Importance Of Aligning Human Resources With Strategy


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HR's Emerging role in the formulation and implementation of strategy. traditional HR Vs Strategic HR. models Integrating strategy and HRM

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Importance Of Aligning Human Resources With Strategy

  1. 1. Importance of Aligning Human Resources with Strategy Chapter 2 Nisha Hariyani
  2. 2. HR’s Emerging Role <ul><li>Strategic human resource management is an approach which defines how the organization’s goals will be achieved through people, by means of HR strategies and integrated HR policies and practices. </li></ul>
  3. 3. Transition from HRM to Strategic HRM <ul><li>Changes in the business environment brought about by globalization and the development of new technology have made it mandatory for organizations to involve HRM in the strategic Decision Making Process. </li></ul><ul><li>Changes in Market Conditions, economic conditions, labor markets, industrial structure, and international competition have all highlighted the importance to the management of human resources for gaining a competitive advantage. </li></ul>
  4. 4. Transition from HRM to Strategic HRM <ul><li>5p model identifies various HR activities that must be aligned with the Strategic needs of the Business to gain a competitive advantage. </li></ul><ul><li>HR Philosophy: refers to Org attitude </li></ul><ul><li>HR Policies: Refers to guidelines </li></ul><ul><li>HR Programs: Coordinated HR efforts to sustain Change </li></ul><ul><li>HR Practices: includes roles that individuals assume in an Org. </li></ul><ul><li>HR Processes: Involves Identification, formulation and implementation of HR activity </li></ul>
  5. 5. Traditional HR Vs Strategic HR <ul><li>Administrative in nature </li></ul><ul><li>Endorsing Specialization of work </li></ul><ul><li>Development of Policies and its Functions </li></ul><ul><li>Ensures Adherence to the Rules </li></ul><ul><li>Transactional in Nature: routine day to day work </li></ul><ul><li>People Not viewed as Competitive advantage </li></ul><ul><li>Change is Slow and Fragmented. </li></ul><ul><li>Empowering in Nature </li></ul><ul><li>Multi Tasking – Changing according the Envi </li></ul><ul><li>It is More Interdisciplinary in Nature </li></ul><ul><li>Rules and Regulations are Flexible. </li></ul><ul><li>Focus on Short Term Objectives of Org. </li></ul><ul><li>People as viewed as Intellectual Assets. </li></ul><ul><li>Change is Proactive and Systematic </li></ul>
  6. 6. Role of strategic HRM (SHRM) <ul><li>Strategic Role </li></ul><ul><li>Information and Decision Making Role </li></ul><ul><li>Strategic HR functional Role </li></ul><ul><li>Administrative Role </li></ul>
  7. 7. Barriers To SHRM <ul><li>Focusing on Shot Term Performance </li></ul><ul><li>Lack of technical Knowledge </li></ul><ul><li>Lack of Strategic perspective </li></ul><ul><li>Difficulty in quantifying </li></ul><ul><li>Apprehensions towards training people </li></ul><ul><li>Resistance of employees </li></ul><ul><li>` </li></ul>
  8. 8. Model Integrating Strategy & HR <ul><li>Two models help us understand the relationship between HR and Strategy, they are </li></ul><ul><li>Model of Best Practice </li></ul><ul><li>Model of Strategic Change </li></ul>
  9. 9. Model of Best Practice Strategic Level Operational Level Business Process Level Frame policies Recruitment and Retention Checking equal Weight age to all stakeholder
  10. 10. Models Integrating Strategic Change & HRM
  11. 11. The model has four basic Propositions: <ul><li>Strategic integration </li></ul><ul><li>High commitment </li></ul><ul><li>High quality </li></ul><ul><li>Flexibility </li></ul>
  12. 12. Model of Strategic Change & HRM Socio economic, technical Politico-legal Culture, Structure, Politics Leadership, task technology Business outputs Role Definition Organization HR outputs HR Flows Work systems Reward systems Employee Relations Objectives Product – market Strategy and Tactics Outer Context HRM Context Inner Context Business strategy content HRM Content
  13. 13. Economic Indicators of HRM <ul><li>Investment Perspective of HR </li></ul><ul><ul><li>Management Value </li></ul></ul><ul><ul><li>Organization Attitude Towards Risk </li></ul></ul><ul><ul><li>Employee skills Required </li></ul></ul><ul><ul><li>Cost benefit Analysis </li></ul></ul><ul><ul><li>Outsourcing </li></ul></ul><ul><li>Human Capital Accounting </li></ul><ul><ul><li>Sources of employee value: productivity & added Value </li></ul></ul><ul><ul><li>Adding value through rewards & benefits </li></ul></ul><ul><ul><li>Adding value through attrition & recruitment </li></ul></ul>
  14. 14. End of Chapter 2