Dr.V.Mohanasundarammanlymohan@gmail.com

• Today's HR professionals contribute to creating engagement capital, or building engagement over time, to improve employee effort, retention, and key business outcomes. As we balance short-term improvements with engagement drivers that sustain engagement over time, there is a greater alignment of the HR function to an organization's strategic needs

TODAY’S SCENARIO

HR’s Strategic Challenges• Strategic plan

– A company’s plan for how it will match its internal strengths and weaknesses with external opportunities and threats in order to maintain a competitive advantage.

• Three basic challenges– The need to support corporate productivity

and performance improvement efforts.– That employees play an expanded role in

employers’ performance improvement efforts.

– HR must be more involved in designing—not just executing—the company’s strategic plan.

Strategic Human Resource Management

• Strategic Human Resource Management– The linking of HRM with

strategic goals and objectives in order to improve business performance and develop organizational cultures that foster innovation and flexibility.

-Formulating and executing HR systems—HR policies and activities—that produce the employee competencies and behaviors the company needs to achieve its strategic aims.

SHRM

• Strategic human resource management has been defined as ‘the linking of human resources with strategic goals and objectives in order to improve business performance and develop innovative organizational culture that foster innovation and flexibility.

• Strategic human resource management means formulating and executing human resource policies and practices that produce the employee competencies and behaviours that the company needs to achieve its strategic aims.

• Gary Dessler

• Strategic human resource management is concerned with all those activities that affect the behaviour of individuals in their efforts to formulate and implement the strategic needs of business.

— R. S. Schuler

Evolution of SHRMPersonnel Management

Human Resource Management(early 1970s)

Strategic Human Resource Management(early 1980s)

Features of Strategic Human Resource Management• As strategic human resource management is closely associated with goal-

setting, policy formulation and allocation of resources, it is performed at top management levels.

• Strategic human resource management aims at fulfilling the long-term HR requirements of the organization and, thus, focuses on the expansion of process capabilities (process refers to HR policies and procedures that produce efficiency).

• It is interrelated with business strategies. For instance, it provides critical inputs to the formulation of business strategy, and specific HR strategies (like recruitment, training and performance appraisal) are in turn shaped by overall business strategies.

• Strategic human resource management entrusts strategy formulation tasks with line managers while HR professionals play an advisory role.

• It views employees as the strategic capability of the organization and attempts to distinguish the organization from its competitors in the market on that basis.

Difference b/w SHRM & Traditional HRM Traditional HRM SHRM

Focus of activity Employee relations Partnership with internal & external groups

Role of HR Reactive & transactional Proactive & transformational, change leader

Initiative for change Slow & not integrated with larger issues

Fast,flexible & systematic

Time Horizon Short-term Consider various time frames

Control Bureaucratic control Organic control

Job design Focused job design Broad job design

Important investment Capital,products,technology & finance

People & their knowledge skills & abilities

Accountability Cost centre Investment centre

Linking Corporate and HR Strategies

HR’S Strategic Roles• HR professionals should be part of the firm’s

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.

HR’s Strategy Formulation Role• HR helps top management formulate strategy in a variety of ways

by.

– Supplying competitive intelligence that may be useful in the strategic planning process.

– Supplying information regarding the company’s internal human strengths and weaknesses.

– Build a persuasive case that shows how—in specific and measurable terms—the firm’s HR activities can and do contribute to creating value for the company

HR’s Strategy Formulation Role• HR helps top management formulate strategy in a variety of ways

by.

– Supplying competitive intelligence that may be useful in the strategic planning process.

– Supplying information regarding the company’s internal human strengths and weaknesses.

– Build a persuasive case that shows how—in specific and measurable terms—the firm’s HR activities can and do contribute to creating value for the company

The Basic Architecture of HR

The High-Performance Work System• High-performance work system

(HPWS) practices.– High-involvement employee

practices (such as job enrichment and team-based organizations),

– High commitment work practices (such as improved employee development, communications, and disciplinary practices)

– Flexible work assignments. – Other practices include those

that foster skilled workforces and expanded opportunities to use those skills.

Translating Strategy into HR Policy and Practice

Basic Model of How to AlignHR Strategy and Actionswith Business Strategy

FACTORS CONTRIBUTING TO STRATEGIC ASPECTS OF HR FUNCTIONS

Internal factors :• organization structure • organization culture• organization competencies• organization internal policies • organization processes, etc. External factors:• market scenario• competitors• government policies• technological advancements, etc."

Emerging Trends In The Field Of Strategic Human Resource

Management• The employee involvement

• Flow rate of an HR • Performance Management • Reward Systems • Loyalty towards the work • Focus on employee retention • Cross cultural issues • Effects of rapid changes in technology • New emerging concepts of line and general management

Difference b/w SHRM & HR StrategySHRM HR Strategies

• A general approach to strategic management to HR• Aligned with the organizational intention with future directions• Focus on long term people issue• Defines the areas in which specific HR strategies need to be developed • Focus on macro concern such as structure & culture• Strategic HRM decisions are built into strategic business plans

• Outcome of the general SHRM approach.• Focus on specific organizational intentions about what needs to be done.• Focus on specific issues that facilitate the achievement of corporate strategy.• Human resource strategy derived from SHRM

THREE IMPORTANT STRATEGIC HR TOOLS

STARTEGYIC MAP HR SCORECARD DIGITAL DASHBOARD

Strategic map - A strategy map is a diagram that is used to document the primary strategic goals being pursued by

an organisation or management team

The HR Scorecard Approachto Formulating HR Policies,Activities, and Strategies

Strategic Map

HR SCORECARD

DIGITAL DASHBOARD

• Presents the manager with desktop graphs and charts, so he or she gets a picture of where the company has been and where it’s going. In terms of each activity in the strategy map.

Models• Control based: the way in which

management attempts to monitor and control employee role

performance

• Resource Based: grounded in the nature of the employer–employee exchange

• Integrative Based: combination of above models

Control-Based Model Management structure + HR practice

To Secure all aspect of work

High level of labour productivity& Profitability

Starting point:

Marx’s

‘Transformation of labour power into labour’

What Alternatives HR have? Edward: 1. Bureaucratic

control: written rules & procedures

2. Technological control: assembly line, surveillance camera

3. Divide & rule policy

Control-Based ModelBurawoy: From Despotic regime To Hegemonic

regime

Despotic refers to coercive manager

Hegemonic refers to industrial citizenship[the collective

rights and duties legislatively granted to employees]

Bamberger & Meshoulam:Process-based control : focus is on

efficiency and cost containment

Outcome-based control: focus is on actual results

Resource-Based Model Based on nature of the reward–effort exchange• Selznick: work organizations each possess ‘distinctive competence’ that

enables them to outperform their competitors

Barney:• The resource-based perspective emphasizes the strategic importance of

exploiting internal ‘strengths’ and neutralizing internal ‘weaknesses’• Its all about making competitive advantage, for that”• Exploitation of resource & capability should be done Four characteristics of resources and capabilities –• value, • rarity, • inimitability and • non-substitutability – are important in sustaining competitive advantage

Integrative ModelBamberger and Meshoulam

integrated the two models arguing none of them were sufficient enough to give a appropriate flow to the HR strategy, so they took two main dimensions:

Acquisition & development:• make-or-buy’ aspect of HR

strategy. organizations can lean more towards ‘making’ their workers(high investment in training) or more towards ‘buying’ their workers from the external labour market.

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