hrmg100 week 10
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HRMG100 – WEEK 10[WEEK 10 IN TEXTBOOK]
STRATEGIC HUMAN
RESOURCE MANAGEMENT
HUMAN RESOURCE MANAGEMENT
• the person, department or section of an organisation which deals with people
• it involves the process of co-ordinating all aspects of what needs to happen to and for people in an organisation – recruitment, training, monitoring and appraisal
• it also involves policy development, systems, processes and procedures , planning and development
ONE TYPE DOES NOT FIT ALL
Human Resource Management departments or sections vary from one organisation to another, depending upon :
• size of an organisation• the type of organisation• the age of an organisation• staff stability or high staff turnover
HRM SUPPORTS THE WHOLE ORGANISATION
The aim of a Human Resource Management section is to support the strategic direction of an organisation
In other words the HRM Department should plan for and recruit staff to:
• Enable the organisation to function well now• Enable the organisation to function well in
the future
SOME HRM OBJECTIVESLike other departments – Accounting, Research & Development etc – HRM must assist the organization in achieving its objectives:
• Organizational effectiveness – employee selection, job satisfaction, productivity, low wastage, motivation, change, recognition, performance evaluation, rewards etc.
• Profit – cost containment in the staffing area (downsizing etc)
• Customer Service• Ethical behaviour – social responsibility
The Basic Elements of Human Resource Management
• Job analysis, evaluation & classification• Job design • Recruitment• Selection• Induction, training and development• Skills audit• Performance Management
THE HRM PROCESS
SOME STEPS IN THE SELECTION PROCESS
APPLICATIONS:• Cover Letter and Resume or CV• These should address “selection criteria”SHORT-LISTING:
Choosing some of the applications who best meet the “selection criteria” for interview
INTERVIEW:• an individual interviewer or a Panel• an individual interview or a Group Interview
THE POTENTIAL OF HRM By hiring certain people, or groups of people,
organisations can attempt to:
• maintain the status quo • strengthen the current organisational culture• prepare an organisation for change• enable an organisation to change – including
changing its organisational culture.
Strategy-Structure-Culture
Strategy-Structure-Culture
• HRM exists as part of a larger system• To be effective HRM must be familiar and
congruent to the other parts in the system• The strategy-structure-culture interaction
suggests that changes in one may require changes in another as the three are interconnected
STRATEGIC HUMAN RESOURCE MANAGEMENT
To be strategic is to:- plan- design- scheme- manoeuvre- plot- develop a game-plan
To be strategic is to - be tactical- achieve an advantage- have a long term plan for success - outwit your enemies (your competitors)
Strategic Human Resource Management (SHRM) aims to ensure that you are at least one step ahead of your competitors
The organisation aims to have a competitive advantage
SHRM by considering the future goals of an
organisation Strategic Human Resource Management should ensure that an organisation has the staff it needs in the future to be able to achieve those goals:
• staff re-training and/or development• recruitment• decruitment
Strategic HRM• Definition of SHRM: The process of HRM
which is driven by planning, foresight and analytical decision making
• SHRM involves:– Setting standards and policies and developing a
culture that aligns with the organisation’s environment and objectives
– Identifying and implementing activities and policies to enact the chosen strategy and to manage the employment relationship
SHRM & ORGANISATIONAL PERFORMANCE• SHRM is important to an organisation’s
survival and sustainability• SHRM should lead to improved
organisational performance - short term- medium term
- long term
Competitive Advantage – The Resource Based View
An organisation can have a competitive advantage (an advantage over competitors) by having :
• human skills• knowledge• learning mechanisms• systems and processes• behaviours
that are superior to its competitors
The Resource Based ViewPfeffer & Vaiga 1999
Effective staff management and effective HRM practices should deliver:
• increased productivity and less waste• greater collaborative problem solving• better skills in use of equipment• improved customer satisfaction• fewer accidents• less staff turnover and absenteeism• increased staff loyalty
The Resource Based View(The negatives)
It assumes that the organisation is always in control and seems to overlook that there are many external environmental factors beyond the firm’s control which can affect its performance:
• minimum wage rates (for the sector)• EEO requirements• trade union activity• Economic conditions
The Resource Based view tends to reduce people to assets.
SHRM is intangible
Intangible = it can’t be measured in financial terms:
An organisation can obtain non-financial advantage from:- skills developed- location- knowledge and intellectual property- relationships and networks- efficient and effective systems and processes
THE BALANCED SCORECARDKaplan and Norton (1996) developed the Balanced Scorecard as a simple way of measuring organisational performance:
• it is one way of assessing intangible and intellectual assets
• it translates an organisation’s vision, mission, value and strategy into a comprehensive set of performance measures
• this serves as the framework for a strategic management system
THE BALANCED SCORECARD
The four areas addressed in the Balanced Scorecard are:
1.The customers’ perspective2.The innovation & learning perspective3.The internal perspective – what do the
workers excel at?4.The shareholders’ perspective – financial
returns on funds investd!
MODELS OF SHRM (1)
JACKSON AND SCHULER (1995):– A variety of macro-level environmental
characteristics influence the adoption of HRM practices, policies and philosophiesEG. laws & regulations, culture, politics, markets, industry dynamics
– Information interpretation depends on the organisation’s technology, structure, size, life cycle stage and strategy
MODELS OF SHRM (2)
KOCHAN AND BAROCCI (1985):– Causal links between environmental changes,
HRM policies and practices and the needs/goals of stakeholders
– The need to recognise HRM policies and practices that respond to environmental changes both inside and outside the organisation
– Accurate and comprehensive understanding of the organisation’s history is necessary
MODELS OF SHRM (3)
KLATT, MURDICK AND SCHUSTER (1978):– A systems approach aimed at planning and
development– HR implications should be considered when
developing organisational objectives:• Type of employees required• How employee behaviours impact on
organisational objectives• What systems are required regarding
behaviour and accountability
The SHRM Application Tool
• The SHRM Application Tool provides a framework for analysing the organisation, its environment and issues as a whole
• It presents six steps in a decision-making process of SHRM
• To be effective, this tool needs to be continuous, with ongoing monitoring, constant responses and regular evaluation
The SHRM Application Tool
Step 1Analyse environmental factors
• Environmental factors should be analysed at three levels:1. Monitor/analyse data and the organisation’s history,
present factors and trends2. Internal organisational environment
• Strategy, size, structure and culture
3. External environment• Technology, governments, customers and globalisation,
economics, labour market, political/legal, social and demographics
• This provides a picture of the organisation’s present situation
Step 2Detect potential problem or opportunity
• Need to identify strengths, weaknesses, opportunities and threats
• Gap analysis• At what level do these issues occur?– Individual, group or organisational
• Assess potential impact and prioritise– Porter’s five forces (see slide 35)– SWOT analysis
Step 3 Verify /falsify potential problem or opportunity
• Issues should be put into environmental contexts– What is the cause?– Positive or negative outcomes expected?
• This step sets the stage for considering specific approaches to solving the issue
• If the issue is verified, planning is required for evaluating alternatives and developing a plan of action
Step 4
Devise plan and success criteria
• Identify alternatives– Identify all conceivable courses of action which
will address the issue(s) in Step 3– Brainstorming and mind mapping
• Evaluate alternatives– Be realistic: does the alternative address the
issue?– Suitability, feasibility, acceptability
Step 4Devise plan and success criteria (cont.)
Establish success criteria– Identify the functional activities required to
implement the alternative, including resources– Identify the preferred action plan, including
criteria for evaluation– Be mindful of managerial decisions
(i.e. mode of communication, leadership, resistance)– Overall, how will this action lead to the organisation
developing a competitive advantage?
Step 5Implement the plan
• The decision is translated into action• Be aware of employee resistance to change– Customise to personnel and sections– Low risk: Minimal employee resistance is expected
but should still be monitored– High risk: Greater uncertainty and resistance is
expected (more time may be needed on this step) along with worker education and participation
Step 6Evaluate against success criteria
• Evaluate the effectiveness of the action against the criteria developed in Step 4
• Analyse positive and negative effects– We can learn from failures as well as successes
• This is not the end!– SHRM is a continuous process as the organisation
and its environment change continuouslyEvery organisation is unique; there is no one best way to conduct SHRM
PORTER’S FIVE FORCES
To check out your competitors/rivals Porter says investigate the following five forces:
1.Intensity of rivalry2.Barriers to entry3.Buyer power4.Supplier power5.Threat of substitutes
THE AIMS OF SHRM Strategic Human Resource Management aims to
align the functions and processes of HRM with the strategic aims and objectives and competitive advantage of an organisation.
The availability and skills, knowledge, experience and superiority of staff is as important as finance, technology, location and innovation.
SHRM AIMS TO LINK IT ALL TOGETHER.