Strategic HRM

1. ‘Emerging Dimension to
Human Resource Management:
A Conceptual Review on
Strategic Human Resource Management’
(SHRM)
Prof. Pardeep Kumar

2. INTRODUCTION
Organizations are increasingly looking at human resources as a
unique asset that can provide sustained competitive advantage due
to
• the changes in the business environment
• increasing globalization
• changing demographics of the workforce
• increased focus on profitability through growth
• technological changes
• competition for intellectual capital and
• the never-ending changes that organizations are going through
Global business competition is shifting from
efficiency to innovation and from enlargement of scale
to creation of value, so Management needs to be
oriented towards the strategic use of human resources.
Prof. Pardeep Kumar

3. STRATEGY
Strategy: Strategies are specific, measurable,
obtainable broad statements, patterns of action,
decisions, and policies carefully developed
with involvement by an institution's
stakeholders that guide a group to achieve the
stated result, a vision or goals in a specific
desired timeframe.
“It is the company's plan of how it will
balance its internal strengths & weaknesses
with external opportunities & threats in
order to maintain a competitive advantage”Prof. Pardeep Kumar

4. SHRM
SHRM includes all those activities affecting the
behavior of individuals in their efforts to formulate
and implement the strategic needs of business
“Integrating human resource considerations
with other physical, financial, &
technological resources in the setting of
goals and solving complex organizational
problems & emphasizing the
implementation of a set of policies and
practices that will build employee pool ofProf. Pardeep Kumar

5. Approaches to SHRM
Human Factor Approach:
 links Human Resource activities with competency based
performance measures including the human resource,
their performance and competency
 gaining competitive advantage by using people
effectively, drawing on their expertise and ingenuity to
meet clearly defined objective
Surpluses Approach:
 links Human Resource activities with business
surpluses or profit
 Integration of the business surplus to the human
competency and performance
Prof. Pardeep Kumar

6. SHRM CONCEPT
One-way Vertical Fit
 Aligning HRM systems to the business strategy
 HR as strategically reactive HR where alignment is taken as
the partnering role of HR & HR is highly integrated with
business processes
 Align the human resources to three kinds of competitive
strategies, namely innovation, quality enhancement and cost
reduction strategy
Two-way Vertical Fit
 Aligning to the business strategy & contribute in the strategy
formulation.
 HR as strategically proactive HR that involves creating future
strategic alternatives.
 creating a culture change, identifying mergers & acquisition
possibilities, tracking the market & proactively making change
Prof. Pardeep Kumar

7. Horizontal fit
 Aligning various HRM systems to each other, connections
created between and within the people processes.
 HR practices should be linked to organizational strategy, but
these practices also need to be strategically linked to each
other to ensure that they are promoting the same goals.
Five key aspects to SHRM
 The external environment
 The business strategy that affects and is affected by the
SHRM process
 The internal environment – the organizational context within
which SHRM operates
SHRM comprising the HR strategy and individual HRM
practices
 The outcomes of the process of SHRM
Prof. Pardeep Kumar

8. SHRM Process
• SGRM process involves determining what needs to be done to
achieve corporate objectives, often over 3 - 5 years
• Mission statement containing business definition and future
plan for success is made
• Examining organization and competitive environment
• Environmental analysis i.e. opportunities- threats analysis is
done and business prepares to meet environmental pressures
• Establishing optimal fit between organization and its
environment
• Organizational self-assessment i.e. strengths-weaknesses
analysis is done and the road map for attaining goals is made
• Establishing goals and objectives- Laying concrete figures
that will help in benchmarking the performance is done.
• Reviewing and revising strategic plan.
Prof. Pardeep Kumar

9. Barriers to SHRM
• Lack of growth strategy or failure to implement one.
• Firms’ short-term orientation
• Insufficient general management training of managers
• Lack of appreciation & cooperation from the line managers
• Increasing focus on the quantifying results
• Feeling of risk in investing heavily on human resources
• Inability of the HR practices to change according to the
business needs
• Disincentives related to changes associated with SHRM
• High resistance due to lack of cooperation from the bottom
line
• Interdepartmental conflict
• Limited time, money and the resources
• Status-quo approach of employees
Prof. Pardeep Kumar

10. SHRM Benefits
1. Identifying and analyzing 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.
Prof. Pardeep Kumar

11. CONCLUSION
 SHRM practices enhance employee productivity and the ability of
agencies to achieve their mission.
 Integrating the use of personnel practices into the strategic
planning process enables an organization to better achieve its goals
and objectives.
 Combining human resource practices, all with a focus on the
achievement of organizational goals and objectives, can have a
substantial affect on the ultimate success of the organization
“When the vision is one year …cultivate flowers
When the vision is ten years… cultivate trees
When the vision is eternity……cultivate people”
Prof. Pardeep Kumar

12. Prof. Pardeep Kumar