Strategic human resource management (SHRM) aims to align human resource strategies and practices with the overall business strategy. It involves analyzing the external environment, assessing the internal human resource strengths and weaknesses, and developing HR strategies to support the organizational goals and strategies. Effective SHRM requires integrating HR into strategic planning, formulating supportive HR strategies, implementing those strategies, and providing feedback to evaluate their impact. This allows HR to contribute to organizational performance by ensuring the availability of an efficient workforce, providing necessary training and skills development, and fostering employee commitment and motivation.

1. Strategic HRM:
Alignment Business and HR Excellence
www.humanikaconsulting.com
www.hipotest.com

2. Seta A. Wicaksana
0811 19 53 43
wicaksana@humanikaconsulting.com

3. 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?
• might a business take the position of low-cost
provider?
• does strategy refer to perspective, to the view one
takes of matters, and to the purposes, directions,
decisions and actions stemming from this view?
• Does strategy refer to a pattern in our decisions
and actions?
• Does repeatedly copying a competitor’s new
product offerings signal a "me too" strategy?

4. Definition
• Strategy is a term that comes from the
Greek strategia, meaning "generalship." In
the military, strategy often refers to
maneuvering troops into position before the
enemy is actually engaged
• Strategy is deciding where to go and the
means to get there.
• Strategy is a declaration of intent.

5. Levels of Strategy-Making in
a Diversified Company
Corporate
Strategy
Business Strategies
Functional Strategies
Operating Strategies
Two-Way Influence
Two-Way Influence
Two-Way Influence
Corporate-Level
Managers
Business-Level
Managers
Functional
Managers
Operational
managers

6. What is strategic management?
• 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
• 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. Company mission
and social
responsibility
External
environment
Internal analysis
Strategic analysis and choice
Long-term
objectives
Generic and grand strategies
Short-term objectives;
reward systems
Functional tactics
Policies that
empower action
Restructuring, reengineering
and refocusing the organization
Strategic control and
continuous improvement
Possible?
Desired?
Legend
Major impact
Minor impact
Ex 1-6:
Strategic
Management
Process

9. Strategic analysis HRM
“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

10. WHAT IS
SHRM?
• Strategic human
resource management
has been defined as
‘the linking of human
resources with strategic
goals and objectives in
order to improve
business performance
and develop innovative
organizational culture
that foster innovation
and flexibility.

11. Some Organisational Strategies
Be number one or number
two in every industry in
which we compete, or get
out
Low prices, every day
Foster innovation

12. Aim of SHRM
• Long-term Objectives
✓Profitability
✓Return on investment
✓Competitive position
✓Technological leadership
✓Productivity
✓Employee relations
✓Public responsibility
✓Employee development

13. Aim –Short term
• Detailed work planning
• Emphasis on technical qualifications and skills
• Emphasis on job-specific training
• Emphasis on job-based pay
• Use of performance appraisal as a control device
• Team-based training

14. HR strategy?
'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”

15. Types of HR Strategy: General Strategies
High-performance working
team
• Supplying competitive
intelligence regarding the
external environment
• Supplying information
regarding the company’s
internal human strengths
and weaknesses.
• Showing how the firm’s
HR activities can and do
contribute to creating
value for the company

16. Types of HR
Strategy: Specific
Strategies
Relating to the different aspects of
human resource management such
as
• Learning And Development And
Reward
• Human Capital Management,
• Corporate Social Responsibility,
• Organization Development,
• Engagement,
• Knowledge Management,
• Employee Resourcing,
• Talent Management,
• Employee Relations, And
• Employee Well-being

17. Difference Between Strategic HRM & HR strategies:
STRATEGIC HRM HR Strategies [ HR StrategiesHRS ]
General Approach to Strategic Mgnt of HR Outcome [manifestation] of general HRM
approach
Aligned with organizational intention about
future direction
Focus on specific organizational intentions
about what needs to be done.
Focus on long term people issue Focuses on short term performance measures
that is result/outcome.
SHRM decisions are built into strategic business
plan
HRSs decisions are derived from SHRM.
Deals with macro-concerns such as quality,
commitment, performance, culture & mgnt
development
HRSs are concerned with ensuring availability of
an efficient workforce, training, good employee
relations
Defines areas in which specific HR strategies
need to be developed.
HRSs facilitate the successful achievement of
corporate objectives + goals

18. Approaches to SHRM
• The resource-based approach-A
resource-based approach will address
methods of increasing the firm’s
strategic capability by the development
of managers and other staff who can
think and plan strategically and who
understand the key strategic issues.
• Strategic fit- The HR strategy should be
aligned to the business strategy
(vertical fit).
• HR strategy should be an integral part
of the business strategy, contributing to
the business planning process as it
happens.

19. High-
performance
Management
Aims to make an impact on the performance of the
firm through its people in such areas as productivity,
quality, levels of customer service, growth, profits
and, ultimately, the delivery of increased
shareholder value.

20. High-
performance
Management
Practices include rigorous recruitment and selection
procedures, extensive and relevant training and
management development activities, incentive pay
systems and performance management processes.

21. High-commitment
Management

22. The aim is to create a
climate in which a
continuing dialogue
between managers
and the members of
their teams takes
place in order to
define expectations
and share information
on the organization’s
mission, values and
objectives.
High-involvement
Management

23. Types of Strategic Planning

24. Types of Strategic Planning:
Corporate-level strategy
Identifies the portfolio
of businesses that, in
total, comprise the
company and the ways
in which these
businesses relate to
each other.
• Diversification
strategy
• Vertical integration
strategy
• Consolidation
strategy
• Geographic
expansion strategy

25. Types of Strategic
Planning: Business-
level/competitive
strategy
Identifies how to build and strengthen the business’s long-
term competitive position in the marketplace.
• Cost leadership
• Differentiation
• Focus

26. Types of Strategic
Planning: Functional
strategies
Identify the basic courses of
action that each department
will pursue in order to help
the business attain its
competitive goals.

27. Methodology
for strategy
development
• Strategic analysis
• Environmental analysis
• human resource environment
• human resource legal environment
• Establish organizational direction
• Strategy formulation
• Human resource planning
• Strategy implementation
• Work force utilisation and employment
practices
• Reward and development system
• Strategic control
• Performance impact of human resource
practices
• Human resource evaluation

28. Strategy
formulation
• 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?

29. Strategy Formulation
Process
• 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

30. SHRM concern • 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 is about
improving business
performance through people.
• The major concerns of strategic
HRM are to meet the business
needs of the organization and
the individual and collective
needs of the people employed
in it.
• strategic HRM can make a
contribution to improving
business performance.

31. Strategic HRM
(IMPORTANCE)
• 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

32. Benefits of
SHRM
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

33. 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
Theoretical frame work of SHRM

34. Theoretical
frame work
of SHRM
• Strategy driven
• Resource based view
• Competitive advantage based on unique allocation of
resources {selection /Compensation package} (TCS)
• Behavioral view
• Control and influence the behaviors of individuals
(Infosys)
• Cybernetics systems
• Adoption or abandonment of practices based on
feedback on contributions to strategy (Bosch – MICO)
• Agency/transactions cost view
• Use of control systems, performance evaluation and
reward systems etc
• (In the absence of performance evaluation strategy
may not be pursued)
• Non-Strategy driven
• Resource dependence and power theories
• Power and politics= legislation, unionization, control
of resources, expectations of social responsibility.
• Institutional theory
• In appropriate performance evaluation dimensions
(inertia / rational decision making.appraisal

35. International
strategy
• Multinational, global and transnational strategies
• Strategic alliances
• Sustainable global competitive advantage
• Globally competent managers
• Location of production facilities

36. 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

37. Benefits of
integrating
HRP with
Strategic
planning
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.

38. Strategic
components
of HRM
relevant to
internal fit
Management awareness
Management of the function
Portfolio of programs
Personnel skills
Information technology
Awareness of the environment

39. Requirements
for SHR-
Managers
Information
management
skills
Planning skills
Management
skills
Integration
skills
Change
management
skills

40. Effective HR Strategy Formulation and
Implementation
Organizational
Strategies
Organizational
Characteristics
Organizational
Capabilities
Environment
HR Strategies
Consistency
Consistency
Consistency
Consistency
Improved
Firm
Performance
Fit
Fit
Fit
Fit

41. Strategy
Implementation
Work Force
Utilization And
Employment
Practices
Efficient
utilization
of human
resources
Dealing
with
employee
shortages
Selection
of
employees
Dealing
with
employee
surpluses

42. Strategy implementation
work force utilization and employment practices
• 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

43. Strategy implementation
work force utilization and employment practices
• 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

44. Special
implementation
challenges
Strategy implementation system – Reward
and development systems
Strategically oriented
performance
management system
Strategically oriented
compensation systems
Employee
development
Dual career couples
Career path for technical professionals

45. Strategy
implementation
system– Reward
and
development
systems
• 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.

46. Strategy
implementati
on system–
Reward and
development
systems
• 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.

47. Strategy implementation system–Reward
and development systems
• Strategically oriented
performance management
system
• Strategically oriented
compensation systems
• Employee development
• Skill based pay
• Broad banding
• Team based pay
• Variable compensation
• Executive compensation

48. Strategy implementation system–Reward and
development systems
• 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

51. Barriers to the
implementation
of HR strategies
• Failure to understand the
strategic needs of the
business,
• Lack of assessment of
the environmental and
cultural factors that
affect the content of the
strategies and the
development
• Taking of ill-conceived
and irrelevant actions

52. Criteria For
An Effective
HR Strategy
• Satisfies business needs;
• Founded on detailed analysis and study;
• can be turned into actionable programs;
• is coherent and integrated;
• Takes account of the needs of line managers and employees generally
as well as those of the organization and its other stakeholders
• It is coherent and integrated, being composed of components that fit
• with and support each other.
• It takes account of the needs of line managers and employees
generally as well as those of the organization and its other
stakeholders.

53. Learning and Giving
for Better Indonesia