Strategic Human Resource Management


By

Supreet Ahluwalia
Senior Lecturer
Department of Business
Manipal University Dubai Campus
Block #7 International Academic City Dubai
United Arab Emirates
 


The human resource management that aims to improve the productive contribution of individuals while simultaneously attempting to attain other societal and individual employee objectives has undergone drastic change with the passing of years.

We all know that HRM is concerned with the "people" & keeping the fact in mind that HRM helps in acquiring, developing, stimulating & retaining the outstanding employees as it gives both effectiveness & efficiency to the working of the organization, it has been started being used strategically & is now termed  as Strategic human resource management.

The changing role of HRM:

The role of human resource management is changing & is changing very fast, to help companies achieve their goals. HRM has gone through many phases from hiring & firing to relationship building, from there to legislation role, & now its role is shifting from protector & screener to strategic partner & as a change agent.

Defining SHRM:

o Organizational use of employees to gain or keep a competitive advantage against competitors.

o Involves aligning initiatives involving how people are managed with organizational mission and objectives.

In today's flattened, downsized & high-performing organizations, highly trained & committed employees not machines are often the firm's competitive key.

Perhaps the most drastic change in HR's role today is its growing involvement in developing & implementing the company's strategy.

In order to understand the modern aspect of HR i.e. SHRM, lets discuss the terms which would help us in understanding the concept:

o Core Competency can be defined as - A unique capability in the organization that creates high value and that differentiates the organization from its competition.

o Mission Statement explains purpose and reason for existence; it is usually very broad, but not more than a couple of sentences & it serves as foundation for everything organization does.

o Strategy: the company's plan of how it will balance its internal strengths & weaknesses with external opportunities & threats in order to maintain a competitive advantage, earlier this role was performed by the line managers, but now it is carried by the HR manager.

Strategies increasingly depend on strengthening organizational competitiveness & on building committed work teams, & these put HR in a central role. In the fast changing, globally competitive & quality oriented industrial environment, it's often the firm's employees its human resources who provide the competitive key. And so now it is a demand of the time to involve HR in the earlier stages of development & implementing the firm's strategic plan, rather than to let HR react to it. That means now the role of HR is not just to implement the things out but also to plan out in such a manner that the employees can be strategically used to get edge over the competitors, keeping in mind the fact that this is the only resource (HUMANS), which cannot be duplicated by the competitors.

The Strategic Management Process includes:

Determining what needs to be done to achieve corporate objectives, often over 3 - 5 years
Examining organization and competitive environment
Establishing optimal fit between organization and its environment
Reviewing and revising strategic plan

The Stage in the Process of Strategic Management:

Mission statement- Business definition and future plan for success.
Environmental analysis- OT analysis and preparing to meet environmental pressures.
Organizational self-assessment- SW analysis and chalking road map for attaining goals.
Establishing goals and objectives- Laying concrete figures that will help in benchmarking the performance. These benchmarks will lead to the development of strategy that will decide how the company intends to meets its environmental challenges with given environmental and resource constraints in the time to come.


Benefits of a Strategic Approach to HR:

*
Facilitates development of high-quality workforce through focus on types of people and skills needed
* Facilitates cost-effective utilization of labor, particularly in service industries where labor is generally greatest cost
* Facilitates planning and assessment of environmental uncertainty, and adaptation of organization to external forces
* Successful SHRM efforts begin with identification of strategic needs
* Employee participation is critical to linking strategy and HR practices
* Strategic HR depends on systematic and analytical mindset
* Corporate HR departments can have impact on organization's efforts to launch strategic initiatives

Human Resources Life Cycle:


The above diagram is divided into four different colours each indicating a separate stage of HR life cycle. Each stage has specific actions or steps that form respective stage for e.g. in third stage there are six different steps involved such as step 3 to step 8. These four stages cover all actions or functions pertaining to HR manager's job and they are related with strategic plan of the organisation.

The cycle starts with laying down a strategic plan, linking HR functions in it, and it provides the basis for Manpower planning and internal mobility. The Manpower planning will lead to the function of acquiring right people for the right job and in accordance recruitment as well as selection exercise will be designed and tools selected.  For e.g. if a automobile company decides to launch a new four-wheel model in the time to come their focus will be on Research and Development and then on Market Testing and last but foremost production and after sales. This new plan will act as the guideline for the company and will help in determining how many people do we need and what qualifications they should posses and how many of them can be kept on full-time rolls and as permanent employees.

The next Stage is for sustaining and retaining those who are hired and making sure that they work efficiently and help the company move in the selected direction. They should also facilitate the smooth movement of the company in the desired direction and should result in achievement of corporate goals and objectives effectively and efficiently. Employee's performance should be rated and compared with the benchmarks, recorded deviations are to be corrected, and precautionary measures for the future are implemented. In last stage the separation or farewell to those who are non-performing or may be to those who have completed their job or task i.e. project teams, is bided.

Factor Linkages of HR Plans and Strategies:


Given diagram presents various factors that have an impact on HR plans and Strategy and how are they interlinked with each other. Their interactions and impact on each element and the resulting change in HR Plan and policy is also indicated clearly.


The table given above takes into consideration two of the generic strategies and the strategic focus required to generate each of these competitive advantages along with HR strategy and activities needed to be done by HR Department to help the organization in generating these strategic advantages and to move successfully towards desired goals and objectives.

To understand these linkages we can look at them as tasks and steps needed to be taken in order to complete the tasks. The selected strategic focus should be very clear and well integrated into organizational policy and clearly communicated to HR Department to help in drafting suitable HR strategy and last in carrying out all activities.

Conclusion:

Ideally HR & top management work together to formulate the company's overall business strategy; that strategy then provides the framework within which HR activities such as recruiting & appraising must be crafted. If it is done successfully, it should result out in the employee competencies & behavior that in turn should help the business implement its strategies & realize its goals.

According to an expert "the human resources management system must be tailored to the demands of business strategy".

In order to be successful the employees should be developed in such a manner that they can be the competitive advantage, & for this the human resource management must be an equal partner in both the formulation & the implementation of the corporate & competitive strategies.

References:

Greer Charles, Strategic Human Resource Management 3 rd. edition, Prentice Hall Inc.
Meffinson D, Banfield Paul, Mathews J J, Human Resource Management, Kogan Page
Dessler Gary, Human Resource Management 8 Th. Edition, Pearson education Asia
 


Supreet Ahluwalia
Senior Lecturer
Department of Business
Manipal University Dubai Campus
Block #7 International Academic City Dubai
United Arab Emirates
 

Source: E-mail January 21, 2008

          

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