Chapter 1:

Strategic Human
Resource
Management

Faculty of Business and Economics

 Learning objectives
• On successful completion, you will be able to:
– Define HRM
– Explain the relationship between HRM and management
– Describe the role of the HR manager
– Understand HRM activities performed in the organxn
– Explain the meaning of strategy
– Explain SHRM
– Describe a strategic approach to HRM
– Appreciate the strategic challenges faced by those working
in HRM
Faculty of Business and Economics
School of Management and Public Administration
 Fast Facts
• A Gallup survey found that more than 80 per
cent of Australian workers are not engaged
– Disengaged workers are three times likely to take
sick leaves.
• Watson Wyatt found that when US employees
are highly engaged
– Employee productivity increased by 26 per cent
– Employee turnover was reduced
– Shareholder returns increased
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School of Management and Public Administration
 Human resource management (HRM)

• The focus is on managing people within the

employer–employee (enterprise) relationship.
• It involves the productive use of people in
achieving the:
– organization's strategic business objectives, and
– satisfaction of individual employee needs.
• HRM is either part of the problem or part of the
solution in gaining the productive contribution of
people.
Faculty of Business and Economics
School of Management and Public Administration
Best Employers

Faculty of Business and Economics

School of Management and Public Administration
 Human and social capital
• Employment of high performance HR practices
increases in the value placed on HR by the senior
management and positively impact both human and
social capital.
• Human capital is the knowledge, skills and abilities
present in organization's human resources.
• Social capital describes the strength of personal
relationships existing within an organization that
promotes sharing knowledge, employee motivation,
team work and work commitments.
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School of Management and Public Administration
 HRM & management

HRM is management, but management is more

than HRM.
• HRM deals directly with people.
• Management includes:
o marketing
o management information systems
o production
o research and development
o accounting and finance.

Faculty of Business and Economics

School of Management and Public Administration
 Approaches to HRM
• Instrumental (Hard)
– Stresses the rational, quantitative and strategic aspects.
– Performance improvement & competitive advantage
are highlighted.
• Humanistic (Soft)
– Emphasis's the integration of HR policies and practices
with strategic business objectives but
– Also acknowledges employee development,
collaboration, participation and trust.
Which approach are you most comfortable with?
Why?
Faculty of Business and Economics
School of Management and Public Administration
 Eight key roles for an HR Manager
• Strategic partner
– Translate business strategy into action, become part
of the business team
• Administrative expert
– Using technology, rethinking and redesigning
activities
• Employee advocate
– Be the employees’ voice
• Agent for change and cultural transformation
– Catalyst for change
Faculty of Business and Economics
School of Management and Public Administration
 Eight key roles for an HR Manager
• Talent manager
– Attract, develop and retain core employees
• Organization ambassador
– Represent organization in competent manner,
market HR within organization
• Board and senior executive resource
– Contribute to board members on HR policies,
practices to promote business success
• Legal advisor
– Ensure legal compliance, monitor HR hazard risk
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School of Management and Public Administration
 Roles
of HR
manager

Faculty of Business and Economics

School of Management and Public Administration
 HRM Activities
• Job analysis
• Human resource planning
• Recruitment
• Selection
• Performance appraisal
• Human resource development
• Career planning and development
• Employee motivation
Faculty of Business and Economics
School of Management and Public Administration
 HRM Activities
• Change and cultural transformation
• Health and safety
• Remuneration and benefits
• Employee relations and/or industrial relations.
– Employee relations focuses on workplace relations,
and deals with;
• Employee attitudes and behaviour and
• Relationship between the organisation and its employees.

Faculty of Business and Economics

School of Management and Public Administration
 HRM, productivity & organization
performance
• A common indicator of organization and HRM
performance is productivity.
• Productivity is defined as an organization's total
output of goods and services divided by its total
inputs.
• Total factor productivity;
Output (good & services)
---------------------------------------------------------------------------------------
Labour + capital + materials + technology + energy

Faculty of Business and Economics

School of Management and Public Administration
 HRM, productivity & organization
performance
Productivity
improvements
are necessary
for the
economy and
organization to
be remain
competitive
(see figure 1.7,
p. 19).
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School of Management and Public Administration
 Ethical issues and HRM
• HR managers today are increasingly faced with
complex, ambiguous and conflicting issues
involving questions of morality & standards of
behaviour:
– What is good or bad? Right or wrong?
– Is management more responsible to shareholders or to
employees?
– How should terminations be managed? What about
monitoring employee email? Performance based pay?
Spoken English levels?
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School of Management and Public Administration
 Ethical issues – influencing factors
• Personality and national culture
• The situation and its importance to
individuals
• Corporate culture
• The existence of:
– clear, unambiguous organizational policies
– codes of conduct.

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School of Management and Public Administration
Whistleblowing

Faculty of Business and Economics

School of Management and Public Administration
HR & Whistleblowing

Faculty of Business and Economics

School of Management and Public Administration
 Strategy and stakeholders

• Strategy defines the direction in which an

organization intends to move and establishes the
framework for action to get there.
• Stakeholders are individuals, groups or
organizations that are affected by or have a vested
interest in an organization's policies or decisions.
– Who are the stakeholders of this educational
institution?
– Who are the stakeholders of any organization?

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School of Management and Public Administration
Example of stakeholder interests

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School of Management and Public Administration
 Strategic Management

• Strategic management involves:

– Strategy formulation
– Organizational mission and objectives
– Environmental analysis
– Strategy selection and implementation
– Performance evaluation and feedback.

Faculty of Business and Economics

School of Management and Public Administration
Example of stakeholder interests

Faculty of Business and Economics

School of Management and Public Administration
 Types of Strategies
• Growth
• Retrenchment
• Stability
• A combination of growth, retrenchment and stability
• International strategies (global, multi-domestic,
transnational).

What would happen if the HR strategy is not aligned

with the organizational strategy?
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School of Management and Public Administration
 HR Strategies MUST …

• Reflect the strategic objectives and values of the

organization;
• Be taken into account in organizational
strategies (and vice versa);
• Support culture, climate, and organizational
processes to attract and retain good staff;
• Identify the organization's competencies and
match people to these; and
• Sustain and build organizational commitment.
Faculty of Business and Economics
School of Management and Public Administration
 Strategic HRM
• Strategic HRM focuses on the linking of all HR
activities with the organization's strategic
objectives.
• SHRM objectives must accurately reflect
organizational values.
• HR objectives, policies and plans must be judged
by how well they help achieve the organization's
strategic business objectives.

Faculty of Business and Economics

School of Management and Public Administration
 Strategic HRM objectives & activities

• Strategic HRM objectives and activities must:

– be measurable;
– include deadline dates for accomplishment;
– identify and involve key stakeholders and HR
customers to ensure the necessary collaboration;
and
– nominate the individuals or parties responsible for
implementation.

Faculty of Business and Economics

School of Management and Public Administration
 Purpose of HR Policies

• The purpose of HR policies is to:

– reassure employees that they will be treated fairly
and objectively;
– help managers make quick and consistent decisions;
– give managers the confidence to resolve problems
and to defend their decisions.
• Procedures detail precisely what action is to be
taken in a particular situation.

Faculty of Business and Economics

School of Management and Public Administration
 Organizational culture
• Organizational culture is represented by the values,
beliefs, assumptions and symbols that define how an
organization conducts its business.
• Organizational culture and business success are co-
dependent.
• HRM activities stimulate and reinforce the behaviour
needed to achieve the organization's strategic
objectives.

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School of Management and Public Administration
 Evaluating outcomes & performance
• Adaptability
• Commitment
• Competence
• Congruence
• Cost-effectiveness
• Job satisfaction
• Justice
• Motivation
• Performance
• Trust

Faculty of Business and Economics

School of Management and Public Administration
 HRM Challenges
HR managers need to:
– be strategic contributors;
– show the true value of the HR function to the
organization;
– be the employees’ voice; and
– demonstrate professional competence.
• HR managers need to constantly demonstrate
the connection between HR, organizational
performance and employee well-being.
Faculty of Business and Economics
School of Management and Public Administration
 Summary
• The shift from an industrial society to an
information society also presents HRM with
unique challenges, including:
– creating a fair and just workplace;
– managing people respectfully and creatively;
– restoring trust lost through restructuring, downsizing
and work pressures.

Faculty of Business and Economics

School of Management and Public Administration
 Summary
• In the current environment HR managers need
to:
– adopt a strategic approach;
– be part of the top management team;
– be involved in corporate planning and understand
the business;
– become bottom-line oriented;
– develop and communicate a vision for HRM.

Faculty of Business and Economics

School of Management and Public Administration
 End of Chapter 1
Now you can:
 Define human resource management (HRM)
 Explain the relationship between HRM and management
 Describe the role of the HR manager
 Understand HRM activities performed in the organizations
 Explain the meaning of strategy
 Explain the meaning of strategic human resource management
(SHRM)
 Describe a strategic approach to HRM
 Appreciate the strategic challenges faced by those working in HRM

Ask any questions in tutorial?

Faculty of Business and Economics
School of Management and Public Administration