Cgapter Seven Strategic Role of HRM

Strategic Human Resource Management (SHRM)
Fesseha Afewerk (A/Professor)

Certified Management educator and trainer
Addis Ababa University

College of Business and Economics
School of Commerce Graduate Program
1
Module outline…
Chapter Seven
Strategic Role of HRM
7.1. Introduction
7.2. The Strategic Nature of HR Activity
7.3. The Changing Roles of HRM
7.4. What Being Strategic Means
7.5. The Strategic Role of HR Directors
7.6. The Strategic Role of Heads of HR Functions
7.7. The Strategic Role of HR Business Partners
2
Objective
•Upon the completion of this chapter, you will be able
to:
1. Explain how HR relates to the management
process.
2. Give at least three examples of how managers can
use HR concepts and techniques.
3. Illustrate the HR management responsibilities of line
and HR managers.
4. Illustrate HR’s role in formulating and executing
5. company
Compare strategy.
and contrast the different roles of HR.
3
7.1. Introduction
• SHRM is not just about strategic planning.
• It is equally, if not more, concerned with the
implementation of strategy and the strategic
behavior of HR specialists working with
their line management colleagues on an
everyday basis to ensure that the business
goals of the organization are achieved and
its values are put into practice..
4
Introduction…
• Thus, the strategic role of HR professionals
is examined in this chapter, which starts
with an overview of the strategic nature of
HR and continues with discussions of the
business partner model and what ‘being
strategic’ means.
• The chapter concludes with analyses of the
roles of HR directors, HR business partners
and HR advisers or assistants
5
7.2. The Strategic Nature of HR Activity
• Ulrich (1997) further distinguished between

strategic HR and HR strategy.
• He stated that strategic HR was the process of
linking HR practices to business strategy.
• Thus, strategic HR deals with identifying the
capabilities required of a business strategy and
using HR practices to develop those capabilities.
• On the other hand, he viewed HR strategy as
building an agenda for the HR function and
defining the mission, vision and priorities of the HR
function. 6
The Strategic Nature of HR Activity…
• The work of HR practitioners can be divided into two
main areas:
– transactional activities and
– strategic activities.
• Transactional activities consist of the service delivery
aspects of HR – recruitment, training, dealing with
people issues, legal compliance and employee services.
• HR strategic activities support the achievement of the
organization’s goals and values and involve the
development and implementation of forward-looking
HR strategies that are integrated with one another and
aligned to business objectives. 7
• Importantly, HR strategic activities also
involve HR practitioners working with their
line management colleagues in the continuous
development and implementation of the
business strategy.
• HR has to get its service delivery activities
right – that’s what it’s there to do, day by day,
and its reputation with line managers largely
depends on this.
8
• The importance of human capital in

achieving competitive advantage, the
credibility of HR also depends on its
ability to make a strategic
contribution that ensures that the
organization has the quality of
skilled, motivated and engaged
people it needs.
9
Figure 7. 1 Transactional versus Strategic Role of the HR Professional
10
• transactional HR activities and strategic HR
activities are different in at least five different
aspects.
• One, while the area of interest in the
transactional approach involve recruiting,
training, pay, and labor relations that in the
strategic approach involves strategy and culture
of the organization.
• Two, while view of the organization in the
transactional approach is micro-level that in the
strategic approach is macro-level. 11
• Three, in the transactional approach, the clients are
employees whereas in the strategic approach the
clients are managers and the organization as a
whole.
• Four, in the transaction approach, HR has weak
status in the organization whereas in the strategic
approach, it has strong approach.
• Finally, the educational requirement in the
transactional approach is specialist in HRM,
whereas that in the strategic approach is general
HR education with management experience or
general manager with HR experience. 12
7.3. The Changing Roles of HRM
• A great shift in HR roles is

envisaged today as a consequence
of the more prominent links to
business needs and a greater
requirement to contributing to
organizational performance.
13
The Changing Roles of HRM…
• With the repositioning of the HR function over

time, the roles of HR professionals have
consequently changed in order to battle with
internal and external business pressures, and
strive to achieve the strategic goals set by their
organizations.
• The clarification of roles, accordingly, augments
HR professionals’ understanding of how to add
value to the organization and help line managers
set clear expectations.
14
• The criteria for defining HR roles, thus,

have indeed varied over time, shifting from
a focus on activities (what do HR people
do), to time (where do HR people spend
time), to metaphors (what identity do HR
people have), and to value creation (what
value do HR people create).
• The changing roles of HRM as proposed in
literature are summarized in Figure 7.2.
15
Figure 7. 2 The Changing Roles of HRM
16
Figure 7. 2 The Changing Roles of HRM…
17
• The Clerk of Works, the Contract Manager,

and the Architect Model
• Tyson and Fell (1986) distinguished three ideal
types of HR roles and named the clerk of works,
the contract manager, and the architect.
• These HR roles are founded on different
parameters. They are depicted as modes of
operation that depend on HRM’s contribution to
the building of the business. The roles change
depending on the organizational context and the
expectation of how HR should operate in this
specific context. 18
• In the clerk of works model, HRM is an administrative

support activity with no involvement in business planning,
all authority being vested in line managers.
• The principal activities for the HR staff are recruitment,
record-keeping, and welfare.
• HRM is seen as an administrative activity with a focus on
basic routines.
• In the contract manager model, the principal activities of
the HR staff include confronting unions with a regulatory
system, and fixing day-to-day issues with the unions and
responding in a reactive way to problems. There is a strong
industrial relations focus. HR has tightly defined roles that
are pragmatic, problem solving ‘fire fighting’ focus. 19
• In the architect model, HR managers seek to

create and build the organization as a whole
contributing to the success of the business
through explicit policies, which influence the
corporate plan.
• HR is senior creative specialist, initiates policy
changes, and acts as partner with senior line
managers. Personnel manager regards himself or
herself as a business manager first, and a
‘professional’ personnel manager second.
20
Figure 7. 3 Tyson’s Three Ideal Types of HR roles
…
21
• Schuler’s (1990) Model of HR Role

• Schuler (1990) describes the HR department’s potential role as
a “valued member of the management team” and emphasizes
the necessity for HR managers to take on new roles and
competencies.
• These roles include partnering up with line management,
shaping and advocating change, planning, integrating and
implementing strategies, and managing and developing
talent.
• According to Shuller, the HR professional is a business person,
a shaper of change, a consultant to organization/partner to line,
a strategy formulator and implementor, a talent manager, an
asset manager, and a cost controller.
22
• Wiley’s (1992) Model of Strategic HR Role

• Wiley’s (1992) HRM model also depicts roles
according to contextual criteria – specifically;
strategic, legal, and operational aspects. Wiley
highlights how important a role HR managers
play in contributing to their organization’s
processes and maximizing the organization’s
potential through its HR, by supervising various
HR activities, such as recruitment, selection,
compensation, training and development.
23
• According to Wiley (1992), an

HR professional is a
consultant, an assessor, an
innovator/change agent, a
business partner, and a cost
manager.
24
• Storey’s Model of Strategic HR Role

• Another early attempt at representing HR’s changing
role was Storey’s 1992 model.
• His framework was based on strategic integration and
the active relationship between HR and business
strategy.
• Storey carried out a research study in the period 1986-
1988 covering 15 major British organizations (both
private and public), and came up with four roles that
he believed may be performed by Personnel Managers.
– Advisors, Handmaidens, Regulators, and
Change-makers. 25
• He further categorized these

four roles, as illustrated in
Figure 7.4., on the basis of two
dimensions; interventionary
versus non-interventionary, as
well as strategic versus
tactical.
26
Figure 7. 4 Storey’s Model of Strategic HR Role
27
• According to Storey, advisors, as the name suggests, are

facilitators and consultants (non- interventionists) for line
management. Handmaidens simply implement
management’s set policies, and, as such, are also non-
interventionists. Storey’s handmaiden role is thus similar to
Legge’s conformist innovator role. Regulators, on the other
hand, are active legislators who devise the rules and supervise
their application. They are therefore interventionists, but only
on the tactical level.
• Finally, change-makers are the long-term policy planners
whose “interventionism” is geared towards the long-term
(hence strategic) implementation of HRM policies that
enhance employee commitment and dedication, whilst
observing the long-term strategic interests of the organization.
28
• Ulrich’s Strategic HR Role Model

• Ulrich (1997) identified four HR roles
and named administrative expert,
employee champion, change agent, and
strategic partner. He explained these
roles in the people versus process
dimension, and in the strategic versus
operational dimension (See Figure 7.5).
29
Figure 7. 5 Ulrich’s HR Role Model (1997)
People
Employee Change
Champion Agent
Operational Strategic
Administrative Strategic
Partner
Expert
Process
30
• Thus, the roles of HR professionals and

functions have changed through time from
welfare worker role of the 1960s to the most
recent strategic partner roles.
• Changes in business contexts and
philosophies have provided HR
professionals with the opportunity to
become strategic partners, playing the sorts
of roles that help organizations define and
meet their strategic needs. 31
• The strategic role of HR is to promote

the achievement of the organization’s
business goals by developing and
implementing HR strategies that are
integrated with the business strategy and
are coherent and mutually supportive;
and by ensuring that a strategic approach
is adopted by the HR function that
supports the business and adds value.
32
Figure 7. 6 Strategic HR Role Framework
33
• Ulrich and Brockbank, later in 2005

proposed a new consolidated framework
which filters out the noise and synthesizes
the previous work to clarify and update HR
professionals’ present roles, and also aid in
their professional development.
• This updated framework (Figure 7.7.)
consists of the following five HR roles
which have evolved from Ulrich’s 1997
HR-role framework.
34
1. Strategic partner – consists of multiple

dimensions: business expert, change agent,
strategic HR planner, knowledge manager and
consultant; combining them to align HR
systems to help accomplish the organization’s
vision and mission, helping managers to get
things done, and disseminating learning across
the organization.
• This is about partnering up with line managers
to formulate and implement strategies and help
achieve the organization’s goals 35
2. Employee advocate – focuses on the needs of

today’s employees through listening,
understanding and empathizing. HR professionals
are responsible for keeping the two-way
employer-employee relationship intact.
3. Human capital developer – in the role of
managing and developing human capital
(individuals and teams), focuses on preparing
employees to be successful in the future. The HR
manager recognizes human capital as a critical
asset and focusing on developing the workforce.
36
\
4. Functional expert – concerned with the HR practices that are

central to HR value, acting with insight on the basis of the
body of knowledge possessed. Some are delivered through
administrative efficiency (such as technology or process
design), and others through policies, menus and interventions.
Necessary to distinguish between the foundation HR practices
– recruitment, learning and development, rewards, etc – and
the emerging HR practices such as
• communications, work
• Process and organization design, and
• executive leadership
• development. HR professionals should work on designing and
delivering efficient and effective HR practices and processes
37
5. Leader – leading the HR function,

collaborating with other functions and
providing leadership to them, setting and
enhancing the standards for strategic thinking
and ensuring corporate governance. HR
professionals, therefore, must show genuine
leadership skills and gain credibility
38
Figure 7. 7 Ulrich and Brockbank’s Improved Strategic
HR Role Model
39
7.4. What Being Strategic Means
• A more realistic assessment of what being
strategic means can be produced by
analyzing what is involved at different
levels: HR directors, heads of major HR
functions (learning and development,
reward, etc) who may be in centers of
expertise, business partners embedded in
operational departments, and HR advisers or
assistants who may be working in shared
service centers. 40
What Being Strategic Means …
HR Changes and Challenges Today
• Over the the recent years, organizations have
generally adopted the concept of Business Partner,
at least partly, and experimented with variations of
Business Partner roles with simultaneous strategies
and structures for handling all the rest of HR
functions.
• The goal has been to manage the tactical areas of
HR efficiently and effectively and to
simultaneously grow and develop the strategic
areas of HR. 41
• Tactical areas of HR include the more compliance or
administrative such as risk management (legal
defense, compliance, legal and regulatory
requirements and cost containment), employee
relations (policy issues, supervision, etc.), and some
day-to-day operational tasks of managing
employment, benefits and payroll.
• The thinking behind this is that when these areas are
managed effectively, there is then time and resources
for the Business Partner role to deal with the human
capital issues that impact the business strategically.
42
• The Strategic Business Partner Role
• In order to be effective, they will need business credibility,
the ability to work in partnership with the other leaders,
and deep HR and OD functional knowledge.
• The SBP model is a way to ensure the human system
implications and needed change strategies are part of
business leadership decisions.
• It involves both what was always intended as strategic
work in HR and new work in strategic thinking,
organization design, culture change, human system
alignment and change management.
43
• In order to put more context around the
Strategic Business Partner role, as Hanna
(1988) says, we need to start by working
from the outside-in. We live in a hyper-
turbulent world.
• Today we must adapt to numerous
unprecedented challenges that change the
very nature of what business we are in and
how that business gets conducted.
44
• SBP’s can be developed and positioned to support a business with
the perspective and skills that help with organization effectiveness.
Human system problems plague senior leaders daily, including
issues like:
• Dealing with the employee or leader who isn’t the right person for a
job or doesn’t have the right capabilities
• Identifying where tomorrow’s leaders will come from
• Helping a team when it isn’t performing at a high level
• Getting sales to work effectively with R&D or manufacturing
• Leading and gaining consensus from strategic planning sessions
• Designing and building an organization capable of executing the
strategic direction
• Solving problems that lie at the interface of technology, people and
performance
45
• Increasing innovation or speed across the organizations’ processes
7.5. The Strategic Role of HR Directors
• The strategic role of HR directors is to promote

the achievement of the organization’s business
goals by
1) developing and implementing HR strategies that
are integrated with the business strategy and are
coherent and mutually supportive and
2) ensuring that a strategic approach is adopted by
the HR function that supports the business and
adds value.
46
The Strategic Role of HR Directors…
• To carry out this role the HR director should:
– understand the strategic goals of the organization;
– appreciate the business imperatives and performance
drivers relative to these goals;
– comprehend how sustainable competitive advantage can be
obtained through the human capital of the organization and
know how HR practices can contribute to the achievement
of strategic goals;
– contribute to the development of the business strategy on an
‘outside-in’ basis by emphasizing how the organization’s
distinctive human resources can make an impact;
– contribute to the development for the business of a clear
vision and a set of integrated values; 47
– ensure that senior management understands the HR
implications of its business strategy;
– be aware of the broader context (the competitive
environment and the business, economic, social and
legal factors that affect it) in which the organization
operates;
– understand the kinds of employee behavior required
successfully to execute the business strategy;
– think in terms of the bigger and longer-term picture of
where HR should go and how to get there;
– believe in and practice evidence-based management;
– be capable of making a powerful business case for any
proposals on the development of HR strategies. 48
• There are many views in the literature on the

skills required, which can be categorized into
three broad areas.
– One area is around HR knowledge and technical
abilities and also includes business and functional
skills.
– A second area is organizational/ interpersonal skills
including leadership, change, knowledge management
and consultancy skills.
– A third is a set of personal competencies which range
from assertiveness, drive, resilience and problem-
solving, through to having strong personal values.
49
7.6. The Strategic Role of Heads of HR
Functions
• The strategic role of heads of HR functions is
fundamentally the same for their function as that
of HR directors for the whole organization.
• They promote the achievement of the
organization’s business goals by developing and
implementing functional strategies that are
aligned with the business strategy and integrated
with the strategies for other HR functions, and
adopt a strategic approach in the sense of
ensuring that HR activities support the business
and add value. 50
The Strategic Role of Heads of HR Functions …
• To carry out this role heads of HR functions

should:
– understand the strategic goals of the
organization as they affect their function;
– appreciate the business imperatives and
performance drivers relative to these goals;
– help senior management to understand the
implications of its strategy for the HR function;
– know how HR practices can contribute to the
achievement of the strategic goals;
51
The Strategic Role of Heads of HR Functions …
– ensure that their activities provide added value for
the organization;
– be aware of the broader context in which the
function operates;
– think in terms of the bigger and longer-term picture
of where HR strategies for the function should go
and how to get there;
– be capable of making a powerful business case for
any proposals on the development of HR strategies
for the function.
52
7.7. The Strategic Role of HR Business
Partners
• HR business partnering is a model whereby
HR professionals work closely with business
leaders and/or line managers to achieve shared
organizational objectives, in particular
designing and implementing HR systems and
processes that support strategic business aims.
• This can involve the formal designation of
‘HR business partners’ - HR professionals
who are embedded within specific areas of the
business.
53
The Strategic Role of HR Business Partners …
• The strategic role of HR business partners is to promote the
achievement of the business goals of the organizational unit or
function in which they operate. To carry out this role they should:
– understand the business and its competitive environment;
– understand the goals of their part of the business and its plans to
attain them;
– ensure that their activities provide added value for the unit or
function;
– build relationships founded on trust with their line management
clients;
– provide support to the strategic activities of their colleagues;
– align their activities with business requirements;
– be proactive, anticipating requirements, identifying problems and
producing innovative and evidence-based solutions to them. 54
Activity
1. Identify the Key roles and
Responsibilities of HR
managers.
2. Traditional
Organizations
Vs. High Performance
Organizations
55
Role of HR Manager 8/1/13
• Conscience Role
• Counsellor
• Mediator
• Spokesman
• Problem solver
• Change Agent
- As a Specialist
- As a Source of help and also a controller
HR’s strategic role
 Employees as organization's assets
 Driving business strategy
 Spanning organizational functions
 HRD Deliverables:
 Performance
 Capacity Building
 Problem solving/consulting
 Org. change and development
Essential Responsibilities HR Manager in Today’s Workplace
1. Hiring and Recruitment

2. Create Compelling Job Descriptions
3. Design Effective Onboarding and Training Programs
4. Strategic Talent Management
5. Develop Employee Retention Strategies
6. Manage Compensation and Benefits
7. Streamline Event Planning and Scheduling
8. Ensure Compliance With Rules and Regulations
9. Facilitate Performance Reviews
Traditional
Organizations
Vs. High Performance Organizations
 Design • Traditional
• High Performance
Components Organizations Organizations
 People – Narrow expertise – Multi-skilled team players
 Decision Systems – Rugged individuals – Dispersed
 Human Resources – Centralized – Open
 Structure – Closed – Realistic job interviews
 Values & Culture – Continuous learning
– Standardized selection
– Routine training – Performance-based pay
– Job-based pay – Enriched jobs
– Narrow, repetitive jobs – Flat, flexible hierarchies
– Tall rigid hierarchies – Self-contained businesses
– Functional departments – Promote involvement
– Promote compliance – Innovation and
cooperation
– Routine behaviors
Chapter Seven Ends
60

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Strategic Human Resource Management (SHRM)

Fesseha Afewerk (A/Professor)

Addis Ababa University

• Ulrich (1997) further distinguished between

• The importance of human capital in

• A great shift in HR roles is

• With the repositioning of the HR function over

• The criteria for defining HR roles, thus,

• The Clerk of Works, the Contract Manager,

• In the clerk of works model, HRM is an administrative

• In the architect model, HR managers seek to

• Schuler’s (1990) Model of HR Role

• Wiley’s (1992) Model of Strategic HR Role

• According to Wiley (1992), an

• Storey’s Model of Strategic HR Role

• He further categorized these

• According to Storey, advisors, as the name suggests, are

• Ulrich’s Strategic HR Role Model

• Thus, the roles of HR professionals and

• The strategic role of HR is to promote

• Ulrich and Brockbank, later in 2005

1. Strategic partner – consists of multiple

2. Employee advocate – focuses on the needs of

4. Functional expert – concerned with the HR practices that are

5. Leader – leading the HR function,

• The strategic role of HR directors is to promote

• There are many views in the literature on the

• To carry out this role heads of HR functions

1. Hiring and Recruitment

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