STRATEGIC

HRM
 What is a strategy
 The company’s long-term plan for how it will balance its internal
strengths and weaknesses with its external opportunity and
threats to maintain a competitive advantage

 At the core, its is the debate between best fit and best
practice
 Used for gaining a competitive advantage
 Innovation: Offer something new; different from competitors
 Quality Enhancement: Products and services
 Cost Reduction: to be the lowest cost provider
 Optimal strategy depends on the wants of customers and
nature of competitors
 Strategic Management is a process for analyzing
a company's competitive situation, developing
the company's strategic goals, and devising a
plan of action and allocation of resources that
will help a company achieve its goals.

 Strategic human resource management is the

pattern of planned human resource deployments
and activities intended to enable an organization
to achieve its goals.
 Strategic HRM, therefore, is concerned with the following:

1. Analyse the opportunities and threats existing in the

external environment.

2. Formulate strategies that will match the organisation’s

(internal) strengths and weaknesses with environmental
(external) threats and opportunities. In other words,
make a SWOT analysis of organisation.

3. Implement the strategies so formulated.

4. Evaluate and control activities to ensure that

organisation’s objectives are duly achieved.
 Nature of SHRM:

1) Long-term Focus: As business strategies have a long-term orientation, therefore, focus

of SHRM is also long-term probably more than one year.

2) Associated with Goal-Setting: SHRM is highly related with setting of objectives,

formulation of policy and allocation of resources and it is carried out at all levels of top
management.

3) Interrelated with Business Strategies: There is an interrelation between business

strategies and SHRM. E.g. it gives significant inputs when business strategy is
formulated, and human resource strategies (like recruitment, staffing, training and
performance appraisal).

4) Fosters Corporate Excellence Skills: SHRM considers employees as the strategic

potential of the organization and on that basis makes effort to differentiate the
organization from its competitors present in the markets. It also promotes learning of
modern skills.
 Aims of SHRM:

1)To develop Strategic Competencies: to make sure that the company has needed
standards and competent and highly motivated employees for achieving sustainable
competitive advantage.

2)To give Sense of Direction: It guides the organization in the right direction so that the
business requirements of the organization and the individual as well as the co-
operative requirements of its employees are met by creation and attainment of
consistent and reasonable HR policies and programmes.

3)To achieve Integration: Target of SHRM is to give a united framework, so that the
organized HR system works synergistically in accordance with the organizational
strategic objectives.

4)To formulate Business Strategy: by focusing on the measures through which the
organization can use the power of its human resources for the increasing benefits.
 ADVANTAGES AND DISADVANTAGES OF
STRATEGIC HRM
 Advantages:
 Help gain a competitive edge

 Help solve HRM problems

 Make the efficient use of employees and reduce
costs
 Help anticipate and plan for changes

 Benefit long term

 Disadvantages:
Difficulty in predicating the people
 behavior

 Problems with predicating external events

affecting HR planning
 Needing constantly monitoring
 Leading to industrial relation problems
THE FIVE P’S MODEL OF SHRM
 Philosophy: Statements of how organization values &
treats employees; essentially culture of the organization
 Policies: Expressions of shared values & guidelines for action on
employee-related business issues
 Programs: Coordinated & strategized approaches to initiate,
disseminate, & sustain strategic organizational change efforts
necessitated by strategic business needs
 Practices: HR practices motivate behaviors that allow individuals
to assume roles consistent with organization’s strategic
objectives.Three categories of roles:
 Leadership
 Managerial
 Operational
 Processes: Continuum of participation by all employees in
specific activities to facilitate formulation & implementation of
other activities
Thank
You