Strategic Human Resource Management

An IntroductionStrategic Human Resource ManagementMs. Pooja Rahul Sharma(Faculty of HRM)HLCPE, Ahmedabad Strategy comes out of process of ascertaining objectives of business unit, making necessary changes in such objectives taking decisions in respect of utilization of required resources, for achieving objects & taking policy decisions decisions to get resources,its use & its disposalStrategic Management-As per general opinion, strategic management means strategic planning implemented by the management for solution of various problems arose in the area of production, employees,& finance to the business unit.Scope of Strategic ManagementTo fix mission of the unitTo make favourable internal environmentAnalysis & evaluation of External environmentSWOT analysis to be madeSelection of new alternatives to achieve mission To develop grand strategy To fix short-term annual targetsTo raise resources & facilities Evaluation & control on activities.HR StrategyHR Strategy is concerned with two key elementsDetermining the strategic objective Developing a plan of actionStrategic Human Resource Management Strategic Human Resource Management is an approach relates to decisions about the nature of employment relationship,recruitment,training,development,performance management, reward,& employee relationship.Four Components of SHRMAn organization uses combination of several resources Tangible & Intangible resourcesPhysical capital resourcesOrganizational capital resources Human capital resourcesHuman resources as assetsThe VRIO FrameworkVRIO framework a resource based view of an organization determines the value of human resources for the organization on the basis of four criteria-value,rareness,imitability & organization.The Investment perspective of Human ResourceFactors Determining the investment orientation of an organizationManagement valuesAttitude towards risk nature of skills needed by employees utilitarian or bottom-line perspective availability of outsourcingEvolution of SHRMObjectives of SHRMTo ensure the availability of a skilled,commited, & highly motivated workforce in the organization to achieve sustained competitive advantage. To provide direction to the organization so that both the business needs of the organization & the individual & collective needs of its workforce are met.Difference b/w SHRM & Traditional HRM Traditional HRMSHRMFocus of activityEmployee relationsPartnershipwith internal & external groupsRole ofHRReactive & transactionalProactive & transformational, change leaderInitiative for changeSlow & not integrated with larger issuesFast,flexible& systematicTime HorizonShort-termConsidervarious time framesControlBureaucratic controlOrganic controlJob designFocused job designBroad job designImportant investmentCapital,products,technology& financePeople & their knowledge skills & abilitiesAccountabilityCost centreInvestment centreDifference b/w SHRM & HR StrategySHRMHR StrategiesA general approach to strategic management to HRAligned with the organizational intention with future directionsFocus on long term people issueDefines the areas in which specific HR strategies need to be developedFocus on macro concern such as structure & cultureStrategic HRM decisions are built into strategic business plansOutcomeof the general SHRM approach.Focus on specific organizational intentions about what needs to be done.Focus on specific issues that facilitate the achievement of corporate strategy.Human resource strategy derived from SHRMStrategic FIT: A Conceptual FrameworkThe strategic fit proposes that if an organization seeks to maximize its competitive advantage, it must match its internal resources & skills with opportunities available in the external enviornment.Five types of Fit- 1. Best fit approach 2. Fit as contingency 3. Best Practice approach 4. Fit getalt 5. Fit as bundles.Strategic FIT: A Conceptual Framework Best Fit Approach-This linkage is reffered as external fit or vertical integration means the linkage of HR strategies with business strategies.Bases of classification of HR Strategies:Different types of business strategiesStages in the business or product cycleTypes & number of productsHR strategy classificationHR Practices corresponding to the stages of an organizations life cycle Life Cycle StagesHR PracticesStart-upFlexible patterns of workRecruitment of highly motivated & committed employees.Competitive payLittle formalityGrowthMore sophisticated recruitment & selectionTraining & developmentPerformance Mgmt processReward systemsDeveloping stable employee relationsMaturityAttention to the control of labourcostFocus on increasing productivityControl compensationDeclineEmphasis on rationalization of workforce & downsizingRetraining & career consulting servicesLinking Business Strategy HR StrategyBusiness StrategyHR StrategyCost LeadershipUtilization HR StrategyDifferentiationFacilitation HR StrategyFocusAccumulation HR strategyMiles & Snows Classification of Business Strategy with HR strategyDominant culture of organization (Business Strategy)HR strategyDefendersFind change threateningFavour strategies which encourage continuity & securityBureaucraticapproachPlanned & regularly maintained policiesBuild human resourceProspectorsThrive on changeFavour strategies of productor market development

Creative & flexible management styleHave high quality human resourceLittle opportunity for long term HR planning.Emphasize onrecruitment,selection& performance based compensationAnalyzersSeek to match new ventures with the present businessset-upThese firms are followers- the ventures are not new to themarket,onlynew to the firmLow level of monitoring & coordinationBuy as well asMake key human resourcesEmphasize on HR planningOther frameworksGolden & Ramanjuman(1985)-4 types of linkage 1. Administrative Linkage 2 .One way linkage 3. Two way linkage 4. Integrated Linkage HR Bundles ApproachIn general terms the bundles approach is also termed as internal fit or horizontal integration. The purpose of bundling is to bring about coherence b/w HR practises.Coherence exist when a mutually reinforcing set of HR practices is developed to contribute to the strategic objectives of the organizations so that these practices ensure the matching of resources to the needs of organization & bring about the performance quality.Best Practice ApproachThis approach focus on the view that organizations should adopt best practice irrespective of the context. According to this view, superior management practices are readily identifiable & are transferable across organizations. It contains- employment security Selective hiring Team workingHigh pay contingent Extensive trainingReduction of status differencesInformation sharing

Distinctive Human Resources PracticesProspectorsDefendersTheoretical Perspectives of SHRMTheoretical Perspectives of SHRMFit Perspective-match its internal resources & skills with opportunities available in the external environment. Functional Perspective-An organization performs best when each departmental unit maximizes its contributions limited to its unique area of expertise.Economic perspective- Human resources are a unique & distinguishable source of competitive advantage. Typological Perspective-Three distinct types of HR strategies InducementInvestmentInvolvementSHRM Approaches: The Indian Context Three Major approaches to understanding people function developed in India are presented-Alternative HR StrategiesContract companies in manufacturing sector- The use of contract workers has increased significantly at the production sites in electric & auto industries.Business Strategy of Contract firms-

Operation ManagementPolicyWorkers Skill Level(Development Type)Workers Skill Level (Acquisition Type)Contractor-managedtypeDevelopment/Contractor-managedtype

Acquisition/Contractor-managedtype

Client Managed typeDevelopment/Client Managed type

Acquisition/Client Managed type

Restructuring & SHRM in Healthcare OrganizationThe healthcare industry is in a growth mode & there is high level of focus on healthcare cost. As the part of strategy, the hospital industry is likely to engage in downsizing & restructuring Steps involved in plan to restructuring of hospital Environmental scan prior to developing restructuring activities. The environmental scan will result in defining the business strategy Pre-structuring Re- structuring Post-restructuring Competition related HRM changes in the Retail Banking Industry Since the mid-1990s,the retail banking divisions of commercial banks are under pressure to change the way they do business banks are faced with an extremely competitive environment as well as threats from non-banking institutions Focus or Niche Strategy-the typical initiatives are as follows: being a one-stop financial service provider. Aggressive selling to new customers Aggressive cross selling of new products to existing customers.Establishing a presence in chosen geographical markets.Establishing alternative channels of delivery of financial services.Developing a reputation for providing the highest quality service.