategy is a management process for direction of HR department. i HR strategy is not something to be owned solely by HR department, but rather YW senior line management collectively. The HR department's role is to facilitate .a Suateles with Business Stay pale ies Company Mission 1, An Investment Perspective of HRM 29 2. Environment Scaining HR Environment — 4. Strategy Formulation 3. Environment Scanning: HR Legal Environment ¥ 5. HR Planning strategy Implementation: St Swretorce Utilization 7. Strategy Implementation: eyment Practices * Reward and Development Systems ¥ 8, Performance Impact of HR Practices ¥ 9. HR Evaluation ‘surce:Chatles R. Greer, Strategic HR Management, Prentice Hall Inc, Jew Jersey. development and then help to manage it and to support its implementation. Other themes are: (i) HR strategy must play a Key role in developing the organisation's competitive advantage, not merely to support the business strategy but to develop its proactivity. (i) HR strategy can play a major contribution to the creation and capture of shareholder value, or “economic value’—HR strategy has clear links with value or cash generation, directly or indirectly. : (ii) HR strategy is best developed as an integral part of the business s| be a part of number one business strategy. strategy, it shouldStrategie Human fe, Human Reso, Ute 2 Mana, "Ht owner of HR strategy Is the CEO. Hager lO SUPPOTL its imple plement, HR strategy, project m res a different mindset and process, proper 2 ert (iv), The (v) To facilitate value, which requ most HR departments. 3. ROLE OF HR STRATEGY Dyson case study has highlighted role of HR strategy: (Figure 2) + HRstrategy has a big role in helping shape the mind-set, and in helpi Min stitutes skills and processes to support the brand, interationay ac pL customer-based innovation. mal expansion“? FR strategy has a major role in any cost reduction/major operational ™“ HER strategy need to have a focus on organisational process 2¢ wel change, strategic planning, resource allocation and product development pri as Skills (¢ «Gul kortages should be a major focus of FIR strategy—this i Red'aoamee SR ctategic initiatives inootving recruitment strategies, reward iP wha vay oan evelopment, company values and style, and management proces . Dlumately, HR strategy needs to tackle with very dificult appointiment/s jesues regarding very senior management positions. TUCCESSon Figure 2 HR Planning and Development, Organisation and Strategy Strategic HR Planning and Development Future Organization Position Competitive Strategy Current Organization PositionAligning HR Strategies with Business Strategios 4 4, ALIGNING HR STRATEGIES WITH BUSINESS STRATEGIES (STRATEGIC ALIGNMENT) __HR strategies define how a company will manage its people toward achievement of business objectives—ie. setting priorities for action. Like any strategy, a HR strategy is a directional plan of action for managing change. It provides a business perspective of actions necessary to gain and sustain competitive advantage through the management of human resources—a focus on priorities in managing people in a changing environment. Through HR strategy, corporate managers and HR professionals jointly define and resolve people related business issues. The planning process adds value by helping managers identify the issues ‘most critical to the organisation's competitiveness and ultimately to its success. It helps management set priorities and define a vision of how it intends to manage its people. In Figure 3 the management of human resources is aligned with business strate through the defined HR issues and strategies. The clearer ater focused the issues a strategies, the closer the alignment. Figure 3 Strategic Alignment Business Strategy + External and internal environment. * Business related changes and issues. * Business mission, vision, values, objectives and strategies. Alignment + Human resource issues. | + Human resource Strategies. Implementation: + HR programmes and activities. Management of human resources + Evaluation of results, The process of developing and implementing HR strategies, ie. the process of* managing human resources in alignment with business strategy—is a management process. HR strategies are management strategies, developed and implemented by managing executives in the same manner as other functional strategies. Figure 4 is a series of activities through which managers successively define and address human resource issues on a continuing basis. ‘The challenges of managing resources is to ensure that all HR activities are focused on business needs. All HR activities should fit together as a system and be aligned with HR strategies. These strategies, in turn, should be aligned with business strategy. 5. CONTRIBUTION OF HR STRATEGIES Thus, HR strategies contribute to managing growth and change, achieving and iow costs, improving quality, balancing autonomy and synergy. This may be elaborated further that business organisations face challenges in achieving and maintaining a competitive edge in a rapidly changing world. These include managing growth and change in a global market place, introducing new technology, achieving and maintaining low costs, improving service/product quality, and balancing diversity and synergy. ‘Addressing these business challenges requires the talent, energies, and performance of employees. How effectively business strategies are implemented depends in large part on management of human resources. maintaining |Strategic Human Re; Ez Source Maan, — 1 Figure 4 ment of Human Resources with Strategy Aligning the Manage Defining HR Isuses eee EELS D EY Developing HR Strategies 4 _-»| Aligning Employee Expectations with Strategy Sharing Success Enabling Performance t Developing Effective Managers = Companies perceive human resource issues as important challenges in achivin desired business changes. HR issues and strategies are directly linked with business issue and strategies. They go hand in hand in reality, thus, also in management thinking planning, and action. - a Human resource strategy helps to focus, mobilise, and direct all HR activities on the issues that most directly affect the business. It is the glue that binds all other HR activities and makes sense of them from management view-point. Thus, benefits of HR strategy are listed in Figure 5. Designing the Organization Defining Staffing Needs Strategic Staffing Developing Capabilities Figure 5 Benefits of HR strategy * Defines opportunities and barriers for achievement of business objectives. + Prompts new thinking about issues and educates participants and provides a wider perspective. * Tests management commitment for actions; a process for allocating resources to specific programmes and activities. * Develops a sense of urgency and commitment to action, + Establishes selected Joy ng-term courses of action considered high priority over the next two to three years, * Provides a strategic focus for managing the business and developing management talents. REFERENCE Tony Grundy and Laura Brown, Value-based HR Strategy, Elsevier, Boston.