A1. What do you understand by Strategic HRM?

Discuss in brief the meaning of

Investment Orientation of an organization.

Strategic human resource management is a process that helps the human resources department
maximize the potential of its workforce through strategic planning, talent management,
leadership development, organizational design, and performance management.

In the past, strategic HR management was an administrative function.

Today, HR managers play a critical role in ensuring that the organization has the right people
that help improve business performance and ensure that it delivers on its mission.

It means that HR professionals need to understand its goals and objectives. How they can best
help the organization achieve those goals, and what actions will allow them to do so. This article
will help you better understand what strategic human resource management is and how a smart
plan can bring tremendous value to the organization.

Investment Orientation of an organization

Adopting an investment perspective is the beginning of Strategic human resource management,

an organization have to invest on its people for attaining competitive advantage. Organization

sees employees as central to its mission/strategy. Employees are human assets that increase in
value to the organization and the marketplace when investments of appropriate policies and
programs are applied. Organization has a mission statement and strategic objectives that espouse
the value of human assets in achieving goals. Has a management philosophy that encourages the
development and retention of human assets and does not treat or regard human assets in the same
ways as physical assets.

Investment perspective of human resource management sources of employee’s value

a) Technical Knowledge
I. Markets,
II. Processes,
III. Customers,
IV. Environment
b) Ability to Learn and Grow
I. Openness to new ideas
II. Acquisition of knowledge and skills
c) Decision Making Capabilities
d) Motivation
e) Commitment
f) Teamwork
I. Interpersonal skills,
II. Leadership ability
A2. Describe in brief the factors influencing an organization’s investment orientation
There are five factors that influence organization's investment orientation

a) Management value

b) Utilitarianism

c) Nature of employee skills

d) Attitude towards the Risk

e) Ability of outsourcing

a. Management Value

o What value management places on value of its human resource relative to other capital
assets like brand names, distribution channel, facilities, plant, equipment and tools etc.

o Senior management values and actions decide organization investment in assets

The extent to which organization is investment oriented on human asset can be known through
these questions

I. 1 Does the organization see its people as being central to its mission strategy?

II. Does the both company wide and within individual business units support the value of
human assets and their role in achieving goals?

III. Does the management philosophy of the organization encourage the development of any
strategy to prevent the depreciation of human assets, are they considered replicable and
amortizable as physical assets?

b. Attitude Towards Risk

o Universal principal higher a risk higher a return

o In general, investment on human resource is very very risky

o Physical assets are property of company whereas employees are not owned by it
 o If organization view investment on human resource necessary for realizing strategic
objectives they often develop strategy to have ownership of employee services such as
long-term employment, long term benefits, opportunities for personal and professional
development

c. Nature of Employee Skills

o Employee skills that are specific and cannot be applied to other organization are less
risky

o Customized software knowledge

o Marketable skills applicable and demand in other organizations

o Need to apply retention strategy (ESOP)

d. Utilitarianism Approach

o Cost Benefit Analysis (investment from utility perspective)

o In this approach all costs and benefits are tried to quantify, for example: Development of
Performance appraisal system calculated based on direct cost and time spent on this
initiative

o Generally, investment on human resources and output are difficult to quantify

o It’s very difficult to access level of services required to prevent customers from moving
to competitors/or maintain their loyalty. Any additional service has no impact on
financial performance

o Impact of employee moral program difficult to quanitfy, therefore, organization reluctant

to make investment

e. Ability to Outsource

o Cost effective outsourcing facility is available

o An investment-oriented company make decision on investment based on sustainable

competitive advantage
 o Whether outsourcing provide more saving, efficiency, and access to expertise

Conclusion

o Organization invests in resources where they will have higher and visible return like
investment in marketing, advertising, product development, physical expansions and
mergers/acquisitions.

o For example: McDonald put little emphasis on employee development and more focus on
product development, advertisement, expansion.

o An investment perspective approach is often avoided as employee may not remain with
the organization for longer time period

o Most organizations measure performance on short term criteria Investment on human

resource/asset is long term

o Organization needs to develop effective strategy. Employee stock ownership program

o Employee stock ownership is beneficial for employee commitment and stay with
organization

o When organization gains competitive advantage through its employees when they invest
on this important resource than very difficult for competitors.

o Investment on human asset is long term and risky but obviously it is source of
competitive advantage
B1. Discuss the four aspects of Alrich’s “HR Champion” Model (1997).
The human resources (HR) functions are especially organized using the Ulrich’s HR Model.
Large, customer-focused businesses all over the world employ the David Ulrich HR model to
increase the effectiveness and efficiency of their HR divisions. Ulrich's model aids in the
organization of roles and responsibilities within HR departments by outlining who is accountable
for the crucial duties that are essential to the efficient operation of any firm. David Ulrich was
the person who came up with the idea that there should be four compartments for the HR
functions in large companies or corporations.
 Strategic Partner: The Strategic Partner's role is to assist in overseeing the expansion
and development of the workforce. They examine the systems and procedures that could
assist offer what the client wants and needs more effectively, and they turn to the
consumer to see what they could do better. Strategic partners put a strong emphasis on
coordinating HR initiatives and operations with global business strategy. The partner
fosters system thinking that is customer-centered while coordinating tactics with business
outcomes. Most internal employees of the company communicate with the HR
department through strategic HR. The strategic partner gives internal clients feedback on
the caliber of their interactions and the advantages of working with the business.
Additionally, they look for top talent within the company and aid in filling any openings.
Sharing HR objectives with the workforce and assisting in the promotion of harmony and
productivity at work are additional responsibilities.
 Administrative Expert: The position of the administrative expert is more internally
focused. They oversee the delivery of daily "business as usual" production, as well as
costs, personnel, and other factors. The administrative specialist develops a successful
and effective HR process. They are entrusted with creating procedures that are
specifically tailored to satisfy the distinct needs of organizations in an efficient manner.
The function of the administrative expert has notably evolved over time. The initial focus
of this position was on ensuring the highest level of service quality possible. Today, the
emphasis is more on an organization's ability to provide great service at the lowest
possible prices. The specialists also stay up to date on any amendments to labor and trade
laws, legislation, regulations, occupational health and safety standards, and other related
laws, which aids businesses in updating their policies and procedures to remain
compliant.
 Change Agent: The change agent considers how the company's culture as a whole may
be improved from both a personal and a professional standpoint. To lead and enable
change to improve the workplace for all, they will collaborate with line managers. The
role of a change agent involves assisting organizations with change and transition while
putting a strong emphasis on their people resources. For instance, the HR job conveying
these organizational changes internally is a change agent when an organization is
growing, changing, or revising its aims and objectives. A change agent's comprehensive
knowledge of corporate cultures aids in institutionalizing the ability to change. This is
often accomplished by providing people with training and allowing line managers to take
the reins of change projects. Employees get new abilities through training that they will
 require when their jobs and the goals of the company change. In a nutshell, the change
agent aids in preparing the whole organization for its upcoming phase of expansion or
evolution.
 Employee Champion: The employee champion encourages employee input and makes
sure they experience respect and hearing at work. They assist in implementing procedures
and practices that promote safety, and they can also work to ensure that employees are
content and healthy, which is extremely advantageous to the business as a whole. The
goal of these HR experts is to develop a dedicated and qualified staff with a heavy
emphasis on maximizing human capital contribution. These people ought to be
knowledgeable about the demands of employees and what the HRM needs to do to
accommodate those needs. Employee champions use the advantages of digital design in
today's changing workplace to boost engagement and productivity among the more tech-
savvy millennial generation workforce. Along with protecting employees amid
organizational transition, they also look out for their interests. In essence, the champion
uses surveys to gauge worker satisfaction and identify any flaws in the workplace
environment that can affect workers' productivity.
This establishes the foundation for a highly effective HR department and specifies precisely
which functions should be given priority over people and processes. It specifies whether each
person should focus on operational or strategic planning within those jobs. The core goals
attached to the model are to:
 Create a high-functioning and unified team structure
 Define every role in the department
 Ensure the company is performing to its best and operating competitively
 Measure performance to consistently do better
The HR departments of thousands of large businesses were able to operate with far greater
efficiency because to Ulrich's HR model, which eventually enhanced the customer experience.
By dividing the workforce into four key roles (Strategic Partner, Administrative Expert, Change
Agent, and Employee Champion), roles and responsibilities were more clearly defined, and it
was made sure that factors like safety, employee satisfaction, and the company's future weren't
overlooked in favor of more conventional HR tasks.
Without a doubt, the Ulrich model has changed the way that human resource functions are
thought about. The concept is particularly well-suited to large, intricate enterprises with
numerous business units. The Ulrich model highlights the four crucial functions that each
forward-thinking HR must fulfill for efficient, stress-free HR operations. With this paradigm, the
HR division puts the supply of value to the company above resource-intensive bureaucracy. It
does, however, have several drawbacks related to the lengthy implementation times and the
uncertainty surrounding the model's status as a technique or blueprint. In conclusion, Ulrich
model offers firms that can properly adopt it a bright future.