Chapter No. 2 FORMULATING AND IMPLEMENTING HRM STRATEGIES from Managing Human Resources by Susan E. Jackson

1. FORMULATING
AND
IMPLEMENTING
HRM
STRATEGIES
Chapter 2
Mr. Muhammad Irfan
Lecturer Management Sciences
Al-Fajar Institute Mianwali

2. LEARNING GOALS
1. Show the importance of formulating and implementing HRM strategies.
2. Explain the roles and responsibilities of the HR Triad for formulating and implementing
HRM strategies.
3. Describe how external environmental factors impact the formulation of HRM strategies.
4. Discuss how the internal environment affects the formulation of HRM strategies.
5. Describe several different types of HRM strategies and how they relate to business
strategies.
6. Show the process of formulating HRM strategies.
7. Explain how effectively implementing an HRM strategy can improve organizational
effectiveness.
8. Discuss two current issues in formulating and implementing HRM strategies.

3. THE IMPORTANCE OF FORMULATING
AND IMPLEMENTING HRM STRATEGIES
▪ Strategy formulation refers to the process of determining
the best course of action to achieve competitive
advantage.
▪ Strategy implementation refers to putting the chosen
strategic plans into action.

5. ELEMENTS OF THE ENVIRONMENT FOR
MANAGING HUMAN RESOURCES
The External Environment:
▪ The external environment encompasses local, national, and multinational
conditions that confront an organization. The specific elements of the external
environment described in this chapter are
▪ The economic landscape.
▪ The demographic landscape.
▪ The socio-cultural landscape.

6. The three other elements of the external environment will be discussed in
later chapters, specifically:
▪ The political and legal landscape—Chapter 3.
▪ Unions—Chapter 13.
▪ The global landscape—Chapter 14.
These six aspects of the external environment all have strong implications
for a firm’s business strategy as well as other elements of the internal
environment.

7. The Internal Environment:
▪ The internal environment refers to conditions within the organization itself.
▪ Organizations are complex systems that include many elements. We will not attempt to
describe all of these in this chapter. Instead, we focus on a few elements that have
particular relevance for managing human resources:
▪ Business strategy.
▪ Company culture.
▪ Technology.
▪ Resources such as financial, organizational, reputation, and human.

8. THE HR TRIAD
▪ Responsibility for formulating and implementing HRM strategies
rests with all members of the HR Triad—HR professionals, line
managers, and employees—working together to achieve common
goals. Managers, HR professionals, and all other employees
contribute to the organization’s ability to adapt by monitoring the
environment, interpreting events that occur in the environment,
making adjustments to strategies and practices as needed, and
effectively implementing those adjustments.

9. UNDERSTANDING THE EXTERNAL
ENVIRONMENT
THE ECONOMIC LANDSCAPE:
▪ The economic landscape refers to the economic conditions in which firms
compete.
THE DEMOGRAPHIC LANDSCAPE
▪ The demographic landscape refers to characteristics of the people where the
company does business.
▪ These characteristics include the population’s age, gender, ethnicity, income, and
education.

10. THE SOCIO-CULTURAL LANDSCAPE
▪ The socio-cultural landscape refers to the attitudes and values of society.
▪ Attitudes and values of people in the workforce can vary substantially across nations and are
also reflected in differences in national cultures.
THE POLITICAL LANDSCAPE
▪ Politics and legal regulations go hand-in-hand because politicians enact and enforce laws.
▪ As government administrations come and go, businesses must constantly analyze the
implications of their philosophies and policies

11. UNDERSTANDING THE INTERNAL
ENVIRONMENT
TECHNOLOGY
▪ Technology refers to the process of making and using tools and equipment plus
the knowledge used in this process.
▪ Robotics
▪ Information Technologies (IT)
▪ Human resource information systems and e-HRM

12. COMPANY CULTURE
▪ A company culture is the unique pattern of shared assumptions, values, and norms that
shape the socialization activities, language, symbols, and ceremonies of people in the
organization.
▪ Vision, mission, and values
▪ Company subcultures: company subculture exists when assumptions, values, and norms
are shared by some—but not all—organizational members.

14. BUSINESS STRATEGIES
▪ A business strategy is a set of integrated and coordinated commitments and actions
intended to achieve stated goals of a business or business-unit.
▪ High Quality : Firms such as GE and Haier that compete on quality adopt practices
such as Total Quality Management (TQM), ISO 9000, and Six Sigma to ensure that
their products and services meet the highest possible quality standards.
▪ Low cost
▪ Customer service
▪ Innovation
▪ FINANCIAL, ORGANIZATIONAL, REPUTATION AND HUMAN RESOURCES

15. HRM STRATEGIES
STRATEGIC ALIGNMENT
▪ Vertical Alignment: Vertical alignment exists when the HRM strategies fit with all
elements of the internal environment (the culture, business strategy, technology,
and so on) and all elements of the external environment (economic landscape,
demographic landscape, etc.). Alignment between the business and HRM
strategies is essential for effective business strategy implementation.
▪ Horizontal Alignment: Horizontal alignment exists when all of the HR policies,
practices, and processes comprising the HRM system are consistent with the
each other and mutually reinforcing. Horizontal alignment sends a clear message
to employees concerning how they should behave while at work.

16. TYPES OF HRM STRATEGIES
High commitment HRM strategy
▪ This HRM strategy enhances organizational performance by improving employee
capabilities, motivation, and performance
High control HRM strategy
▪ This HRM strategy enhances organizational performance by improving employee
efficiency, productivity, and compliance.
Customized HRM strategies
▪ A customized HRM strategy focuses on achieving very specific outcomes of most
importance to a particular company, taking into account all elements of the internal
and external environments.

17. High Commitment
HRM Strategy
▪ General job descriptions
▪ High skill requirements
▪ Extensive training focused on performance
▪ Competitive wages
▪ Pay is linked closely to performance
▪ Generous benefits
▪ Self-managed teams
▪ High levels of employee participation in
decision making
▪ High job security for good performers
High Control
HRM Strategy
▪ Specific job descriptions
▪ Low skill requirements
▪ Limited training
▪ Low wages
▪ Pay is linked closely to performance
▪ Minimal benefits
▪ Intense supervision
▪ Low levels of employee participation in
decision making
▪ Low job security

18. Customized HRM strategies
Customized HRM strategies are designed to balance multiple concerns. These include:
▪ The need to perform one’s current job well while also imagining how it could be done
better or even eliminated.
▪ The need for employees who are strongly committed to the company but who also
have strong connections to people in other organizations.
▪ The need for employees who take personal responsibility for doing their own jobs well
while also being team players who willingly make sacrifices in order to helps others
and achieve team goals.
▪ The need to hold employees accountable for fulfilling current responsibilities as
explicitly prescribed by formal job descriptions, as well as contributing to the
organization’s long-term success by continuously learning and adapting to prepare for
an uncertain future.

19. HRM STRATEGY FORMULATION