SHRM

1. SHRM
UNIT 1

2. “Strategic human resource
management means formulating
and executing human resource
policies and practices that produce
the employee competencies and
behaviors that the company needs
to achieve its strategic aims.”- Gary
Dessler

3. “Strategic human resource management
is an approach to making decisions on
the intentions and plans of the
organization concerning the employment
relationship and the organization’s
recruitment, training, development,
performance management, and the
organization’s strategies, policies, and
practices.” – Armstrong

4. Strategic human resource management
(SHRM) is defined as “the pattern of
planned human resource deployments
and activities intended to enable an
organization to achieve its goals”. –
Wright & McMahanAn HR strategy
typically includes a clear statement of
the organization's goals and objectives,
as well as a description of the HR
function's role in achieving those goals.

5. What is Strategic Human Resource
Management (SHRM)?
Strategic Human Resource
Management (SHRM) is a process of
managing human resources that links
the workforce with the core
strategies, objectives, and goals of an
organization. It focuses on the
following aspects of HR operations:

6. •Ensuring practices that foster
flexibility and gives competitive
advantage to the organization.
•Building a cultural fit for the
organization.
•Ensuring superior business
performance.

7. Since it is essentially a contemporary
approach to human resource
management, the HR department has to
play a key role in making SHRM
successful. HR managers need to gain a
deeper understanding of SHRM in order
to be active partners in creating company
policies and implementing them.

8. Strategic HR management can be integrated
into various functions including hiring,
training, and rewarding the workforce for
their performance. The SHRM approach
finds ways for the HR personnel to make a
positive and direct contribution to the
company’s growth. There has to be a
strategic plan related to every employee’s
development and retention in sync with the
long-term business goals.

9. In the modern world, especially in the
post-pandemic era, it is not easy for all
businesses to overcome HR challenges.
There are various components of the HR
ecosystem that can be confusing for
employers and lead to ineffective
decisions. Consequently, there could also
be a loss of productivity and a slowdown
of business growth.

10. NATURE OF SHRM
• Long-term Focus: As business
strategies have a long-term
orientation, therefore, focus of
SHRM is also long-term
probably more than one year.

11. •Associated with Goal-Setting:
SHRM is highly related with
setting of objectives, formulation
of policy and allocation of
resources and it is carried out at
all levels of top management.

12. •Interrelated with Business
Strategies: There is an interrelation
between business strategies and
SHRM. E.g. it gives significant
inputs when business strategy is
formulated, and human resource
strategies (like recruitment, staffing,
training and performance appraisal).

13. •Fosters Corporate Excellence
Skills: SHRM considers employees as
the strategic potential of the
organization and on that basis makes
effort to differentiate the organization
from its competitors present in the
markets. It also promotes learning of
modern skills.

14. Objectives of Human Resource Strategy
The objectives of Human Resource
Strategy are as follows:
• To use various mechanism to build
healthy two-way communication.
• To screen out potential managers whose
values are not people oriented.
• To provide highly competitive salaries
and pay-for-performance incentives.

15. •To guarantee to the greatest extent
possible for fair treatment and
employ security for all employees.
•To institute various promotion-from-
within activities aimed at giving
employees every opportunity to fully
utilize their skill and gifts at work.

17. Importance of Human Resource Strategy
Important characteristics of Human
Resource strategy are as follows:
• Objective Oriented – HR strategy
focuses on organizational objectives as
well as human resource management
function of the organization. It is
prepared to realize certain well-defined
objectives of the organization.

18. •Future Oriented – HR
strategy is formulated to
supply sufficient number and
kind of employees in future to
achieve the organizational
goals and objectives. Hence, it
is future-oriented mechanism.

19. •Competitive Advantage – HR
strategy focuses on
the competitive advantage in the
market in the sense that it makes
people more and more strategic
to achieve their goals. Hence, it
accepts people as strategic
resources in the organization.

20. •Environmental Adaptation
– HR strategy helps in
adapting any sort of change
that has occurred in the
environment. Its plans and
procedures are designed and
implemented as per the
environmental change.

21. •Efficiency Development – HR
strategy develops the skill,
knowledge and ability of
employees and make them
competitive. As a result, of which
the efficient employees can be
mobilized in the organization for a
longer period of time.

22. Human Resources contribution to strategy
1. Understand your organization’s objectives
A good human resources strategy is
closely linked to organizational goals, so it’s
important to first understand the business’s
objectives and mission. Work closely with
management or executives to articulate the
company’s short- and long-term goals for
growth.

23. 2. Evaluate your current capabilities
Perform a skills inventory for every employee to
determine which individuals are skilled in
specific areas. This may help you better
understand how your employees can contribute
to the company’s main objectives. It also helps
you recognize your company’s strengths, which
you can use to craft a more specific and
effective HR strategy.

24. 3. Perform a SWOT analysis
After evaluating individual employees, conduct a
strengths, weaknesses, opportunities, and threats
(SWOT) analysis, which is a strategic planning
technique used to identify areas in which ways
you can help the company grow. You can use this
analysis to leverage your company’s strengths in
order to capitalize on opportunities in the
market. Additionally, by identifying threats and
weaknesses, you can come up with a plan to
overcome them or minimize their impact.

25. 4. Analyze your capabilities in
comparison with SWOT analysis
Evaluate your company’s—and,
specifically, your team’s—ability to
help you capitalize on opportunities
and effectively manage threats.
Identify ways that your company
could better prepare employees to
serve the goals of the organization.

26. 5. Assess your future HR needs
Next, evaluate what you will need
from employees in the future to
capitalize on opportunities,
minimize threats and achieve
company goals. You should be
able to determine:

27. •Which new jobs you will need to fill
•Which skills current employees will
need to obtain to fill the new jobs
•Whether you’re sufficiently utilizing
the abilities of your current
employees
•Whether your current HR
professionals and the hiring practices
they use can accommodate the
necessary growth

28. 6. Evaluate whether additional tools are necessary
Work with the information technology (IT) department
to do an audit of your company’s hardware and
software. Determine whether there are tools available
that would enable your employees to do their jobs more
effectively. Procedures such as scheduling, project
management and goal setting can help a team
coordinate their efforts and improve productivity. There
are numerous productivity tools available to teams,
such as:

29. •Recruitment tools: Finding the right
candidates can be a breeze with modern
platforms that connect human resources
managers with companies seeking to
boost their practices and outsource new
talent. Companies like Bambee offer all-
inclusive HR packages for businesses
that need help creating and implementing
a human resource management strategy.

30. •Employee recognition
platforms: Similar to social media, these
apps provide employees with an
opportunity to be applauded for their
achievements within the workforce, and
can offer an easy way for team members
to communicate via text. Check out
software such as Bonusly if you want to
boost communication and morale.

31. •Enjoy light-speed communication
across teams and platforms: With
programs such as popular Slack,
employees can instantly message each
other using a wide range of platforms
and share the projects they’re working
on. Conversations and documents are
easily searchable, improving
productivity and reducing the need for
team meetings.

32. •Identify top candidates and verify their skills
online: Save time reading resumes by screening new
recruits before any paperwork needs to be completed
by your HR department and find the most highly
trained talent to join your team. Reduce the number
of under qualified applicants with programs such
as Plum.io, which creates standardized tests for
individuals to complete during the application
process.

33. •Identify top candidates and verify their skills
online: Save time reading resumes by screening
new recruits before any paperwork needs to be
completed by your HR department and find the
most highly trained talent to join your team.
Reduce the number of under qualified applicants
with programs such as Plum.io, which creates
standardized tests for individuals to complete
during the application process.

34. •Use time management software to
streamline HR procedures: Implement a
digital time clock to make it easier for your
human resources team to manage time
records and improve attendance.
The Hubworks program combines an
online timekeeping platform with POS and
inventory systems, among other features.

35. 7. Implement your strategy
After you’ve finished your analysis
and completed an assessment of what
you need, it’s time to start expanding
your workforce and developing the
skills of your current employees to
better meet the needs of the
company. Implement your HR
strategy by doing the following

36. •Recruiting applicants: Start searching
for candidates who have the skills you
identified during the analysis phase.
•Organizing a selection
process: Interviewing and identifying the
right candidates are essential components
of the process. You’ll need to select
relevant questions and tests to evaluate
candidates and their abilities.

37. •Hiring candidates: After completing the
necessary background checks, extend
offers to the most qualified candidates.
•Designing an on boarding program: An
employee on boarding program can
improve retention and help new hires feel
confident in their roles more quickly.

38. 8. Evaluate your process
Decide on a time line after which you’ll review
your progress, identify areas for improvement and
evaluate whether the changes are helping further
your company’s growth. If you determine that your
strategy isn’t getting you closer to your objectives,
identify ways you could make adjustments. Human
resources strategies take at least one year to
implement, because a company needs time to track
the success of new policies. Metrics that can help
you quantify your workforce’s performance
include:

39. •Employee retention rate.
•Overall company growth.
•Feedback from managers,
employees and clients.
•Financial performance index.
•Employee satisfaction surveys
•Goal-based metrics.

41. Strategy driven role behaviors and practices –
Competitive strategies require different
human resource practices and different
role behaviors. The role behaviors needed
of employees throughout an organization
provide a rationale for the linkage
between competitive strategies and
human resource practices.

42. For example, the competitive strategies of
(1) Innovation
(2) Quality Enhancement
(3) Cost reduction
can be used to explain how different
employee behaviors are needed for
successful implementation of different
strategies. These behaviors are roles that
go beyond skills, knowledge, and
abilities.

43. Innovative strategy
Essentially, for successful implementation
of an innovative strategy, employees
probably need to be cooperative because of
the interdependencies involved, highly
creative, oriented toward the long term, risk
takers, and comfortable with ambiguity .It
has been hypothesized that under
innovation strategies, the appropriate role
behaviors will be more likely to obtained
with

44. (1) group-oriented, long-term
appraisal systems
(2) Generalized skill development
and broad career paths
(3) Compensation approaches
accentuating internal equity
(4) Flexible compensation packages
including stock ownership.

45. Cost reduction strategies
In contrast, for successful
implementation of cost-reduction
strategies, employees should be focused
on the short term, risk averse,
predictable, results oriented, and
comfortable working by themselves.
With cost reduction, it has been
hypothesized that desired role behaviors
are more likely with

46. (1) Performance appraisal systems
emphasizing results in the short term
(2) Virtually no training programs
(3) Very specialized jobs
(4) Narrow and specialized career
paths
(5) Procedures for continual tracking
of wage rates in the labor market

47. For each of the different sets of
strategies and role behaviors, different
human resource practices are required.
General categories of such human
resource practices include
• Planning
•Staffing
• Appraisal
• Compensation
• Training and Development

48. Theoretical Perspectives on SHRM approaches
Three theoretical approaches to strategic HRM
can be identified. The first is founded on the
concept that there is ‘one best way’ of
managing human resources in order to improve
business performance. The second focuses on
the need to align employment policies and
practice with the requirements of business
strategy in order that the latter will be achieved
and the business will be successful.

49. This second approach is based on the
assumption that different types of HR
strategies will be suitable for different
types of business strategies. Third, a
more recent approach to strategic
HRM is derived from the resource-
based view of the firm, and the
perceived value of human capital.

50. 1. Universalist approach
The perspective of the universalist approach is derived
from the conception of human resource management as
‘best practice. In other words it is based on the premise
that one model of labour management – a high-
commitment model – is related to high organisational
performance in all contexts, irrespective of the particular
competitive strategy of the organisation. An expression of
this approach can be seen in Guest’s theory of HRM,
which is a prescriptive model based on four HR policy
goals: strategic integration, commitment, flexibility and
quality. These policy goals are related to to HRM policies
which are expected to produce desirable organisational
outcomes.

51. Guest (1989) describes the four policy goals as follows:
•Strategic integration – ensuring that HRM is fully
integrated into strategic planning, that HRM policies are
coherent, and that line managers use HRM practices as
part of their everyday work.
•Commitment – ensuring that employees feel bound to
the organisation and are committed to high performance
via their behaviour.
•Flexibility – ensuring an adaptable organisation
structure, and functional flexibility based on multiskilling.
•Quality – ensuring a high quality of goods and services
through high-quality, flexible employees.

52. 2. Fit or contingency approach
The fit or contingency approach is based on
two critical forms of fit. The first is external fit
(sometimes referred to as vertical integration) –
that HR strategy fits with the demands of
business strategy; the second is internal fit
(sometimes referred to as horizontal
integration) – that all HR policies and activities
fit together so that they make a coherent whole,
are mutually reinforcing and are applied
consistently.

53. The strength of this model is that it
provides a simple framework to show
how selection, appraisal, development
and reward can be mutually geared to
produce the required type of employee
performance. For example, if an
organisation required cooperative team
behaviour with mutual sharing of
information and support, the broad
implications would be:

54. •Selection: successful experience of
teamwork and sociable, cooperative
personality; rather than an independent
thinker who likes working alone.
•Appraisal: based on contribution to the
team, and support of others; rather than
individual outstanding performance.
•Reward: based on team performance and
contribution; rather than individual
performance and individual effort.

55. Rеsοurcе-bаsed-approach
Thе resource-based look at the organization (Barney
1991) keeps activated tries to write a resource-based
style of proper HRM (In Box all 1996). Τhe resource-
based look at this company can be involved making use
of the interactions between inner methods (of which hr
include one), plan and solid results. They targets the
publicity of continual cοmрetіtive benefit through the
introduction of real funds in the place of just aligning
recruiting to latest ѕtrategiс aim. Peoples methods
provides aggressive positive aspect for all the
companies, provided that they might be special and
should not end up being duplicated or replaced fоr by
contending enterprises.

56. The three aspects of HR fit are:
1. Vertical fit : This aspect of vertical fit concerns the
coincidence between HR practices and overall business
strategy.
2. Horizontal fit: This relates to the extent to which HR
activities are mutually consistent. Consistency ensures
that HR practices reinforce one another.
3. External fit: The third aspect concerns how well HR
activities match the demands of the external
environment. Ensuring these aspects of fit requires HR
practice choices. The challenge is to develop internally
consistent configurations of HR practice choices that
help to implement the firm’s strategy and enhance its
competitiveness.

57. There is a need for strategic
flexibility along with a strategic fit for
the long-term competitive advantage
of the firm. The fit is defined as a
temporary state in an organization,
whereas flexibility is defined as the
firm’s ability to meet the demands of
the dynamic environment. The two
types of flexibility identified are:

58. Linking business strategies to HR strategies.
This issue of fitting HR practices to
business strategy is becoming
increasingly important and relevant HR
issues for HR staff and line managers.
HR fit involves making sure HR activities
make sense and help the organization
achieve its goals and objectives.

59. Resource Flexibility
Resource flexibility is the extent
to which a firm can apply its
resources to a variety of purposes.
It also involves the cost, difficulty,
and time needed to switch
resources from one use to another.

60. Coordination flexibility
Coordination flexibility concerns the
extent to which an organization has
decision making and other systems
that allow it to move resources
quickly from one use to another. This
task is accomplished by having an
effective partnership between HR
managers and line managers.