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Strategic Human

Resource Management

ROHIT KUMAR
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HRM Role Change
 The HR function has historically been reactive and
subservient to the other business functions.
 Role has changed recently due to environmental
change and uncertainty
 Need to maintain an effective alignment with the
environment while managing internal
interdependencies.

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HRM Role Change
 Increasingly, competitiveness is viewed as being
dependent on human resources.
 Competitive advantage in companies is its workers--it
is what often distinguishes companies with similar
technology.
 HRM has come to be seen as directly related to the
ability of the firm to cope with organizational and
environment contingencies.
 Recently, there has been a reorientation to an
integrative, proactive, and strategic way of looking at
an organization's employees.

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HRM Role Change
 Historically, Primary HR functions included:
 Human resource planning;

 Recruiting staff

 Job analysis

 performance review systems

 Wage, salary, and benefits administration

 Employee training

 Personnel record keeping

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Characteristics of Past Approach
 HR/Personnel function was physically and
psychology separated from the real work of the
organization.
 Personnel depts. grew in a relatively uncoordinated,
piecemeal fashion.
 HR/Personnel lacked an integrative, proactive, and,
above all, strategic orientation.

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Personnel-The Traditional View

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Characteristics of Current Approach

1) The systematic integration of separate HRM


functions
2) 3) The inclusion of HR considerations in decisions
affecting corporate strategies and structures.
4) Strategic management and strategic human
resource management integrate the separate HRM
functions.

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HRM -- The Strategic View

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Traditional HR Versus Strategic HR

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Theoretical Perspectives on SHRM

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Why is Strategic HRM Vital?
 Because an organization must have people who are
involved in the development of the business strategy,
understand it, are committed to it, and can make a
contribution to its success

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What is Strategic HRM?

It is how an organization uses its people to help form


and execute its business strategy.

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How Can HRM Be Strategic?

 Participate in the Discussion of the New Strategy


 Evaluate Organizational Capacity
 Design HR Practices Which Can Execute New
Strategy
 Establish Metrics to Evaluate Practices

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HRM Integration
 HR Practices Must be Linked to Achieving the Business
Strategy
 Each HR Practice must be Designed, Aligned, and
Measured Using an Integrated Set of Metrics

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Human Resource Management
Employee Planning and
Relations Job Design

Recruiting and
Compensation
Selection

Performance Training and


Management Development

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HR Alignment

Employee Planning and


Relations Job Design

INTERNAL Recruiting and


Compensation
FIT Selection

Performance Training and


Management Development

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Strategic HRM
HRM as a competitive advantage involves strategic human
resource management.
 1) Represents an effort to link HRM activities to a firm's

business strategy.
 2) Based on a growing recognition for HR managers to

assume a broader role in the overall organizational


strategy.
 3) Recognition that the HR function should be "planned,

organized, and evaluated on the basis of its contribution to


the business."
 4) SHRM is based on the recognition that HRM activities

are organizational in scope.

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Model of Strategic HR Management

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Essential Elements of SHRM

1. Internally transforming HR staff and structure


2. Enhancing administrative efficiency
3. Integrating HR into the strategic planning process
4. Linking HR practices to business strategy and one
another.
5. Developing a partnership with line management
6. Focusing on the bottom-line impact of HR and measuring
that impact.

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HR’S Strategic Architecture
 Knowing the business
 Mastering HR practices
 Managing Culture
 Orchestrating change
 Personal Credibility
 Strategic HR Performance Management

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Measuring HRM
 Customer Reactions
 HR Impact
 Money Value of HR Programs
 Benchmarking HR Practices

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What About Measurement?
 We have designed and pursued a new business
strategy.
 We have instituted new HRM changes and interventions
 How and why do we use data and metrics to both design
and evaluate such HR practices?

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Protocols for Measurement - The
Balanced Score Card

Financial Customers

Employees Business Development

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What are the types of Metrics --
Recruitment?
 Competencies  Performance evaluations
 Cost per hire  Overall company
 Retention rate performance
 Time to fill  Surveys

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Convert Data to Metrics - Training
 Costs of proposed  Does this program
training have any measurable
 Baseline measures results?
 Post training measures  Is it worth an
 Return on investment investment?

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Training Metrics - Some Issues
 Cost effective? ROI?
 Timeliness
 Adaptable, Simple
 Measure a variety of
outcomes
 Look at soft and hard
data - convert if possible
 Is there a casual
connection?

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Steps in the Strategic HRM Process
 New Business Strategy  HR Must be a Key
 SWOT Analysis Player in this Process.
 Assess HR Capacity  Design New
 Develop Core Organization
Competencies  Assess new core
 Test and Evaluate competencies
 Initiate HR Practices
 Recruit

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Steps in the Process
 Orient, Train and Develop
 Evaluate Performance
 Establish Career and
Succession Plans
 Set Total Reward System

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Six Measures of HR Service
Delivery

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What are the competencies of a
Strategic HRM Executive?
 Be a Strategist - Know the Business
 Be an Administrator - Deliver the Basics
 Be a People Champion
 Be a Change Agent

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