Manoj Mathew, RSOM

Strategic Human Resource Management

Strategic HRM is the pattern of planned human resource deployment and activities intended to help an organisation achieve its goals.

Wright & McMahan

Strategic HRM is the development of a consistent, aligned collection of practices, programmes, and policies to facilitate the achievement of the organisation’s strategic objectives.

Jeffrey A. Mello

HRM/HRD IN STRATEGIC ORG(SHRM)

Strategic HRD is development that arises from a clear vision abt people’s abilities & potential & operates within the overall strategic framework of the business.

The strategic planning process that take place in an org

1)Mission goals & value statements

2)Environmental threats & opportunities

3)org strength & weakness

4)Goals & objectives

5)Formulation of strategies-implementing the strategies which are decided upon

Approaches to Strategic HRM/HRD

Universalistic Approach – There is one best way to manage human resources,ie; strategic HRM is the process of transforming traditional HR practices in to a limited set of correct HR procedures.This set of HR prractices mainly include the following

-high level of employment oppurtunities

-slective hiring practices

-a focus on teams& decntralised decision making

-high pay levels

-extensive employee trainee

-Practices that reduce status distinctions among employees

-High levels of information sharing

Strategic Fit Approach –this involves matching specific HR practices to the firms overall business strategies There are normally 3 fits with respect to this they are, Vertical fit how far the HR practices are consistent with the overall business strategy. Horizontal fit relates to the interrelationship among HR activities ie; the extent to which they are mutually consistent. External Fit how well the HR activities match the demands of the external environment.

HR as internal Service Providers here the HR professionals improve the quality &cost effectiveness of HR services provided& to increase the satisfaction of mgt ‘Customers’ in various business units within the firm.

Configurational Approach – the effectiveness of HRM/HRD in enhancing a firm’s competitive advantage depends on a set or bundle of HR practices rather than on any single HR program /policy. Depending upon the various situations in an org an HR mgr has to apply the bundle of HR practices

Resource Based -This model is based on the idea that org gain competitive advantage when they possess resources that are valuable ,rare,difficultfor competitors to imitate, & organized in such a way as to maximize their overall value to the firm.

Difference btw key HR Skills in Traditional HRM/HRD & SHRM

THRM SHRMSpecalist generalist

A good policy & procedure wrier a good communicator

Speaks HR alone Speaks the language

of business

Mgt hierarchy focused customer focused, good customer

relation skill

Few financial/marketing skill understanding these aspects of

business

Stays within the box Thinks outside the box

Focused on the internal org focused on internal as well the

broader society

Factual communicator Persuader

A nationalist A internationalist

HR Strategic Choices these are the options it has available in desiging its human resource system,they are called strategic to the extent that they affect the firm’s performance either favourably/unfavourably in the long run.

They are:

-Staffing -Many staffing decisions have implications for strategy implementation in an org. whether the firm goes for internal /external recruitment determines the opportunities for the current employees & their rewards training & development etc.

-Appraising-Once strategic goals are set it is important that the performance appraisal system be adjusted to evaluate the behaviors needed to achieve these objectives. For example if the firm is following a customer intimacy strategy will need to assess performance in terms of things like customer retention rates & number of referrals from current customers.

-Compensating -different reward systems are needed for different strategies. For eg operational excellence firm should focus on team productivity, profit sharing, skill based pay, while customer intimacy firms should focus on individual rewards, non financial rewards& service award programs.

-Training & Development- there are 2 way out for the org either they can right away hire highly qualified employees from external labor market or else they can give in house training to the workers. To be effective t&d must be tied to the overall strategic objectives of the org.For eg due to tight labor market condition& need to keep its cost low

Org may develop its non managerial workers for managerial jobs on to meet up with this strategy one way out is to make them work with & learn from current mgr’s for this the mgr’s who are helping should be recognized & the workers who have successfully completed the program should b offered promotional opportunities

-employee influence- latest hr factor which influences an org strategy is employee influence which is nothing but employees with a feeling of involvement in the results of their efforts employee influence take place in the following ways,paticipation in decision making, accountability for outcomes, sharing in the wealth created by these outcomes .

-Work system – The way in which the work is carried out in an org.For eg team approach is one of the fasted growing trend in which more authority & responsibility are delegated to self mged teams or autonomous work groups to plan organize supervise & evaluate their own work.

-Career Planning- This is one best way of integrating the employees interest towards org strategy. Since the employees are directed in the right path by way of CP, it develops each worker feed back is provided they are able to know were they are and accordingly work on them which facilitate a lot in synchronizing an employees interest with that of the org strategy.

-Communication –information sharing a major component in integrating HR programs with the org strategy.

Strategic HRM/HRD Model High Performance Model

Involves the development of a number of interrelated processes that together make an impact on the performance of the firm through its people in such areas as productivity, quality, levels of customer service, growth, profits, & ultimately the delivery of increased shareholder value. According to Stevens he suggests the main drivers, support systems & culture for the increased overall performance of the org are as follows

decentralized decision making

developing people capacities by learning at all levels of, with emphasis

on self mgt & team capabilities

Performance, operational & people mgt process aligned to org

objectives

Fair treatment of those who leave the org &engagement with the needs of communiy outside the org.

In short ,HPM practice include rigorous recruitment &selection procedures, extensive & relevant training & mgt development activities, incentive pay systems & performance mgt process.

-High Commitment Mgt This has been defined by Wood(1996) as a Form of mgt which is aimed at eliciting a commitment so that behavior is primarily self regulated rather than controlled by sanctions & pressures external to the individual & relations with in the org are based ion high levels of trust. The characteristics feature of this model as defined by Beeret al (1984) & Walton are

- more emphasis on Career ladders, trainability& commitment.

-high level of functional flexibility with the abandonment of potentially rigid

job descriptions

-reduction of hierarchies & the ending of status differentials

-a heavy reliance on team structure for disseminating information (team briefing), structuring work (team working),& problem solving (quality circles)

To this wood & Albanese(1995) added the following

a satisfying job design which have a considerable level of intrinsic satisfaction

-a policy of no compulsory lay off, redundancies, & permanent employment guarantees.

Emphasis on merit pay & profit sharing

A high involvement of employees in the mgt of quality.

High Involvement Management

This approach involves treating employees as partners in the enterprise whose interests are respected & who have a voice on matters that concern them It Is concerned with communication & involvement.

5 high involvement work practices that have been identified by Pil & Mac Duffie (1999) are

-online work teams

-off line employee involvement activities & problem solving groups

-job rotation

-Suggestion Programmes

-decentralization of quality efforts

Barriers to SHRM

Focusing on ST Performance

Lack of technical knowledge

Lack of strategic perspective

Difficulty in quantifying

Apprehensions towards training people

Resistance of employees