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Strategic Human Resource Management

PRESENTED BY:
CHANIMA BHATTCHARYA SHRASTA SAXENA SUNIL KUMAR

Time to strategies?
HR has long since been considered as a support function. Has that definition changed over time? Is it becoming more strategic in nature? Only Supportive ? oR Strategic !!

Sandip Mallik, director- HR, Aviva India, says,
"HR is becoming more strategic on two counts. • First, HR is a risk manager.

• Second, HR facilitates the growth of engagement capital both of which have a huge impact on franchise valuation.

TODAY’S SCENARIO
• Today's HR professionals contribute to creating engagement capital, or building engagement over time, to improve employee effort, retention, and key business outcomes. As we balance short-term improvements with engagement drivers that sustain engagement over time, there is a greater alignment of the HR function to an organization's strategic needs

HR’s Strategic Challenges
• Strategic plan – A company’s plan for how it will match its internal strengths and weaknesses with external opportunities and threats in order to maintain a competitive advantage. • Three basic challenges – The need to support corporate productivity and performance improvement efforts. – That employees play an expanded role in employers’ performance improvement efforts. – HR must be more involved in designing— not just executing—the company’s strategic plan.

The Strategic Management Process
• Strategic management – The process of identifying and executing the organization’s mission by matching its capabilities with the demands of its environment.

• Strategy – A strategy is a course of action. – The company’s long-term plan for how it will balance its internal strengths and weaknesses with its external opportunities and threats to maintain a competitive advantage.

Strategic Human Resource Management
• Strategic Human Resource Management – The linking of HRM with strategic goals and objectives in order to improve business performance and develop organizational cultures that foster innovation and flexibility.

-Formulating and executing HR systems—HR policies and activities—that produce the employee competencies and behaviors the company needs to achieve its strategic aims.

Linking Corporate and HR Strategies

HR’S Strategic Roles
• HR professionals should be part of the firm’s strategic planning executive team.
– 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 marketdriven organizations. – Conceptualize and execute organizational change.

HR’s Strategy Formulation Role
• HR helps top management formulate strategy in a variety of ways by. – Supplying competitive intelligence that may be useful in the strategic planning process. – Supplying information regarding the company’s internal human strengths and weaknesses. – Build a persuasive case that shows how—in specific and measurable terms—the firm’s HR activities can and do contribute to creating value for the company

The Basic Architecture of HR

The High-Performance Work System
• High-performance work system (HPWS) practices.
– High-involvement employee practices (such as job enrichment and team-based organizations), – High commitment work practices (such as improved employee development, communications, and disciplinary practices) – Flexible work assignments. – Other practices include those that foster skilled workforces and expanded opportunities to use those skills.

Translating Strategy into HR Policy and Practice

Basic Model of How to Align HR Strategy and Actions with Business Strategy

FACTORS CONTRIBUTING TO STRATEGIC ASPECTS OF HR FUNCTIONS

Internal factors : • organization structure • organization culture • organization competencies • organization internal policies • organization processes, etc. External factors: • market scenario • competitors • government policies • technological advancements, etc."

Emerging Trends In The Field Of Strategic Human Resource Management
• The employee
involvement • Flow rate of an HR • Performance Management • Reward Systems • Loyalty towards the work • Focus on employee retention • Cross cultural issues • Effects of rapid changes in technology • New emerging concepts of line and general management

THREE IMPORTANT STRATEGIC HR TOOLS

STARTEGY MAP
• Graphical tool that summarizes the chain of activities that contribute to the company’s success, and shows employees the “big picture” of how their performance contributes to achieving the company’s overall strategic goals.

HR SCORECARD
• A process for managing employee performance and for aligning all employees with key objectives, by assigning financial and non financial goals, monitoring and assessing performance, and quickly taking corrective action.

The HR Scorecard Approach to Formulating HR Policies, Activities, and Strategies

DIGITAL DASHBOARD

• Presents the manager with desktop graphs and charts, so he or she gets a picture of where the company has been and where it’s going. In terms of each activity in the strategy map.

Models
• Control based: the way in which management attempts to monitor and control employee role performance

• Resource Based: grounded in the nature of the employer–employee exchange

• Integrative Based: combination of above models

Control-Based Model
Management structure + HR practice

Starting point:

To Secure all aspect of work

Marx’s
High level of labour productivity & Profitability

‘Transformation of labour power into labour’

What Alternatives HR have?
Edward: 1. Bureaucratic control: written rules & procedures 2. Technological control: assembly line, surveillance camera 3. Divide & rule policy

Control-Based Model
Burawoy:

From Despotic regime To Hegemonic regime Despotic refers to coercive manager Hegemonic refers to industrial citizenship[the collective rights and duties legislatively granted to employees]
Bamberger & Meshoulam:

Process-based control : focus is on efficiency and cost containment Outcome-based control: focus is on actual results

Resource-Based Model
Based on nature of the reward–effort exchange • Selznick: work organizations each possess ‘distinctive competence’ that enables them to outperform their competitors Barney: • The resource-based perspective emphasizes the strategic importance of exploiting internal ‘strengths’ and neutralizing internal ‘weaknesses’ • Its all about making competitive advantage, for that” • Exploitation of resource & capability should be done Four characteristics of resources and capabilities – • value, • rarity, • inimitability and • non-substitutability – are important in sustaining competitive advantage

Integrative Model
Bamberger and Meshoulam integrated the two models arguing none of them were sufficient enough to give a appropriate flow to the HR strategy, so they took two main dimensions: Acquisition & development: • make-or-buy’ aspect of HR strategy. organizations can lean more towards ‘making’ their workers(high investment in training) or more towards ‘buying’ their workers from the external labour market. .

Locus of control: • Degree to which HR strategy focuses upon monitoring the employees. Whether process-based is forged with the psychological contract or not to make it outcomebased

Commitment : • focusing on the internal development of employees’ competencies and outcome control • This typically refers to ‘knowledge work’. In such workplaces, managers must rely on employees to cope with the uncertainties inherent in the labour process and can thus only monitor and evaluate the outcomes of work • Here, employees may effectively ‘control themselves’

Traditional: • focusing on the external recruitment of competencies and • behavioral or processbased controls • prevalent in firms with a highly routinized transformation process, low-cost priority and stable competitive environment. • ‘You are here to work, not to think!’

Collaborative: • Involves the organization subcontracting work to external independent experts (for example consultants or contractors), giving extensive autonomy and evaluating their performance primarily in terms of the end results.

Paternalistic: • offers learning opportunities and internal promotion to employees for their compliance with process-based control mechanisms

S.H.R.M in Small and Medium Sized Enterprises

• According to “Journal of Management and Marketing Research”, the conceptual framework for studying the relationship between the strategic human resource management practices of small and medium sized businesses and their performance as corporate partners, as industry and competitive conditions change.

• Like any other organization, the sophistication of their human resource management practices can lead to operational inefficiencies that can affect their ability to meet their obligations to corporate buyers.

Factors that Enable Operating Excellence
STRONG MANAGEMENT TEAM
RECRUITING AND RETAINING TALENT

OPERATING EXCELLANCE

ENABLING STRATEGY SUPPORTIVE CULTURE

REWARDS AND INCENTIVES TO INDIVIDUAL AND TEAM

Element of Factor Affecting SME’s S.H.R.M.
According to “Journal of Management and Marketing Research”
INDUSTRY CONDITION
COMPETETIVE CONDITIONOF INDUSTRY FACTORS DIRECT COMPETETION FROM OTHER SME’S

VALUE TO SME’S PARTNER

Reasons for Adopting SHRM In SME’S
• Emerging Strategic Partnership. • Building competitive advantage in industry. • Strategic implementation and execution of strategies. • To be focused on intellectual, human and social capital. • Focusing on Core Competency.

SHRM IN DIFFERENT SME INDUSTRY

Growth Industry

SHRM APPROACH

Matured Industry

Innovative leader, aggressively adopting strategic human resource management practices to enable it meet the needs of partners in fast growing industries

Matured leader relying on the technical human resources management capabilities that have proven beneficial in meting partner needs. May be anticipating a competitive need to shift focus to serving the needs of companies in a fast moving industry and thus a need to adopt strategic human resource management practices

Flexible leader whose human resource management practices is focused on meeting the current needs of its big business partner

Laggard, reliant on technical human resource management practices. Has limited resources to be competitive in serving the needs of companies in a growing industry

Fragmented Industry

Declining Industry

Success of Strategic Human Resource Management in SME’S
• Institutionalization and the resultant job satisfaction and psychological ownership of SHRM practices are keys towards building the core competencies and internal organizational capabilities that enables an SME to become a valued strategically.

• Management commitment is also critical to the success of the SHRM practices of a SME.