Strategic Human Resource Management


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In this presentation, we will discuss the inclusion and inception of the concept of human resource management in an organization to steer the workforce in a unified course of action to reach the aspired goal.
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Strategic Human Resource Management

  2. 2. CHAPTER 1 INTRODUCTIONConsequences of Liberalizations, Privatization andand Globalization made the CEO’S of variouscompanies to include the HUMAN RESOURCEaspects in the strategic management processStrategic Human Resource Management gained itssignificance in the post liberalization periodHuman Resource Manager in most of the companiesis a member of strategic management team today
  3. 3. CHAPTER 1 WHAT IS STRATEGYStrategy is a unified course of action to achievethe goal Strategy has been defined by Glueck as“unified, comprehensive and integrated plandesigned to ensure that the basic objectives ofthe enterprise are achievedStrategy has been defined by Mintzberg as “apattern in a stream of decisions or actions”
  4. 4. CHAPTER 1 WHAT IS STRATEGIC MANAGEMENTStrategic management has been defined by John andRichard as “the set of decisions and subsequentactions used to formulate and implement strategies thatwill optimize the fit between the organization and itsenvironment in an effort to achieve organizationalobjectives”Strategic management has been defined by Samueland Peter as “a continuous, iterative, cross-functionalprocess aimed at keeping an organization as a wholeappropriately matched to its environment” Contd.
  5. 5. CHAPTER 1 WHAT IS STRATEGIC MANAGEMENT Analysis of the above definitions reveal that Strategic Management is :1. Cross functional process to view the organization as a single system2. Match the organization to its environment i.e., matching the strengths with the opportunities, and3. Set of decisions and actions to achieve the organizational objectives
  6. 6. CHAPTER 1STRATEGIC MANAGEMENT PROCESSThe basic steps of the strategic managementprocess include: Vision, Mission and Objectives of the company External Environmental Analysis Internal Environmental Analysis Revise Organizational Direction, if necessary contd.
  7. 7. CHAPTER 1STRATEGIC MANAGEMENT PROCESS Formulation of alternative strategies Selecting the best strategy Strategy implementation Strategic Evaluation and Control
  8. 8. CHAPTER 1 VISIONWhat the organization want to create ?It has the potential power to focus thecollective energy of insiders and to giveoutsiders a better idea of what anorganization really is
  9. 9. CHAPTER 1 MISSION It relates to the company’s existence withthe needs of the societyIt is defined as “ an enduring statement ofpurpose that distinguishes one companyfrom other similar companies A mission statement is a declaration of anorganization’s reason for being
  10. 10. CHAPTER 1 OBJECTIVESAccomplishment of mission of anorganization requires the formulation of anumber of objectives Objectives are ends towards whichactivity is aimed
  11. 11. CHAPTER 1 GOALSGoals are derived from objectivesGoal is precise and is expressed in clearand specific terms
  12. 12. CHAPTER 1STRATEGIC EVALUATION AND CONTROL Establishment or determination of standard performance Measurement of actual performance Compare the actual performance with thestandard performance Find out whether the actual performance isequal to or more or less than the standardperformance Contd.
  13. 13. CHAPTER 1 STRATEGIC EVALUATION AND CONTROL If the actual performance is either equal to ormore than the standard performance, continuethe strategy implementation process, as nocorrective action is necessaryIf the actual performance is less than thestandards, find out areas to be corrected andtake corrective action Also change or modify the organizationalstrategies, if they cannot be achieved due tosignificant shift in the external environment
  14. 14. CHAPTER 1 CORPORATE LEVEL STRATEGIESThe strategic alternatives applicable to theentire company are known as corporate levelstrategiesThese strategies revolve “around thequestion of whether to continue or change thebusiness enterprise is currently in or improvethe efficiency and effectiveness with whichthe firm achieves its corporate objectives”
  15. 15. CHAPTER 1KINDS OF CORPORATE LEVEL STRATEGIES Glueck and Jauch identified four kinds of corporate level/grand strategies: Stability Strategies Growth Strategies Retrenchment Strategies Combination Strategies
  16. 16. CHAPTER 1 STRATEGIC BUSINESS UNIT (SBU)Organizational activities are divided intostrategic subsystems which have a set ofproducts or services, competitors and a goaldistinct from those of other subsystems Strategies are formulated for eachsubsystem consistent with corporate levelstrategies SBUs are designed based on productdifferentiation, market segments, distinctivecompetencies etc.
  17. 17. CHAPTER 1 GENERIC STRATEGIESGeneric strategies are formulated at the SBUlevel based on product differentiation, marketsegments and distinctive competencyGeneric Strategies are: Low cost leadership Differentiation and Focus
  18. 18. CHAPTER 1 FUNCTIONAL LEVEL STRATEGIESFunctional level strategies are formulated inconsistent the SBU level strategyThe important functional strategies include: Production Marketing HRM Materials Management R&D
  19. 19. CHAPTER 1STRATEGIC HUMAN RESOURCE (SHR) ISSUESThe strategic team at the corporate level, SBUlevel and the functional level should considerfollowing SHR issues while formulating andimplementing strategies: Employment Development Performance Appraisal Compensation Industrial Relations Work Systems Organizational Culture
  20. 20. CHAPTER 1 ORGANISATIONAL AND HUMAN RESOURCE STRATEGIESAppropriate HR strategies at Corporate Level: Stability strategy: Motivation and Retention of skilled employees- job rotation, job enrichment and empowerment are appropriate HR practices Growth strategy (Internal Growth): Training the existing employees and promote them to the higher levels, employ the new candidates at the lower level and outsourcing some employees Contd.
  21. 21. CHAPTER 1ORGANISATIONAL AND HUMAN RESOURCE STRATEGIESConcentration strategy: Training and Developingemployees and outsourcing specialized skillsMergers and Acquisition Strategies: Improving the employee morale, managing and unifying the cultural diversity, counsel the employees regarding resistance to change, adoption to the new system and procedures help the employees in allaying the fears of loosing jobs. Contd.
  22. 22. CHAPTER 1 Work pressures through counselling and open communication Integrating the two wage structures and benefits, preparing an equitable and severance package and arrange outplacement assistance, establish career and succession plans, clarify leadership style and cultural issues etc. Horizontal integration: To train and develop theexisting employees to provide the skills
  23. 23. CHAPTER 1necessary in the area of new business, employingnew candidates for the diversified business,compensation and industrial relations schemesslightly different from those of the existingbusiness• Conglomerate Diversification: Perform HRMfunction altogether from those of the existingcompanies or train the existing employees to thenew business areas, skills etc. and transfer themto the diversified business area. Contd.
  24. 24. CHAPTER 1• Joint Ventures: Formulate the programme formanagement of cultural diversity, train the existingemployees in the new technologies and systems ofthe partner company.• Retrenchment Strategies: •Turnaround strategy- through open communication, employee counselling, reduction in the labour cost • Liquidation and divestment strategy- retrenchment, outplacement assistance, cut in salaries, perks, redeploy in sister organizations etc.
  25. 25. CHAPTER 1• SBU Level Strategies:•Low cost leadership - HR strategies those fit hereare enhancing labour productivity, improving skills,reducing movement time of the employee at workplace, low participation, explicit job criteria etc.• Differentiation Strategy - Relevant HR strategiesare developing creative skills of the employeesthrough training, empowering the employees etc.• Focus/Niche Strategy: Relevant HR strategiesare high employee participation, narrow careerpaths etc.
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