ROLE OFSTRATEGICMANAGEMENTINHUMAN RESOURCEMANAGEMENT MBAO 6030 Human Resource Strategy
WHAT IS STRATEGY?The Meaning of “Strategy” Plans that involve the top executives and/or board of directors of the firm A general framework that provides a perspective for selecting specific policies and procedures. A factor that contributes to Competitive Advantage in markets Having a long-term focus A critical factor that affects Firm Performance
Human resource strategy involves the planned and effective use of human resources in order to get an edge over the competitors.n The use of planning in human resource management.n An integral approach to the design and implementation of HR systems.n Matching HRM policies and activities with the business strategy of the organization.n Viewing people as a strategic resource for the achievement of competitive advantage.
HR Strategy: Strategic FitCorporate StrategyBusiness StrategyHR StrategyHR System Training Rewards(Performance Mgmt.) MBAO 6030 Human Resource Strategy
HR Strategy: HR System Internal FitHR Strategy Goal Setting Appeal Performance Measurement Coaching Rewards Performance Evaluation Performance Management System
STRATEGY IN HUMAN RESOURCE MANAGEMENT describes thevision, mission goals of the HRM Function in the organization. The HRM Strategy describes the final anddesired state of the HRM Function. The HRMEmployees use the HRM Strategy as the basis for thegoal setting process within the HRM Function tonavigate their own performance the right direction.
External environment Pans regulating Competition employee Gov policy Technology Market trends HR strategies HR Procurement OUTCOMES planning Development IncreasedCORPORATE BUSINESS Design of PerformanceSTRATEGY STRATEGY performance jobs management Customer What Compensation Satisfaction workers do Labor Employee Internal environment What workers relations Culture satisfaction need Structure Policies Past strategy HRIS
Strategic management plays an importantrole in different aspects of Human Resourcemanagement.1.HR PLANNING2.STAFFING-RECRUITMENT & SELECTION3.TRAINING & DEVELOPMENT4.PERFORMANCE APPRAISAL5.COMPENSATION & REWARDS
1. HR PLANNING-Prevents overstaffing and understaffing. Ensures the organization has the right number of employees with the right skills in the right places and at the right time. Ensures the organization is responsive to changes in its environment. Provides direction and coherence to all HR activities and systems. Facilitates leadership continuity through succession planning. HR planning follows from the strategic plan, the information collected in the HR planning process contributes to the assessment of internal organization’s environment done in strategic planning.
2.STAFFING- The process of recruiting applicants and selecting prospective employees, remains a key strategic area for human resource strategy. An organisation’s performance is a direct result of the individuals it employs, the specific strategies used and decisions made in the staffing process will directly impact the success of the strategic plan. i. Recruitment & Selection ii. Placement
An effective staffing strategy requires in depth planning for therecruiting process to ensure efficiency and generation of a qualifiedapplicant pool. The strategic decisions organizations need to makerelative to staffing are summarized below:
3. Training and Development- Training and development of employees is a key strategic issue for organizations. Training involves employees acquiring knowledge and skills that they will be able to use on the job. There are two key factors to develop successful training programmes in organizations. The first is planning and strategizing the training. This involves four distinct steps: • Needs assessment • The establishment of objectives and measures • Delivery of the training • Evaluation The second key factor is to ensure that desired results are achieved or accomplished. Training needs are to be integrated with performance management systems and compensation.
FOR EX. INFOSYS WHICH IS AKNOWLEDGE BASED IT BUSINESS ALWAYSREQUIRES ITS HUMAN RESOURCE TO BETO BE HIGHLY SKILLEDTO BE COMPETENTEASILY ADAPTING TO CAHANGING WORK SITUATIONSTO BE WELL INFORMED
INFOSYS HAS GAINED ITS MOTIVE OFSMART WORKFORCE THROUGH ITS WELLORGANISED TRAINING ACTIVITY.THE MOTTO OF INFOSYS TRAINING PROGRAM IS “LEARN ONCE, USE ANYWHERE” OBJECTIVE IS TO NURTURE A LARGENUMBER OF HIGH QUALITY LEADERS WITH AGLOBAL PERSPECTIVE.
THE TRAINING SPECTRUM INCLUDESOFTWARE DEVELOPMENTMANAGERIAL SKILLSSOTWARE SKILLSLEADERSHIP & DOMAIN SPECIFIC TRAININGTRAINING IS PROVIDED AT THREE LEVELSENTRY LEVELLATERAL LEVELLEADERSHIP TRAINING(Infosys Leadership Institute)
ENTRY LEVEL→ An employee who joins at theentry level undergoes a 14-week comprehensive trainingprogramme covering both technical and managerialaspects.LATERAL LEVEL→ A separate trainingprograms for lateral entrants. Using a blend ofpresentations and interactive sessions, they areintroduced with the Infosys brand/culture. Task basedtraining takes place afterward.LEADERSHIP TRAINING →Training inleadership qualities is the third level programme.Infosys Leadership Institute(ILI) in Mysore trains about400 infoscions anually.
ILI RUNS SPECIAL PROGRAMMES ALSOFirst time traveler training 3 day event with 6 modules i.e.→ Personal trait understanding → Culture & project elements appreciation → Customer interfacing → Communication skills → Corporate etiquette → Social Interfacing skillsLanguage trainingBon Voyage→ Training given to all its travelers at thetime of collecting tickets/passport, covers immigrationprocesses & tips on making ones way in a new country.
ILI CURENTLY HAS78 Full time FacultyMore than 200 consultantsTop level management including Chairman &. directors also conducts workshop. Infosys spends around 4% of total wage bill ontraining & delivers about 10% of the total trainingthrough E-Learning Programs.
FIRM LEVEL COMPETITIVE STRATEGY COST LEADERSHIP CUSTOMER INNOVATION SATISFACTIONHR PEOPLE WORKING PEOPLE WORKING PEOPLECOMPETITIVE HARDER SMARTER WORKINH WITHOBJECTIVES VISIONHR STREAMLINE EDUCATE LINE DEFINE VISIONDECISIONS STANDARDIZE MANAGERS & ATTRACTAND DECREASE OTHER CLIENTS CREATIVEACTIONS PRODUCTION DELEGATE TALENT TIME DECISIONS REWARD RISK REDUCE COSTS INCREASE PROVIDE FLEXIBILITY OPPORTUNITIES & TOOLS FOR EXPLORATION
4.PERFORMANCE APPRAISAL- An organization’slong-term success in meeting its strategic objectives relies onmanaging employee performance and ensuring that performancemeasures are consistent with the strategic needs.One purpose of performance appraisal systems is to facilitateemployee development. A second purpose is to determine appropriate rewardsand compensation, which must be clearly linked to achievementof strategic goals.
FOR Ex.:- PHILIPS TAKE A FIVE-POINT SCALETO MEASURE THE POTENTIAL OF AN EMPLOYEE ANDPUT THEM IN ONE OF THE QUADRANTS.P HIGH PROBLEM STARSO CHILDRENT C DEN A BTI PLANNED SOLIDA SEPERATION CITIZENSL LOW HIGH PERFORMANCE
Low potential-Low performance- Employees under this criteria are asked to improve their performance initially. If that effort fails, Philips works towards a planned separation. Low potential-High performance-Defined as solid citizens-high skills but limited capability to grow beyond their current job profile. Low performance-High potential-Problem children do well in their jobs if a location, boss or job profile is changed. If they continue to perform less, the separation process is initiated. High performance-High potential-Are like star performers. And are given challenging tasks constantly.
The appraisal criteria considers the followingfeatures:- Conceptual Effectiveness- Vision Business orientation Sense of Reality Interpersonal Effectiveness- Negotiating power Personal influence Verbal Behavior
Operational Effectiveness Result orientation Individual effectiveness Risk taking control Achievement Motivation- Professional ambition Innovativeness Stability Philips lays down a fast track, career growth plan for the star performers. Separates the star performers from the employees ranks & exploit their potential fully using rewards & incentive schemes.
5.COMPENSATION & REWARDS Organizations face a number of key strategic issues in setting their compensation and reward policies and programmes. These include: Compensation relative to the market Balance between fixed and variable compensation Appropriate mix of financial and non financial compensation Developing an overall cost-effective compensation programme that results in high performance.
HR Strategy: Context of HR System1. The “Five Factors” Influencing the HR System External Environment Social: social values, roles, trends, etc. Political: political forces, changes. Ex. Bush presidency and its agenda for Social Security. Legal: laws, court decisions, regulatory rules. Economic: product, labor, capital, factor markets.
2. The Workforce3. Organization Culture Weak vs. Strong culture “Type” of culture4. Organization Strategy What are a firm’s distinctive competencies? What is the basis that competitive strategy be sustained? What are a firm’s strategic objectives? Compare corporate and Business strategies.
1. Technology of Production & Organization of Work Required employee skills Ease of monitoring employees’ input