STRATEGIC HUMAN RESOURCE MANAGEMENT

The word ‘Strategy’ comes from the Greek word ‘strategus’ meaning
‘commander of chief’
The development and usage of the term suggests that it is composed of two
terms ‘stratos’ (army) and ‘agein’ (to lead) and thus in the military context
understood as to produce large scale operations.
The Oxford dictionary defines it in terms of ‘generalship’ related to war.
In the management literature ‘strategy ’ has now replaced the more traditional
term ‘long term planning’ that the top managers perform in order to
accomplish an organisation’s goals.
Some definitions of strategic management:
Wheelen and Hunger: that set of managerial decisions and actions that
determine the long-run performance of a corporation
Aktouf: maintenance of a ‘vision of the future’ that is constantly updated by data
on both internal and external environment.
Hill and Jones: the specific pattern of decisions and actions that managers take
to achieve superior organisational performance.
It is considered as a continuous process undertaken by the top management,
that requires constant adjustment of three interdependent poles: values of the
senior management, the environment, and the available resources.
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Strategy: It is a long term plan with a course of action
Strategic Plan: A strategic Plan is the company’s plan for how it will
match its internal strengths and weaknesses with the external
opportunities and threats in order to maintain a competitive
advantage.
The essence of Strategic Planning is to analyse the present position of
business, where one like to be and how to reach the same. It seeks to
match market with products and other corporate resources in order to
strengthen a corporation’s competitive position. The Manager then
formulates specific HR and other strategies to take the company from
its current position to the desired position
The strategic management process consists of five events or steps:
1.Organisation’s direction
2.Environmental analysis
3.Strategy formulation
4.Strategy implementation
5.Strategy evaluation
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1.Organisation’s direction: This is the first step in which the senior
managers evaluate their position in relation to the organisation’s current
mission and goals.
A mission statement is the organization’s statement of purpose and
describes who the company is and what it does. Customers, employees,
and investors are the stakeholders most often emphasized, but others like
government or communities (i.e., in the form of social or environmental
impact) can also be impacted. Mission statements are often longer than
vision statements. Sometimes mission statements include a summation of
the firm’s values. Organizational values are those shared principles,
standards, and goals.
A vision statement, in contrast, is a future-oriented declaration of the
organization’s purpose. In many ways, the mission statement lays out the
organization’s “purpose for being,” and the vision statement then says, “on
the basis of that purpose, this is what we want to become.” The strategy
should flow directly from the vision, since the strategy is intended to
achieve the vision and satisfy the organization’s mission.
A goal is is a desired future state that the organisation attempts to realize.
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2.Environmental analysis: Along with some form of internal and
organizational analysis using SWOT (strengths, weaknesses, opportunities,
threats) (or the firm’s strengths, weaknesses, opportunities, and threats), a
strategy is formulated into a strategic plan. This plan should allow for the
achievement of the mission and vision. The factors that are most important
to the organisation’s future are referred as strength factors.
3.Strategy formulation: At this stage the senior managers evaluate the
interaction of the strategic factors and make strategic choices that guide the
organisation to meet its goals. Strategies may be formulated at the
corporate, business and functional levels.
4.Strategy implementation: It is an area of activity that focuses on the
techniques used by the managers to implement the strategies. Factors that
vare included here are type of leadership, structure of the organisation,
information and control system, and the management of human resources.
The key factor, however, is leadership
5.Strategy evaluation: In this step it is determined to what an extent actual
change and performance matches desired change and performance.
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In diversified enterprises, strategies are initiated at four
distinct organisation levels - These are as follows:
1. Corporate Strategy – It is a strategy for the company
and all of its businesses as a whole.
2. Business Strategy – It is a strategy for each separate
business the company has diversified into.
3. Functional Strategy – Then there is a strategy for each
specific functional unit within a business. Each business
usually has a production strategy, a marketing strategy,
a finance strategy, and so on.
4. Operating Strategy – And finally, this is a still narrower
strategy for basic operating units — plants, sales districts
and regions, and departments within functional areas.
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Corporate and Business Strategy
•Business strategy is concerned with the strategic decisions
concerning the choice of product, competitive advantage,
customer satisfaction, etc.
•Corporate strategy is concerned with the overall objective and
scope of business to fulfill stakeholder’s expectations.
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Basis for
Business Strategy Corporate Strategy
Comparison
Corporate Strategy is stated in the
Business Strategy is the strategy framed by the
mission statement, which explains
Meaning business managers to strengthen the overall
the business type and ultimate goal
performance of the enterprise.
of the firm.
Created by Middle level management Top level management

Nature Executive and Governing Decisive and Legislative

Selection of plan to fulfill the objectives of Business selection in which the

Relates to
organization. company should compete.

Deals with Particular business unit or division Entire business organization

Term Short term strategy Long term strategy

Maximizing profitability and

Focus Competing successfully in the marketplace.
business growth.

Approach Introverted Extroverted

Expansion, Stability and

Major strategies Cost Leadership, Focus and Differentiation
Retrenchment.
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Features of Functional Strategy
Some important features of functional strategy are as follows:
1. The time span of a functional strategy, as compared to a business-level strategy,
is short.
2. It focuses attention on what needs to be done now to make the grand strategy
work.
3. It is more specific and action-oriented because it clearly outlines what should be
done in each functional area so as to achieve the corporate objectives.
4. Functional strategy pertains to the function, department, division of the enterprise.
5. It has to be in pursuance of the overall corporate strategy.
6. It acts to achieve corporate and business unit objectives by maximizing resource
productivity.
7. It is the game plan to manage a principal subordinate activity within a business.
8. Functional strategy is concerned with developing and nurturing a distinctive
competence to provide a company or business unit with a competitive advantage.
9. The orientation of the functional strategy is dictated by its parent business unit’s
strategy.
10. Functional strategy is narrower in scope than business strategy. It contains
relevant details of the overall business game plan by setting out the actions,
approaches and practices which are to be employed in managing a particular
function.
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11. It may differ from region to region.
12. Functional strategies should be in sync rather than serving their own narrower
purposes. They should be in coordination and consistency with long-term
objectives and grand strategy.
13. These functional strategies have to be related to each other and to the overall
corporate strategy.
14. Implementation of these strategies involves a wide range of policy decisions to
be made relating to the functional areas.
15. The focus of these functional strategies is often towards external environment.
16. Functional strategies help in implementation of grand strategy. These translate
grand strategy into action.
17. There might be several sub-functional areas within functional strategies.
18. Functional strategies are made within the guidelines that have been set at
higher levels.
19. These are detailed statements of the “means” or activities that will be used to
achieve short-term objectives and establish competitive advantage.
20. A functional strategy supports business-level strategy, which in turn supports
corporate-level strategy.
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Importance of functional strategies:
1. Help in Operation of Business Functions:
2. Managerial Road Map:
3. Help in Implementation of Grand Strategy:
4. Decisional Guides to Action:
5. Improves Effectiveness and Efficiency:
6. Builds Competitive Advantage:
Other Benefits of Functional Strategies:
i. They give operating personnel a better understanding of their role
in the firm’s mission.
ii. The process of developing them becomes a forum for raising and
resolving conflicts between strategic intent and operational reality.
iii. They provide a basis for developing budgets, schedules, trigger
points, and other sources of strategic control.
iv. They can be powerful motivators, especially when connected to
the reward system.
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THE MEGA TRENDS IN HRM
1.INNOVATION:- It talks about how human have increased their
power of thinking & communicating
2.DEMOGRAPHIC CHANGE:- In this change we are very much
concerned about the age factor which prevails leading either to
talent shortage or talent excess.
Traditionalists (1925-45), Baby boomers (1946 - 64) Generation X
(1965 - 80), Y (1981 - 2000) known as millennial, and Z (2001
onwards)
3.GLOBALIZATION:-Due to changes business because of stiff
competition,more competitor, requirement of in flow of
cash,brand name companies have started exporting products to
different notion
4.WEB 2.0:-The users generated continued talks about how the
web have transformed itself into a multi user platform
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Strategic human resource management is the practice of
attracting developing,rewarding or retaining employee for
benefit of both the employee as individuals & organization as
whole.As a result a goal of HRD reflect & support the goal of
rest of the organization it links human resources with strategic
goal & objectives in order to improve business performance &
develop organization culture that foster innovation,flexibility &
competitive advance.
SHRM means accepting & involving the HR function as a
strategic partner in the formulation & implementation of
company strategies to give them competitive edge over others.
The HR Manager’s job has grown broader and more strategic
over time. Globalisation, technological, and nature of work
trends have made the HR managers shoulder several new
responsibilities. One of the foremost is to make their functions
to be more strategic.
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HR strategies is involved to make the company more valuable,
for instance by boosting skill levels and thereby improve
performance
Strategic HRM refers to adopting a specific plan in regard to
human resources, and revamping human resource policies
and practices and developing employee competencies to cope
with the special challenging situation.
Gary Dessler and Biju Varkkey: SHRM means formulating and
executing HR policies and practices that produce employee
competencies and the behaviours that the company needs to
achive its strategic aim.
Davud, Cenzo and Stephen: SHRM creates a clear connection
between the goals of the organisation and the activities of the
people who work there. All the employees should see the link
between their daily tasks and achievement of a purpose or
goal.
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Some strategic HR Choices:
Work Flows:
Efficiency  Innovation
Control  Flexibility
Explicit job description  Broad job classes
Detailed work planning  Loose work planning

Staffing:
Internal recruitment  External recruitment
Supervisor makes hiring  HR makes hiring
Skill and qualification  Fit in with firm’s culture
Informal hiring  Formal hiring
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Separations:
Layoffs Inducing voluntary retirement
Hiring freeze  Recruitment as needed
Letting them fend for themselves  Continuing
support after termination
No preference for rehiring Preferential rehiring

Performance appraisal
Uniform appraisal Customized appraisals
procedures
Control-oriented appraisals Multiple-purpose
appraisals
Supervisory input only Multiple inputs (peers,
subordinate)
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Training and development
Individual training  Team training
Job-specific training  Generic training
Buy skills with higher wages  Make skills at
lower wages

Compensation
Fixed pay  Variable pay
Job-based pay  Individual-based pay
Seniority-based pay  Performance-based
pay
Centralized pay decisions Decentralized one
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International management:
Create global company culture  Adapt to
local culture
Rely on own country nationals  Rely on
expatriates
No formal repatriation  Repatriation
agreement
Universal company policies  Country-
specific company polices
 Role of HR Managers
The Functions of HR Manager Include:
•Recruitment and hiring.
•Training and development.
•Employer-employee relations.
•Maintaining company culture.
•Managing employee benefits.
•Creating a safe work environment and handling
disciplinary actions
Role of HR Managers:
Personnel role
Welfare role
Administrative role
Industrial relations role
 Role of HR Managers
1.ADMINISTRATIVE ROLE(Record maintenance and compliances)-
Policy maker  Administrative expert  Advisor
House keeper Councillor  Welfare officer
Legal consultant or statutory compliance
2.OPERATIONAL ROLE(Service and delivery) –
Recruiter  Developer  Trainer 
Co-ordinator Employee person Payroll process
Performance appraisal Retaining and relieving
3.STRATEGIC ROLE(Planning)-
Creating high performance team Reducing cycle time for
innovation
Implementing new technology . Developing and delivering in time.
STRATEGIC PARTNER-
Deliver strategic service in terms of cost
Building a competent consumer-oriented work force
It plays the role of a strategic formulator and implementer.