INTRODUCTION TO STRATEGIC HUMAN RESOURCES MANAGEMENT

CHARLES-HENRI BESSEYRE DES HORTS, PHD ASSOCIATE PROFESSOR HEC PARIS

Course contents overview

1. Definition of HRM, Evolution of HRM, The Traditional Roles

2.
3.

Strategy, Basic Concepts and Evolution

The Strategic Roles of HRM: Business Partner, Value Creation, Outside-In

4.
5.

Strategy & HRM: Implementation, Contribution & CoConstruction

Strategic Decisions where HRM can play a Key Role: Market, Technology, Globalization, Mergers & Acquisitions
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Course contents overview (contd)

6. 7. 8. Key competencies required for HRM to be strategic HR Strategy: The Building Blocks of Strategic HRM Reinforcing Strategic HRM Through Stakeholders' Value Creation

9.

Managing Organizational Risks and Sustaining

Competitive Advantage

10. An Illustrative Case: SAS Institute

2 mini-quizzes after 3rd and 7th sessions + final test
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Lecture 1 Definition of HRM, Evolution of HRM, The Traditional Roles

CHARLES-HENRI BESSEYRE DES HORTS, LECTURE 1

Agenda of the Session

Definitions of HRM The HRM System

Evolution of HRM
Traditional Roles of HRM Administrative

Legal
Psychological Managerial

CHARLES-HENRI BESSEYRE DES HORTS, LECTURE 1

Definitions of HRM
Human Resources Management (HRM) refers to the policies, practices, and systems that influence employees behavior, attitudes and performance. HRM seeks to achieve competitive advantage through the strategic deployment of a highly committed and capable workforce, using an integrated array of cultural, structural, and personnel techniques HRM is characterized by a number of practices: strategic workforce planning, recruitment & integration, job design & grading, performance/potential assessment, total compensation, careers & mobility, training & development
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Human Resources Management System

STRATEGIC OBJECTIVES
Strategic Workforce Planning
JOB DESIGN & GRADING

Recruitment/ Integration

Training & Development

COMMUNICATION TECHNOLOGY HR CONTROL

Total Compensation

Careers/ Mobility

PERFORMANCE / POTENTIAL ASSESSMENT

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Evolution of HRM: Expertise + Partnership

Individual
Patnership with Managers/Employees Strategic Roles Outside-in (Stakeholders)

Value Creation (Innovation) Business Partner (Influence) Managerial (Tools) Psychological (Motivation) Legal (Protection) Administrative (Discipline)
1950s 1970s 1990s 2000s

Collective

Expertise
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Traditional Roles

HR function transformation
Decisions Services
Provide efficient and effective services to customers Contribute to the improvement of organizational decisions

TALENTSHIP

Control
Comply with norms and control management processes

HUMAN RESOURCES

PERSONNEL
Source: adapted from Boudreau & Ramstad, 2007
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From personnel to human resources

Personnel Mgt
Cost Administrative Collective Static Mechanistic Short Term Rigid Quantitative

Human Resources Mgt

Investment Strategic Individual/Group Dynamic Organic Long Term Flexible Qualitative

Equality

Equity

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Administrative role
Foundation of HRM: record keeping of all basic people activities + compliance with local legal rules Recruitment Job assignment Training Career Health & Safety Compensation Benefits Absenteeism Turnover Etc
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Administrative role (contd)

Mass production of data and transactional work: efficiency key issue Key issues of accuracy, precision and maintenance of the personnel data files at the local and central HRM levels HRM Information Systems (HRIS) constitute the backbone of all administrative activities e-HR (Internet-based HRIS) split the administrative role between HRM function, managers and employees (cf. managerial role)
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Legal role
Compliance with local legal rules: employment (recruitment, anti-discrimination, dismissals) , work environment (working time, physical environment), compensation & benefits (minimum wage, equal pay), training & development (budget, target populations) , health and safety, labor relations Increasing importance in HRM because of the change of labor laws in many countries around the world towards more protection for employees and more rules to apply for employers: Continental Europe stills gives the highest level of protection

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Legal role (contd)

Labor relations focus: Personnel representatives: defense of compliance with legal rules Union representatives: negotiation of new local norms and legal rules Work councils: information and/or consultation on company situation (in Germany: codetermination of key strategic decisions) Transnational labor structures in multinational companies: global norms

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Psychological role
Impact of HRM is critical to reinforce employees motivation and engagement: obtaining the extra mile is the key objective Many motivation theories explain HRM practices: two key ones

Maslow Needs Hierarchy

Selfactualization Recognition Social/Belonging Security

Adams Equity Theory

People are motivated when the ratio between contribution and reward is balanced Contribution Reward Lots of consequences for HRM: Individualization of HR decisions Perception of fairness Managers involvement in HR decisions
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Basic/Physiological

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Managerial role
The stage of development of HRM that is the most common in organizations today: HR practices widely shared with internal customers (managers & employee) with HRIS and/or e-HR Development of professional practices using sophisticated tools internally developed or acquired from external providers, for example: recruitment & integration: campus management, job profiles, tests, interviews, assessment centers, induction programs training & development: needs assessment, competencies gap analysis, training plan, personnel reviews, career tracks, mobility programs
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Managerial role (contd)

Development of professional practices using sophisticated tools internally developed or acquired from external providers, for example: performance management: performance evaluation, job grading, salary surveys, compensation packages (fixed/variable, short/long term), benefits plan (global vs. individualized, rigid/flexible: cafeteria) talent management: employer branding, talent identification, specific development programs, compensation packages, perquisites
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Key learning points of Session 1

HRM is a fairly recent field in management sciences and has experienced a tremendous change in the last 50 years from traditional to strategic roles, partly thanks to technology (internet) HRM is built upon policies, practices that form a system aiming at increasing company performance and competitive advantage Administrative role: foundation of HRM to ensure that HR decisions are based on accurate and reliable data, HRIS are critical

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Key learning points of Session 1 (contd)

Legal role: compliance with legal rules and norms with increasing pressure from many stakeholders (states, communities, unions) Psychological role: get from the employees the extra mile through motivational and engagement programs, key issue of fairness in HRM Managerial role: development and use of sophisticated tools (using technology), involvement of managers and employees in HR decisions

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