Dr P.SudarkodiAssociate Professor

Koshys Institute of Management Studies

Bangalore

Topic :- Introduction to SHRM

Subject :- Strategic HRM

Class :- IV Semester MBA

Human resources refer to the people who work in an organization.

Human resource management is concerned with a holisticapproach towards the management of people working in anorganization, who contribute to the achievement of organizationalobjectives.

Strategy is the determination of the long term goals and objectivesof an organization, and the allocation of resources necessary forcarrying out these goals.

It is a unique comprehensive and integrated plan to attain the

objective.

Importance of strategies

Gives direction

Effectiveness

Optimum resource allocation

Program all activities

Defines accountability

Enhance communication

Enhance decision making

Like strategy, HR strategy is concerned with two key elements:

1. Determining the strategic objectives(what goals is the strategy supposed toachieve? For example, the goals may behigh productivity, reduced accidents,etc.)

2. Developing a plan of action (how will thehuman resources be organized andallocated to accomplish the objectives ofthe organization?)

Human resource strategy, therefore,

involves the planned and effective use of

human resources by an organization to

help it gain or maintain an edge over its

competitors.

An organization is said to achieve

competitive advantage when it is able to

gain and maintain edge over its

competitors by differentiating its products

or services from those of its competitors,

thereby increasing its market share.

STRATEGIC HRM: Definition and

Components

Strategic HRM is concerned with the relationshipbetween HRM and strategic management in anorganization.

Strategic human resource management is anapproach which relates to decisions about thenature of employment relationship, recruitment,training, development, performancemanagement, reward and employee relations.

intended to enable the firm to achieve itsgoals’.

An organization uses a combination of

several resources- tangible and intangible- in

the pursuit of its objectives. These resources

can be grouped into three basic types:

1. Physical capital resources- the plant,

equipment, and finances.

2. Human capital resources-the skills, judgement,

and intelligence of the organization’s

employees.

An organization may have huge capitaland most advanced machinery, but if itdoes not have capable, motivated, andhigh performing employees, theorganization is not likely to demonstratesustained levels of high performance.Since all physical and capital resourcesdepend on people for their efficient use,maintenance, and management, thequality of the people of an organization isimportant in attaining competitiveadvantage.

Strategic HRM is based on HRM principles

incorporating the concept of strategy. So if

HRM is a coherent approach to the

management of people, strategic HRM

now implies that what is done on a

planned way that integrates organizational

goals with policies and action sequences.

Objectives of SHRM

The major objectives of SHRM are as follows:

To ensure the availability of a skilled,committed, and highly motivated workforce inthe organization to achieve sustainedcompetitive advantage.

To provide direction to the organization so thatboth the business needs of the organization andthe individual and collective needs of itsworkforce are met. This is achieved bydeveloping and implementing HR practices thatare strategically aligned.

Strategic HRM is most likely to be practiced inorganizations with the following characteristics:

•Strong, visionary and often charismatic leadership from the top.•Well articulated missions and values.•A clear expressed business strategy which had been implemented successfully.•A positive focus on well understood critical success factors•The organization offers a closely related range of products or services to customers.•A cohesive top management team.•A personnel/HR director who plays an active part in discussing corporate/business issues as well as making an effective and corporate/business-oriented contribution on HR matters.

EVOLUTION OF SHRM

The HR function has evolved over time.

In India, the Tata Iron and Steel Company

(TISCO) was one of the first organizations to set

up a personnel department in the year 1947.

The history of the function pre-dates Taylor’s

theory of scientific management and Fayol’s

administrative theory. However, it was only

during the 1930s and 1940s that the function

grew in significance, largely due to war-time

imperatives.

Evolution of the HR Function

1. PERSONNEL MANAGEMENT

2. HRM (early 1970s)

3. SHRM (early 1980s)

1. PERSONNEL MANAGEMENT

Part of mechanistic organization

Bureaucratic

High centralization

High formalization

Low flexibility

2. HRM (early 1970s)

Part of organic organization

Cross-hierarchical and cross-functional

teams

Decentralized

Low formalization

Flexible

3. SHRM (early 1980s)

Convergence between HRM and business

strategy

Proactive HRM

Concerned with organizational

effectiveness and performance.

EVOLUTION OF SHRM THOUGHT

The success of Japanese firms in the 1980s wasattributed mostly to their Human Resourcepractices and organizational and nationalcultures.

This realization attracted attention to the crucialrole of the HR function in providing sustainablecompetitiveness.

There is growing fusion of personnelmanagement, industrial relations, humanresource development and knowledgemanagement which combinedly constitutes thefield of Strategic Human Resource Management.

Its key characteristics are best summarized by Session (1989):

1. A stress on the integration of personnel policies both with one another and with corporate planning more generally;

2. The focus shifts from management-trade union relations to management- employee relations, from collectivism to individualism; and

3. There is stress on commitment and the exercise of initiative, with managers donning the role of ‘enablers’, coaches and facilitators.

DIFFERENCE BETWEEN TRADITIONAL HRM & SHRM

Basis Traditional

HRM

SHRM

Responsibility

for HR

programmes

Staff personnel in

the HR

department.

Line mangers; all

managers

responsible for

people are HR

managers.

Focus of

activities

Employee

relations-ensuring

employee

motivation and

productivity,

compliance with

laws.

Partnerships with

internal (employees)

and external

(customers,

stakeholders, public

interest groups)

groups.

Role of HR Reactive and

transactional.

Proactive and

transformational,

change leader.

Initiative for

change

Slow,

piecemeal, and

fragmented, not

integrated with

larger issues

Fast, flexible, and

systematic, change

initiatives

implemented in

concert with other

HR systems.

Time

horizon

Short-term Consider various

time frames as

necessary (short,

medium, or long-

term).

Control Bureaucratic

control through

rules,

procedures, and

policies

Organic control

through flexibility,

as few

restrictions on

employee

behavior as

possible.

Job design Focus on

scientific

management

principles-

division of labor,

independence,

and

specialization.

Broad job

design, flexibility,

teams and

groups, and

cross-training

Important

Investments

Capital,

products,

technology, and

finance

People and

their

knowledge,

skills and

abilities.

Perception Cost centre Investment

centre

Steps In SHRM

1. Aligning business and HR needs

2. Developing your HR strategy

3. Organisational performance

4. Organisational design and structure

5. Strategic resourcing

6. Organisation development

7. Compensation and benefits

8. Organisation culture

Approaches of SHRMResource based approach-fit between

resource and opportunity

High performance approach-

Increase pf,share,produ,quality,cus ser

good rec,training,per,benefits

High commitment approach-trust

High involvement approach-partner

Universalistic Approach –hrm-shrm

Configurationally approach-

alignment(ver/hori)(int/ext)

HR Challenges for the indian

companies

Decreasing no. of committed employees.

Finding the right people.

Retention of employee

Competitive compensation and benefit

Recruiting talent becoming more difficult

Knowledge transfer from senior to newer

employees.

Problem in alighting hr strategies' with

business strategy.

Development Hr infrastructure.

Shaping and managing future applicants

Managing hr cost and accounting

Managing retirement problems

HR Strategies to be followed by Indian

company to overcome the challenges they

face.Talent retention

Talent acquisition(RRR)

Competitive work environment

Align individual goal to orn goal

Career development

Succession planning

Competency mapping

Knowledge management

HR Environment

Role of HR Manager

Administrative role

Policy Maker

Advisor

House keeper

Counsellor

Welfare officer

Legal Advisor

Operational Role

Recruiter

Trainer and Motivator

Liaison officer

Mediator

Employee champion

Strategic Roles

Strategic Partner

Change Champion

HR has to understand the Envi

Internal

Extenal

Economic Factors

Supplier

Customer

Competitor

Globalisation

Cultural Factors

Attitude

Behaviour

Time dimension

Reward system

Ethics

Climate

Social Factors

Csr

Evi friendly

Pay Tax

Awareness prog

Legal factors

Follow the legislature(Act)

Follow constitution

Article-14-equality

-15no discrimination based on caste or religion

-23 restricting forced labour

38(d)-men and women are equal

42-maternity leave

43(a) worker participation in management

Internal envi

Mission, Policies

Orgn culture

Abstract-belief,feeling,values

Material-dresscode,premises,product

Orgn Structure

HR system R&S

T&D

Comm

Per App

WLB

Importance of SHRM

Cost effective engagement of labour

Meet changing needs

Exploitation of emerging opportunities

Provides clear-cut goals,direction and

future focus.

Helps in planning and executing org

change

Optimum utilization of resource

Develop knowledge and skill.

Enhance coordination

Motivates employee.

Base for measurement.

Barriers to SHRM

Absence of long term orientation

Lack of Strategic Reasoning(no experience in SM)

Lack of adequate support from top manager

Resistance from labour union

Fear of failure

Rigid HR Policy

Fear of Attrition

Absence of measurement techniques(HR manager)

Overcoming Barriers of SHRM

Perform through SWOT analysis/PESTLE

Formulate strategy

Gain support

Access barrier

Manage Change

Set up action plan

Implement

Follow up

Role of HR as Strategic in Planning

Act as Business partner-connect people,

tool, and strategy

Set best practices-modern HR

practice/active function

Act as change agent-motivating emp

Innovative ideas-open minded and

creativeness.

THANK YOU