Strategic Human Resource Management 1

Overview Introduction HR Planning Factors affecting HRP Training and Development

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HRM
At Harvard Business School , prestigious HRM course was introduced 1981. Simultaneously other interpretations were developed in Michigan and New York. HRM shot into prominence from 1981. Human Resource Approach: Focuses on total organization. Grew out of organizational science trend. Combines learning from the previous movements with current research on behavioural science.

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HRM

HRM is the effective use of HR to enhance organizational performance.

HRM- is activity an organization conducts to use its HR effectively. HRM - proposes that people are a capital resource (Human capital) and return on people is the measurable outcome.

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HRM involves
Modern HRM is a HRM involves procedures

combination of principles of Sociology Psychology Philosophy Sociology Economics Management

and practices which help attainment of Individual Organizational Social goals

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Suggested reading

Personnel Management - Edwin Flippo Human resource management Cynthia Fisher, Schoenfeldt Shaw Organizational Behaviour Stephen Robbins (13th edition) Human Resource Management Garry Dessler Human Resource Management P.Subba Rao News papers and HR journals for current senario.

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Introduction
HRM starts from organizations needs for HR with

demand rather than supply. HRM gives equal importance to individual and organizational development. Why care about HRM?? Impact on you as employees Impact on you as managers Potential future roles as HR professionals Impact of HRM on organizations

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Introduction
HRM Is deep rooted comprehensive activity taken up to improve the quality of human beings who are vital assets of the organization. Is subsystem of general management system. Is directed towards managerial needs for resource in organization, with greater emphasis on planning, monitoring and control rather than problem solving and mediation. Is one of the most challenging and complex fields of study and work.
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Importance of HRM
Importance of HRM has increased since the 1980s. Why?
People determine the success and failure of organizations

and projects. Globalization Government regulation Stronger knowledge/research base Changing role of labor unions Challenge of matching worker expectations with competitive demands Learning organizations, Knowledge workers,knowledge customers.
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Human Resources Management

HR Management - All the activities that are necessary to acquire, train, appraise, and pay the organizations employees.

Strategic Human Resource Management The process of aligning the firms HR Management goals and policies with the strategic goals of the enterprise to improve business performance.

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Human Resources Management

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HRM Functions

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Objectives of HRM

Objectives of HRM

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HRM functions
Functional areas of HRM - All activities connected with

the employees and all decisions related to human relations. Functions of HRM seek to secure the maximum return with minimum investment on HR. SHRM encompasses every activity relating to HR in an organization and communication system which reduces militancy. Physical assets loose their value by constant and regular use ,value of HR increases through appropriate utilization and proper development.

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Organizational structure and design

Organization design: deals with structural aspects of

organizations.
Aims at analyzing roles and relationships to ensure

collective effort is organized to achieve specific ends.

Organizational structure: The formal arrangement of jobs

within an organization. How job tasks are formally divided, grouped and coordinated. The pattern of formal relationships. Policies & procedures, evaluation systems , Reporting structure

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Organizational structures
Six elements managers need to address when they design
1.

2.
3.

4.

Organizations Structure Work specialization : The degree to which tasks in the organization are divided into separate jobs with each step completed by a different person. Departmentalization : the basis by which jobs are grouped together. Chain of command : The unbroken line of authority that extends from the top of the organization to the lowest level of rank and clarifies who reports to whom. Span of control : The number of subordinates a manager can efficiently and effectively direct.

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Foundations of Organizational structure

Centralization & Decentralization The degree to which decision making is concentrated at a single point in the organization. 6. Formalization The degree to which jobs within the organization are standardized. In highly formalized job - very little discretion on what, when and how to do the job. Basis --employees can be expected to handle the same input in the same way resulting in consistent and uniform output.
5.

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Departmentalization by Type

1. 2. 3. 4. 5.

Functional : Grouping jobs by functions performed Product: Grouping jobs by product line Process : designing, cutting, stitching Customer: Grouping jobs by type of customer and needs Geographical: Grouping jobs on the basis of territory

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Structural Choice is Important.

Structural Choice is Important.

It focuses attention on particular areas Shapes how resources will be used Directs communication flows Defines control and other processes Illustrates peoples roles relative to others roles Structure must be more flexible ( decentralized authority) when environmental change is rapid.

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Structural decisions
Structural decisions are influenced by overall strategy of the organization
1. Size of the organization - Firms change from organic to mechanistic organizations as they grow in size. Technology use by the organization Degree of environmental uncertainty -Dynamic environments require organic structures; mechanistic structures need stable environments.
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2. 3.

Common Organizational Designs

Traditional Designs
1. Simple structure (SS) - Low departmentalization, wide spans of control, centralized authority, little formalization 2. Functional structure - Departmentalization by function. Operations, finance, HR, Product research and development 3. Divisional structure - Composed of separate business units or divisions with limited autonomy under the coordination and control the parent corporation.

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Traditional organizational structure

The bureaucracy: A structure with highly routine operating tasks achieved through specialization Highly formalized rules and regulations Tasks are grouped into functional departments Centralized authority Narrow spans of control - Decision making follows chain of command. Key concept of Bureaucracy is standardization.

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Characteristics of the Classical Bureaucratic Model (Max Weber)

Emphasis on obeying one leader. Reliance on rules that specify employee rights and duties. Selection based on technical competence. Advancement is based on longevity and competence. Relationships are impersonal. Labor is divided and individual specialization is encouraged. Strengths Minimum duplication of personnel and equipment Enhanced communication - Centralized decision making

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Problems with bureaucracy

Weaknesses - Subunit conflicts with organizational goals

Obsessive concern with rules and regulations

No discretion to deal with problems Social and psychological aspects of the organization are

ignored. Rules and procedures (means) replace goals (ends). Rigid communication system - slow information flow. Inhibits responses to environmental changes.

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Matrix-Project Structure

Assigns specialists from different functional areas to work on projects. Specialists return to their areas when the project is completed. Employees continuously work on projects - move on to the next project as one is completed. Advantages - Fluid and flexible design. Can respond to environmental changes. Faster decision making. Disadvantages - Complexity of assigning people to projects. Task and personality conflicts.

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Matrix Structure

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Contemporary Organizational Designs

Team Structure -Entire organization is made up of work

groups or teams.
Advantages - Employees are more involved and

empowered. Reduced barriers among functional areas.

Disadvantages - No clear chain of command. Pressure on

teams to perform.

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Contemporary Organizational Designs

Boundaryless Organization
Concepts: Eliminate vertical (hierarchical) and horizontal

(departmental) internal boundaries. Eliminates the chain of command Has limitless spans of control Uses empowered teams rather than departments
Eliminates external boundaries: Uses virtual, network,

and modular organizational structures to get closer to stakeholders.

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Contemporary Organizational Designs

Virtual Organization - consists of a small core of fulltime employees.
Temporarily hires specialists to work on opportunities that arise. A small, core organization that outsourcers its major business functions. Highly centralized with little or no departmentalization. A temporary or permanent coalition of autonomous organizations. Pool resources, capabilities and information to achieve common business objectives.
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Contemporary Organizational Designs

4. Network Organization

A small core organization that outsources its major business functions (e.g., manufacturing) in order to concentrate what it does best. + Maximizes effectiveness of core unit - Fragmentation. Difficult to control systems and develop employee loyalty.. Success dependent on locating resources 5. Modular Organization A manufacturing organization that uses outside suppliers to provide product components for its final assembly operations.
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Contemporary Organizational Design Challenges

1.
2.

Keeping Employees Connected

Building a Learning Organization Characteristics of a learning organization: An open team-based organization design that empowers employees Extensive and open information sharing Leadership that provides a shared vision of the organizations future, support and encouragement A strong culture of shared values, trust, openness, and a sense of community.
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Environmental influence
HRM cannot exist in vacuum. It is an interdependent

activity. Environmental factors that influence the organization through HR is called in STEPIN Social Technological Economic Political International Natural

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Strategic HRM

SHRM The linking of HRM with strategic goals and objectives , to improve business performance and develop organizational cultures that foster innovation and flexibility. Organizational use of employees to gain or keep a competitive advantage against competitors

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Linking Corporate and HR Strategies

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Translating Strategy into HR Policy and Practice

Basic Model of How to Align HR Strategy and Actions with Business Strategy

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The HR Scorecard Approach

HR scorecard Measures the HR functions effectiveness and efficiency in producing employee behaviors needed to achieve the companys strategic goals. Creating an HR scorecard Must know what the companys strategy is. Must understand the causal links between HR activities, employee behaviors, organizational outcomes and the organizations performance. Must have metrics to measure all the activities and results involved.

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The HR Scorecard Approach to Formulating HR Policies, Activities, and Strategies

Figure 311

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HR Managers Strategic Roles

HR professionals should be part of the firms strategic planning executive team.
Identify the human issues that are vital to business strategy.

Help establish and execute strategy.

Provide alternative insights. Are centrally involved in creating responsive and market-driven organizations. Conceptualize and execute organizational change.

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The Basic Architecture of HR

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