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Skylark
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Group Leader:
Hafiz Syed Asad BAM 9211
Other members:
Arslan Aslam BAM 9234Arslan Khalid BAM 9222
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Linking between Human ResourceManagement (HRM) and Business
Strategy
HRM Business Strategy
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Human Resource Management
(HRM)
Human Resource Management
(HRM) is the function within anorganization that focuses on
recruitment , management and
providing direction for the people
who work in the organization.
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The role of HRM in organizations
y Change agent and problem solver
y Adviser/ innovator
y Employee advocate
y Service provider
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What is Business Strategy?
Business strategy is a long
term plan of action designed
to achieve a particular goal orset of goals or objectives.
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Levels of Strategy
There are three levels of strategy;
y Corporate level Strategy
y Business/Competitive level Strategy
y Operational level Strategy
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Corporate Strategy:
y addresses the entire strategic scope of theorganization.
y This is the "big picture" view of the organizationand includes deciding how the resource
allocation processhow cash, staffing, equipmentand other resources are distributedis typicallyestablished at the corporate level
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Corporate Level Strategyy Diversification Strategy; Penetrating into new product
line.
y Vertical Integration Strategy; Producing its own rawmaterials or selling its products direct.
y Consolidation Strategy; Combining of two or morefirms and reduces company size.
y Geographic Expansion Strategy; Expands thecompanys business.
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Business level Strategy:
y Concerned with how a business competes successfully
in a particular market. It concerns strategic decisionsabout choice of products, meeting needs of customers,gaining competitive advantage over competitors,creating new opportunities .
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Business Level Strategyy Cost Leadership strategy; Reducing economic
costs below competitors.
y Differentiation; Positioning a brand in such a way asto differentiate it from the competition and establish animage that is unique
y Focus; The selection of a segment in the industry toserve the exclusion of others.
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Operational Strategy :y It is concerned with how operational departments like
marketing, finance, R & D, involve in business.
y It is input for corporate and business level strategy.Operational strategy therefore focuses on issues ofresources, processes, people etc.
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Strategic Managers for All Levels
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Integration In HRM
y Integration is the heart of HRM having two forms;
yVertical Integration
y Horizontal Integration
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Vertical Integration
yVertical integration is about Effectiveness of HR.HRis effective when it contributes to the mission and
objectives of the organization.
y 'do the right things' Overall objectives &strategy of business
HRPractices
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Horizontal Integrationy Horizontal integration is that all HRactivities feed
into each other and support each other.
y Do the things in right way
Resourcing
T &D
Motivation
Maintenance
HRPractices
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HR Strategic FitCor orate
trate y
B si esstrate y
Rtrate y
R ystem Trai i Rewards( erf. Mgmt)
Horizontal Fit
Vertical Fit
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Strategic Management:
yA process for analyzing a companys competitivesituation, developing the companys strategic goals,
and devising a plan of action and allocation ofresources that will help a company achieve its goals.
There are two components of Strategic Management Process;
1. Strategy Formulation
2. Strategy Implementation
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Strategy Formulation2-8
Mission
- reason for
being
Goals
- what it
hopes to
achieve
Strategic
Choice
ExternalAnalysis
- opportunities
- threats
Internal
Analysis
- strengths
- weaknesses
- ways to
fulfill goals
and mission
HR Input
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The Role of HR in Strategy Formulation
2-12
Administrative
Linkage
One-Way
Linkage
Two-Way
LinkageIntegrative
Linkage
Strategic
Planning
Strategic
Planning
Strategic
Planning Strategic
Planning
HR
Function
HR
Function
HR
Function
HRFunction
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Strategy Implementation
Organizationalstructure
Taskdesign
Types ofinformation
Rewardsystem
Selection,T&D ofpeople
Performance
Productmarketstrategy
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Strategic Human Resource Management
All those activities affecting the behavior ofindividuals in their efforts to formulate and
implement the strategic needs of thebusiness and achieve organizational goals.
(SHRM)
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Strategic HR Management
Strategic
Choice
Firm
Performance
- productivity
- quality
- profitability
HR Needs
- skills
- behaviors
- cultureHR
Capability- skills
- abilities
- knowledge
HR Actions
- behaviors
- results
HR Practices
- recruitment
- training
- performance
management
- labor relations
- HR planning
- job analysis
- job design
- selection
- development
- pay structure
- incentives
- benefits
Emergent Strategies
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Strategic HRMObjectives and Plans
Integrity
Social
Responsibility
Link of HRPlan/
Strategy withOrg Obj
Costcontainment
Customerservice
OrgEffectiveness
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Strategic Formulation of HRMAnalyze the problems in business
Diagnose factors influencing thesituation
Conclusion and recommendations(alternative strategies)
Action planning ; how overcome theproblems
Resource planning;what resourceswe need, how we allocate
Benefits; how satisfy business needs
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Strategic Implementation of HRM
y Strategic Staffing
y Strategic Human Resource Implementation
y Strategic PerformanceManagement
y Strategic CompensationManagement
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Basic Model of
How to Align
HRMwith Business
Strategy
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