STRATEGIC

HUMAN RESOURCE
MANAGEMENT
 Topics
• Strategy
• Concept of strategy. (s-2)
• Features of strategy (s-1)
• Systematic approach to formulate strategy.(s-2)
• HR strategy. (S-1)
• General HR strategy. (S-1)
• Specific HR strategy. (S-1)
• Criteria for an effective HR strategy (s-1)
 STRATEGY
• Strategy is the determination of the basic
long-term goals and objectives of an
enterprise, and the adoption of courses of
action and the allocation of resources
necessary for carrying out these goals.
 Concept of strategy
Competitive advantage
A competitive advantage is an advantage over competitors gained by offering
consumers greater value, either by means of lower prices or by providing greater
benefits and service that justifies higher prices.
The three generic strategies are summarized in the figure below:
• Innovation
• Quality
• Cost leadership
Distinctive capabilities
The organization is specially or uniquely capable of doing, the company does well
in comparison than its competitor.
Strategic fit
Strategic fit expresses the degree to which an organization is matching its resources
 and capabilities with the opportunities in the external environment.
 Features of strategy
• It is forward looking
• Organizations capability depends on resource
capabilities
• To achieve Strategic fit
 Systematic approach to formulate strategy

• Define the mission

• Set objectives
• Conduct internal and external environmental scan
• Analysis existing strategies
• Define distinctive capabilities
• Define key strategic issue
• Determine corporate and functional strategies
• Prepared integrated strategic plan
• Implement the strategies
• Monitor implementation
 HR strategies
• HR strategies indicates what the organizations
wants to do about its human resources
management policies and practices and how
they should be integrated with the business
strategy. It is a part of a strategic HRM process
that leads to the development of overall or
specific strategies for implementation by HR.
 General HR strategy

• High performance management:

High-performance management aims is to make

an impact on the performance of the
organization in such areas as productivity,
quality, levels of customer service, growth and
profit through high performance work system
• High commitment management:

• It enhancing mutual commitment. A form of

management which aim eliciting a commitment
so that behavior is primarily self-regulated
rather than controlled by sanctions and
pressures external so that individual, and
relations within the organization are based on
high level of trust
High involvement management:
• Are a specific set of human resource practice
that focus on employee decision making,
power, access to information, training and
incentives.
 Specific strategies
• Human capital management
• Knowledge management
• CSR
• Engagement
• Organization development
• Resourcing
• Talent management
• Reward
• Learning and development
 Criteria for an effective HR strategy

• Will satisfy business needs.

• Is founded on detailed analysis and study and is
evidence-based –it is not just wishful thinking.
• Is coherent and integrated being composed of
components that fit with and support each
others.
• Takes account of the needs of line managers and
employees generally as well as those of the
organizations and its other stakeholders
 Strategic HRM-CHP3
• Strategic HRM
• Perspective of SHRM
• Aims of SHRM
• Model of SHRM
 Strategic HRM
Strategic HRM defines the organization’s
intentions and plans on how its business goals
should be achieved through people. It is based
on three propositions:
• first, that human capital is a major source of
competitive advantage;
• second, that it is people who implement the
strategic plan; and
• third, that a systematic approach should be
adopted to defining where the organization
wants to go and how it should get there
• the use of planning
• a coherent approach to the design and
management of personnel systems based on an
employment policy and workforce strategy and
often underpinned by a ‘philosophy’
• matching HRM activities and policies to some
explicit business strategy
• seeing the people of the organization as a
‘strategic resource’ for the achievement of
‘competitive advantage’
• Focus through SHRM
 Change in structure and culture
 Organizational effectiveness and performance.
 Matching resources to future requirement.
It deals with any major people issues that affect
or are affected by the strategic plans of the
organization.
 Perspective of SHRM

• The universalistic perspective

Some HR practices are better than others and all
organizations should adopt these best practices.
• The contingency perspective:
To be effective an organization’s HR policies must be
consistent with other aspects of the organization.
• The configurational perspective:
This is a holistic approach that emphasize the
importance of the pattern of HR practices and is
concerned with how this pattern of independent
variables is related to the dependent variable
 Chapter
• Levels of strategic decision making
• Developing HR strategies
• Methodologies for formulating HR strategies
• Achieving vertical integration
 Levels of SHRM
• Upstream 1st order:
Which are concerned with the long term
direction of the organization.
• Downstream 2nd order
Which are concerned with internal operation
procedure.
• Downstream 3rd order
Which are with strategic choice of HR
 Overall approach
• Build the guiding coalition: involve people from all
parts
• Image the future: create a vision of areas of
strategic importance.
• Understanding current capabilities and identify the
gap
• Create map of system:
• Model of dynamic of the system
• Bridge into action
Methodology for formulating HR strategies

• Assess the feasibilities: feasibility depends upon the

number and types of key people required to make the
proposal succeed can be obtained on a timely basis
and a reasonable cost
• Determine desirability: examine the implication of
strategy in terms of sacrosanct hr policies
• Determine the goal: indicates the main issue to be
worked on and derive primarily from the content of
the business strategy
• Decide means of achieving goal:
 Achieving vertical integration
• Cultural integration:
• Fit with the business strategy
intentions concerning growth or retrenchment,
acquisitions, mergers divestments, diversification,
product/market development
proposals on increasing competitive advantage
through innovation leading to product/service
differentiation, productivity gains, improved
quality/customer service, cost reduction (downsizing
• the felt need to develop a more positive,
performance-orientated culture and other
culture management imperatives associated
with changes in the philosophies of the
organization in such areas as gaining
commitment, mutuality, communications,
involvement, devolution and teamwork
 Achieving horizontal integration

• Horizontal integration or fit is achieved when the various

HR strategies cohere and are mutually supporting. This can
be attained by the process of ‘bundling’.Bundling is carried
out by, first, identifying appropriate HR practices, second,
assessing how the items in the bundle can be linked
together so that they become mutually reinforcing and
therefore coherent, which may mean identifying integrating
practices such as the use of competence-based processes
and performance management, and, finally, drawing up
programmes for the development of these practices, paying
particular attention to the links between them
 Setting out he strategy
• 1.
Basis
– business needs in terms of the key elements of the business strategy;
– environmental factors and analysis (SWOT/PESTLE);
– cultural factors – possible helps or hindrances to implementation.
• 2. Content
– details of the proposed HR strategy.
• 3 Rationale
the business case for the strategy against the background of business needs and
environmental/cultural factors.
• 4 Implementation plan
– action programme;
– responsibility for each stage;
– resources required;
– proposed arrangements for communication, consultation, involvement and training;
– project management arrangements.
• 5.
• Costs and benefits analysis
– an assessment of the resource implications of
the plan (costs, people and facilities) and the
benefits that will accrue for the organization as
a whole, for line managers and for individual
employees (so far as possible these benefits
should be quantified in terms of value added).
 HR strategic review

• redefined the purpose of the organization;

• emphasized that the core purpose will continue to be given

absolute priority;

• set out the need to secure the future of activities outside its
core purpose and importantly

• made proposals designed to shape and secure the financial

future