linking between hrm and business strategy by "skylark" group

8/7/2019 Linking between HRM and Business strategy by "Skylark" group

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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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linking between hrm and business strategy by "skylark" group

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