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Ref: SHRM – Charles Greer
Strategic HRM
What is strategy?
Ref: SHRM – Charles Greer
 What is strategy?
 Is it a plan?
 Does it refer to how we will obtain the ends we seek?
Is it a position taken?
 Just as military forces might take the high ground
prior to engaging the enemy..
 Does strategy refer to a pattern in our decisions and
actions?
Strategy is
Ref: SHRM – Charles Greer
 Strategy is all these— 4 P
 It is perspective, position, plan, and pattern.
 Strategy is the bridge between policy or high-order goals on
the one hand and tactics or concrete actions on the other.
 Strategy and tactics together straddle the gap between ends
and means.
 Strategy is a term that refers to thoughts, ideas, insights,
experiences, goals, expertise, memories, perceptions, and
expectations that provides actions.
Meaning
Ref: SHRM – Charles Greer
 Strategy is a term that comes from the Greek
Strategia, meaning "general ship." In the military,
strategy often refers to manoeuvring troops into
position before the enemy is actually engaged
Definitions in use
Ref: SHRM – Charles Greer
 Some of the definitions in use include the
following:
 Strategy is that which top management does that is of
great importance to the organization.
 Strategy refers to basic directional decisions, that is, to
purposes and missions.
 Strategy consists of the important actions necessary to
realize these directions.
 Strategy answers the question: What should the
organization be doing?
 Strategy answers the question: What are the ends we
seek and how should we achieve them?
What is strategic management?
Ref: SHRM – Charles Greer
 A continuous, iterative process aimed at
keeping an organization as a whole
appropriately matched to its environment
(Samuel C. Certo and J. Paul Peter, Strategic
Management)
 Keeping the business in tune with
management and marketing forces both
outside and inside the firm.
Competitive strategy
Ref: SHRM – Charles Greer
 Competitive strategy leads to competitive
advantage
 Generates supernormal ROI
 Offers services of value
 Uses cost effective technology
 Avoids erosion of competitive advantage by
exploiting and developing a technological base
Stages in Strategic management
Ref: SHRM – Charles Greer
 Strategic analysis
 Environmental analysis
 Establish organizational direction
 Strategy formulation
 Strategy implementation
 Strategic control
Strategy & HRM ?– NEED FOR STRATEGIC
HRM
Ref: SHRM – Charles Greer
 Physical assets are viewed as investments
 Can
 superior technology
 Superior facility
 Superior product
Bring about and more importantly sustain competitive
advantage?
 Physical facilities can be duplicated, cloned or
reverse engineered and they no longer
provide competitive advantage
Strategy & HRM ?– NEED FOR STRATEGIC HRM
Ref: SHRM – Charles Greer
 Cost of employees as variable cost of
production.
 No formal recognition of human resource as a key
resource
 No recognition of firms contribution to training
 Cost of recruitment, training and replacement
 ROI for investments in human resources
“maintainable advantage usually from
outstanding depth in selected human skills,
HRM – Changing times?
Ref: SHRM – Charles Greer
 Views of employees as cost centre is
changing
 Selection process
 Induction and training process
 Education
 Retention - negative impact of employee turn
over
 Compensation
 Innovation and learning – cost of un recorded
knowledge
Strategic HRM
Ref: SHRM – Charles Greer
 HRM is a strategic tool only if it contributes to the
bottom line. The question is; Does it?
 Forecasts of shifts in skill needs from manual to
cerebral
 Human Resources needs to looked at from an
Investment perspective.
Strategic analysis HRM
Ref: SHRM – Charles Greer
“To be competitive, organizations in many
industries must have highly skilled.
Knowledgeable workers. They must also have
a relatively stable labour force since employee
turnover works directly against obtaining the
kind of coordination and organizational
learning that leads to fast response and high-
quality products and services”
- Edward Lawler
Human resources Investment Consideration
Ref: SHRM – Charles Greer
 Management values
 Risk return on investments
 Economic rationale for investment in training
 Utility theory
 Outsourcing as an alternative to investment in
Human resources
Investment practices for improved retention
Ref: SHRM – Charles Greer
 Organizational cultures emphasizing
interpersonal relationship values
 Effective selection procedures
 Compensation and benefits
 Job enrichment and job satisfaction
 Practices providing work life balance
 Organizational direction creating confidence
in the future
 Retention of technical employee
 Other practices in facilitating retention
 Opportunities for training, growth, new learning,
liberal transfer policies
Investments in job-secure work forces
Ref: SHRM – Charles Greer
 Recognition of the costs of downsizing and lay offs
 Bumping less senior employees
 Reduced productivity
 Cost of training the incumbent, wage supplement
 Costs relating to termination of employees
 Separation payments, higher rates for unemployment
compensation, Depletion of the firms investment in
training employees.
 Administrative costs
 Human resource processing activities, Clerical
expenses, cost of conducting medical examination of
laid off employees, increased supervisory obligations for
managers of reassigned employees.
 Intangible costs
 Morale, disruption of efficiencies in work processes,
Accidents, Depletion of goodwill, irregular age
distribution
Investments in job-secure work forces
Ref: SHRM – Charles Greer
 Alternatives to layoffs
 When down turn is of short duration
 Block / shut off inflow of personnel into the
organization –attrition brings down the cost
 Redeployment of current employees
 Curtailment of sub contractors and reallocate the
work to permanent employees
 Sharing of economic loss –
 Fewer work days
 Employment guarantees
 The work effort and job security relationship
 The less secure the greater is the flexibility and
productivity
Non-traditional investment
approaches
Ref: SHRM – Charles Greer
 Investment in (disabled) Differently-abled
employees
 Investments in employee health
 Countercyclical hiring – technical personnel .
Stages in Strategic management
Ref: SHRM – Charles Greer
1. Strategic analysis
1. Environmental analysis
1. human resource environment
2. human resource legal environment
2. Establish organizational direction
2. Strategy formulation
1. Human resource planning
3. Strategy implementation
1. Work force utilisation and employment practices
2. Reward and development system
4. Strategic control
1. Performance impact of human resource practices
2. Human resource evaluation
The human resource
environment
Ref: SHRM – Charles Greer
 Global changes
 WTO, EU, G8 , G10 etc.
 Boarders and barriers
 E-commerce, M-commerce
 Emerging markets, new markets.
 Technology
 Demography
 Culture
 Etc….
 The imperative >>‘HR focus’
The human resource environment
-General environment
Ref: SHRM – Charles Greer
 Technology and organisational structure
 Worker values and attitudinal trends
 Management trends
 Demographic trends
 Trends in utilisation of human resources
 International developments
The human resource environment
-General environment
Ref: SHRM – Charles Greer
1. Influence of technology
2. HRIS
3. Redeployment of HR staff
to operating units
4. New organisational
structures (Short /
accountability)
1. Unbounded corporations
2. Virtual corporations /
networked organisations
3. Cellular
organisations/guilds
4. Respondent
organisations/ supply
niche components
5. Stimulus for entrepreneurial
1. Technology and
organisational structure
2. Worker values and
attitudinal trends
3. Management trends
4. Demographic trends
5. Trends in utilisation of
human resources
6. International developments
The human resource environment
-General environment
Ref: SHRM – Charles Greer
1. Ethical/moral issues
1. (older generation blaming
younger generation)
2. Time spent on work/ leisure
3. Work enjoyment / satisfaction
/appeals
4. Loyalty of employees
5. Age
1. Younger no loyalty and
expect none
2. New employee Perception
before joining and after
joining the job
6. Emphasis on core values,
cultures, family, social service)
1. Technology and
organisational structure
2. Worker values and
attitudinal trends
3. Management trends
4. Demographic trends
5. Trends in utilisation of
human resources
6. International
developments
The human resource environment
-General environment
Ref: SHRM – Charles Greer
1. Management of diversity
2. Work teams
3. Virtual teams
4. Human resource
outsourcing
5. Open book management
6. TQM
7. Integrated manufacturing
8. Reengineering
9. Management of
professionals
10. Managing of aftermath of M
1. Technology and
organisational structure
2. Worker values and
attitudinal trends
3. Management trends
4. Demographic trends
5. Trends in utilisation of
human resources
6. International
developments
The human resource environment
-General environment
Ref: SHRM – Charles Greer
1. Aging work force
(HMT)
2. Baby boom-US, China
3. Labour Shortages
4. Racial diversity
5. Occupational
distribution for women
6. Dual career couples
1. Technology and
organisational structure
2. Worker values and attitudinal
trends
3. Management trends
4. Demographic trends
5. Trends in utilisation of human
resources
6. International developments
The human resource environment
-General environment
Ref: SHRM – Charles Greer
1. Telecommuting / working
from home
2. Relocation from work
3. Growing use of temporary
and contingent workers
4. Employee leasing
1. Technology and
organisational structure
2. Worker values and attitudinal
trends
3. Management trends
4. Demographic trends
5. Trends in utilisation of
human resources
6. International developments
The human resource environment
-General environment
Ref: SHRM – Charles Greer
1. NAFTA
2. EU
3. GATT
4. WTO
5. G7
1. Technology and
organisational structure
2. Worker values and attitudinal
trends
3. Management trends
4. Demographic trends
5. Trends in utilisation of human
resources
6. International developments
The human resource environment
-Legal environment
Ref: SHRM – Charles Greer
 An overview of Industrial Relations Climate
 Emerging trends and paradigm shifts towards
Employee Relations
 Employee Relations Policy
 Implications of:
 Employment Related Legislations
 Payment Related Legislations
 Social Security Related Legislations
 Welfare Related Legislations
The human resource environment
-Legal environment
Ref: SHRM – Charles Greer
 Equal employment opportunity for women.
 Age, gender discrimination, promiscuous gender based
harassment. Promiscuity, Dealing with incidences, pregnancy
discrimination, Disability discrimination, Religious
discrimination, Reservations and protection, health care
benefits, family and medical leave.
 Employee relations
 Negligent hiring, immigration, Employment at will, Drug
testing, Safety
 Labour relations and collective bargaining.
 Emerging issues
 Strategic impact of the legal environment
Principles of labour legislation
Ref: SHRM – Charles Greer
 Social Justice:
 Social Equity
 Standards in terms of living, position in
society etc. of the working population.
 National Economy
 International Uniformity
Strategy formulation
Ref: SHRM – Charles Greer
 What are the purpose(s) and objective(s)
of the organization?
 Where is the organization presently
going?
 What critical environmental factors does
the organization currently face?
 What can be done to achieve
organizational objectives more effectively
in the future?
Strategy formulation process
Ref: SHRM – Charles Greer
 Development of organizational philosophy and
mission statement
 Environmental scanning
 Analysis of SWOT
 Formulation of strategic objectives
 Generation of alterative strategy
 Evaluation and selection of strategies
 Informal / incremental strategic planning
 Managed/logical incremental planning
A strategy is the pattern or plan that integrates an organisation’s major goals, policies,
and action sequences into a cohesive whole
Competitive strategy in Business
Units
Ref: SHRM – Charles Greer
 Periodic forward scanning
 Analysis based on longer time frame
 Communication about goals and resource
allocation
 Framework for short-term plan evaluation and
integration
 Decisional criteria framework for short term
decision making
 PLANNING IN SBU’S
 Base strategy will be integrated with functional specializations
to exploit the opportunity seen by the strategy and achieve the
goals.
 Low cost leadership, differentiation, niche
Value Chain Analysis
Ref: SHRM – Charles Greer
 Primary activities
 Inbound logistics
 Operations
 Outbound logistics
 Marketing and sales
 Service
 Secondary Activity
 Procurement
 Human Resource
Management
 Technology
Development
 Infrastructure
Steps in Value Chain Analysis
Ref: SHRM – Charles Greer
 Value chain analysis can be broken down into a
three sequential steps:
1. Break down a market/organisation into its key
activities under each of the major headings in the
model (primary activities / secondary activities)
2. Assess the potential for adding value via cost
advantage or differentiation, or identify current
activities where a business appears to be at a
competitive disadvantage;
3. Determine strategies built around focusing on
activities where competitive advantage can be
sustained
HR strategy ?
Ref: SHRM – Charles Greer
'a human resource system that is tailored
to the demands of the business strategy'
-Miles and Snow 1984
'the pattern of planned human resource
activities intended to enable an organization
to achieve its goals'
- Wright and McMahan 1992
“the pattern planned human resource
deployments and activities intended to enable
an organisation to achieve its goals”
SHRM concern
Ref: SHRM – Charles Greer
SHRM concern is to ensure
 HR management is fully integrated with the strategy
and strategic needs of the firm
 HR policies cohere across policy areas and areas of
hierarchy
 HR practices are adjusted and used by line
manages and employees as part of their everyday
work
Strategic HRM(IMPORTANCE)
Ref: SHRM – Charles Greer
 Needs investment –ROI
 Cost of investment
 Reduction in total Labour cost
 Efficiency in operation
 Optimal use of human resources
 A source of competitive advantage
 Technical skills (pace of technological change)
 Knowledge and capabilities
 Management of critical and Difficult HR areas
 Management of change (Resistance to change)
 Lack of trust
 Antagonistic labour
 Motivational problems
 Management relations
 Economic turbulence
 Within the country (turbulence)
 Globalisation
 Dramatically changing demographics
 Differences in workforce values
Strategic human resource management and ∟ HRP are considered
important to manage uncertainties; HR is integrated with strategy;
Integrating and aligning HR function with strategy
Benefits of SHRM
Ref: SHRM – Charles Greer
1. Identifying and analysing external opportunities and
threats that may be crucial to the company's success.
2. Provides a clear business strategy and vision for the
future.
3. To supply competitive intelligence that may be useful
in the strategic planning process.
4. To recruit, retain and motivate people.
5. To develop and retain of highly competent people.
6. To ensure that people development issues are
addressed systematically.
7. To supply information regarding the company's
internal strengths and weaknesses.
8. To meet the expectations of the customers effectively.
9. To ensure high productivity.
10. To ensure business surplus thorough competency
HRM Practices
Firm strategy Institutional /
Political forces
HR Capital pool
(Skills, abilities)
HR behaviors
Firm level outcomes
(performance,
satisfaction,
absenteeism etc)
Resource
based view
of the firm
Cybernetics
Agency/transaction costs
Resource dependence
institutional
Behavioral
approach
Ref: SHRM – Charles Greer
Theoretical frame work of SHRM
Theoretical frame work of SHRM
Ref: SHRM – Charles Greer
1. Strategy driven
1. Resource based view - Competitive advantage based on unique
allocation of resources {selection /Compensation package} (TCS)
2. Behavioral view - Control and influence the behaviors of individuals
(Infosys)
3. Agency/transactions cost view
1. Use of control systems, performance evaluation and reward
systems etc - (In the absence of performance evaluation strategy
may not be pursued)
1. Non-Strategy driven
1. Resource dependence and power theories
1. Power and politics= legislation, unionization, control
of resources, expectations of social responsibility.
2. Institutional theory
1. In appropriate performance evaluation dimensions
HUMAN RESOURCE ACTIVITY TYPOLOGY
Staffing planning
Benefits of planning
Retirement planning
Compliance
Performance enhancement
Consulting
Employee relations
Labour negotiations
Executive compensation
Employee development
Management development
Recruitment interviewing
< IMPORTANT TO EXECUTIVES >
Payroll
Benefits administration
Retirement administration
Employee records
Relocation administration
Recruitment information processing
< IMPORTANT TO EMPLOYEES >
Recruitment information processing
Employee assistance programs
Strategic value of
activity
Low
High
Relationship
Transactional Type of HR activity
Back Ref: SHRM – Charles Greer
Benefits of integrating HRP with Strategic
planning
Ref: SHRM – Charles Greer
 Generates more solutions to complex
organizational problems
 Ensures consideration of human resources in
organizational goal setting process
 Ensures consideration of human resources in
assessment of organizational abilities to
accomplish goals and implement strategies
 Reciprocal integration prevents strategy
formulation based on personal
rigidities/preferences
 Facilitates concurrent consideration of
strategic plans and managerial succession.
Strategic components of HRM
relevant to internal fit
Ref: SHRM – Charles Greer
 Management awareness
 Management of the function
 Portfolio of programs
 Personnel skills
 Information technology
 Awareness of the environment
HR Practitioners Role
Ref: SHRM – Charles Greer
 The HR managers have keen role in the effective planning and
implementation of the policies and decisions that in tune with the
business changes.
 They should act as strategic partners and be proactive in their role than
mere reactive, passive spectators.
 The HR managers should understand how far their decisions
contribute to business surplus incorporating human competency and
performance to the organisation.
 Strategic HR managers need a change in their outlook from seeing
themselves as relationship managers to strategic resource managers.
 Kossek (1987, 1989) argues that major HRM innovations occur when senior
management takes the lead and adoption of innovative SHRM practices is dependent
on the nature of relationship of the HR Department with the CEO and the line
managers.
 Legge (1978) commenting on the actions of the personnel practitioner in the
innovation process suggests that adoption of an innovation by an organization
depends largely on HR practitioners' credibility with information and resource
providers.
 HR Department and HR managers in these innovative organizations play a
strategic role (Ulrich, 1997) linking the HR strategy with the business
strategy of the organization.
 A crucial aspect concerning SHRM is the concepts of fit and flexibility. The
degree of fit determines the human resource system's integration with
organization strategy. It is the role of HR Managers to ensure this fit in
between Human Resource System with the Organization Strategy.
Requirements for SHR-Managers
Ref: SHRM – Charles Greer
 Information management skills
 Planning skills
 Management skills
 Integration skills
 Change management skills
Human resource planning
Ref: SHRM – Charles Greer
 Strategic role of HRP
 Over view of HRP
 Managerial issues in planning
 Selecting forecasting technique
 Forecasting the supply of human resources
 Forecasting the demand for human resources
Human resource planning
Ref: SHRM – Charles Greer
 Strategic role of HRP
 Over view of HRP
 Managerial issues in
planning
 Selecting forecasting
technique
 Forecasting the supply
of human resources
 Forecasting the demand
for human resources
 Developmental planning
for strategic leadership
 Assessment of strategic
alternatives
 Adding value
 Contribution to strategic
human resource
management
 Strategic salary
planning.
Human resource planning
Ref: SHRM – Charles Greer
 Strategic role of HRP
 Over view of HRP
 Managerial issues in
planning
 Selecting forecasting
technique
 Forecasting the supply
of human resources
 Forecasting the demand
for human resources
 Steps in HRP
 Interfacing strategic planning and
scanning the environment
 Taking an inventory of the companies
current human resources.
 Forecasting the demand for human
resources
 Forecasting the supply of human
resources both from within the
organization and from the external
labor market
 Comparing the forecast of demand and
supply
 Planning the actions needed to deal
with anticipated shortages or overages
 Feeding back such information into the
strategic management process
Human resource planning
Ref: SHRM – Charles Greer
 Strategic role of HRP
 Over view of HRP
 Managerial issues in
planning
 Selecting forecasting
technique
 Forecasting the supply
of human resources
 Forecasting the demand
for human resources
 Planning in a context
of change
 Responsibility for
human resource
planning
 Failure to plan for
human resources
Human resource planning
Ref: SHRM – Charles Greer
 Strategic role of HRP
 Over view of HRP
 Managerial issues in
planning
 Selecting forecasting
technique
 Forecasting the supply
of human resources
 Forecasting the demand
for human resources
 Personal implications
 Changing receptivity
towards planning
 Stricter legislations for
lay off etc
 Other issues
 Mind set of work force
and related actions.
Human resource planning
Ref: SHRM – Charles Greer
 Strategic role of HRP
 Over view of HRP
 Managerial issues in
planning
 Selecting forecasting
technique
 Forecasting the supply
of human resources
 Forecasting the demand
for human resources
 Purpose of planning
 Organisational
characteristics
 Industry characteristics
 Environmental
turbulence
 Other consideration
 Technique of forecasting
 Cost
 Accuracy
Human resource planning
Ref: SHRM – Charles Greer
 Strategic role of HRP
 Over view of HRP
 Managerial issues in
planning
 Selecting forecasting
technique
 Forecasting the supply
of human resources
 Forecasting the demand
for human resources
 Replacement charts Mgr posi
 Human resurce
inventories
 Succession planning
 Markov analysis ….
 Renewal models age cohorts, internal
mobilization
 Computer simulation
 Regression analysis
 Trend extrapolation
 Utilisation of supply
forecasting techniques
Human resource planning
Ref: SHRM – Charles Greer
 Strategic role of HRP
 Over view of HRP
 Managerial issues in
planning
 Selecting forecasting
technique
 Forecasting the supply
of human resources
 Forecasting the demand
for human resources
 Heuristics, Rule of
thumb and the Delphi
technique
 Operations research
and management
science technique
 Regression analysis
 Utilisation of demand
forecasting technique
 Trend extrapolation
Strategy formulation process
Ref: SHRM – Charles Greer
 Development of organizational philosophy and
mission statement
 Environmental scanning
 Analysis of SWOT
 Formulation of strategic objectives
 Generation of alterative strategy
 Evaluation and selection of strategies
 Informal / incremental strategic planning
 Managed/logical incremental planning
A strategy is the pattern or plan that integrates an organisation’s major goals, policies,
and action sequences into a cohesive whole
Strategy implementation
work force utilization and employment practices
Ref: SHRM – Charles Greer
 Efficient utilization of human resources
 Dealing with employee shortages
 Selection of employees
 Dealing with employee surpluses
Strategy implementation
work force utilization and employment practices
Ref: SHRM – Charles Greer
 Efficient utilization of
human resources
 Dealing with
employee shortages
 Selection of
employees
 Dealing with
employee surpluses
 Cross training and flexibility
in assigning work
 Using work teams
 Requirements for effective
teams
 Forming
 Storming
 Norming
 performing
 Operating on a non union
basis
Strategy implementation
work force utilization and employment practices
Ref: SHRM – Charles Greer
 Efficient utilization of
human resources
 Dealing with
employee shortages
 Selection of
employees
 Dealing with
employee surpluses
 Strategic recruiting
 Special recruiting for
minorities and women
workers
 Flexible retirement as
a source of labour
 Managing vendors of
outsourced functions
Strategy implementation
work force utilization and employment practices
Ref: SHRM – Charles Greer
 Efficient utilization of
human resources
 Dealing with
employee shortages
 Selection of
employees
 Dealing with
employee surpluses
 Managing vendors of
outsourced functions
 Making the outsourcing
decision
 Selecting and negotiating
with outsourcing vendors
 Managing the outsourcing
transactions
 Managing vendor
relationships
 Monitoring and evaluating
vendor performance
Strategy implementation
work force utilization and employment practices
Ref: SHRM – Charles Greer
 Efficient utilization of
human resources
 Dealing with
employee shortages
 Selection of
employees
 Dealing with
employee surpluses
 Reliability and validity
 Predictive validity
 Concurrent validity
 Content validity
 Job analysis
 KSA
 Interviews
 Behavioural interviews
 Testing
 Assessment centres
Strategy implementation
work force utilization and employment practices
Ref: SHRM – Charles Greer
 Efficient utilization of
human resources
 Dealing with
employee shortages
 Selection of
employees
 Dealing with
employee surpluses
 Redeployment and
retraining
 Early retirement
 Retreat from
employment security
policy
 Downsizing and
layoffs
 Termination strategies
Strategy implementation
work force utilization and employment practices
Ref: SHRM – Charles Greer
 Downsizing and layoffs
 Findings
 Co are not well prepared
 6 months to 1 year co indicators do
not improve –profits, ROI, Stock
prices, expense ratios
 Survivors syndrome
 Myth of job security exploded (Who
moved my cheese)
 Sustained improvement can be
brought about only with
improvements in productivity,
quality and effectiveness and
integrate reductions in head count
with planned changes in the way
the work is designed.
 Downsizing in not a one time quick
fix solution to enhance
competitiveness. –is a part of
continuous improvement.
 Efficient utilization of
human resources
 Dealing with
employee shortages
 Selection of
employees
 Dealing with
employee surpluses
Strategy implementation
work force utilization and employment practices
Ref: SHRM – Charles Greer
 Downsizing and layoffs
 Guide lines for conduct of layoffs
 Give early warnings /
announcements of layoffs
 Soften the impact with
compensation and benefits
 Utilise the services of outplacement
firms
 Supply retraining services
 Provide equitable and decent
treatment to laid off employees
 Ensure supportive treatment of
survivors
 Maintain a cooperative approach
with unions
 Uphold obligation to the community
 Efficient utilization of
human resources
 Dealing with
employee shortages
 Selection of
employees
 Dealing with
employee surpluses
Special implementation
challenges
Ref: SHRM – Charles Greer
 Career path for technical professionals
 Dual career couples
 Strategy implementation system – Reward and
development systems
 Strategically oriented performance management system
 Strategically oriented compensation systems
 Employee development
Strategy implementation system
– Reward and development systems
Ref: SHRM – Charles Greer
 Strategically oriented
performance
management system
 Strategically oriented
compensation
systems
 Employee
development
 Performance measurement
approaches
 MBO
 Graphic scale rating
 Narratives
 BARS
 Behavioral observation
scales
 360 –degree feedback
 Performance evaluation of
executives
 Effectiveness of performance
measurement.
YOU GET WHAT YOU MEASURE, YOU MEASURE WHAT YOU VALUE, YOU
CAN NOT CONTROL WHAT YOU CANNOT MEASURE.
Strategy implementation system
– Reward and development systems
Ref: SHRM – Charles Greer
 Strategically oriented
performance
management system
 Strategically oriented
compensation
systems
 Employee
development
 Traditional
compensation
systems
 Job analysis > job evaluation
> salary/wage hierarchy
 Point system
 Factor comparison system
 Hybrid system
 Internal equity
 > Wage surveys to establish
external equity.
Strategy implementation system
– Reward and development systems
Ref: SHRM – Charles Greer
 Strategically oriented
performance
management system
 Strategically oriented
compensation
systems
 Employee
development
 Traditional
compensation systems
 Inadequacies
 Wage for know-how not
given
 Compensated for specific
job only
 Impact of collective
bargaining on wage
structures.
 Does not work well with
managers and
professionals
Strategy implementation system
– Reward and development systems
Ref: SHRM – Charles Greer
 Strategically oriented
performance
management system
 Strategically oriented
compensation
systems
 Employee
development
 Skill based pay
 Broad banding
 Team based pay
 Variable
compensation
 Executive
compensation
Strategy implementation system
– Reward and development systems
Ref: SHRM – Charles Greer
 Strategically oriented
performance
management system
 Strategically oriented
compensation
systems
 Employee
development
 Training programs
 Training methods
 Apprenticeships
 Management
development
 Management
development for
international
assignments
 Product life cycle and
managerial fit
 PLC, Evolutionary stage >
Steady state
 Development Vs selection
The performance impact of
human resource practices
Ref: SHRM – Charles Greer
 Individual high performance practices
 Limitations of individual practices
 Evolution of practices
 Systems of high performance human resource
practices
 Individual best practices Vs systems of
practices
 Universal practices Vs contingency
perspectives
The performance impact of
human resource practices
Ref: SHRM – Charles Greer
 Seven management
practices that enhance
performance –Jefrey
Pfeffer
1. Employment security
2. Selective hiring of new
personnel
3. Self managed teams and
decentralization of decision
making as basic principle of
org design
4. Comparatively high
compensation on
organizational performance
5. Extensive training
6. Reduced status distinctions
and barriers
7. Extensive sharing of financial
and performance information.
 Individual high performance
practices
 Limitations of individual
practices
 Evolution of practices
 Systems of high performance
human resource practices
 Individual best practices Vs
systems of practices
 Universal practices Vs
contingency perspectives
The performance impact of
human resource practices
Ref: SHRM – Charles Greer
 Compensation
 High compensation linked to
organisational performance
 Incentive based compensation
 Profit sharing
 Team based compensation
 Diversity
 Employment
 Countercyclical hiring,
downsizing, early retirement
programs, employment
security, human resource
outsourcing.
 Industrial relations
 Decertification of union
bargaining agent
 Positive labour relations
 Strikes, lockouts
 Internal labour market
 Individual high performance
practices
 Limitations of individual
practices
 Evolution of practices
 Systems of high performance
human resource practices
 Individual best practices Vs
systems of practices
 Universal practices Vs
contingency perspectives
The performance impact of
human resource practices
Ref: SHRM – Charles Greer
 motivation
 Decentralized decision
making
 Self managed teams
 Open book management
 Reduced status
differentials or symbolic
egalitarianism
 Performance management
 Staffing
 Cognitive tests, staffing
selectivity, CEO
succession insider
outsider, yield analysis of
recruiting sources
 Training
 Individual high performance
practices
 Limitations of individual
practices
 Evolution of practices
 Systems of high performance
human resource practices
 Individual best practices Vs
systems of practices
 Universal practices Vs
contingency perspectives
The performance impact of
human resource practices
Ref: SHRM – Charles Greer
 Individual high performance
practices
 Limitations of individual
practices
 Evolution of practices
 Systems of high
performance human
resource practices
 Individual best practices Vs
systems of practices
 Universal practices Vs
contingency perspectives
 Each practice has a
different kind of impact
on individual workers –
if possible to address at
individual levels the
same may be done.
 Results of studies that
give positive or negative
indication can not be
taken as absolute
The performance impact of
human resource practices
Ref: SHRM – Charles Greer
 Individual high performance
practices
 Limitations of individual
practices
 Evolution of practices
 Systems of high
performance human
resource practices
 Individual best practices Vs
systems of practices
 Universal practices Vs
contingency perspectives
 HR practices are path
dependant. They
consist of policies that
are developed over time
and cannot be simply
purchased in the market
by competitors.
The performance impact of
human resource practices
Ref: SHRM – Charles Greer
Has positive impact
 Commitment oriented systems
 Decentralized decision making,
general training, Highly skilled
employees, High wages - bonuses
 Human capital enhancement
 Comprehensive training, BARS,
Technical and problem solving skills,
selective staffing
 Human resource administrative
system
 Hourly pay, individual equity, individual
incentive, result based performance
appraisal
 Motivation and commitment system
 Receptiveness to new training,
compensation contingent on firms
performance, extent of status
differentials
 Skills and organizational structures
 Attitude survey, access to grievance
procedures, formal job anasysis, info
sharing
 Individual high performance
practices
 Limitations of individual
practices
 Evolution of practices
 Systems of high performance
human resource practices
 Individual best practices Vs
systems of practices
 Universal practices Vs
contingency perspectives
The performance impact of
human resource practices
Ref: SHRM – Charles Greer
 Individual high performance
practices
 Limitations of individual
practices
 Evolution of practices
 Systems of high
performance human
resource practices
 Individual best practices Vs
systems of practices
 Universal practices Vs
contingency perspectives
 Mxed evidence and
response
 Some individual practices
have had positive impact
 Systems of practices have
both
 Adoption
 Implementation
 fit
The performance impact of
human resource practices
Ref: SHRM – Charles Greer
 Individual high performance
practices
 Limitations of individual
practices
 Evolution of practices
 Systems of high
performance human
resource practices
 Individual best practices Vs
systems of practices
 Universal practices Vs
contingency perspectives
 Have their own
applicability
 Evidence for success of
both
 Greater evidence for
contingency
Human Resource Evaluation
Ref: SHRM – Charles Greer
 Overview of evaluation
 Approaches to evaluation
 Prevalence of evaluation
 Evaluating strategic contributions of traditional
areas
 Evaluating strategic contributions in emerging
areas
Human Resource Evaluation
Ref: SHRM – Charles Greer
 Overview of evaluation
 Approaches to
evaluation
 Prevalence of
evaluation
 Evaluating strategic
contributions of
traditional areas
 Evaluating strategic
contributions in
emerging areas
 Scope of evaluation
 Strategic impact
 Level of analysis
 Criteria
 Level of constituents
 Ethical dimensiona
Human Resource Evaluation
Ref: SHRM – Charles Greer
 Overview of evaluation
 Approaches to
evaluation
 Prevalence of
evaluation
 Evaluating strategic
contributions of
traditional areas
 Evaluating strategic
contributions in
emerging areas
 Audit approaches
 Analytical approaches
 Quantitative and
qualitative measures
 Balance scorecard
perspective
 Benchmarking
 Industry influences
Human Resource Evaluation
Ref: SHRM – Charles Greer
 Overview of evaluation
 Approaches to
evaluation
 Prevalence of
evaluation
 Evaluating strategic
contributions of
traditional areas
 Evaluating strategic
contributions in
emerging areas
 Little
 Results not revealed
Human Resource Evaluation
Ref: SHRM – Charles Greer
 Overview of evaluation
 Approaches to
evaluation
 Prevalence of
evaluation
 Evaluating strategic
contributions of
traditional areas
 Evaluating strategic
contributions in
emerging areas
 HRP
 Staffing
 Training
 Performance evaluation
systems
 Compensation systems
 Utility analysis
 labour and employee
relations
Human Resource Evaluation
Ref: SHRM – Charles Greer
 Overview of evaluation
 Approaches to
evaluation
 Prevalence of
evaluation
 Evaluating strategic
contributions of
traditional areas
 Evaluating strategic
contributions in
emerging areas
 Equal employment
opportunity and
management of
diversity
 Quality readiness

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strategic hrm.ppt

  • 1. Ref: SHRM – Charles Greer Strategic HRM
  • 2. What is strategy? Ref: SHRM – Charles Greer  What is strategy?  Is it a plan?  Does it refer to how we will obtain the ends we seek? Is it a position taken?  Just as military forces might take the high ground prior to engaging the enemy..  Does strategy refer to a pattern in our decisions and actions?
  • 3. Strategy is Ref: SHRM – Charles Greer  Strategy is all these— 4 P  It is perspective, position, plan, and pattern.  Strategy is the bridge between policy or high-order goals on the one hand and tactics or concrete actions on the other.  Strategy and tactics together straddle the gap between ends and means.  Strategy is a term that refers to thoughts, ideas, insights, experiences, goals, expertise, memories, perceptions, and expectations that provides actions.
  • 4. Meaning Ref: SHRM – Charles Greer  Strategy is a term that comes from the Greek Strategia, meaning "general ship." In the military, strategy often refers to manoeuvring troops into position before the enemy is actually engaged
  • 5. Definitions in use Ref: SHRM – Charles Greer  Some of the definitions in use include the following:  Strategy is that which top management does that is of great importance to the organization.  Strategy refers to basic directional decisions, that is, to purposes and missions.  Strategy consists of the important actions necessary to realize these directions.  Strategy answers the question: What should the organization be doing?  Strategy answers the question: What are the ends we seek and how should we achieve them?
  • 6. What is strategic management? Ref: SHRM – Charles Greer  A continuous, iterative process aimed at keeping an organization as a whole appropriately matched to its environment (Samuel C. Certo and J. Paul Peter, Strategic Management)  Keeping the business in tune with management and marketing forces both outside and inside the firm.
  • 7. Competitive strategy Ref: SHRM – Charles Greer  Competitive strategy leads to competitive advantage  Generates supernormal ROI  Offers services of value  Uses cost effective technology  Avoids erosion of competitive advantage by exploiting and developing a technological base
  • 8. Stages in Strategic management Ref: SHRM – Charles Greer  Strategic analysis  Environmental analysis  Establish organizational direction  Strategy formulation  Strategy implementation  Strategic control
  • 9. Strategy & HRM ?– NEED FOR STRATEGIC HRM Ref: SHRM – Charles Greer  Physical assets are viewed as investments  Can  superior technology  Superior facility  Superior product Bring about and more importantly sustain competitive advantage?  Physical facilities can be duplicated, cloned or reverse engineered and they no longer provide competitive advantage
  • 10. Strategy & HRM ?– NEED FOR STRATEGIC HRM Ref: SHRM – Charles Greer  Cost of employees as variable cost of production.  No formal recognition of human resource as a key resource  No recognition of firms contribution to training  Cost of recruitment, training and replacement  ROI for investments in human resources “maintainable advantage usually from outstanding depth in selected human skills,
  • 11. HRM – Changing times? Ref: SHRM – Charles Greer  Views of employees as cost centre is changing  Selection process  Induction and training process  Education  Retention - negative impact of employee turn over  Compensation  Innovation and learning – cost of un recorded knowledge
  • 12. Strategic HRM Ref: SHRM – Charles Greer  HRM is a strategic tool only if it contributes to the bottom line. The question is; Does it?  Forecasts of shifts in skill needs from manual to cerebral  Human Resources needs to looked at from an Investment perspective.
  • 13. Strategic analysis HRM Ref: SHRM – Charles Greer “To be competitive, organizations in many industries must have highly skilled. Knowledgeable workers. They must also have a relatively stable labour force since employee turnover works directly against obtaining the kind of coordination and organizational learning that leads to fast response and high- quality products and services” - Edward Lawler
  • 14. Human resources Investment Consideration Ref: SHRM – Charles Greer  Management values  Risk return on investments  Economic rationale for investment in training  Utility theory  Outsourcing as an alternative to investment in Human resources
  • 15. Investment practices for improved retention Ref: SHRM – Charles Greer  Organizational cultures emphasizing interpersonal relationship values  Effective selection procedures  Compensation and benefits  Job enrichment and job satisfaction  Practices providing work life balance  Organizational direction creating confidence in the future  Retention of technical employee  Other practices in facilitating retention  Opportunities for training, growth, new learning, liberal transfer policies
  • 16. Investments in job-secure work forces Ref: SHRM – Charles Greer  Recognition of the costs of downsizing and lay offs  Bumping less senior employees  Reduced productivity  Cost of training the incumbent, wage supplement  Costs relating to termination of employees  Separation payments, higher rates for unemployment compensation, Depletion of the firms investment in training employees.  Administrative costs  Human resource processing activities, Clerical expenses, cost of conducting medical examination of laid off employees, increased supervisory obligations for managers of reassigned employees.  Intangible costs  Morale, disruption of efficiencies in work processes, Accidents, Depletion of goodwill, irregular age distribution
  • 17. Investments in job-secure work forces Ref: SHRM – Charles Greer  Alternatives to layoffs  When down turn is of short duration  Block / shut off inflow of personnel into the organization –attrition brings down the cost  Redeployment of current employees  Curtailment of sub contractors and reallocate the work to permanent employees  Sharing of economic loss –  Fewer work days  Employment guarantees  The work effort and job security relationship  The less secure the greater is the flexibility and productivity
  • 18. Non-traditional investment approaches Ref: SHRM – Charles Greer  Investment in (disabled) Differently-abled employees  Investments in employee health  Countercyclical hiring – technical personnel .
  • 19. Stages in Strategic management Ref: SHRM – Charles Greer 1. Strategic analysis 1. Environmental analysis 1. human resource environment 2. human resource legal environment 2. Establish organizational direction 2. Strategy formulation 1. Human resource planning 3. Strategy implementation 1. Work force utilisation and employment practices 2. Reward and development system 4. Strategic control 1. Performance impact of human resource practices 2. Human resource evaluation
  • 20. The human resource environment Ref: SHRM – Charles Greer  Global changes  WTO, EU, G8 , G10 etc.  Boarders and barriers  E-commerce, M-commerce  Emerging markets, new markets.  Technology  Demography  Culture  Etc….  The imperative >>‘HR focus’
  • 21. The human resource environment -General environment Ref: SHRM – Charles Greer  Technology and organisational structure  Worker values and attitudinal trends  Management trends  Demographic trends  Trends in utilisation of human resources  International developments
  • 22. The human resource environment -General environment Ref: SHRM – Charles Greer 1. Influence of technology 2. HRIS 3. Redeployment of HR staff to operating units 4. New organisational structures (Short / accountability) 1. Unbounded corporations 2. Virtual corporations / networked organisations 3. Cellular organisations/guilds 4. Respondent organisations/ supply niche components 5. Stimulus for entrepreneurial 1. Technology and organisational structure 2. Worker values and attitudinal trends 3. Management trends 4. Demographic trends 5. Trends in utilisation of human resources 6. International developments
  • 23. The human resource environment -General environment Ref: SHRM – Charles Greer 1. Ethical/moral issues 1. (older generation blaming younger generation) 2. Time spent on work/ leisure 3. Work enjoyment / satisfaction /appeals 4. Loyalty of employees 5. Age 1. Younger no loyalty and expect none 2. New employee Perception before joining and after joining the job 6. Emphasis on core values, cultures, family, social service) 1. Technology and organisational structure 2. Worker values and attitudinal trends 3. Management trends 4. Demographic trends 5. Trends in utilisation of human resources 6. International developments
  • 24. The human resource environment -General environment Ref: SHRM – Charles Greer 1. Management of diversity 2. Work teams 3. Virtual teams 4. Human resource outsourcing 5. Open book management 6. TQM 7. Integrated manufacturing 8. Reengineering 9. Management of professionals 10. Managing of aftermath of M 1. Technology and organisational structure 2. Worker values and attitudinal trends 3. Management trends 4. Demographic trends 5. Trends in utilisation of human resources 6. International developments
  • 25. The human resource environment -General environment Ref: SHRM – Charles Greer 1. Aging work force (HMT) 2. Baby boom-US, China 3. Labour Shortages 4. Racial diversity 5. Occupational distribution for women 6. Dual career couples 1. Technology and organisational structure 2. Worker values and attitudinal trends 3. Management trends 4. Demographic trends 5. Trends in utilisation of human resources 6. International developments
  • 26. The human resource environment -General environment Ref: SHRM – Charles Greer 1. Telecommuting / working from home 2. Relocation from work 3. Growing use of temporary and contingent workers 4. Employee leasing 1. Technology and organisational structure 2. Worker values and attitudinal trends 3. Management trends 4. Demographic trends 5. Trends in utilisation of human resources 6. International developments
  • 27. The human resource environment -General environment Ref: SHRM – Charles Greer 1. NAFTA 2. EU 3. GATT 4. WTO 5. G7 1. Technology and organisational structure 2. Worker values and attitudinal trends 3. Management trends 4. Demographic trends 5. Trends in utilisation of human resources 6. International developments
  • 28. The human resource environment -Legal environment Ref: SHRM – Charles Greer  An overview of Industrial Relations Climate  Emerging trends and paradigm shifts towards Employee Relations  Employee Relations Policy  Implications of:  Employment Related Legislations  Payment Related Legislations  Social Security Related Legislations  Welfare Related Legislations
  • 29. The human resource environment -Legal environment Ref: SHRM – Charles Greer  Equal employment opportunity for women.  Age, gender discrimination, promiscuous gender based harassment. Promiscuity, Dealing with incidences, pregnancy discrimination, Disability discrimination, Religious discrimination, Reservations and protection, health care benefits, family and medical leave.  Employee relations  Negligent hiring, immigration, Employment at will, Drug testing, Safety  Labour relations and collective bargaining.  Emerging issues  Strategic impact of the legal environment
  • 30. Principles of labour legislation Ref: SHRM – Charles Greer  Social Justice:  Social Equity  Standards in terms of living, position in society etc. of the working population.  National Economy  International Uniformity
  • 31. Strategy formulation Ref: SHRM – Charles Greer  What are the purpose(s) and objective(s) of the organization?  Where is the organization presently going?  What critical environmental factors does the organization currently face?  What can be done to achieve organizational objectives more effectively in the future?
  • 32. Strategy formulation process Ref: SHRM – Charles Greer  Development of organizational philosophy and mission statement  Environmental scanning  Analysis of SWOT  Formulation of strategic objectives  Generation of alterative strategy  Evaluation and selection of strategies  Informal / incremental strategic planning  Managed/logical incremental planning A strategy is the pattern or plan that integrates an organisation’s major goals, policies, and action sequences into a cohesive whole
  • 33. Competitive strategy in Business Units Ref: SHRM – Charles Greer  Periodic forward scanning  Analysis based on longer time frame  Communication about goals and resource allocation  Framework for short-term plan evaluation and integration  Decisional criteria framework for short term decision making  PLANNING IN SBU’S  Base strategy will be integrated with functional specializations to exploit the opportunity seen by the strategy and achieve the goals.  Low cost leadership, differentiation, niche
  • 34. Value Chain Analysis Ref: SHRM – Charles Greer  Primary activities  Inbound logistics  Operations  Outbound logistics  Marketing and sales  Service  Secondary Activity  Procurement  Human Resource Management  Technology Development  Infrastructure
  • 35. Steps in Value Chain Analysis Ref: SHRM – Charles Greer  Value chain analysis can be broken down into a three sequential steps: 1. Break down a market/organisation into its key activities under each of the major headings in the model (primary activities / secondary activities) 2. Assess the potential for adding value via cost advantage or differentiation, or identify current activities where a business appears to be at a competitive disadvantage; 3. Determine strategies built around focusing on activities where competitive advantage can be sustained
  • 36. HR strategy ? Ref: SHRM – Charles Greer 'a human resource system that is tailored to the demands of the business strategy' -Miles and Snow 1984 'the pattern of planned human resource activities intended to enable an organization to achieve its goals' - Wright and McMahan 1992 “the pattern planned human resource deployments and activities intended to enable an organisation to achieve its goals”
  • 37. SHRM concern Ref: SHRM – Charles Greer SHRM concern is to ensure  HR management is fully integrated with the strategy and strategic needs of the firm  HR policies cohere across policy areas and areas of hierarchy  HR practices are adjusted and used by line manages and employees as part of their everyday work
  • 38. Strategic HRM(IMPORTANCE) Ref: SHRM – Charles Greer  Needs investment –ROI  Cost of investment  Reduction in total Labour cost  Efficiency in operation  Optimal use of human resources  A source of competitive advantage  Technical skills (pace of technological change)  Knowledge and capabilities  Management of critical and Difficult HR areas  Management of change (Resistance to change)  Lack of trust  Antagonistic labour  Motivational problems  Management relations  Economic turbulence  Within the country (turbulence)  Globalisation  Dramatically changing demographics  Differences in workforce values Strategic human resource management and ∟ HRP are considered important to manage uncertainties; HR is integrated with strategy; Integrating and aligning HR function with strategy
  • 39. Benefits of SHRM Ref: SHRM – Charles Greer 1. Identifying and analysing external opportunities and threats that may be crucial to the company's success. 2. Provides a clear business strategy and vision for the future. 3. To supply competitive intelligence that may be useful in the strategic planning process. 4. To recruit, retain and motivate people. 5. To develop and retain of highly competent people. 6. To ensure that people development issues are addressed systematically. 7. To supply information regarding the company's internal strengths and weaknesses. 8. To meet the expectations of the customers effectively. 9. To ensure high productivity. 10. To ensure business surplus thorough competency
  • 40. HRM Practices Firm strategy Institutional / Political forces HR Capital pool (Skills, abilities) HR behaviors Firm level outcomes (performance, satisfaction, absenteeism etc) Resource based view of the firm Cybernetics Agency/transaction costs Resource dependence institutional Behavioral approach Ref: SHRM – Charles Greer Theoretical frame work of SHRM
  • 41. Theoretical frame work of SHRM Ref: SHRM – Charles Greer 1. Strategy driven 1. Resource based view - Competitive advantage based on unique allocation of resources {selection /Compensation package} (TCS) 2. Behavioral view - Control and influence the behaviors of individuals (Infosys) 3. Agency/transactions cost view 1. Use of control systems, performance evaluation and reward systems etc - (In the absence of performance evaluation strategy may not be pursued) 1. Non-Strategy driven 1. Resource dependence and power theories 1. Power and politics= legislation, unionization, control of resources, expectations of social responsibility. 2. Institutional theory 1. In appropriate performance evaluation dimensions
  • 42. HUMAN RESOURCE ACTIVITY TYPOLOGY Staffing planning Benefits of planning Retirement planning Compliance Performance enhancement Consulting Employee relations Labour negotiations Executive compensation Employee development Management development Recruitment interviewing < IMPORTANT TO EXECUTIVES > Payroll Benefits administration Retirement administration Employee records Relocation administration Recruitment information processing < IMPORTANT TO EMPLOYEES > Recruitment information processing Employee assistance programs Strategic value of activity Low High Relationship Transactional Type of HR activity Back Ref: SHRM – Charles Greer
  • 43. Benefits of integrating HRP with Strategic planning Ref: SHRM – Charles Greer  Generates more solutions to complex organizational problems  Ensures consideration of human resources in organizational goal setting process  Ensures consideration of human resources in assessment of organizational abilities to accomplish goals and implement strategies  Reciprocal integration prevents strategy formulation based on personal rigidities/preferences  Facilitates concurrent consideration of strategic plans and managerial succession.
  • 44. Strategic components of HRM relevant to internal fit Ref: SHRM – Charles Greer  Management awareness  Management of the function  Portfolio of programs  Personnel skills  Information technology  Awareness of the environment
  • 45. HR Practitioners Role Ref: SHRM – Charles Greer  The HR managers have keen role in the effective planning and implementation of the policies and decisions that in tune with the business changes.  They should act as strategic partners and be proactive in their role than mere reactive, passive spectators.  The HR managers should understand how far their decisions contribute to business surplus incorporating human competency and performance to the organisation.  Strategic HR managers need a change in their outlook from seeing themselves as relationship managers to strategic resource managers.  Kossek (1987, 1989) argues that major HRM innovations occur when senior management takes the lead and adoption of innovative SHRM practices is dependent on the nature of relationship of the HR Department with the CEO and the line managers.  Legge (1978) commenting on the actions of the personnel practitioner in the innovation process suggests that adoption of an innovation by an organization depends largely on HR practitioners' credibility with information and resource providers.  HR Department and HR managers in these innovative organizations play a strategic role (Ulrich, 1997) linking the HR strategy with the business strategy of the organization.  A crucial aspect concerning SHRM is the concepts of fit and flexibility. The degree of fit determines the human resource system's integration with organization strategy. It is the role of HR Managers to ensure this fit in between Human Resource System with the Organization Strategy.
  • 46. Requirements for SHR-Managers Ref: SHRM – Charles Greer  Information management skills  Planning skills  Management skills  Integration skills  Change management skills
  • 47. Human resource planning Ref: SHRM – Charles Greer  Strategic role of HRP  Over view of HRP  Managerial issues in planning  Selecting forecasting technique  Forecasting the supply of human resources  Forecasting the demand for human resources
  • 48. Human resource planning Ref: SHRM – Charles Greer  Strategic role of HRP  Over view of HRP  Managerial issues in planning  Selecting forecasting technique  Forecasting the supply of human resources  Forecasting the demand for human resources  Developmental planning for strategic leadership  Assessment of strategic alternatives  Adding value  Contribution to strategic human resource management  Strategic salary planning.
  • 49. Human resource planning Ref: SHRM – Charles Greer  Strategic role of HRP  Over view of HRP  Managerial issues in planning  Selecting forecasting technique  Forecasting the supply of human resources  Forecasting the demand for human resources  Steps in HRP  Interfacing strategic planning and scanning the environment  Taking an inventory of the companies current human resources.  Forecasting the demand for human resources  Forecasting the supply of human resources both from within the organization and from the external labor market  Comparing the forecast of demand and supply  Planning the actions needed to deal with anticipated shortages or overages  Feeding back such information into the strategic management process
  • 50. Human resource planning Ref: SHRM – Charles Greer  Strategic role of HRP  Over view of HRP  Managerial issues in planning  Selecting forecasting technique  Forecasting the supply of human resources  Forecasting the demand for human resources  Planning in a context of change  Responsibility for human resource planning  Failure to plan for human resources
  • 51. Human resource planning Ref: SHRM – Charles Greer  Strategic role of HRP  Over view of HRP  Managerial issues in planning  Selecting forecasting technique  Forecasting the supply of human resources  Forecasting the demand for human resources  Personal implications  Changing receptivity towards planning  Stricter legislations for lay off etc  Other issues  Mind set of work force and related actions.
  • 52. Human resource planning Ref: SHRM – Charles Greer  Strategic role of HRP  Over view of HRP  Managerial issues in planning  Selecting forecasting technique  Forecasting the supply of human resources  Forecasting the demand for human resources  Purpose of planning  Organisational characteristics  Industry characteristics  Environmental turbulence  Other consideration  Technique of forecasting  Cost  Accuracy
  • 53. Human resource planning Ref: SHRM – Charles Greer  Strategic role of HRP  Over view of HRP  Managerial issues in planning  Selecting forecasting technique  Forecasting the supply of human resources  Forecasting the demand for human resources  Replacement charts Mgr posi  Human resurce inventories  Succession planning  Markov analysis ….  Renewal models age cohorts, internal mobilization  Computer simulation  Regression analysis  Trend extrapolation  Utilisation of supply forecasting techniques
  • 54. Human resource planning Ref: SHRM – Charles Greer  Strategic role of HRP  Over view of HRP  Managerial issues in planning  Selecting forecasting technique  Forecasting the supply of human resources  Forecasting the demand for human resources  Heuristics, Rule of thumb and the Delphi technique  Operations research and management science technique  Regression analysis  Utilisation of demand forecasting technique  Trend extrapolation
  • 55. Strategy formulation process Ref: SHRM – Charles Greer  Development of organizational philosophy and mission statement  Environmental scanning  Analysis of SWOT  Formulation of strategic objectives  Generation of alterative strategy  Evaluation and selection of strategies  Informal / incremental strategic planning  Managed/logical incremental planning A strategy is the pattern or plan that integrates an organisation’s major goals, policies, and action sequences into a cohesive whole
  • 56. Strategy implementation work force utilization and employment practices Ref: SHRM – Charles Greer  Efficient utilization of human resources  Dealing with employee shortages  Selection of employees  Dealing with employee surpluses
  • 57. Strategy implementation work force utilization and employment practices Ref: SHRM – Charles Greer  Efficient utilization of human resources  Dealing with employee shortages  Selection of employees  Dealing with employee surpluses  Cross training and flexibility in assigning work  Using work teams  Requirements for effective teams  Forming  Storming  Norming  performing  Operating on a non union basis
  • 58. Strategy implementation work force utilization and employment practices Ref: SHRM – Charles Greer  Efficient utilization of human resources  Dealing with employee shortages  Selection of employees  Dealing with employee surpluses  Strategic recruiting  Special recruiting for minorities and women workers  Flexible retirement as a source of labour  Managing vendors of outsourced functions
  • 59. Strategy implementation work force utilization and employment practices Ref: SHRM – Charles Greer  Efficient utilization of human resources  Dealing with employee shortages  Selection of employees  Dealing with employee surpluses  Managing vendors of outsourced functions  Making the outsourcing decision  Selecting and negotiating with outsourcing vendors  Managing the outsourcing transactions  Managing vendor relationships  Monitoring and evaluating vendor performance
  • 60. Strategy implementation work force utilization and employment practices Ref: SHRM – Charles Greer  Efficient utilization of human resources  Dealing with employee shortages  Selection of employees  Dealing with employee surpluses  Reliability and validity  Predictive validity  Concurrent validity  Content validity  Job analysis  KSA  Interviews  Behavioural interviews  Testing  Assessment centres
  • 61. Strategy implementation work force utilization and employment practices Ref: SHRM – Charles Greer  Efficient utilization of human resources  Dealing with employee shortages  Selection of employees  Dealing with employee surpluses  Redeployment and retraining  Early retirement  Retreat from employment security policy  Downsizing and layoffs  Termination strategies
  • 62. Strategy implementation work force utilization and employment practices Ref: SHRM – Charles Greer  Downsizing and layoffs  Findings  Co are not well prepared  6 months to 1 year co indicators do not improve –profits, ROI, Stock prices, expense ratios  Survivors syndrome  Myth of job security exploded (Who moved my cheese)  Sustained improvement can be brought about only with improvements in productivity, quality and effectiveness and integrate reductions in head count with planned changes in the way the work is designed.  Downsizing in not a one time quick fix solution to enhance competitiveness. –is a part of continuous improvement.  Efficient utilization of human resources  Dealing with employee shortages  Selection of employees  Dealing with employee surpluses
  • 63. Strategy implementation work force utilization and employment practices Ref: SHRM – Charles Greer  Downsizing and layoffs  Guide lines for conduct of layoffs  Give early warnings / announcements of layoffs  Soften the impact with compensation and benefits  Utilise the services of outplacement firms  Supply retraining services  Provide equitable and decent treatment to laid off employees  Ensure supportive treatment of survivors  Maintain a cooperative approach with unions  Uphold obligation to the community  Efficient utilization of human resources  Dealing with employee shortages  Selection of employees  Dealing with employee surpluses
  • 64. Special implementation challenges Ref: SHRM – Charles Greer  Career path for technical professionals  Dual career couples  Strategy implementation system – Reward and development systems  Strategically oriented performance management system  Strategically oriented compensation systems  Employee development
  • 65. Strategy implementation system – Reward and development systems Ref: SHRM – Charles Greer  Strategically oriented performance management system  Strategically oriented compensation systems  Employee development  Performance measurement approaches  MBO  Graphic scale rating  Narratives  BARS  Behavioral observation scales  360 –degree feedback  Performance evaluation of executives  Effectiveness of performance measurement. YOU GET WHAT YOU MEASURE, YOU MEASURE WHAT YOU VALUE, YOU CAN NOT CONTROL WHAT YOU CANNOT MEASURE.
  • 66. Strategy implementation system – Reward and development systems Ref: SHRM – Charles Greer  Strategically oriented performance management system  Strategically oriented compensation systems  Employee development  Traditional compensation systems  Job analysis > job evaluation > salary/wage hierarchy  Point system  Factor comparison system  Hybrid system  Internal equity  > Wage surveys to establish external equity.
  • 67. Strategy implementation system – Reward and development systems Ref: SHRM – Charles Greer  Strategically oriented performance management system  Strategically oriented compensation systems  Employee development  Traditional compensation systems  Inadequacies  Wage for know-how not given  Compensated for specific job only  Impact of collective bargaining on wage structures.  Does not work well with managers and professionals
  • 68. Strategy implementation system – Reward and development systems Ref: SHRM – Charles Greer  Strategically oriented performance management system  Strategically oriented compensation systems  Employee development  Skill based pay  Broad banding  Team based pay  Variable compensation  Executive compensation
  • 69. Strategy implementation system – Reward and development systems Ref: SHRM – Charles Greer  Strategically oriented performance management system  Strategically oriented compensation systems  Employee development  Training programs  Training methods  Apprenticeships  Management development  Management development for international assignments  Product life cycle and managerial fit  PLC, Evolutionary stage > Steady state  Development Vs selection
  • 70. The performance impact of human resource practices Ref: SHRM – Charles Greer  Individual high performance practices  Limitations of individual practices  Evolution of practices  Systems of high performance human resource practices  Individual best practices Vs systems of practices  Universal practices Vs contingency perspectives
  • 71. The performance impact of human resource practices Ref: SHRM – Charles Greer  Seven management practices that enhance performance –Jefrey Pfeffer 1. Employment security 2. Selective hiring of new personnel 3. Self managed teams and decentralization of decision making as basic principle of org design 4. Comparatively high compensation on organizational performance 5. Extensive training 6. Reduced status distinctions and barriers 7. Extensive sharing of financial and performance information.  Individual high performance practices  Limitations of individual practices  Evolution of practices  Systems of high performance human resource practices  Individual best practices Vs systems of practices  Universal practices Vs contingency perspectives
  • 72. The performance impact of human resource practices Ref: SHRM – Charles Greer  Compensation  High compensation linked to organisational performance  Incentive based compensation  Profit sharing  Team based compensation  Diversity  Employment  Countercyclical hiring, downsizing, early retirement programs, employment security, human resource outsourcing.  Industrial relations  Decertification of union bargaining agent  Positive labour relations  Strikes, lockouts  Internal labour market  Individual high performance practices  Limitations of individual practices  Evolution of practices  Systems of high performance human resource practices  Individual best practices Vs systems of practices  Universal practices Vs contingency perspectives
  • 73. The performance impact of human resource practices Ref: SHRM – Charles Greer  motivation  Decentralized decision making  Self managed teams  Open book management  Reduced status differentials or symbolic egalitarianism  Performance management  Staffing  Cognitive tests, staffing selectivity, CEO succession insider outsider, yield analysis of recruiting sources  Training  Individual high performance practices  Limitations of individual practices  Evolution of practices  Systems of high performance human resource practices  Individual best practices Vs systems of practices  Universal practices Vs contingency perspectives
  • 74. The performance impact of human resource practices Ref: SHRM – Charles Greer  Individual high performance practices  Limitations of individual practices  Evolution of practices  Systems of high performance human resource practices  Individual best practices Vs systems of practices  Universal practices Vs contingency perspectives  Each practice has a different kind of impact on individual workers – if possible to address at individual levels the same may be done.  Results of studies that give positive or negative indication can not be taken as absolute
  • 75. The performance impact of human resource practices Ref: SHRM – Charles Greer  Individual high performance practices  Limitations of individual practices  Evolution of practices  Systems of high performance human resource practices  Individual best practices Vs systems of practices  Universal practices Vs contingency perspectives  HR practices are path dependant. They consist of policies that are developed over time and cannot be simply purchased in the market by competitors.
  • 76. The performance impact of human resource practices Ref: SHRM – Charles Greer Has positive impact  Commitment oriented systems  Decentralized decision making, general training, Highly skilled employees, High wages - bonuses  Human capital enhancement  Comprehensive training, BARS, Technical and problem solving skills, selective staffing  Human resource administrative system  Hourly pay, individual equity, individual incentive, result based performance appraisal  Motivation and commitment system  Receptiveness to new training, compensation contingent on firms performance, extent of status differentials  Skills and organizational structures  Attitude survey, access to grievance procedures, formal job anasysis, info sharing  Individual high performance practices  Limitations of individual practices  Evolution of practices  Systems of high performance human resource practices  Individual best practices Vs systems of practices  Universal practices Vs contingency perspectives
  • 77. The performance impact of human resource practices Ref: SHRM – Charles Greer  Individual high performance practices  Limitations of individual practices  Evolution of practices  Systems of high performance human resource practices  Individual best practices Vs systems of practices  Universal practices Vs contingency perspectives  Mxed evidence and response  Some individual practices have had positive impact  Systems of practices have both  Adoption  Implementation  fit
  • 78. The performance impact of human resource practices Ref: SHRM – Charles Greer  Individual high performance practices  Limitations of individual practices  Evolution of practices  Systems of high performance human resource practices  Individual best practices Vs systems of practices  Universal practices Vs contingency perspectives  Have their own applicability  Evidence for success of both  Greater evidence for contingency
  • 79. Human Resource Evaluation Ref: SHRM – Charles Greer  Overview of evaluation  Approaches to evaluation  Prevalence of evaluation  Evaluating strategic contributions of traditional areas  Evaluating strategic contributions in emerging areas
  • 80. Human Resource Evaluation Ref: SHRM – Charles Greer  Overview of evaluation  Approaches to evaluation  Prevalence of evaluation  Evaluating strategic contributions of traditional areas  Evaluating strategic contributions in emerging areas  Scope of evaluation  Strategic impact  Level of analysis  Criteria  Level of constituents  Ethical dimensiona
  • 81. Human Resource Evaluation Ref: SHRM – Charles Greer  Overview of evaluation  Approaches to evaluation  Prevalence of evaluation  Evaluating strategic contributions of traditional areas  Evaluating strategic contributions in emerging areas  Audit approaches  Analytical approaches  Quantitative and qualitative measures  Balance scorecard perspective  Benchmarking  Industry influences
  • 82. Human Resource Evaluation Ref: SHRM – Charles Greer  Overview of evaluation  Approaches to evaluation  Prevalence of evaluation  Evaluating strategic contributions of traditional areas  Evaluating strategic contributions in emerging areas  Little  Results not revealed
  • 83. Human Resource Evaluation Ref: SHRM – Charles Greer  Overview of evaluation  Approaches to evaluation  Prevalence of evaluation  Evaluating strategic contributions of traditional areas  Evaluating strategic contributions in emerging areas  HRP  Staffing  Training  Performance evaluation systems  Compensation systems  Utility analysis  labour and employee relations
  • 84. Human Resource Evaluation Ref: SHRM – Charles Greer  Overview of evaluation  Approaches to evaluation  Prevalence of evaluation  Evaluating strategic contributions of traditional areas  Evaluating strategic contributions in emerging areas  Equal employment opportunity and management of diversity  Quality readiness