University of Hail

College of Business Administration

Executive Master of Business Administration

STRATEGIC HUMAN RESOURCE

MANAGEMENT
Chapter 1
Introduction: Strategic Human Resource
Management in the Twenty-first Century

Dr. Abdulrab
 The Strategic View of Human Resources

• Employees are human assets

 Increasein value to organization and marketplace
when investments of appropriate policies & programs
are applied

• Effective organizations recognize that employees

have value
 Much as organization’s physical & capital assets have
value
• Employees are valuable source of sustainable
competitive advantage 4-2
Sources of Employee Value
• Technical Knowledge
• Markets, processes, customers, environment
• Ability to Learn and Grow
• Openness to new ideas
• Acquisition of knowledge & skills
• Decision Making Capabilities
• Motivation
• Commitment
• Teamwork
• Interpersonal skills, leadership ability
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Adopting an Investment
Perspective
• Determines how to best invest in people
• Costs
• Out-of-pocket
• Opportunity
• Human assets become competitive
advantage
• Required skills become less manual, more
knowledge-based
• Appropriate, integrated, strategy-
consistent approach is needed
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A Dilemma
• Failure to invest in employees causes
• Inefficiency
• Weakening of organization’s
competitive position
• Human assets are risky investment
• Require extra effort to ensure that
they are not lost

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•
How Organization can invest in its people ?

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The Investment-Oriented Organization

Organizational Characteristics
• Sees people as central to mission & strategy

• Mission statement & strategic objectives adopt

value of human assets in achieving goals

• Management philosophy encouraging

development & retention of human assets

• Does not treat human assets in same ways as

physical assets

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Investment Orientation Factors
Senior Management Values and Actions
An organization’s willingness to invest in its human resources is
determined by the “investment orientation” of its managers.
Attitude Toward Risk
Investment in human resources is inherently riskier due to lack of
absolute “ownership” of the asset.
Nature of Skills Needed by Employees
The more likely that skills developed by employees are marketable
outside the firm, the more risky the firm’s investment in the
development of those skills.

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Investment Orientation Factors
Utilitarian (“Bottom Line”) Mentality
• An attempt is made to quantify employee worth to
the organization through a cost-benefit analysis.
• The “soft” benefits of HR programs and polices are
difficult to objectively quantify because they affect
many different organizational areas and have
differential effects on individual employees.
Availability of Outsourcing
• If cost-effective outsourcing is available, investments
will be made only in HR activities producing the
highest returns and largest sustainable competitive
advantages.
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 Activities of HR Manager
13

HRM Activities
• Job analysis
• Human resource planning or employment planning
• Employee recruitment
• Employee selection
• Performance appraisal
• Human resource development activities
• Career planning and development activities
• Compensation
• Industrial relations
• Health and safety programs
• Managing diversity
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Class Activity- Nordstrom

Human Resources at Nordstrom

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