Strategic management and strategic human resource management (SHRM) are discussed. Strategy is defined as a perspective, position, plan, and pattern that provides general guidance for actions to achieve organizational ends. SHRM involves integrating HR policies and practices to support business strategy and goals. Effective SHRM requires aligning HR with strategy, developing employees' skills and commitment, and ensuring HR strategies and policies work coherently together to fulfill organizational strategy. The document discusses various models and approaches to strategic management and SHRM.
2. What is strategy?
ďIs it a plan?
ďDoes it refer to how we will obtain the ends we
seek? Is it a position taken?
ďmight a business take the position of low-cost
provider?
ďdoes strategy refer to perspective, to the view one
takes of matters, and to the purposes, directions,
decisions and actions stemming from this view?
ďDoes strategy refer to a pattern in our decisions and
actions?
ďdoes repeatedly copying a competitorâs new
product offerings signal a "me too" strategy?
3. Strategy is
Strategy is all theseâ
ďit is perspective, position, plan, and pattern.
ďStrategy is the bridge between policy or high-order
goals on the one hand and tactics or concrete actions
on the other.
ďStrategy and tactics together straddle the gap between
ends and means.
ďstrategy is a term that refers to ideas, insights,
experiences, goals, expertise, memories, perceptions,
and expectations that provides general guidance for
specific actions of particular ends.
4. Strategy is...
ďStrategy is at once the course we chart, the journey we
imagine and, at the same time, it is the course we steer,
the trip we actually make. Even when we are
embarking on a voyage of discovery, with no
particular destination in mind, the voyage has a
purpose, an outcome, an end to be kept in view. It is
a unified and integrated plan made to achieve the basic
objectives of the enterprise like:
ďEffectiveness
ďHandling events and problems
ďTaking advantage of opportunities
ďFull resource utilization
5. Strategy is...
Strategy is a combination of flexibly designed
corporate moves, through which an organization can
compete with its rivals successfully. The following are
the features of the Strategy:
ďIt should be formulated from the top level
management, however, sub-strategies can be made by
middle level management.
ďIt should have a long range perspective.
ďIt should be dynamic in nature.
ďThe main purpose is to overcome from uncertain
situations.
ďIt should be made in such a way, to make the best
possible use of scarce resources.
6. What is Policy?
The policy is also regarded as a mini â mission
statement, is a set of principles and rules which directs
the decisions of the organization. Policies are
framed by the top level management of the
organization to serve as a guideline for operational
decision making. It is helpful in highlighting the rules,
value and beliefs of the organization. In addition to
this, it acts as a basis for guiding the actions.
Policies helps the management of an organization to
determine what is to be done, in a particular situation.
These have to be consistently applied over a long
period of time to avoid discrepancies and overlapping.
7. Differences Between Strategy and Policy
The following are the major differences between
strategy and policy:
ďStrategy is the best plan opted from a number of plans,
in order to achieve the organizational goals and
objectives. Policy is a set of common rules and
regulations, which forms as a base to take day to day
decisions.
ďStrategy is a plan of action while the policy is a
principle of action.
ďStrategies can be modified as per the situation, so they
are dynamic in nature. Conversely, Policies are
uniform in nature, however relaxations can be made
for unexpected situations.
8. Differences Between Strategy and
Policy...
ďStrategies are concentrated toward actions, whereas
Policies are decision oriented.
ďStrategies are always framed by the top management
but sub strategies are formulated at the middle level.
In contrast to Policy, they are, in general made by the
top management.
ďStrategies deals with external environmental factors.
On the other hand, Policies are made for internal
environment of business.
The difference between Strategy and Policy is, a little
complicated because Policies come under the
Strategies and policies are made to support strategies
in several ways. Both of them are made by the
top management as well as made after a deep analysis.
9. What is strategic management?
ďA continuous, iterative process aimed at keeping an
organization as a whole appropriately matched to its
environment
ďKeeping the business in tune with management and
marketing forces both outside and inside the firm
ďStrategic management provides overall direction to the
enterprise and involves specifying the organization's
objectives, developing policies and plans designed to
achieve these objectives, and then allocating resources
to implement the plans.
ďStrategic management is not static in nature; the
models often include a feedback loop to monitor
execution and inform the next round of planning.
10. Strategic Management Process
Strategic Management Process:
ďDetermining what needs to be done to achieve
corporate objectives over 3 - 5 years
ďExamining organization & competitive environment
ďEstablishing optimal fit between organization & its
environment
ďReviewing & revising strategic plan
13. Human Resource Management (HRM)
Activities that managers engage in to attract and
retain employees and to ensure that they perform at
a high level and contribute to the accomplishment of
organizational goals.
ďTraditional HRM activities:
- Recruitment and selection
- Training and development
- Performance appraisal and feedback
- Pay and benefits
- Labor relations
- etc.
15. The Resource â Based view of the organization
and its link to HRM.
ďResource-based theory conceives of organizational
resources as unique bundles that have the power to
give an organization a competitive advantages over
others in the same industry or sphere of operations.
ďResources: Physical, human and organizational.
ďSix resources: financial, physical, human,
technological, reputation and organizational
ďUniqueness or heterogeneity is stressed over sameness
or homogeneity.
17. Policy of HRM
ďThe overall policy of human resource management is to
ensure that the organization is able to achieve success
through people. âHRM systems can be the source of
organizational capabilities that allow firms to learn and
capitalize on new opportunities.â
Twelve policy goals for HRM have been identified by
Caldwell (2004):
1. managing people as assets that are fundamental to the
competitive advantage of the organization;
2. aligning HRM policies with business policies and
corporate strategy;
3. developing a close fit of HR policies, procedures and
systems with one another;
4. creating a flatter and more flexible organization capable
of responding more quickly to change;
18. Policy of HRM
5. encouraging team working and cooperation across
internal organizational boundaries;
6.creating a strong customer-first philosophy throughout the
organization;
7. empowering employees to manage their own self-
development and learning;
8. developing reward strategies designed to support a
performance-driven culture;
9. improving employee involvement through better internal
communication;
10. building greater employee commitment to the
organization;
11. increasing line management responsibility for HR
policies;
12. developing the facilitating role of managers as enablers.
19. Strategic Management & its link to HRM
ďThese different approaches to strategic management have
corresponding implications for the formation of human resource
strategy.
ďTo be strategic, HRM needs to demonstrate a two â way link to
strategy. In this way, HRM will be informed by organizational
strategy as well as helping to shape the nature of that strategy.
This idea of strategic integration is a key concept in definition of
strategic HRM.
ďThe most significant feature of HRM is the importance attached to
strategic integration, which flows from top managementâs vision
and leadership, and which requires the full commitment of
people to it.
ďThis is a key policy goal for HRM, which is concerned with the
ability of the organization to integrate HRM issues into its
strategic plans, to ensure that the various aspects of HRM cohere,
and to encourage line managers to incorporate an HRM
perspective into their decision making.
20. What is Strategic Human Resource Management
ďIs it about long-range strategic planning?
ďIs it about day-to-day strategic management?
ďOr is it about both?
21. Strategic Human Resource Management
Strategic Human Resource Management (SHRM)
ďis the process by which managers design the
components of a HRM system to be consistent
with each other, with other elements of
organizational architecture, and with the
organizationâs strategy and goals.
ďis the process of defining how the organizationâs
goals will be achieved through people by means of
HR strategies and integrated HR policies and
practices.
22. Strategic Human Resource Management ..
ďRequires abandoning the mindset and practices of
âpersonnel managementâ and focusing on
strategic issues than operational issues.
ďIntegration of all HR programs within a larger
framework, facilitating the organizationâs mission
and its objectives.
23. Requirements of HR Policies And Procedures
HR policies and procedures are required to ensure
that human resource management issues are dealt
with consistently in line with the values of the
organization on how people should be treated,
and that legal requirements are met.
24. Distinction Between HR Policies And Procedures
ďA policy provides continuing guidelines and
generalized guidance on how HR issues should be
dealt with to ensure that an appropriate approach
is adopted throughout the organization.
ďA procedure spells out precisely what steps
should be taken to deal with major employment
issues such as grievances, discipline, capability
and redundancy.
25. Specific HR Policies
Specific HR policies cover:
ďage and employment; ⢠grievances;
ďworkâlife balance ⢠health and safety;
ďbullying; ⢠managing diversity;
ďdiscipline; ⢠promotion;
ďe-mails and the internet; ⢠redundancy;
ďemployee development; ⢠reward;
ďemployee relations; ⢠sexual harassment;
ďemployee voice; ⢠substance abuse;
ďemployment;
30. Overall:
⢠performance
⢠Engagement
⢠human capital
advantage
⢠HRM process
advantage
⢠etc
Specific:
⢠organization
development
⢠corporate social
responsibility
⢠resourcing
⢠talent management
⢠learning and
development
⢠employee reward
⢠employee
relations
⢠employee
well-being
HR STRATEGY AREAS
31. Criteria for HR Strategy
â˘Aligned to corporate goals
â˘Set out clear aims
â˘Supported by business case
â˘Take account of individual as well as business needs
â˘Contain realistic and achievable
ď plans for implementation
32. Conducting a Strategic Review
1. Analysis
2. Diagnosis
3. Conclusions and
recommendations
4. Action planning
Involve senior
management
and
line managers
Involve Employees
And their
representatives
33. Main Principles of SHRM
ďA stress on the integration of personnel policies to
form a coherent package, and with business
planning more generally.
ďThe focus of responsibility for personnel
management no longer resides with specialist
managers but is now assumed by senior line
management.
ďThe focus shifts from management-trade union
relation to management-employee relations, from
collectivism to individualism.
ďThere is stress on commitment and exercise of
initiative, with managers now assuming the role of
âenablerâ, âempowererâ and âfacilitatorâ.
35. Universal Approach
ďThe Universal Approach assumes that there are
âBest HR practicesâ which promises success
irrespective of organizational circumstances.
ďIt is suggested that there is âone best wayâ of
achieving HR effectiveness. The link between
organizational strategy and HR strategy is still
emphasized but advocates of universalistic school
argue that this involves top management giving
âHR practices the profile they deserve in the senior
management processâ.
37. Matching Model ( Closed )
ďThis model specifies HR policies and practices
which are relevant to specific organizational
situations.
ďThis thinking has argued that there is a clear and
mutually supportive relationship between
organizational strategy and HR strategy and goes
on to say that this relationship gives rise to the
implementation of specific HR initiatives.
ďThis is to say that the match between the
organizational strategy and HR strategy is closed
and prescribed in the sense that a particular type
of organizational strategy suggests the need for a
specific HR strategy and set of practices.
38. Matching Model ( Open )
ďThis model defines the employee behaviours
necessitated by the organizationâs overall strategy.
These behaviours are delivered through HR
strategy.
ďThe open approach to SHRM also argues the
existence of a clear and mutually supportive
relationship between organizational strategy and
HR Strategy. However, it differs from the closed
approach in that the HR strategy initiatives should
not be prescribed, following from the
organizational strategy, but should be left open.
ďIn other words, the test of the degree to which the
HR strategy is truly âstrategicâ is a test of
appropriateness to the organizational strategy.
40. History of SHRM
ďDerived in 1980s due to changes in the external
environment. For example, American Industry ,
particularly motor car production, was being
outperformed significantly by Japanese
companies. Other factors also Social, Technological
and labour market etc.
ďPeter Drucker emphasized the importance of
employees as key organizational assets over 50
years ago.
41. Changes in the HRM operating environment
of the 1980s and 1990s
42. The Contribution of SHRM to organizational performance
ďAll studies in SHRM indicate that SHRM practices
have an effect on the bottom line of the
organization.
ďAccording to UKâs chartered Institute of Personnel
Development:
More than 30 studies carried out in the UK and the
US since the early 1990s leave no room to doubt that
there is a correlation between people management
and business performance, that the relationship is
positive, and that it is cumulative: the more and
more effective the practices, the better end resultsâ.
43. HR STRATEGY
ďHR Strategy means a system of human resource
practices for a particular job or a collections of jobs
aimed at the best employee performance possible
to meet the firmâs ultimate goal.
ďHR Strategy emphasis a system of HR practices
because, it is the broad array of practices that
matters in terms of employee performance and not
individual test, recruiting or interview techniques
for example.
44. HR STRATEGY
ďHR Strategies always stay focus on getting the best
performance from employees. Usually these means getting
the employees to;
ďHave something (skills, competencies, abilities)
ďFeel something (commitment, engagement and motivation)
ďDo something (come to work, be productive, serve customer,
stay with the organization)
ďThe purpose of HR strategies is to guide development and
implementation Program. They provide a means of
communicating to all concerned the intentions of the
organization about how its human resources will be
managed.
ďBecause all organizations are different, all HR strategies are
different. There is no such things as a set of standard
characteristics.