Lesson 1 introduction to shrm

INTRODUCTION TO STRATEGIC HRM

KATOPOLA, D. A @ NIT_2016

LESSON 1

05/03/2023 KATOPOLA, Daudi : Lesson 1 2

Contents • Introduction• Concept of SHRM• Objectives of SHRM• Approaches to SHM• Role of SHRM• Models of SHRM• Contribution of HRM to business strategy• Contemporary issues in HRM• Internal and external fit in SHRM systems• Summary


Preamble (1-3)• SHRM covers the concepts and practices that guide and

align Human Resource Management philosophy, tactical planning and practice with the strategic and long term goals of the organization, with a particular focus on human capital. It deals with the macro-concerns of the organization regarding structure, quality, culture, values, commitment, matching resources to future needs and other longer term people issues.


Preamble (2-3)• Strategic HRM gives direction on how to build the

foundation for strategic advantage by creating an effective organizational structure and design, culture, employee value proposition, systems thinking, an appropriate communication strategy and preparing an organization for a changing landscape, which includes downturns and mergers & acquisitions. Sustainability and corporate social responsibility come within the ambit of this discipline, especially with reference to organizational values and their expression in business decision making.


Preamble (3-3)• Strategic HRM emphasizes organizational codes of

ethics, managing the societal impact of business decisions, philanthropy and the role of the human resource professional in improving the quality of life of employees, their families and the community at large.


Introduction• Although most business leaders recognize the importance

of the people factor, few of them have been successful in using HR effectively, in such a way as to inspire success and to achieve a high-performance business strategy.


…cont’d • Business leaders who believe they can decide the HR

priorities without a deeper understanding of the relationship between business strategy, organization and people will find that their organization never becomes a truly high-performing company. HR managers who believe they can determine the HR agenda for any organization largely within the HR function itself will fail to add value to the organization they work for.


…cont’d • In our view, the CEO and the HR leader need to form a

natural alliance so that together they manage the balance between keeping the successful core activities of the past, doing away with other, less successful existing activities and building new capabilities for growth and future success.


…cont’d • What is needed more than ever before is a common view

on the business HR agenda that needs to be delivered in order for the organization to be successful overall. Rapid change is happening in all sectors of public and corporate life, and the ability to adapt to such change has become of strategic importance. Clarity on what needs to be done on the human side of the organization is vital. In a high-performance company, people behave in an inspired, responsible and decent manner. Such a company has a way of doing business whereby ‘heart and mind’ come together.


HR Practices corresponding to the stages of an organization’s life cycle Life Cycle Stages

HR Practices

Start-up • Flexible patterns of work• Recruitment of highly motivated & committed employees.• Competitive pay•Little formality

Growth • More sophisticated recruitment & selection• Training & development• Performance Mgmt process• Reward systems• Developing stable employee relations

Maturity • Attention to the control of labour cost • Focus on increasing productivity• Control compensation

Decline • Emphasis on rationalization of workforce & downsizing• Retraining & career consulting services


Concept of SHRM• In order to understand the meaning and nature of

Strategic HRM, the concepts of strategy and strategic management need to be understood.


Strategy meaning (1-2)• Strategy is a term that comes from the Greek strategia,

meaning "generalship." In the military, strategy often refers to maneuvering troops into position before the enemy is actually engaged


Strategy (2-2)Institutions CRDB

BankNMB Bank NBC Bank TBL Tahmeed

Assets Worth

Tsh5.3 trillion ($2.4 billion)

Tsh4.5 trillion ($2 billion)

$0.7 billion

Market Share

20% 17% 6%

Strategy Product Innovation

Close to customer

?? Quality Customer Care


Quote: ATE Employer of the Year-2016 (TBL)

"TBL certification demonstrates that delivering World Class human resources practices is possible in the country and

could be easily linked with the overall TBL's consistent high performance in the market."

-TBL Human Resource Director Mr. David Magese


Definitions in use• Some of the definitions in use include the following: • Strategy is that which top management does that is of

great importance to the organization. • Strategy refers to basic directional decisions, that is, to

purposes and missions. • Strategy consists of the important actions necessary to

realize these directions. • Strategy answers the question: What should the

organization be doing? • Strategy answers the question: What are the ends we

seek and how should we achieve them?


Strategic Management-As per general opinion, strategic management means strategic planning implemented by the management for solution of various problems arose in the area of production, employees,& finance to the business unit.


Scope of Strategic Management• To fix mission of the unit• To make favourable internal environment• Analysis & evaluation of External environment• SWOC analysis to be made• Selection of new alternatives to achieve mission• To develop grand strategy• To fix short-term annual targets• To raise resources & facilities• Evaluation & control on activities.


Stages in Strategic management• Strategic analysis

• Environmental analysis• Establish organizational direction

• Strategy formulation• Strategy implementation• Strategic control


Stages in Strategic management• Strategic analysis

• Environmental analysis• Establish organizational direction

• Strategy formulation• Human resource planning

• Strategy implementation• Work force utilisation and employment practices• Reward and development system

• Strategic control• Performance impact of human resource practices• Human resource evaluation


HR strategy ?“the pattern of planned human resource activities intended to enable an organization to achieve its goals”

- Wright and McMahan 1992

“the overall plan that leads the implementation of specific HRM functional areas. HRM strategies guide personnel decisions that ensure the best fit for the organization. All functional areas of HRM strategies need to match the overall business strategy”


HR StrategyHR Strategy is concerned with two key elements:

i. Determining the strategic objective ii. Developing a plan of action


Strategic Human Resource Management

Strategic Human Resource Management is is the practice of attracting, developing, rewarding, and retaining employees for the benefit of both the employees as individuals and the organization as a whole.


Objectives of SHRM

i. To ensure the availability of a skilled,commited, & highly

motivated workforce in the organization to achieve

sustained competitive advantage.

ii. To provide direction to the organization so that both the

business needs of the organization & the individual &

collective needs of its workforce are met.


Difference btn SHRM & Traditional HRM Traditional HRM SHRM

Focus of activity Employee relations Partnership with internal & external groups

Role of HR Reactive & transactional Proactive & transformational, change leader

Initiative for change

Slow & not integrated with larger issues

Fast,flexible & systematic

Time Horizon Short-term Consider various time frames

Control Bureaucratic control Organic control

Job design Focused job design Broad job design

Important investment

Capital,products,technology & finance

People & their knowledge skills & abilities

Accountability Cost centre Investment centre


Difference btn SHRM & HR StrategySHRM HR Strategies

• A general approach to strategic management to HR• Aligned with the organizational intention with future directions• Focus on long term people issue• Defines the areas in which specific HR strategies need to be developed • Focus on macro concern such as structure & culture• Strategic HRM decisions are built into strategic business plans

• Outcome of the general SHRM approach.• Focus on specific organizational intentions about what needs to be done.• Focus on specific issues that facilitate the achievement of corporate strategy.• Human resource strategy derived from SHRM


SHRM concernSHRM concern is to ensure

• HR management is fully integrated with the strategy and strategic needs of the firm

• HR policies cohere across policy areas and areas of hierarchy• HR practices are adjusted and used by line manages and

employees as part of their everyday work


Benefits of SHRM

i. Identifying and analysing external opportunities and threats that may be crucial to the company's success.

ii. Provides a clear business strategy and vision for the future.iii. To supply competitive intelligence that may be useful in the

strategic planning process.iv. To recruit, retain and motivate people.v. To develop and retain of highly competent people.vi. To ensure that people development issues are addressed

systematically.vii. To supply information regarding the company's internal

strengths and weaknesses.viii. To meet the expectations of the customers effectively.ix. To ensure high productivity. x. To ensure business surplus thorough competency


HRM Practices

Firm strategy Institutional / Political forces

HR Capital pool(Skills, abilities)

HR behaviorsFirm level outcomes

(performance, satisfaction,

absenteeism etc)

Resource based view of the firm

Cybernetics

Agency/transaction costs

Resource dependence institutional

Behavioral approach

Theoretical frame work of SHRM


Theoretical frame work of SHRM• Strategy driven

• Resource based view• Competitive advantage based on unique allocation of resources

{selection /Compensation package}• Behavioral view

• Control and influence the behaviors of individuals (Infosys)• Cybernetics systems

• Adoption or abandonment of practices based on feedback on contributions to strategy (Bosch – MICO)

• Agency/transactions cost view• Use of control systems, performance evaluation and reward systems etc

• (In the absence of performance evaluation strategy may not be pursued)

• Non-Strategy driven • Resource dependence and power theories

• Power and politics= legislation, unionization, control of resources, expectations of social responsibility.

• Institutional theory• In appropriate performance evaluation dimensions (inertia / rational decision

making appraisal


Four Components of SHRM

SHRM

Human Resource

Activities

Pattern & Plans

Purposeful


The VRIO Framework• VRIO framework a resource based view of an

organization determines the value of human resources for the organization on the basis of four criteria- value, rareness, imitability & organization.

VRIO

Rareness

Imitability

Organization

Value


Linking Business Strategy & HR StrategyBusiness Strategy HR Strategy

Cost Leadership Utilization HR Strategy

Differentiation Facilitation HR Strategy

Focus Accumulation HR strategy


Theoretical Perspectives of SHRM

SHRM

Fit Perspectiv

e

Functional perspectiv

e

Economic Perspectiv

e

Typological perspectiv

e


Theoretical Perspectives of SHRM• Fit Perspective-match its internal resources & skills with

opportunities available in the external environment.• Functional Perspective-An organization performs best

when each departmental unit maximizes its contributions limited to its unique area of expertise.

• Economic perspective- Human resources are a unique & distinguishable source of competitive advantage.

• Typological Perspective-Three distinct ‘types’ of HR strategies

Inducement Investment Involvement


The human resource environment • Global changes• Boarders and barriers• E-commerce• Emerging markets, new markets.• Technology• Demography• Culture

• Etc….• The imperative >>‘HR focus’


The human resource environment -General environment• Technology and organisational structure• Worker values and attitudinal trends• Management trends• Demographic trends• Trends in utilisation of human resources• International developments


The human resource environment -General environment

• Influence of technology • HRIS• Redeployment of HR staff to

operating units• New organisational structures

(Short / accountability)• Unbounded corporations• Virtual corporations / networked

organisations• Cellular organisations/guilds • Respondent organisations/

supply niche components• Stimulus for entrepreneurial

business

Technology and organisational structure

Worker values and attitudinal trends

Management trends Demographic trends Trends in utilisation of

human resources International

developments



• Ethical/moral issues • (older generation blaming

younger generation)• Time spent on work/ leisure• Work enjoyment / satisfaction

/appeals• Loyalty of employees

• Location near / far• Age

• Younger no loyalty and expect none

• New employee Perception before joining and after joining the job (extrinsic to intrinsic)

• (image, induction and orientation, socialization process)

• Emphasis on core values, cultures, family, social service)





developments



• Management of diversity• Work teams• Virtual teams• Human resource outsourcing• Open book management• TQM• Integrated manufacturing• Reengineering• Management of professionals• Managing of aftermath of Mrg &

Aqui





developments



• Aging work force (HMT)

• Baby boom-US, China • Labour Shortages• Racial diversity• Occupational distribution for women

• Dual career couples





developments



• Telecommuting / working from home

• Relocation from work• Growing use of temporary and contingent workers

• Employee leasing





developments



• COMESA• EU• SADC• WTO• EAC





developments


International strategy• Multinational, global and transnational strategies• Strategic alliances• Sustainable global competitive advantage• Globally competent managers• Location of production facilities


HUMAN RESOURCE ACTIVITY TYPOLOGY

Staffing planningBenefits of planningRetirement planningCompliance

Performance enhancementConsultingEmployee relationsLabour negotiationsExecutive compensationEmployee developmentManagement developmentRecruitment interviewing

< IMPORTANT TO EXECUTIVES >

PayrollBenefits administrationRetirement administrationEmployee recordsRelocation administrationRecruitment information processing

< IMPORTANT TO EMPLOYEES >

Recruitment information processingEmployee assistance programs

Strategic value of activity

Low

High

RelationshipTransactional Type of HR activity


Benefits of integrating HRP with Strategic planning

• Generates more solutions to complex organizational problems

• Ensures consideration of human resources in organizational goal setting process

• Ensures consideration of human resources in assessment of organizational abilities to accomplish goals and implement strategies

• Reciprocal integration prevents strategy formulation based on personal rigidities/preferences

• Facilitates concurrent consideration of strategic plans and managerial succession.


Strategic components of HRM relevant to internal fit

• Management awareness• Management of the function• Portfolio of programs• Personnel skills• Information technology• Awareness of the environment


HR Practitioners Role • The HR managers have keen role in the effective planning and implementation of

the policies and decisions that in tune with the business changes. 1. They should act as strategic partners and be proactive in their role than mere

reactive, passive spectators.2. The HR managers should understand how far their decisions contribute to

business surplus incorporating human competency and performance to the organisation.

3. Strategic HR managers need a change in their outlook from seeing themselves as relationship managers to strategic resource managers.

i. Kossek (1987, 1989) argues that major HRM innovations occur when senior management takes the lead and adoption of innovative SHRM practices is dependent on the nature of relationship of the HR Department with the CEO and the line managers.

ii. Legge (1978) commenting on the actions of the personnel practitioner in the innovation process suggests that adoption of an innovation by an organization depends largely on HR practitioners' credibility with information and resource providers.

4. HR Department and HR managers in these innovative organizations play a strategic role (Ulrich, 1997) linking the HR strategy with the business strategy of the organization.

5. A crucial aspect concerning SHRM is the concepts of fit and flexibility. The degree of fit determines the human resource system's integration with organization strategy. It is the role of HR Managers to ensure this fit in between Human Resource System with the Organization Strategy.


Human Resource Evaluation• Overview of evaluation• Approaches to evaluation• Prevalence of evaluation• Evaluating strategic contributions of traditional areas• Evaluating strategic contributions in emerging areas


Human Resource Evaluation• Overview of evaluation• Approaches to evaluation• Prevalence of evaluation• Evaluating strategic

contributions of traditional areas

• Evaluating strategic contributions in emerging areas

• Scope of evaluation• Strategic impact• Level of analysis• Criteria• Level of constituents• Ethical dimensions





• Audit approaches• Analytical approaches• Quantitative and

qualitative measures• Balance scorecard

perspective• Benchmarking• Industry influences





• Little• Results not revealed





• HRP• Staffing• Training• Performance evaluation

systems• Compensation systems• Utility analysis• labour and employee

relations





• Equal employment opportunity and management of diversity

• Quality readiness

05/03/2023 KATOPOLA, Daudi : Lesson 1

Q & A

54

Recruiting & HR

Lesson 1 introduction to shrm