Strategic Human Resource Management
‘Formulating and executing HR systems –
HR policies and activities – that produces
the employee competencies and behaviors
the company needs to achieve its strategic
aims.’
- Employees must first understand and share
the values and objectives of the org
- Aim is to build a committed workforce
- Integrating people with the strategic goals of
the org
- Managing employees effectively
SHRM
Creating a strategy-oriented HR system
The HR The HR System Employee
Function Behaviors
High Performance
HR Work System Employee
professionals (HPWS) competencies,
with strategic consisting of values,
management strategically motivation, and
competencies aligned HR behaviors
policies, required
practices and by the company’s
activities strategic plan
SHRM
HRM : Shifting Paradigms
Traditional HR Strategic HR
-Reactive -Proactive
-Staff function -Strategic function
-Production oriented -People oriented
-People as liability -People as investment
-Just a resource in the -key player in
production process competitive advantage
-Isolated from company’s -Integrated role in co’s
goals and planning goals and planning
SHRM: model integrating strategy & HR
Stakeholder
Interests
-Shareholders
-Employee groups
-Govt community HRM Policy
Choices Long-Term
Conseq-
HR
-Employee uences
Outcomes
Situational Factors influence
-Human -Individual
Commitment
resource Well-being
-Workforce Competence
flow -Org
characteristics Congruence
-Reward Effective
-B’s strategy Cost
systems ness
-Mngmnt Effectiveness
-Work -Societal
philosophy well-being
-Labour market systems
-Unions
-Technology
-Laws &
societal values
SHRM: as strategic business contributor
Enhancing Org Performance
• Involvement in strategic planning
• Decision making on mergers,
acquisitions and downsizing
• Redesigning org and work processes
• Ensuring financial accountability for HR
results
SHRM: as strategic business contributor....
Expanding Human Capital
• Attracting and retaining human resources
• Developing human resource capabilities
• Identifying and rewarding performance
Delivering Cost-Effective Compliance
System
• Ensuring legal compliance
• Demonstrating administrative efficiency
SHRM: Aligning HR strategy & actions with
business strategy
Formulate Business Strategy
“What are the strategic goals of the business?”
Identify workforce requirements
“What employee competencies and behaviors must HR deliver
to enable the business to reach its goal?”
Formulate HR Strategic Policies and Activities
“Which HR strategies and practices will enable HR to produce
those employee competencies and behaviors?”
Develop Detailed HR Scorecard Measures
“How can HR measure whether it is executing well for the
business, in terms of producing the required workforce
competencies and behaviors?”
SHRM: Corporate strategy
Corporate strategy (CS) is the overall plan for
diversified business.
Three different types CS:
Growth
(hr activities like staffing, compensation,
performance management, employee relation)
Stability
(developing effective retention strategy)
Retrenchment
(strategies for downsizing, boost employee
moral to increase productivity)
SHRM: Barriers for adaptation
Focusing on short-term performance
Lack of technical knowledge
Lack of strategic perspective
Difficulty in quantifying the cost and benefits
of HR
Apprehension towards training people
Resistance of employees
