This document discusses strategic human resource management (SHRM) in small and medium enterprises (SMEs). It outlines factors that enable operating excellence for SMEs, including strong management teams, talent recruitment and retention, enabling strategies, supportive culture, and rewards/incentives. SHRM approaches may differ depending on industry maturity levels - innovative practices are important in growth industries while technical HR is sufficient in mature industries. Institutionalizing SHRM builds core competencies and capabilities, allowing SMEs to better serve corporate partners. Management commitment is also key to SHRM success in SMEs.

1. Strategic Human
PRESENTED BY:
Resource CHANIMA BHATTCHARYA
SHRASTA SAXENA
Management SUNIL KUMAR

2. Time to strategies?
HR has long since been considered as a support
function. Has that definition changed over time? Is
it becoming more strategic in nature?
Only Supportive ? oR
Strategic !!

3. Sandip Mallik, director- HR, Aviva India,
says,
"HR is becoming more strategic
on two counts.
• First, HR is a risk manager.
• Second, HR facilitates the
growth of engagement capital
both of which have a huge
impact on franchise valuation.

4. TODAY’S SCENARIO
• 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

5. 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.

6. The Strategic Management Process
• Strategic management
– The process of identifying and executing the organization’s
mission by matching its capabilities with the demands of its
environment.
• Strategy
– A strategy is a course of action.
– The company’s long-term plan for how it will balance its
internal strengths and weaknesses with its external
opportunities and threats to maintain a competitive
advantage.

7. 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.

8. Linking Corporate and HR Strategies

9. 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.

10. 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

11. The Basic Architecture of HR

12. 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.

13. Translating
Strategy into HR
Policy and
Practice
Basic Model of
How to Align
HR Strategy
and Actions
with Business
Strategy

14. 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."

15. 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

16. THREE IMPORTANT
STRATEGIC HR TOOLS

17. STARTEGY MAP
• Graphical tool that
summarizes the chain of
activities that contribute to
the company’s success,
and shows employees the
“big picture” of how their
performance contributes
to achieving the company’s
overall strategic goals.

18. HR SCORECARD
• A process for managing
employee performance
and for aligning all
employees with key
objectives, by assigning
financial and non
financial goals,
monitoring and
assessing performance,
and quickly taking
corrective action.

19. The HR Scorecard
Approach
to Formulating HR
Policies,
Activities, and
Strategies

20. 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.

21. 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

22. Control-Based Model
Management structure + HR practice Starting point:
To Secure all aspect of work
Marx’s
‘Transformation of labour
High level of labour productivity
power into labour’
& Profitability

23. What Alternatives HR have?
Edward:
1. Bureaucratic control:
written rules &
procedures
2. Technological control:
assembly line,
surveillance camera
3. Divide & rule policy

24. Control-Based Model
Burawoy:
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

25. 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

26. Integrative Model
Bamberger 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.
.

27. Locus of control:
• Degree to which HR
strategy focuses upon
monitoring the employees.
Whether process-based is
forged with the
psychological contract or
not to make it outcome-
based

28. Commitment :
• focusing on the internal
development of employees’
competencies and outcome control
• This typically refers to ‘knowledge
work’. In such workplaces, managers
must rely on employees to cope
with the uncertainties inherent in
the labour process and can thus
only monitor and evaluate the
outcomes of work
• Here, employees may effectively
‘control themselves’

29. Traditional:
• focusing on the external
recruitment of
competencies and
• behavioral or process-
based controls
• prevalent in firms with a
highly routinized
transformation process,
low-cost priority and stable
competitive environment.
• ‘You are here to work, not
to think!’

30. Collaborative:
• Involves the organization subcontracting work to external
independent experts (for example consultants or
contractors), giving extensive autonomy and evaluating
their performance primarily in terms of the end results.

31. Paternalistic:
• offers learning opportunities and internal promotion to
employees for their compliance with process-based control
mechanisms

32. S.H.R.M
in
Small and Medium
Sized
Enterprises

33. • According to “Journal of Management and
Marketing Research”, the conceptual framework
for studying the relationship between the strategic
human resource management practices of small
and medium sized businesses and their
performance as corporate partners, as industry
and competitive conditions change.

34. • Like any other organization, the sophistication
of their human resource management
practices can lead to operational inefficiencies
that can affect their ability to meet their
obligations to corporate buyers.

35. Factors that
Enable Operating Excellence
STRONG
RECRUITING AND
MANAGEMENT RETAINING
TEAM TALENT
OPERATING
EXCELLANCE
ENABLING REWARDS AND
STRATEGY INCENTIVES TO
SUPPORTIVE INDIVIDUAL AND
CULTURE TEAM

36. Element of Factor Affecting
SME’s S.H.R.M.
According to “Journal of Management and
Marketing Research”
COMPETETIVE
INDUSTRY
CONDITIONOF
CONDITION
INDUSTRY
FACTORS
DIRECT
VALUE TO SME’S
COMPETETION
PARTNER
FROM OTHER SME’S

37. Reasons for Adopting SHRM In SME’S
• Emerging Strategic
Partnership.
• Building competitive
advantage in industry.
• Strategic implementation
and execution of
strategies.
• To be focused on
intellectual, human and
social capital.
• Focusing on Core
Competency.

38. SHRM IN DIFFERENT SME
INDUSTRY

39. SHRM
Growth Industry APPROACH Matured Industry
Innovative leader, aggressively Matured leader relying on the technical
adopting strategic human resource human resources management
management practices to enable it meet capabilities that have proven beneficial in
the needs of partners in fast growing meting partner needs. May be anticipating
industries a competitive need to shift focus to
serving the needs of companies in a fast
moving industry and thus a need to adopt
strategic human resource management
practices
Flexible leader whose human resource Laggard, reliant on technical human
management practices is focused on resource management practices. Has
meeting the current needs of its big limited resources to be competitive in
business partner serving the needs of companies in a
growing industry
Fragmented Industry Declining Industry

40. Success of Strategic Human Resource
Management in SME’S
• Institutionalization and the resultant job
satisfaction and psychological ownership
of SHRM practices are keys towards
building the core competencies and
internal organizational capabilities that
enables an SME to become a valued
strategically.
• Management commitment is also critical
to the success of the SHRM practices of a
SME.