Strategic human resource management:

concept and process

Week 5

1
Learning outcomes

 Human resource strategies defined

 strategic HRM defined
 The meaning of strategic HRM
 The aims of strategic HRM
 Approaches to strategic HRM

2
Human resource strategies defined

 Strategic HRM defines the organization’s intentions and plans on how its
business goals should be achieved through people.
 It is based on three propositions:
 first, that human capital is a major source of competitive advantage
 second, that it is people who implement the strategic plan.
 Third, that a systematic approach should be adopted to defining where the
organization wants to go and how it should get there.

3
strategic HRM defined

 Strategic HRM is a process that involves the use of overarching approaches to

the development of HR strategies, which are integrated vertically with the
business strategy and horizontally with one another.

 These strategies define intentions and plans related to overall organizational

considerations, such as organizational effectiveness, and to more specific
aspects of people management, such as resourcing, learning and development,
reward and employee relations.

4
THE MEANING OF STRATEGIC HRM

 Strategic HRM focuses on actions that differentiate the firm from its competitors .
 It has four meanings:
1. The use of planning.
2. A coherent approach to the design and management of personnel systems based on an
employment policy and workforce strategy and often underpinned by a ‘philosophy.
3. matching HRM activities and policies to some explicit business strategy.
4. seeing the people of the organization as a ‘strategic resource’ for the achievement of
‘competitive advantage’.

5
AIMS OF STRATEGIC HRM

 The fundamental aim of strategic HRM is to generate strategic capability by ensuring

that the organization has the skilled, committed and well-motivated employees it needs
to achieve sustained competitive advantage.

 Its objective is to provide a sense of direction in an often turbulent environment so that

the business needs of the organization, and the individual and collective needs of its
employees can be met by the development and implementation of coherent and
practical HR policies and programmes.

6
AIMS OF STRATEGIC HRM(CONT’D)

 When considering the aims of strategic HRM it is necessary to consider how HR

strategies will take into account the interests of all the stakeholders in the organization:
employees in general as well as owners and management.
 Soft strategic HRM’ will place greater emphasis on the human relations aspect of
people management, stressing continuous development, communication, involvement,
security of employment, the quality of working life and work–life balance. Ethical
considerations will be important.

 Hard strategic HRM’ on the other hand will emphasize the yield to be obtained by
investing in human resources in the interests of the business.

7
AIMS OF STRATEGIC HRM(CONT’D)

Strategic HRM should attempt to achieve

a proper balance between the hard and
soft elements

8
APPROACHES TO STRATEGIC HRM

There are five approaches to strategic HRM.

These consist of:
1.Resource-based strategy.
2.achieving strategic fit.
3.High-performance management.
4.High commitment management
5. High-involvement management.

9
APPROACHES TO STRATEGIC
HRM(cont’d)
 The resource-based approach
 A fundamental aim of resource-based HR strategy, is to develop strategic
capability – achieving strategic fit between resources and opportunities and
obtaining added value from the effective deployment of resources.

 The resource-based approach is founded on the belief that competitive advantage is

obtained if a firm can obtain and develop human resources that enable it to learn faster
and apply its learning more effectively than its rivals.

10
APPROACHES TO STRATEGIC
HRM(cont’d)
 Strategic fit
 The HR strategy should be aligned to the business strategy
(vertical fit). Better still, HR strategy should be an integral part of
the business strategy, contributing to the business planning
process as it happens.

11
APPROACHES TO STRATEGIC
HRM(cont’d)

 High-performance management:
 Aims to effect organizational performance through people.
-HRM areas involved
(HPWS – high performance work systems):
-Recruitment & selection
-Training and development
-Reward management
-Performance management

12
APPROACHES TO STRATEGIC
HRM(cont’d)
 High commitment management
 A form of management aimed at eliciting a commitment so that behavior is
primarily self-regulated rather than controlled. Organizational relations based
on trust.
 Approaches to achieve commitment:
- Career ladders and emphasis on trainability
- Functional flexibility
- Reduction of hierarchy, ending of status differentails
- Reliance on teams: dissemination, structuring work, problem solving
- Intrinsic satisfaction via job design
- Permanent employment with temporary workers
- Merit pay and profit sharing 13
- Involvement in quality management
APPROACHES TO STRATEGIC
HRM(cont’d)

 High-involvement management
- Commitment and involvement opposed to bureaucratic control.
- Treating employees as partners. Providing opportunity for the employee to control and
understand their work.
- Communication for mutual understanding.

14
Thank YOU

15