Module

2
Strategic Human Resource
Management

 Strategic Management vs.
Strategic HRM
•  Strategic Management-Process for analyzing a
company’s competitive situation, developing
the company’s strategic gals, and devising a
plan of action and allocating resources that
will increase the likelihood of achieving these
goals.
•  Strategic HRM- is the pattern of planned
human resource deployments and activities
intended to enable an organization to achieve
its goals.
Strategic Management Process

Strategic Management Process

Strategy Formulation Strategy Implementation Strategy Evaluation

 Strategy Formulation

Mission
- reason for
being
 Strategy Formulation

Mission Goals
- reason for - what it
being hopes to
achieve
 Strategy Formulation
External
Analysis

- opportunities
- threats
Mission Goals
- reason for - what it
being hopes to
achieve

Internal
Analysis
- strengths
- weaknesses
 Strategy Formulation
External
Analysis

- opportunities
- threats
Mission Goals Strategic
Choice
- reason for - what it
being hopes to - ways to
achieve fulfill goals
and mission
Internal
Analysis
- strengths
- weaknesses
 Strategy Formulation
External
Analysis

- opportunities
- threats
Mission Goals Strategic
Choice
- reason for - what it
being hopes to - ways to
achieve fulfill goals
and mission
Internal
Analysis
- strengths
- weaknesses

HR Input
 The Role of HR in Strategy
Formulation
Administrati
ve
Linkage

Strategic
Planning

HR
Function
 The Role of HR in Strategy
Formulation
Administrative One-Way
Linkage Linkage

Strategic Strategic
Planning Planning

HR HR
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 HR in Strategy
Formulation
Administrative One-Way Two-Way
Linkage Linkage Linkage

Strategic Strategic Strategic

Planning Planning Planning

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 HR in 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.
 Strategic HR Management

Strategic
Choice
 Strategic HR Management
HR Practices

- recruitment - job analysis

- training - job design
- performance - selection
management - development
- labor relations - pay structure
- HR planning - incentives
Strategic HR Needs - benefits
Choice - skills
- behaviors
- culture
HR HR Actions
Capability
- skills - behaviors
- abilities - results
- knowledge
 Strategic HR Management
HR Practices
- recruitment - job analysis
- training - job design
- performance - selection
management - development
- labor relations - pay structure
Strategic HR Needs - HR planning - incentives Firm
Choice - benefits Performance
- skills
- productivity
- behaviors
- quality
- culture
HR HR Actions - profitability
Capability
- skills - behaviors
- abilities - results
- knowledge

Emergent Strategies
 Product Life Cycle and Operating
Strategies

Growth Maturity

Formation
Sales

Porter
strategies Differentiation Cost Leadership
 HR needs in
Strategy Formulation
HR Role Differentiation Cost Leadership

Focus of firm - creative, risk-taking - efficiency

Employee role - broader tasks - specific & repetitive

creative risk-takers
Training - broad career paths - specific/short-term
skills
Staffing - recruit more from - promote internally
outside
Compensation - external pay equity - internal pay equity

Performance - results-oriented - behavior-oriented

management
 Product Life Cycle and
Directional Strategies

Concentration

Sales
Downsizing
 HR needs in Directional Strategies
HR Role Growth

Internal External

Focus of firm - build on strengths - acquire companies

Training - varied needs - conflict resolution

Staffing - hire and promote - integrate new cultures

acquire new skills
Compensation - incentive targets - standardize practices

Performance - behavior & - standardize practices

management results-oriented
 HR needs in Directional Strategies
HR Role Concentration Downsizing

Focus of firm - things they do best - retrenchment

Training - sharpen current - replace depleted skills

skills
Staffing - promote from within - need for flexibility,
keep morale up
Compensation - internal pay equity - tie to company success

Performance - behavior-oriented - performance-based

management
 Human Resource
Competencies
Professional
Business & Technical
Competence
Knowledge

HR
Professional

Integration Ability to
Competence Manage Change