Human Resource Management:

Gaining a Competitive Advantage

Chapter 02

Strategic Human Resource

Management

McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.
 What is Strategic Management?

 Strategic human resource management (SHRM) is the

pattern of planned HR activities and deployments intended to
enable an organization to achieve its goals.

 Strategic management is a process to address the

organization’s competitive challenges by integrating an
organization’s goals, policies and action sequences into a
cohesive whole.

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2-3
 Strategic Management Process Model
Strategy Formulation Strategy Implementation
HR Practices
•Recruiting
•Training
•Performance management
•Labor relations
•Employee relations
•Job analysis
•Job design
•Selection
HR •Development
Strategic Needs •Pay structure
Mission •Incentives
Goals Choice
•Skills
•Benefits
•Behavior
•Culture

HR
Internal Capability
Analysis •Skills,
•Strengths •Abilities
•Weaknesses •Knowledge

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Strategic Planning and HRM Linkages

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Strategy Formulation

External
Analysis
•Opportunities
•Threats

Internal
Analysis
•Strengths
•Weaknesses

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SHRM- Strategy Formulation

Mission
Mission

Goals
Goals

Strategic
Strategic Choice
Choice

Internal
Internal Analysis
Analysis

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Strategy Implementation Variables

Organizational
Structure

Types Task
of Design
Information

Select
Train
Develop
People

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HRM’s 3 Implementation Variables:

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Strategic Implementation
HR Practices
•Recruiting
•Training
•Performance management
•Labor relations
•Employee relations
•Job analysis
•Job design
Human •Selection
Resource •Development
Needs •Pay structure
•Skills •Incentives
•Behavior •Benefits
•Culture
Human
Human Resource
Resource
Capability Actions
•Skills, •Behaviors
•Abilities •Results
•Knowledge -productivity
-absenteeism
- turnover

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HRM Practices

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Porter’s Strategies

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5 Categories of Directional Strategies

Concentration
Concentration

Internal
Internal Growth
Growth

External
External Growth
Growth

Mergers
Mergers &&
Acquisitions
Acquisitions

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 Summary
HR are the most important asset and single largest most
controllable cost within the business model.

HR professionals must develop business, professional-

technical, change management and integration competencies.

HRM has a profound impact on the strategic plan

implementation by developing and aligning HRM practices
that ensue the company has motivated employees with
necessary skills.

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