Chapter # 1

the evolving/strategic role of Human

Resource Management
By
Ms Madiha Zeeshan
Human Resource Management Strategy

Why is HR critical to firm performance?

 85% of all firms are service firms.
 Service is delivered by people.
 Low quality HR leads to low quality customer
service.
 In the 21st century effective knowledge management
translates into competitive advantage and profits.
 Knowledge comes from a firm’s people.
Human Resource Management Strategy

What is unique about Human Resource Management?

 HR is multidisciplinary: It applies the disciplines of
Economics (wages, markets, resources), Psychology
(motivation, satisfaction), Sociology (organization structure,
culture) and Law (min. wage, labor contracts, EEOC)
 HR is embedded within the work of all managers, and most
individual contributors due to the need of managing people
(subordinates, peers and superiors) as well as teams to get
things done.
Aims of SHRM

 Organizational Effectiveness
HRM strategies aim to support programs for improving
organizational effectiveness by developing policies in such areas
as knowledge management, talent management and generally
creating ‘a great place to work’.

 Human Capital
The human elements of the organization are those that are capable
of learning, changing, innovating and providing the creative
thrust which if properly motivated can ensure the long-term
survival of the organization.’
Aims of HRM

 Knowledge Management
HRM aims to support the development of firm-specific
knowledge and skills that are the result of organizational
learning processes.

 Reward Management
HRM aims to enhance motivation, job engagement and
commitment by introducing policies and processes that ensure
that people are valued and rewarded for what they do and
achieve, and for the levels of skill and competence they reach.
Aims of HRM

 Employee Relations
The aim is to create a climate in which productive and harmonious
relationships can be maintained through partnerships between
management and employees and their trade unions.

 Meeting Diverse Needs

HRM aims to develop and implement policies that balance and adapt
to the needs of its stakeholders and provide for the management of a
diverse workforce, taking into account individual and group
differences in employment, personal needs, work style and
aspirations, and the provision of equal opportunities for all.
SHRM Framework
Difference Between HRM & SHRM
BASIS FOR COMPARISON HRM SHRM

Meaning Human resource management SHRM is a managerial function

(HRM) implies the governance of which implies framing of HR
manpower of the organization in a strategies in such a way to direct
thorough and structured manner. employees efforts towards the
goals of organization.

Nature Reactive Proactive

Responsibility lies with Staff specialist Line manager

Scope Concerned with employee Concerned with internal and

relations external relations

Time horizon Short term Long term

Change Follows change Initiates change

Accountability Cost center Investment center

Control Stringent control over employees It exhibits leniency.

The Evolving Role of SHRM

Strategic Focus

Strategic Partner Change Agent

System People
Administrative Expert Employee Champion

Operational Focus
HR Strategy: Factors Affecting HR System
The “Five Factors” Influencing the HR System
1. External Environment
 Social: social values, roles, trends, etc.
 Political: political forces, changes. Ex. Bush presidency
and its agenda for Social Security.
 Legal: laws, court decisions, regulatory rules.
 Economic: product, labor, capital, factor markets.
2.The Workforce
 Workforce Diversity

 Gender shifts

 Old vs. new paradigm shift (mindsets of the people)

HR Strategy: Factors Affecting HR System

3. Organization Culture
Organizational culture is a system of shared assumptions, values,
and beliefs, which governs how people behave in
organizations. These shared values have a strong influence
on the people in the organization and dictate how they dress,
act, and perform their jobs.
Types of Organizational Culture
HR Strategy: Factors Affecting HR System
4. Organization Strategy
 Company’s current business environment.
 What are a firm’s competitive edge?
 What are a firm’s strategic objectives?
 Compare corporate and Business strategies.
 Company’s current business environment.

5. Technology
 Emerging change in technology & infrastructure that requires transformation and
innovation.
 Training needed to utilize new technology
 Necessary expansion/contraction of workforce
 Adequacy of current facilities to support current technology & organizational output.
Video Links

 Google HR Strategy
https://www.youtube.com/watch?v=FRsJbpppvEU

 Role of HR in 21st century

https://www.youtube.com/watch?v=ukmC6F0JvQw