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STRATEGIC HUMAN RESOURCE MANAGEMENT

Michael Armstrong

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THE CLOUDY NATURE OF STRATEGY

‘Strategy consists
of illusions in the
‘Strategy is ‘There is a gap board room.’
problem solving in between the John Purcell
unstructured rhetoric and the
situations.’ reality of
SHRM.’
Lester Dignam
Lynda Grattan

‘Strategy is often
‘Strategy is ‘Strategy is a fragmentary,
emergent and pattern in a evolutionary and
flexible.’ stream of largely intuitive.’
Sean Tyson activities.’
James Quinn
Henry Mintzberg

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SO WHAT IS STRATEGIC HUMAN
RESOURCE MANAGEMENT?

Is it about long-range strategic planning?

Is it about day-to-day strategic management?

Or is it about both?

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STRATEGIC HRM DEFINED

Strategic HRM is the process of


defining how the organization’s goals
will be achieved through people by
means of HR strategies and
integrated HR policies and practices.

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MODEL OF STRATEGIC HRM

Strategic HRM

Strategic management – HR strategies –


strategic role of HR overall/specific

Strategic choice

Strategic analysis

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SO WHAT IS THE STRATEGIC
ROLE OF HR SPECIALISTS?

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VIEWS ON THE STRATEGIC BUSINESS PARTNER CONCEPT

‘My credibility depends on ‘The CIP thinks that we will


running an extremely all be strategic business
efficient and cost-effective partners, and we’re not, you
administrative machine… know. We have to deal with
If I don’t get that right, and day-to-day HR issues that
consistently, then you can arise in the business.’
forget about any big ideas.’ Student practitioner
HR Director

‘Give me a break! It’s so demeaning. ‘The term worries me to death. HR has to be


How many people in marketing or an integral and fundamental part of
finance have to say they are a developing the strategy of the business. I
partner in the business? Why do we don’t even like the term ‘close to the
have to think that we’re not an business’ because, like ‘business partner’, it
intimate part of the business, just implies we are working alongside our line
like sales, manufacturing and management colleagues but on a separate
engineering? I detest and loathe the track, rather than people management being
term and I won’t use it.’ an integral part of the business.’
Tim Miller, Standard Chartered Bank Alex Wilson, BT

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HR’s STRATEGIC ROLES

Formulate integrated
HR strategies

Work with line


managers to
Contribute to the support the
development of achievement of
business strategies their business
goals

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SEVEN STEPS TO BEING STRATEGIC
Practice
Make evidence-
convincing based
business management
case
Act as for
change innovation
agent
See the big
picture
Appreciate
how HR
can add
value
Understand
the
business
Aware of
business
context

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SO WHAT ABOUT HR STRATEGY?

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HR STRATEGY AREAS

Specific:
Overall:
• organization
• performance
development
• engagement
• corporate social
• ‘the big idea’
responsibility
• human capital
• resourcing
advantage
• talent management
• HRM process
• learning and
advantage
development
• etc
• employee reward
• employee
relations
• employee
well-being

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EXAMPLES OF OVERALL HR STRATEGIES

We want GSK to be a
A strong focus on the
place where the best
overall effectiveness Maintain people do their best
of the organization, its competitive work. GlaxoSmithKline
direction and how it's advantage by
performing. There is continuing to
commitment to, belief attract very high
in, and respect for calibre people.
individuals. New Boots
Forest Council

Staff who are enjoying


themselves, are being
The only HR strategy Stimulate changes
supported and
you really need is the on a broad front
developed, and who
tangible expression of aimed at achieving
feel fulfilled and
values and the competitive
respected at work, will
implementation of advantage through
provide the best
values. West Water people. Pilkington
service to customers.
Optronics
Lands’ End

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BALANCED SCORECARD IN AN INTERNATIONAL CHARITY
Organizational effectiveness
perspective:
• programme development
• programme delivery
• process development and
management
• cost-effectiveness

Stakeholder perspective:
Financial perspective:
• impact on clients
• income growth
• relationships with key funding
• enlistment and retention of
agencies and supporters
supporters
• development of brand
• cost/income ratio
• influence

People perspective:
• leadership behaviour
• talent management
• learning and development
• employee satisfaction –
a ‘great place to work’

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HIGH-PERFORMANCE STRATEGY:
CORPORATION OF LONDON

• Clear line of sight between strategic aims of the Corporation and its staff
• Management sets goals for success and monitors performance
• Leadership from the top and at all levels of management
• Focus on promoting engagement and commitment
• Performance management processes aligned to Corporation objectives
• Capacities of people enhanced by comprehensive learning and
development programmes
• People valued and rewarded according to their contribution

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DECLARATION OF STRATEGIC INTENT: CARE
DELIVERY CHARITY

• Achieve strategic integration – match HR


policies and practices to the business
strategy
• Plan coherent approaches to the
development of HR processes so that
they are interrelated and mutually
supporting
• Focus on the needs to achieve flexibility,
responsiveness, quality and cost-
effectiveness in the delivery of HR
services
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CRITERIA FOR HR STRATEGIES

• Aligned to corporate goals


• Set out clear aims
• Supported by business case
• Take account of individual as well as
business needs
• Contain realistic and achievable
plans for implementation

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STRATEGIC HRM TOOLKIT

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CONDUCTING A STRATEGIC REVIEW

1. Analysis

2. Diagnosis
Involve senior Involve employees
management and and their
line managers 3. Conclusions and representatives
recommendations

4. Action planning

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HR STRATEGY GOALS: HOW DO THEY RATE?

Possible HR strategic objectives Importance* Effectiveness*


Support the achievement of organizational goals
Meet needs of employees
Develop a high-performance culture
Ensure that the organization is seen as ‘a great place to
work’
Increase engagement and commitment
Recruit and retain talented people
Develop talented people
Reward people according to their contribution
Provide employees with a voice
Provide a good working environment
Other (specify)

* Scale: 10 = high 0 = low


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STRATEGIC HRM GAP ANALYSIS
What are the current and desired SHRM characteristics in your organization?
1 2 3 4 5 6 7

Effective high-performance work No attempt made to encourage


system in place high performance

Integrated talent management Talent management is haphazard


programmes are operating
or ineffective
effectively

A traditional approach is adopted


Sophisticated techniques are
with regard to sourcing recruits
used to recruit employees
and selecting applicants

Focus on using blended learning Reliance on the delivery of


and development processes traditional training courses

Reward programmes limited to


A total reward approach is used
financial rewards
effectively

Only lip service is paid to


Employees given a voice on all
employee participation and
matters that concern them
involvement

Mark on the scale: X for current, O for desired – eg:

High-quality HR practices O X Poor-quality HR practices


HR IMPLICATIONS OF CORPORATE STRATEGIES

Corporate strategy Implications for HR strategy

1.

2.

3.

4.

5.

6.

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ANALYSIS OF RESOURCING GOALS

Possible resourcing goals Importance* Effectiveness*

Match people resources to business requirements

Avoid unexpected deficits or surpluses of staff

Attract and recruit high-quality candidates

Minimize recruitment costs

Maximize ‘recruitment intensity’, ie high numbers of applicants


per vacancy
Increase ‘predictive validity’, ie the extent to which predictions of
suitability at the point of recruitment are achieved
Increase retention rates

Reduce cost of labour turnover

* Scale: 10 = high, 0 = low

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ANALYSIS OF TALENT MANAGEMENT GOALS

Talent management goals Importance* Effectiveness*

Define what is meant by talent in terms of competencies


and potential
Ensure that talent is treated as a key corporate resource
Develop a pool of talent that will provide a guaranteed
supply of highly qualified people
Provide for management succession
Rely primarily on growth from within, while recognizing
the need to bring in fresh blood from time to time
Identify those with talent and potential
Institute programmes to develop talent

Create a compelling employee value proposition

Develop the organization as an employer of choice

* Scale: 10 = high, 0 = low


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ANALYSIS OF LEARNING AND DEVELOPMENT GOALS
Learning and development goals Importance* Effectiveness*
Create human capital advantage by ensuring that the
organization has more skilled and competent people
than its competitors
Extend the skills base of the organization
Improve individual, team and organizational
performance
Attract and retain high-quality people by offering them
learning and development opportunities
Improve organizational flexibility by multi-skilling
Provide additional non-financial reward to people in
the form of growth and career opportunities
Reduce the length of learning curves to minimize
learning costs
Ensure that talented people are developed to achieve
their maximum potential
Provide line managers with the skills required to lead
and develop their people

* Scale: 10 = high, 0 = low


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ANALYSIS OF REWARD MANAGEMENT GOALS

Reward management goals Importance* Effectiveness*

Reinforce the achievement of organizational goals

Improve individual, team and organizational


performance
Recruit and retain high-calibre staff

Facilitate staff mobility

Achieve strong relationship between pay and


performance
Reinforce organizational values

Motivate and engage employees

Cost effective

Well-communicated and understood by employees

Managed effectively by line managers

* Scale: 10 = high, 0 = low


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ANALYSIS OF EMPLOYEE RELATIONS GOALS

Employee relations goals Importance* Effectiveness*

Build stable and cooperative relationships with employees


and, where present, their trade unions
Operate on a partnership basis with trade unions

Achieve engagement through employee involvement and


communication processes
Minimize conflict with employees and their unions

Adopt a high-commitment approach to develop mutuality

Maintain bargaining structures and negotiating procedures


that enable agreements to be reached smoothly

* Scale: 10 = high, 0 = low


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PRIORITIZATION OF HR STRATEGIES

Summary of HR Business case Timing Responsibility for


strategy
1.

2.

3.

4.

5.

6.

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STRATEGIC HRM GUIDELINES

• Be clear on what has to be achieved


and why
• Ensure that what you do fits the
business strategy, culture and
circumstances of the organization
• Aim for continuous improvement –
evolution not revolution
• Don’t follow fashion – do your own
thing
• Keep it simple – over-complexity is a
common reason for failure
• Don’t rush – it takes longer than you
think
• Assess resource requirements and
costs
• Manage change – involve,
communicate and train
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Michael Armstrong
email@michael-armstrong.eu

Art work by Youngs Design


Ian@youngsdesign.co.uk

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