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Strategic HRM
Strategic HRM
Prof. S. Pattnaik
Levels of Strategy-Making in
a Diversified Company
Corporate-Level Corporate
Managers Strategy
Two-Way Influence
Business-Level
Managers Business Strategies
Two-Way Influence
Functional
Managers Functional Strategies
Two-Way Influence
Operational
managers Operating Strategies
What is strategic
management?
A continuous, iterative process aimed at
keeping an organization as a whole
appropriately matched to its environment
(Samuel C. Certo and J. Paul Peter, Strategic Management)
Keeping the business in tune with
management and marketing forces both
outside and inside the firm
Possible?
External
Internal analysis
environment
Desired?
Feedback
Feedback
Strategic analysis and choice
Long-term
Generic and grand strategies
objectives
Restructuring, reengineering
and refocusing the organization
Legend Strategic control and
Major impact continuous improvement
Minor
impact
Strategic analysis HRM
“To be competitive, organizations in many
industries must have highly skilled.
Knowledgeable workers. They must also have a
relatively stable labour force since employee
turnover works directly against obtaining the kind
of coordination and organizational learning that
leads to fast response and high-quality products
and services”
- Edward Lawler
Ref: SHRM – Charles Greer
WHAT IS SHRM?
Strategic human resource management
has been defined as ‘the linking of human
resources with strategic goals and
objectives in order to improve business
performance and develop innovative
organizational culture that foster
innovation and flexibility.
Some Organisational
Strategies
3M Foster innovation
Prof. S. Pattnaik
Aim of SHRM
Long-term Objectives
Profitability
Return on investment
Competitive position
Technological leadership
Productivity
Employee relations
Public responsibility
Employee development
Aim –Short term
•Detailed work planning
•Emphasis on technical
qualifications and skills
•Emphasis on job-specific
training
•Emphasis on job-based pay
•Use of performance appraisal as a control device
•Team-based training
Types of HR Strategy
1) general strategies such as
high-performance working team
– Supplying competitive intelligence regarding the
external environment
– Supplying information regarding the company’s
internal human strengths and weaknesses.
– Showing how the firm’s HR activities can and do
contribute to creating value for the company
2) specific strategies relating to the different
aspects of human resource management
such as learning and development and
reward(Human capital management, corporate
social esponsibility,
organization development, engagement,
knowledge management,employee resourcing,
talent management, learning and development,
reward, employee relations, and employee
well-being
Difference Between Strategic HRM &
HR strategies:-
STRATEGIC HRM HR Strategies [ HR StrategiesHRS ]
Aligned with organizational intention about future Focus on specific organizational intentions about
direction what needs to be done.
Focus on long term people issue Focuses on short term performance measures that
is result/outcome.
SHRM decisions are built into strategic business HRSs decisions are derived from SHRM.
plan
Deals with macro-concerns such as quality, HRSs are concerned with ensuring availability of
commitment, performance, culture & mgnt an efficient workforce, training, good employee
development relations
Defines areas in which specific HR strategies need HRSs facilitate the successful achievement of
to be developed. Ref: SHRM – Charles Greerobjectives + goals
corporate
Approaches to SHRM
The resource-based approach-A resource-based
approach will address methods of increasing the firm’s
strategic capability by the development of managers
and other staff who can think and plan strategically and
Prof. S. Pattnaik
Types of Strategic Planning
(cont’d)
Business-level/competitive strategy
– Identifies how to build and strengthen the
business’s long-term competitive position in
the marketplace.
Cost leadership
Differentiation
Focus
Prof. S. Pattnaik
Types of Strategic Planning
(cont’d)
Functional strategies
– Identify the basic courses of action that
each department will pursue in order to
help the business attain its competitive
goals.
Prof. S. Pattnaik
Methodology for strategy
development
Strategic analysis
– Environmental analysis
human resource environment
human resource legal environment
– Establish organizational direction
Strategy formulation
– Human resource planning
Strategy implementation
– Work force utilisation and employment practices
– Reward and development system
Strategic control
– Performance impact of human resource practices
– Human resource evaluation
Ref: SHRM – Charles Greer
Strategy formulation
What are the purpose(s) and objective(s) of
the organization?
Where is the organization presently going?
What critical environmental factors does the
organization currently face?
What can be done to achieve organizational
objectives more effectively in the future?
Resource dependence
Resource institutional
based view
of the firm HRM Practices
Cybernetics
Behavioral
approach
Agency/transaction costs
Firm level outcomes
HR Capital pool HR behaviors (performance,
Non-Strategy driven
– Resource dependence and power theories
– Power and politics= legislation, unionization, control of resources, expectations of
social responsibility.
– Institutional theory
– In appropriate performance evaluation dimensions (inertia / rational decision
making.appraisal
..
Low
< IMPORTANT TO EMPLOYEES >
Consistency
Consistency
Improved
HR Strategies Firm
Performance
Fit Fit
Organizational Organizational
Characteristics Consistency Capabilities
Strategy implementation
work force utilization and employment practices
employee surpluses
YOU GET WHAT YOU MEASURE, YOU MEASURE WHAT YOU VALUE, YOU
Ref: SHRM – Charles Greer
CAN NOT CONTROL WHAT YOU CANNOT MEASURE.
Strategy implementation system
– Reward and development systems
Hybrid system
Employee – Internal equity
– > Wage surveys to establish
development external equity.