Strategic Human Resource

Management
• To deliver superior value and offer unmatched
service, every firm requires committed and
competent workforce.

• Employees are more productive if

 They are loyal and informed
 Involved in teams which collectively decide
 Are trusted to take the right decision
 SHRM is built around three important
propositions
1. Human Resources of a firm are a major
source of competitive advantage
2. Successful organisational performance
depends on a close fit between business and
HR strategy
3. Individual HR strategy should cohere by being
linked to each other to offer mutual support
 Strategic Human Resource
Management
• SHRM is part of strategic planning
• Strategic Plan : The Company’s plan for how it
will match its internal strengths and
weaknesses with its external opportunities and
threats to maintain a competitive advantage
• Essence is to ask “ Where are we now as a
business, where we want to be, and how
should we get there”
• Then formulates specific strategies (Human
resources and other) to take the company from
where it is now to where he or she wants it to be

• Strategy : 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
 HR’s Role in Strategy Formulation
Accepting HR function as strategic partner
While formulation the strategic plan HR can
play important role in:
• Identifying and analysing external threats and
opportunities
• Offer competitive intelligence
• Throw light on company’s internal strengths
and weaknesses
• SHRM means formulating and executing
human resource policies and practices that
produce the employee competencies and
behaviors the company needs to achieve its
strategic aims
• E.g. Ford
 Traditional Vs Strategic HRM
Point of distinction Traditional HR Strategic HR
Focus Employee Relations Partnership with internal and
external customers
Role of HR Transactional, change Transformational, change
follower and respondent leader and initiator
Initiatives Slow , reactive and Fast, proactive and integrated
fragmented
Time Horizon Short term Short, medium and long (as
required)
Control Bureaucratic roles, policies, Organic-flexible, whatever in
procedures necessary to succeed
Job Design Tight Division of labour ; Broad, flexible, , cross training
independence , teams
specialisation
Key investments Capital, Products People, knowledge
Accountability Cost centre Investment centre
Responsibility of HR Staff specialists Line managers
Need and Importance
• Changing demand from customers or the
market place
• New technology and increasing pressure from
competitors (Philip Mirvis)
• Changes in the basic business environment
(Randall Schuler)
• High levels of uncertainty about basic business
conditions
• Rising costs
• Rapid technological change
• Changing demographics
• More limited supplies of highly trained labor
• Rapidly changing government legislation and
regulations
• Increased globalization of industries
 Strategic Outcomes
Strategic HR offers three critical outcomes :
• Increased Performance
• Enhanced customer and employee satisfaction
and
• Increased shareholder value
These outcomes are accomplished through
 Effective management of staffing
 Retention and turnover processes
 Selection of employees that fit with both the
organisational strategy and culture
 Cost effective utilisation of employees through
investment in identified human capital with the
potential for higher return
 Integrated HR policies and programmes that
clearly follow from corporate strategy
 Facilitation of change and adaptation through
a flexible, more dynamic organisation and
 Tighter focus on customer needs, emerging
markets and quality