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Human Resource Management
1
STRATEGIC HRM
Introduction
A strategy: Indicates what an organization's key
executives hope to accomplish in the long run Is concerned with competition and aligning the
resources of the firm
Good HR strategy results in a fit between organizational strategy and HRM policies and programs Recruitment, selection, outsourcing,
telecommuting, performance evaluation, compensation
Human Resource Management 2
Strategic human resource management formulating and executing HR systems that produce
the employee competencies and behaviors the company needs to achieve its strategic aims
Taking a strategic HRM approach means: Making human resources management a top priority Integrating HRM with the company’s strategy,
mission, and goals
HRM can make significant contributions if included in the strategic planning process from the outset The strategic management process helps determine:
What must be done to achieve priority objectives How they will be achieved
Human Resource Management 3
Strategic HRM: A Key to Success
Three levels of strategy apply to HRM activities: Strategic (long term) Managerial (medium term) Operational (short term)
The HRM activities are: Employee selection/placement Rewards Appraisal Development
Human Resource Management 4
Strategic HRM: A Key to Success
Strategic HRM planning leads to: Growth Profits Survival
Planning also: Expands awareness of possibilities Identifies strengths and weaknesses Reveals opportunities Points to the need to evaluate the impact of
internal and external forces
Human Resource Management 5
Traditional HR vs. Strategic HR
Point of distinction
Focus
Role of HR
Initiatives
Time horizon
Control
Job design
Key investmentsAccountabilityResponsibility for HR
Traditional HR
Employee Relations
Transactional change follower and respondent
Slow, reactive, fragmented
Short-term
Bureaucratic-roles, policies, procedures
Tight division of labor; independence, specialization
Capital, products
Cost centre
Staff specialists
Strategic HR
Partnerships with internal and external customers Transformational change leader and initiatorFast, proactive and integratedShort, medium and long (as required)Organic-flexible, whatever is necessary to succeedBroad, flexible, cross-training teams
People, knowledgeInvestment centreLine managers
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Shifts in HR management in India
Emerging HR practice
Strategic role
Proactive
Key part of organizational
mission
Service focus
Process-based organization
Cross-functional teams,
teamwork most important
People as key investments/assets
Traditional HR practice
Administrative role
Reactive
Separate, isolated from
company mission
Production focus
Functional organization
Individuals encouraged,
singled out for praise,
rewards
People as expenses
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Linking Corporate and HR Strategies
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Strategic Management Process
Environmental Scanning
Strategy Formulation Corporate level Business unit level Functional level
Strategy Implementation
Strategy Evaluation
Human Resource Management 9
HR Role in Strategic Management In strategy formulation
HR manager supplies competitive intelligence that is useful
In strategy implementationEncouraging proactive behaviorExplicit communication goalsStimulate critical thinkingProductivityQuality and ServiceProficient strategic management
Human Resource Management 10
A Model to Organize HRM
ARDM means: Acquiring Rewarding Developing Maintaining and protecting
The goals of the ARDM model are: Socially responsible and ethical practices
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A Model to Organize HRM
The eventual success of any HRM activity is: The organization's employees are the best
qualified They perform jobs that suit their needs, skills,
and abilities
Matching people and activities in order to accomplish goals is easier with a diagnostic approach
Human Resource Management 12
Taking a Diagnostic Approach to HRM
The ARDM model has four specific steps: Diagnosis Prescription Implementation Evaluation
Managers typically diagnose a work situation by observing and identifying key factors A prescription is then made to translate the
diagnosis into action Most human resource problems are too complex
to have a single correct prescription
Human Resource Management 13
Taking a Diagnostic Approach to HRM
Implementing a solution is the next step, followed by evaluation Evaluation tells managers whether improvement
in the ARDM process is needed
If an organization teaches its members to focus on ARDM plus the environment, it is likely to achieve: Socially responsible, ethical behaviors Competitive, high-quality products and services
The ARDM model calls for thorough, timely, and systematic review of each situation
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External Environmental Influences
HRM processes are influenced by both the internal and external environments External influences include:
Government laws and regulations Union procedures and requirements Economic conditions The labor force
HR planning must operate within: Guidelines Limits of available resources Competencies
Human Resource Management 15
Economic Conditions
Two economic factors affect HRM programs: Productivity The work sector of the organization
Productivity is: An important part of a nation's economic
condition Representative of an organization’s overall
efficiency The output of goods and services per unit of
input (resources) used in a production process
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Economic Conditions
Managers can influence productivity through sound HRM programs Diagnosis, prescription,
implementation, and evaluation Recruitment and selection Motivational and compensation
techniques Training and development
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Internal Environmental Influences
HRM programs are influenced by: Strategy Goals Organizational culture Nature of the task Work groups The leader’s style and experience
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Goals
Organizational goals differ within and among departments Most departments have similar goals Differences arise from the importance placed
on the goals In organizations where profits take
precedence, HRM goals receive little attention This results in effectiveness problems
(absenteeism, performance decrements, high grievance rates)
Human Resource Management 19
Organization Culture
A firm's organizational culture is shown by: The way it does business How it treats customers and employees The autonomy or freedom that exists in the
departments or offices The degree of loyalty expressed by employees
Human Resource Management 20
Organization Culture
Organization culture represents the perceptions held by the employees There is no one "best" culture for the
development of human resources
Culture can: Impact behavior, productivity, expectations Provide a benchmark for standards of
performance
Human Resource Management 21
Work Group
An employee’s experiences are largely influenced by the work group A group is two or more people who:
Consider themselves a group Work interdependently to accomplish a
purpose Communicate and interact with one another
on a continuous basis In many cases, work next to each other
Human Resource Management 22
Leader’s Style and Experience
The experience and leadership style of the operating manager directly affects HRM activities Orchestrating the skills, experiences,
personalities, and motives of individuals Facilitating interaction within work groups Providing direction, encouragement, and
authority to evoke desired behaviors Reinforcing desirable behavior
Human Resource Management 23