STRATEGIC HUMAN RESOURCE MANAGEMENT:

PROJECT ASSIGNMENT

PROJECT ASSIGNMENT
Strategic HRM demands that the HR function creates and sustains a business relationship with
the organisation to enable it prosper.

While the primary beneficiary of SHRM is the organisation, the onus for developing the above
partnership lies with the function.

TASK
Discuss the key HRM strategies that can help promote the strategic link between the two sides
elaborating on why and how they must emanate from and be supportive of the corporate
strategy at all times, and the role the HRM function must play to make it happen.

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1.0 INTRODUCTION
The concept of strategy
Strategy is the approach selected to achieve specified goals in the future. As defined by
Chandler (1962: 13) it is: ‘The determination of the long-term goals and objectives of an
enterprise, and the adoption of courses of action and the allocation of resources necessary for
carrying out those goals.’ The formulation and implementation of corporate strategy is a process
for developing a sense of direction, making the best use of resources and ensuring strategic fit.

The nature of Strategic HRM

Strategic HRM is an approach that defines how the organization’s goals will be achieved through
people by means of HR strategies and integrated HR policies and practices. It was defined by
Mabey et al (1998: 25) as the process of ‘developing corporate capability to deliver new
organizational strategies’. It is based on two key ideas, namely the resource based view and the
need for strategic fit.

SHRM can be regarded as a mindset underpinned by certain concepts rather than a set of
techniques. It provides the foundation for strategic reviews in which analyses of the
organizational context and existing HR practices lead to decisions on strategic plans for the
development of overall or specific HR strategies. SHRM involves the exercise of strategic choice
(which is always there) and the establishment of strategic priorities. It is essentially about the
integration of business and HR strategies so that the latter contribute to the achievement of the
former.

Strategic HRM is not just about strategic planning, nor does it only deal with the formulation of
individual HR strategies. Its main concern is with integrating what HR does and plans to do with
what the business does and plans to do. SHRM is about both HR strategies and the strategic
management activities of HR professionals. The following ten strategies seek to create and
sustain a business relationship between HR and the organisation to enable it prosper.
1. Human capital management strategy
2. Employee resourcing strategy
3. Learning and development strategy
4. Talent management strategy
5. Organization development strategy
6. Reward strategy
7. Employee relations strategy
8. Corporate social responsibility strategy
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 9. High-performance management strategy
10. Knowledge management strategy

Figure 1
Creating a strategic link between the organization and human resource management through
architecture

Key to direction of arrows:

Organizational architecture influencing HR architecture

HRM architecture contributing to success of corporate architecture.

ORGANIZATIONAL ARCHITECTURE HRM ARCHITECTURE

(Developed through Strategic Planning (Developed through HR Planning)

 ORGANIZATIONAL VISION . HRM VISION

MISSION MISSION

OBJECTIVE(S) OBJECTIVES

STRATEGY STRATEGY

PLANS PLANS

POLICIES POLICIES

PHILOSOPHY PHILOSOPHY

ACTIVITIES ACTIVITIES

VALUES VALUES

BELIEFS BELIEFS

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 PRINCIPLES PRINCIPLES

CULTURE CULTURE

3.0 Human capital management strategy

Human Capital Management (HCM) is concerned with obtaining, analysing and reporting on
data that inform the direction of value-adding people management strategy.

It is an approach to ‘people management’ that treats it as a high level strategic issue rather than
an operational matter to be left to the HR people.

Human capital consists of knowledge, skills and other abilities possessed by members of an
organization’s workforce.

Wei, L. (2006); commented that a human capital pool with a broad array of skills that are
compatible with the corporate strategy, is a catalyst for fulfilling the strategic goals through
promoting behavioral utility among employees.

When implementing a corporate strategy we must have it in mind that people are a vital
resource and that value can be created through people thus the need to developing a Human
Capital Management strategy by the Human Resource Function.

The function will collect data on human capital, so as to obtain, analyses and report on data that
informs the directions of Human Resource strategies and processes that will sustains a business
relationship with the organization to enable it to prosper. Such strategy must emanate from the
business strategy and be support it for better results. This strategy identifies different measures
and how they can be undertaken. Such measures are work force composition, length of Service,
distribution skills analysis and assessment, attrition and its cost, absenteeism, sickness rate and
their cost, average number of vacancies as a percentage of total workforce and total payroll
costs including pay and benefits.

Such a strategy gives an opportunity to recognize people as an asset that contribute to

organization performance and communicates results for decision making in a way supporting
the business strategy.

3.0 Learning and development strategy

Learning and development are strategic HRD activities that ensure the organization has the
talented and skilled people it needs. Individuals on their part get the opportunity to enhance
their knowledge and skills and levels of competency.

Elements of HRD

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  Learning – a relatively permanent change in behaviour that occurs as a result of
instruction, practice or experience.
 Training - the planned and systematic modification of behavior through learning events,
programmes and instruction that enable individuals to achieve the level of knowledge,
skills and attitude needed to carry out their work effectively.
 Development – the growth or realization of a person’s ability and potential for future use
in the organization.
 Education – the development of knowledge, skills and attitude required in all aspects of
life rather than relating to particular areas of activity.

Strategies for creating a learning culture

 Develop and share the vision – belief in a desired and emerging future.
 Empower employees – provide ‘supported autonomy’ e.g. freedom for employees to
manage their work within certain boundaries.
 Provide employees with a supportive learning environment where capabilities can be
discovered and applied.
 Use of coaching techniques to draw out talents of others.
 Allow managers to act as role models
 Encourage networks – communities of practice
 Align systems to vision.

Requirements of the strategy

Organizational Learning
 Systematic problem solving
 Experimentation (by individuals and functions)
 Learning from past experience
 Transferring knowledge quickly and efficiently throughout the organization

Individual Learning
 Identification of learning needs
 Development of learning objectives
 Determination of content
 Mobilization of resources
 Participation in learning event
 Evaluating results

4.0 Talent management strategy

A talent management strategy consists of a declaration of intent on how the processes in the
talent pipeline should mesh together with an overall objective – to acquire and nurture talent
wherever it is and wherever it is needed by using a number of interdependent policies and
practices.

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Talent management is the process of identifying, developing, recruiting, retaining and deploying
talented people - those who have the skills and ability to do something well. As defined by
Baron and Armstrong (2007), ‘talent management is a comprehensive and integrated set of
human resource management activities which ensure that the organization attracts, retains,
motivates and develops talented people it needs now and in the future’. The basis of talent
management is the belief that organizations with the best people win.

Being a comprehensive and integrated bundle of activities, the aim of talent management is to
secure the flow of talent in an organization, bearing in mind that talent is a major corporate
resource. Talent management exists to do one thing: to provide the organization with the talent
it needs by ensuring that all the constituent parts work together towards that end.

Talent management is a strategic management process. In the words of Johnson et al (2005), it

involves ‘understanding the strategic position of an organization, making strategic choices for
the future, and turning strategy into action’. Talent management concentrates on understanding
and satisfying the requirements of the business to achieve organizational capability, growth and
competitive advantage. It aligns its policies with the organization’s strategic intent – its
competitive strategy and operational goals.

The process of talent management takes the form of a ‘bundle’ of interrelated talent
management processes that constitute the talent pipeline. These processes are all directed to
creating and maintaining a pool of talented people with potential. The process starts with the
business strategy and what it signifies in terms of the talented people required by the
organization.

Ultimately, its aim is to develop and maintain a pool of talented people. The business strategy
informs the HR strategy, which is concerned generally with each aspect of talent management
and particularly with talent relationship management. The elements of the talent management
pipeline are resource planning, succession planning, performance management, management
development, reward management and the crafting of an employee value proposition that
makes the organization an attractive place in which to work.

The development and implementation of a talent management strategy requires high-quality

management and leadership from the top and from senior managers and the HR function. As
suggested by Younger et al (2007), the approaches required involve emphasizing ‘growth from
within’, regarding talent development as a key element of the business strategy, being clear
about the competencies and qualities that matter, maintaining well-defined career paths, taking
management development, coaching and mentoring very seriously, and demanding high
performance.

5.0 Organization development strategy

Organization Development Strategy is based on the aspiration to improve organizational
capability, which is broadly the capacity of an organization to function effectively in order to
achieve desired results.
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For an organisation to meet new demands, It is concerned with mapping out intentions on how
the organization should be structured to meet new demands, on system-wide change in fields
such as reward and performance management, on how change should be managed, on what
needs to be done to improve organizational processes involving people such as teamwork,
communications and participation, and on how the organization can acquire, retain, develop
and engage the talent it needs. These intentions will be converted into actions on structure
design, systems development and, possibly, OD-type interventions.

The process of integrated strategic change as conceived by Worley et al (1996) can be used to
formulate and implement organization development strategies. The steps required are:
 The work team, especially at the informal level, has great significance for feelings of
satisfaction, and the dynamics of such teams have a powerful effect on the behaviour of
their members.
 OD programmes aim to improve the quality of working life of all members of the
organization.
 Organizations can be more effective if they learn to diagnose their
 own strengths and weaknesses.
 Managers often do not know what is wrong and need special help in diagnosing
problems, although the outside ‘process consultant’ ensures that decision making
remains in the hands of the client.

6.0 Reward management strategy

This strategy is a declaration of intent which defines what the organization wants to do in the
longer term to develop and implement reward policies or practices as defined.

In order to fulfill the Human Resource function, an effective reward strategy should have
components such as clearly defined goals and a well defined link to business objectives, well
designed pay and reward programmes tailored to the needs of the organization and its people
which are consistent and finally effective and supportive to human resource and reward
processes in place.

The policies of reward strategy address broad issues that are not only limited to achieving equal
pay in the organization but also include relative importance attached to external
competitiveness and internal equity, the level of rewards, taking into account the market stance
and the publication of information on reward structures and processes to employees.
In relation to corporate strategy, reward strategy is an investment made by the organization as it
is key in sustaining a business relationship and fulfilling the objectives set.

Reward strategy can be developed through guiding principles like maintaining rates of pay,
rewarding people according to their contribution which encourages hard work and self
determination from the individuals who in the long run boost the organization keeping it in the
competition on the market making it a healthy corporate strategy.

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Purcell (1999) believes that the focus of strategy should be on implementation. This entails
converting the strategic plan into action and then into results. People must feel that the
procedures used to determine their grades, pay level, and pay progression are fair, equitable,
applied consistently and transparent. They must also feel that the awards distributed to them
are just in terms of their contribution and value to the organization therefore sustaining a good
business relationship in the end.

7.0 Employee relations strategy

Employee relations is a discipline within human resources primarily responsible for
strengthening the employer-employee relationship. Employee relations strategy defines the
intentions of the organization about what needs to be done and what needs to be changed in
ways in which the organization manages its relationships with employees and their trade
unions.

Values which effectively represent the organisation and support achievement of objectives of
the corporate strategy will be decided upon in a participatory way. And then, the values will be
made as transparent as possible through aligning with most of the employees. This will have an
effect of driving expected behaviour in the organization.

Measures will be put in place to recognize and applaud those members of staff who will live up
to those values. It should go without saying that leadership is the most beholden to the cultural
code by gathering the mission/vision statements and the highest execs you can put in a room
and ask them. Build a simple PowerPoint with easy-to-understand statements to disseminate to
your employees and making it public as part talent acquisition process having Increased
understanding, Number of recognitions coming from employees, Number of employees and
leaders who can articulate values being key performance indicators.

Effective communication helps employees not work in a vacuum and need an avenue for
articulating needs, wishes, complaints and goals by ensuring there is flexible ways for
employees to communicate back the good, the bad and yes, the ugly improving how quickly
and how often your employee relations team such as HR professional, line managers,
supervisors and all stake holders respond to both positive and negative employee situations by
Creating templates with a lexicon of words, easy to implement processes, terms and dates that
every employee relations team member understands and can commit to and every employee
comes to expect as a corporate strategy thus improved TAT on complaint and resolving
increased number of communications such as town halls, walk-arounds, emails, calls, logins
Adherence to steps in the communication plan becoming key performance indicators.

Employee compensation contribute a lot in HRS in away the employees feels so valued for the
job they are doing. People who are paid at industry standard or slightly above, feel better about
their jobs than those who receive less than market rate for the same work. And while this is
rarely an easy decision to get, it still does matter a whole lot in the long run. This will vary from
organization to organization, but some common ways to compensate individuals more without
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spending too much additional cash include work flex hours, job sharing options and
departmental consolidation of repetitive tasks or skill silos as a corporate strategy by monitoring
competitors’ benefits and compensation data quarterly +/- compared to yours, checking review
sites for negative mentions of which KPI is the decrease on employee turnover, increasing
number of complaints over a time period, Increasing number of cases appropriately filed.

8.0 Corporate social responsibility strategy

Corporate Social Responsibility can be regarded as the process of integrating business and
society. Mc Williams et al (2006) defined it to mean the actions taken by a business that further
some social good beyond the interests of the firm and that which is required by law. Corporate
Social Responsibility therefore goes beyond mere compliance; it is the commitment to
managing a business ethically in order to make a positive impact on society and the
environment.

At the strategic level, a Corporate Social Responsibility strategy like any other core Human
Resource strategy comprises a series of deliberate stages and/or steps intended to achieve a
particular outcome or strategic end for the organization. It follows that Strategic Corporate
Social Responsibility is fundamental for any organization in as far as deciding what social issues
it should focus on in order to create a Corporate Social agenda. It essentially determines how
socially responsible behavior is exercised both outside and within the organization.

In order to maximize the greatest social impact and reap the greatest business benefits, it is
imperative for an organization to have Corporate Social Responsibility Strategy that is well
aligned and integrated with its overall business and Human Resource strategy. This linkage when
coupled with an organization’s Corporate Social Responsibility initiatives is important, for it
strengthens an organization’s image, its brand and enables it achieve commercial success in
ways that honor ethical values and respect for people, community and the natural environment.

Further to the above, an effective Corporate Social Responsibility Strategy not only creates value
addition as highlighted above but also provides a basis for an organization to achieve
competitive advantage, as important resources and capabilities are created that differentiate an
organization from its competitors.

In developing and implementing an effective Corporate Social Responsibility Strategy and

framework, the Human Resource function should undertake the following:-
 It should identify and prioritize the areas in which Corporate Social Responsibility
activities might be undertaken, with due regard to their relevance in the business
context of the organization and their significance to the organization’s shareholders.
 It should draw up the strategy and make a case for it to top management and the
shareholders in order to obtain their approval.
 It should communicate all the necessary information pertaining to the strategy for
purposes of raising awareness and having employees understand the relevance and
value of Corporate Social Responsibility both to them and the organization.

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  It should then provide internal training to the employees on the skills they need in
implementing the Corporate Social Responsibility strategy.

9.0 High-performance management strategy

Performance management is a strategic and integrated approach to delivering sustained success
to organizations by improving the performance of people who work in them and by developing
the capabilities of teams and the individual.

High performance management aims at making an impact on the performance of an

organization through its people in the areas of productivity, quality, customer service, growth
and ultimately the delivery of increased shareholder value.

A high performance culture is a critical enabler of successful strategy execution. To effectively

transform an organization into a high performing one, a competitive advantage around human
resource is critical starting with the frontline leaders.

Majority of the employers fail to align performance management with strategy and culture. As a
result many employees are unaware of how they can contribute to their company’s strategic
goal. Rather than pushing employees to work harder and longer, they need to be equipped to
work smarter. So for employers to succeed in aligning performance with the organization
strategy, the right tools to employ are going to include: commitment and buy in from top-down
line managers who will engage staff to regain their trust and commitment; performance
management should be taken seriously by the senior management team who should lead by
example if this is to cascade through the organization.

The human resource will have to employ 5key performance framework critical in supporting the
organizational strategy which will include:
i. Setting SMART targets.
ii. Monitoring and evaluating what employees achieve and how they achieve it.
iii. Supporting employees to achieve targets.
iv. Determing an overall rating annually on performance.
v. Agreeing and supporting training and development needs.

10.0 Knowledge management strategy

Knowledge management involves transforming knowledge resources within organizations by
identifying relevant information and then disseminating it so that learning can take place. It
aims to capture an organization’s collective expertise and distribute it to where it can be best
used. It ensures that knowledge is shared by linking people with people and by linking them to
information so that they learn from documented experiences.

This is in accordance with the resource-based view of the firm, which, as argued by Grant
(1991), suggests that the source of competitive advantage lies within the firm (ie in its people
and their knowledge), not in how it positions itself in the market. A successful company is a
knowledge-creating company.
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In order to be competitive in today’s market, a company’s knowledge management strategy
should reflect its competitive strategy, how it creates value for customers, how that value
supports an economic model, and how the company’s people deliver on the value and the
economics.’

Knowledge is either Explicit or Tacit: Explicit knowledge is codified, it can be stored on

databases, disks, and can be disseminated through while Tacit Knowledge exists in minds, its
difficult to articulate in writing and it is acquired through personal experience.
Hansen et al (1999) suggested that it includes scientific or technological expertise, operational
know-how, insights about an industry and business judgment. The main challenge in knowledge
management is how to turn tacit knowledge into explicit knowledge.

A research by Davenport (1996) established that managers get two thirds of there information
by face to face or telephone conversations, therefore that is why it is important for the HR
resource function to recruit employees who are knowledgeable who will be able to disseminate
knowledge to other Team members through workshops, face to face communications, Team
building sessions among others.

11.0 Conclusion
Wei, L. (2006) cited Lengnick-Hall & Lengnick-Hall (1988) who asserted that; a great deal of
conceptual illustrations assert that the employment of effective Human Resource practices and
the design of a Human Resource system compatible with the firm strategy are imperative for the
successful implementation of business strategies.

He further says that; by combining the Human Resource Management function with business
strategy, Strategic Human Resource Management reflects a more flexible arrangement and
utilisation of human resources to achieve the organisational goals, and accordingly helps
organisations gain a competitive advantage. Thus the Human Resource function has to create
and sustain a business relationship with the organization to enable it prosper.

Whereas the Human Resource professional must know that their relevance to any organization
lies in helping any organization relevance to any organization lies in helping any organization to
realize a business strategy, the organization must recognize that it is the Human Resource
professionals who have the tools, competencies and capabilities to support the organization in
bringing the organization strategy to life.

As such, the human resource function ceases to be a command receiver but a participant in
making decision which culminates into becoming strategies business partner and therefore
Strategic Human Resource Management.

Armstrong 2011 states the Strategic Human Resource Management is an approach to the
development and implementation of Human Resource strategies that are integrated with
business strategies and enable the organization to achieve its goals. Such statement informs
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that Human Resource operate as part of the management team, ensuring that Human Resource
activities support the achievement of business strategies on a continuous basis, and are
consciously concerned with seeing that their activities add value.

It is therefore imperative for employment of effective Human Resource practices and the design
of Human Resource systems to be compatible with the organization strategy for the successful
implementation of business/ corporate strategy. It should be to every Human Resource
professionals knowledge that Human Resource strategies must emanate from the corporate
strategy and must be supportive to the corporate strategy at all times for the organization to
grow, proper and become competitive.

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