PART1

INTRODUCTION
HR Strategy

• Plan of what business we want to compete in

• Developing goals
• What are we best at
• What can’t we do
Evolution of Strategic Models in HRM

• Historically, HR focused on employee

• SHRM focuses on organizational effectiveness
How can HR help company to become more profitable?
• System approach
HR is part of the production process that can increase value of good or
service
HR Manager in the role of strategists

Interpersonal
 figurehead
 Leader

Information Processing
 liaison
 monitor
 disseminator
 Spokesperson

Decision-making
initiator/changer
resource allocator
disturbance handler
negotiator
Alternative Strategic Approaches
Best Practices
There are practices that are just good for everyone
Resource Based View
Focuses on how employees can add value to the firm for sustained competitive advantage
• Resources that are difficult to copy
• Resources that add value
Contingency Theory
• Contends that best HR practices will depend upon firm strategy
• Argues for multiple ways to achieve goals
• Do HR practices fit with firm’s strategy?
What does HR Need in Strategy Formulation

HR Role Innovation Cost Leadership

- Efficiency
-Training - Broader tasks - Promote internally
-Staffing - Creative risk-takers - Internal pay equity
-Compensation - Broad career paths
-Performance - Recruit more from
management Outside
- External pay equity
-Allows for mistakes
HR & Strategy Formulation

Administrative
Linkage

Strategic
Planning

HR
Function
 HR & Strategy Formulation

Administrative One-Way Two-Way Integrative

Linkage Linkage Linkage Linkage

Strategic Strategic Strategic

Planning Planning Planning Strategic
Planning

HR
Function
HR HR HR
Function Function Function

SOURCE: Adapted from K. Golden and V. Ramanujam, “Between a Dream and a Nightmare: On the Integration of the Human
Resource Function and the Strategic Business Planning Process,” Human Resource Management 24 (1985): 429-451.
The Role of HRM in Strategy Formulation

 Administrative Linkage — Lowest level of integration; HRM function's attention is

focused on day-to-day activities. No input from the HRM function to the company's
strategic plan is given.
 One-Way Linkage — The strategic business planning function develops the plan and
then informs the HRM function of the plan. HRM then helps in the implementation.
 Two-Way Linkage — Allows for consideration of human resource issues during the
strategy formulation process. The HRM function is expected to provide input to
potential strategic choices and then help implement the chosen option.
 Integrative Linkage — Is based on continuing, rather than sequential interaction. The
HR executive is an integral member of the strategic planning team.
 HR Strategy and the Organizational Life Cycle

Maturity

Growth
Profit

£/volume Develop
or
decline
Start-up

Loss Implications for

• Recruitment?
• Rewards?
• Training & Development?
• Employee Relations?
Time • Organisational development?
Strategic Goal: Health and Well Being

• Keep employees healthy

• Leverage h e a l t h benefits a n d plan design
• P a r t n e r wi th healthcare system for chronic issues
Strategic Goal: Efficiency/Effectiveness

• Partner with IT resources to support HR system upgrades

• Provide management support for workplace flexibility to improve productivity
• Implement self-service, better workflows, and common definitions
• Establish and report metrics to support decision-making
Strategic Goal: Culture and Climate

• Create Diversity and Inclusion (DI) strategy with broad reach and impact
• Develop a more robust engagement plan for safety and health
• Seek out childcare support for better work/life balance

D&I Strategy: An organization’s diversity and inclusion (D&I) strategy should be

aligned with its business goals and company values. In addition, the strategy needs
to be grounded in the real needs of the organization based on hard data
collected and analysed as a part of the organizational assessment process. A
successful D&I strategy is focused on creating an inclusive culture that is both
unique to the organization and sustainable.
Scanning the External Environment
• Environmental Scanning
The process of studying the environment of the organization to pinpoint opportunities
and threats.
• Environment Changes Impacting HR
• Governmental regulations
• Economic conditions
• Geographic and competitive concerns
• Workforce composition
Internal Assessment of the Organizational Workforce

Organizational Capabilities Inventory

• Human Resources Information System (HRIS) databases—sources of information
about employees’ knowledge, skills, and abilities (KSAs)
• Components of an organizational capabilities inventory
• Workforce and individual demographics
• Individual employee career progression
• Individual job performance data
Forecasting HR Supply and Demand

Forecasting
The use of information from the past and present to identify
expected future conditions.
Forecasting Methods
• Judgmental
• Estimates—asking managers’ opinions, top-down or bottom-up
• Rules of thumb—using general guidelines
• Delphi technique—asking a group of experts
• Nominal groups—reaching a group consensus in open discussion
Barriers relating to practice of SHRM

Barriers to successful SHRM implementation are complex. The main reason is a lack of growth
strategy or failure to implement one. Other major barriers are summarized as follows:

• High resistance due to lack of cooperation from the bottom line.

• Interdepartmental conflict.
• The lack of commitment of the entire senior management team.
• Limited time, money and the resources.
• The status quo approach of employees.
• Diverse work-force with competitive skill sets.
• Fear towards victimization in the wake of failures.
• Improper strategic assignments and leadership conflict over authority.
• Vulnerability to legislative changes.
• Resistance that comes through the legitimate labor institutions.
• Presence of an active labor union.
• Rapid structural changes.