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STRATEGIC HRM IN

ACTION
LECTURE 5

Strategic Role of HR :
Strategic Nature of HRM
Human resource practitioners perform in two

areas :
1) Transactional roles : functional activities
that gives service to the organization.
2) Strategic roles: Work with line
management in the continuous development
and implementation of business, values,
goals, and strategies

Proactive roles of HRM


David Ulrich Model (1998)
1. Strategic partners
2. Administrative experts.
3. Employee champions
4. Change agents
Ulrich and Brockbank Model (2005)
1. Strategic partner - multiple roles consisting of business

expert, change agent, strategic Hr planner , knowledge


manager, and consultant
2. Employee advocate
3. Human capital developer
4. Functional expert
5. Leader

Specific Strategic roles of


HRM
Understand the strategic goals of the organization.
Appreciate the business imperatives and

performance drives.
Help senior management to understand
implications of its strategy for the HR function.
Know how HR practices contribute to the
achievement of the strategic goals.
Ensure that their activities provide added value of
the organisation.
Be aware of the broader context in which HRM
operates.

Specific Strategic roles of


HRM
Think in terms of the bigger and longer

term picture of HR goals and means to


achieve those.
Believe in and practice evidence based
management.
Be capable of making a powerful
business case for the development of HR
strategies.
Comprehend how sustainable
competitive advantages can be obtained
through the human capital of the organization.

Firms strategy and HRM


strategy relationship
Corporate Strategy

HR Strategy

Growth

Aggressive hiring,
training , promotion,
layoff, termination

Retrenchment

Early retirement

Diversification

New corporate staff


configuration,
promotions, training
and hiring.

Merger, acquisition

Corporate
acculturation, hiring
and laying off

Firms strategy and HRM


strategy relationship
Differentiation

Decentralized
hiring and training

Low cost provider

Cost reduction, wage


cuts, efficiency
improvement

Luxury/High quality

Hiring highly skilled


personnel , training ,
special compensation

Divestitures

Staff reconfiguration,
layoff , reassignment .

Impacts of Strategic HRM


Manifold

effects on the performances of


human resources:
1. It influences attracting, developing
and retaining high quality people by
matching people to the strategic and
operational needs of the organization.
2.
It
makes
talent
management
successful by making appropriate strategies
of rewards, advancement, challenging jobs,
growth and recognition.

Impacts of Strategic HRM


3.

Develops the big idea about core


values , leadership, work-life balance,
managing diversity, secure employment etc to
make the organization a great place to work.
4. Provides individuals with stimulating
and interesting work and gives them
autonomy and flexibility to perform these
jobs well to enhance job satisfaction which will
lead to greater performance and productivity.

Impact of Strategic HRM


5. Makes the organization a learning and

development center.
6. Capable HRM to manage knowledge
and intellectual capital.
6. Increases engagement, commitment, and
motivation of the people by providing them
identity and core values.

Impacts of Strategic HRM


7.

Develops a performance culture


encouraging
high
performance
in
productivity,
quality,
customer
service,
growth, innovation etc.
8. Develops motivation, commitment,
and job engagement by designing value
added reward structure and management.
10.
Strategic
HRM
affects
overall
synergistic value of the organization.

HRM Strategy Formulation Process


Chapter- 7
Formulation

of strategic human resource


management is a process of crafting
operational policies and practices related to
various functions aspects of human resource
management
in
order
to
make
the
organization and the people
dynamic,
effective, innovative, and of quality to provide
the best services to the customers.
Look at the process in the next slide.

Strategic HRM in Action


Chapter - 7
Vision
Corporate
Strategies

Mission

Formulating Mission
Mission is statement given by the

organization to the people of the society to


get social legitimacy for it product and
business.
Mission presents
Who we are.

What we do.
Why we are here.

Determining Vision
Vision is a road map of a companys future

providing specifics about technology and


customer focus, the geographic and product
markets to be pursued, the capabilities it plans
to develop, and the kind of company that
management is trying to create.
Strategic

vision
reflects managements
aspirations for the organization and its business,
providing a panoramic view of the destiny.

Objectives Setting
Objectives

converts
the
managerial
statement of strategic mission and vision
into specific performance targets results and
outcomes the organization wants to achieve.

Objectives

would be the yard sticks for


tracking organization's performance and
progress in a realistic terms.

Crafting Strategies
A strategy of a company reflects managerial

choices among alternatives and signals


organizational commitment to particular
products, markets, competitive approaches
,and ways of operating the enterprise.
It consists of the competitive efforts and
business approaches that managers
employ to please customers, compete
successfully, and achieve organizational
objectives.

Crafting Strategies
Strategies are of two types

a) Corporate strategies
b) Business strategies

Corporate strategies
Corporate

strategy is the
overall managerial game plan for
a diversified company that gives
an umbrella over all companies
under a parent company.

Business strategies
Business strategies refers to the

managerial game plan for a single company.


It is a plan for creating competitive advantage
in the market.
Cost leadership strategy, product
diversification strategy, quick response
strategy etc. are the business strategies.

Formulating HRM
Strategy
Now, we are to formulate strategic human

resource management strategy under the


umbrella of mission, vision and basic
objectives of the organization.
We know that strategic HRM is a close fit or
alignment
between business and human
resource strategy.- Batt (2007).

Formulating Strategic
HRM
In other words, strategic HRM is an approach

that defines how the organization's goals will


be achieved through people by means of
human resource strategies and integrated
human resource policies and practices.
Armstrong (2008).
We have to set
1. The philosophy of managing people.

Formulating Strategic
HRM
There are three types of approach here i) Hard approach
ii) Soft approach.
iii) Combined approach.
The management can choose the combined

approach as it can apply either approach


which will best fit with the situation to get the
best result.

Formulating Strategic
HRM
2. The structure of the

organization.
3. The rewards system.
4. The training and
development strategy.
5. The performance appraisal
strategy.

Formulating Strategic
HRM
6. The industrial or employee relations

strategy.
8. The benefit and incentive strategy.
8. The organization development strategy.
This is formulated to make the organization
adaptive to changes and
reengineer the
process and positions to improve those to be
effective in the context of the environment.
9. The total quality management strategy.

Formulating Strategic
HRM
10. The integration strategy.
This strategy is designed to integrate human
resource strategy with business strategies so
that business strategies are well implemented
by the employees through their process of work.
It is done through
Clear, purposeful and articulated corporate and
business strategies.
Powerful driving force.
Ownership of top management.

Team working.
Participation of HR in corporate/business strategy

formulation .
Union involvement .
Development orientation of HR strategies.
The process of formulating strategic human resource
management is a continual process because
learning from mistakes will make process more
effective and dynamic to develop the organization
and the people in it.

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