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ROLE OF STRATEGIC MANAGEMENT IN HUMAN RESOURCE MANAGEMENT

MBAO 6030 Human Resource Strategy

WHAT IS STRATEGY?
The Meaning of Strategy Plans that involve the top executives and/or board of directors of the firm A general framework that provides a perspective for selecting specific policies and procedures. A factor that contributes to Competitive Advantage in markets Having a long-term focus A critical factor that affects Firm Performance

Human resource strategy involves the planned and effective use of human resources in order to get an edge over the competitors.
1. 2.

The use of planning in human resource management.

An integral approach to the design and implementation of HR systems. Matching HRM policies and activities with the business strategy of the organization.
3.

Viewing people as a strategic resource for the achievement of competitive advantage.


4.

HR Strategy: Strategic Fit


Corporate Strategy Business Strategy HR Strategy HR System Training (Performance Mgmt.)

Rewards

MBAO 6030 Human Resource Strategy

HR Strategy: HR System Internal Fit


HR Strategy
Goal Setting Appeal Performance Measurement Coaching Rewards Performance Evaluation

Performance Management System

STRATEGY IN HUMAN RESOURCE MANAGEMENT describes the


vision, mission goals of the HRM Function in the organization.
The HRM Strategy describes the final and desired state of the HRM Function. The HRM Employees use the HRM Strategy as the basis for the goal setting process within the HRM Function to navigate their own performance the right direction.

HR strategies HR planning CORPORATE BUSINESS Design of STRATEGY STRATEGY jobs What workers do Internal environment What workers Culture need Structure Policies Past strategy

External environment Competition Gov policy Technology Market trends

Pans regulating employee

Procurement Development Performance management Compensation Labor relations

OUTCOMES

Increased performance Customer Satisfaction Employee satisfaction

HRIS

Strategic management plays an important role in different aspects of Human Resource management.
1.HR PLANNING 2.STAFFING-RECRUITMENT & SELECTION 3.TRAINING & DEVELOPMENT 4.PERFORMANCE APPRAISAL 5.COMPENSATION & REWARDS

1. HR PLANNING-Prevents overstaffing and understaffing.

Ensures the organization has the right number of employees with the right skills in the right places and at the right time. Ensures the organization is responsive to changes in its environment. Provides direction and coherence to all HR activities and systems.

Facilitates leadership continuity through succession planning. HR planning follows from the strategic plan, the information collected in the HR planning process contributes to the assessment of internal organizations environment done in strategic planning.

2.STAFFING- The process of recruiting applicants and selecting prospective employees, remains a key strategic area for human resource strategy. An organisations performance is a direct result of the individuals it employs, the specific strategies used and decisions made in the staffing process will directly impact the success of the strategic plan.
i. ii.

Recruitment & Selection

Placement

An effective staffing strategy requires in depth planning for the recruiting process to ensure efficiency and generation of a qualified applicant pool. The strategic decisions organizations need to make relative to staffing are summarized below:

3. Training and Development- Training and development


of employees is a key strategic issue for organizations. Training involves employees acquiring knowledge and skills that they will be able to use on the job.

There are two key factors to develop successful training programmes in organizations. The first is planning and strategizing the training. This involves four distinct steps:
Needs assessment The establishment of objectives and measures Delivery of the training Evaluation The second key factor is to ensure that desired results are achieved or accomplished. Training needs are to be integrated with performance management systems and compensation.

FOR EX.
INFOSYS WHICH IS A KNOWLEDGE BASED IT BUSINESS ALWAYS REQUIRES ITS HUMAN RESOURCE TO BE
TO BE HIGHLY SKILLED TO BE COMPETENT EASILY ADAPTING TO CAHANGING WORK

SITUATIONS TO BE WELL INFORMED

INFOSYS HAS GAINED ITS MOTIVE OF SMART WORKFORCE THROUGH ITS WELL ORGANISED TRAINING ACTIVITY. THE MOTTO OF INFOSYS TRAINING PROGRAM IS

LEARN ONCE, USE ANYWHERE OBJECTIVE IS TO NURTURE A LARGE NUMBER OF HIGH QUALITY LEADERS WITH A GLOBAL PERSPECTIVE.

THE TRAINING SPECTRUM INCLUDE


SOFTWARE DEVELOPMENT

MANAGERIAL SKILLS
SOTWARE SKILLS LEADERSHIP & DOMAIN SPECIFIC TRAINING

TRAINING IS PROVIDED AT THREE LEVELS ENTRY LEVEL LATERAL LEVEL LEADERSHIP TRAINING(Infosys Leadership Institute)

ENTRY LEVEL An employee who joins at the

entry level undergoes a 14-week comprehensive training programme covering both technical and managerial aspects.

LATERAL LEVEL A separate training programs


for lateral entrants. Using a blend of presentations and interactive sessions, they are introduced with the Infosys brand/culture. Task based training takes place afterward.

LEADERSHIP TRAINING Training in

leadership qualities is the third level programme. Infosys Leadership Institute(ILI) in Mysore trains about 400 infoscions anually.

ILI RUNS SPECIAL PROGRAMMES ALSO


First time traveler training 3 day event with 6
modules i.e. Personal trait understanding Culture & project elements appreciation Customer interfacing Communication skills Corporate etiquette Social Interfacing skills

Language training

Bon Voyage Training given to all its travelers at the time of collecting tickets/passport, covers immigration processes & tips on making ones way in a new country.

ILI CURENTLY HAS


78 Full time Faculty More than 200 consultants Top level management including Chairman &. directors also conducts workshop. Infosys spends around 4% of total wage bill on training & delivers about 10% of the total training through E-Learning Programs.

FIRM LEVEL COMPETITIVE STRATEGY


COST LEADERSHIP CUSTOMER SATISFACTION HR PEOPLE WORKING COMPETITIVE HARDER OBJECTIVES HR STREAMLINE DECISIONS STANDARDIZE AND ACTIONS DECREASE PRODUCTION TIME REDUCE COSTS INNOVATION

PEOPLE WORKING PEOPLE SMARTER WORKINH WITH VISION EDUCATE LINE MANAGERS & OTHER CLIENTS DELEGATE DECISIONS INCREASE FLEXIBILITY DEFINE VISION ATTRACT CREATIVE TALENT REWARD RISK PROVIDE OPPORTUNITIES & TOOLS FOR EXPLORATION

4.PERFORMANCE APPRAISAL- An organizations


long-term success in meeting its strategic objectives relies on managing employee performance and ensuring that performance measures are consistent with the strategic needs.
One

purpose of performance appraisal systems is to facilitate employee development. A second purpose is to determine appropriate rewards and compensation, which must be clearly linked to achievement of strategic goals.

FOR Ex.:- PHILIPS TAKE A FIVE-POINT SCALE TO


MEASURE THE POTENTIAL OF AN EMPLOYEE AND PUT THEM IN ONE OF THE QUADRANTS. PROBLEM CHILDREN C A PLANNED SEPERATION STARS D B SOLID CITIZENS

P HIGH O T E N T I A L LOW

HIGH

PERFORMANCE

Low potential-Low performance- Employees under


this criteria are asked to improve their performance initially. If that effort fails, Philips works towards a planned separation. citizens-high skills but limited capability to grow beyond their current job profile.

Low potential-High performance-Defined as solid Low performance-High potential-Problem children


do well in their jobs if a location, boss or job profile is changed. If they continue to perform less, the separation process is initiated. performers. And are given challenging tasks constantly.

High performance-High potential-Are like star

The appraisal criteria considers the following features:

Conceptual EffectivenessVision Business orientation Sense of Reality Interpersonal EffectivenessNegotiating power Personal influence Verbal Behavior

Operational Effectiveness
Result orientation Individual effectiveness Risk taking control

Achievement MotivationProfessional ambition Innovativeness Stability Philips lays down a fast track, career growth plan for the star performers. Separates the star performers from the employees ranks & exploit their potential fully using rewards & incentive schemes.

5.COMPENSATION & REWARDS


Organizations face a number of key strategic issues in setting their compensation and reward policies and programmes. These include:

Compensation relative to the market

Balance between fixed and variable compensation


Appropriate mix of financial and non financial compensation Developing an overall cost-effective compensation programme that results in high performance.

HR Strategy: Context of HR System


1. The Five Factors Influencing the HR System

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 3. Organization Culture

Weak vs. Strong culture Type of culture What are a firms distinctive competencies? What is the basis that competitive strategy be sustained? What are a firms strategic objectives? Compare corporate and Business strategies.

4. Organization Strategy

5. Technology of Production & Organization of Work


Required employee skills Ease of monitoring employees input

MBAO 6030 Human Resource Strategy