LECTURE 01 Concept of SHRM

Contents
Strategic HRM Defined Basis of SHRM Principles of SHRM Aims of SHRM Objectives of SHRM Concepts of SHRM Perspectives of SHRM Strategic Role of HR SHR Systems based on Employment Models

Contd.
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Contents (Contd.)
Strategic vs. Traditional HR Strategy Driven Role Behaviors Strategic Typology of HR Activities Strategic Staffing Policies Barriers to SHRM Challenges to SHRM Outcomes of SHRM Model of SHRM Linking People with the Strategic needs of

the Business - The 5P Model

Strategic HRM Defined

Strategic HRM Defined

SHRM is concerned with seeing the people of the

organization as a strategic resource for the achievement of competitive advantage - Hendry and Pettigrew A set of processes and activities jointly shared by human resources and line managers to solve people-related business problems - Schuler and Walker SHRM focuses on actions that differentiates the firm from its competitors. - Purcell The central premise of strategic human resource management theory is that successful organizational performance depends on a close fit or alignment between business and human resource strategy. - Batt

Strategic HRM Defined (Contd.)

SHRM is largely about integration and adaptation. Its concern is to ensure that:
HRM is fully integrated with the strategy and the strategic needs of the firm 2. HR policies cohere both across policy areas and across hierarchies 3. HR practices are adjusted , accepted and used by line managers and employees as part of their everyday work
1.

SHRM is an approach that defines how the organizations goals will be achieved through people by means of HR strategies and integrated HR policies and practices Managing SHR includes:

Aligning HR and Business Strategy Reengineering Organization Processes Listening and responding to employees Managing Transformation and Changes

Basis of SHRM

Basis of SHRM
Three propositions

HR/HC play a strategic role in success of an organization and are a major source of competitive advantage 2. HR strategies must be integrated with the business plans (vertical integration)
1.
Allen & White: The

central premise of SHRM theory is that successful organizational performance depends on a close fit or alignment between business and HR Strategy major focus of SHRM should be aligning HR with firm strategies

Boxell et al: The

Basis of SHRM (Contd.)

Three propositions (Contd.)
3.

Individual HR strategies should cohere by being linked to each other to provide mutual support (horizontal integration)

Principles of SHRM

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Principles of SHRM
Ondrack and Nininger: -

There is an overall purpose and the HR dimensions of that purpose are evident 2. A process of developing strategy within the organization exists and is understood, and there is explicit consideration of HR dimensions 3. Effective linkages exist on a continuing basis to ensure the integration of human resource considerations with the organizational decision making process
1.
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Principles of SHRM (Contd.)

Ondrack and Nininger (Contd.): -

The office of the chief executive provided the challenge for integrating HR considerations to meet the needs of the business 5. The organization of all levels establishes responsibility and accountability for HRM 6. Initiatives in the management of HR are relevant to the needs of the business 7. It includes the responsibility to identify and interact in the social, political, technological and economic environments in which the organization is and will be doing business
4.
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Aims of SHRM

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Aims of SHRM
Fundamental Aim
To generate strategic capability by ensuring

that the organization has the skilled, engaged and well motivated employees it needs to achieve sustained competitive advantage
As per the resource based view, the strategic

goal: To create firms which are more intelligent and

flexible than their competitors, by hiring and developing more talented staff and by extending their skills base
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Aims of SHRM (Contd.)

As per Schuler: SHRM is largely about integration and

adaptation. Its concern is to ensure that: HRM is fully integrated with the strategy and strategic

needs of the firm HR policies cohere both across policy areas and across hierarchies HR policies are adjusted, accepted and used by line managers and employees as part of their everyday work

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Aims of SHRM (Contd.)

As per Dyer and Holder: SHRM provides unifying framework which are at

once broad, contingency based and integrative. The rationale for SHRM is the perceived advantage of having an agreed and understood basis for developing and implementing approaches to people management that take into account the changing context in which the firm operates and its longer term requirements Lengnick-Hall: - Underlying this rationale in a business is the concept of achieving competitive advantage through HRM
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Aims of SHRM (Contd.)

As per Storey: Soft SHRM: Human Relations Continuous developmentCommunication Involvement Security of employment QWL Work life balance Hard SHRM: Yield to be obtained by investing in Hr in the interest of

the business

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Aims of SHRM (Contd.)

As per Storey (Contd.): SHRM would attempt to achieve balance b/w

the hard and the soft versions

Corporate Social Responsibility
As they draw resources from the society and

must give back to the society

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Objectives of SHRM

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Objectives of SHRM
1. To identify and analyze external

2. 3. 4. 5.

opportunities and threats that may be crucial to the company's success. To provide a clear business strategy and vision for the future. To supply competitive intelligence that may be useful in the strategic planning process. To recruit, retain and motivate people. To develop and retain highly competent people.

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Objectives of SHRM (Contd.)

6. To ensure that people development issues

are addressed systematically. 7. To supply information regarding the company's internal strengths and weaknesses. 8. To meet the expectations of the customers effectively. 9. To ensure high productivity. 10. To ensure business surplus thorough competency
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Concepts of SHRM

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Concepts of SHRM
Resource Based View
Developed by Penrose and expanded by

Wernerfelt Based on Hamel and Prahalad view: It is the range of resources in an organization including

its HR, that produces its unique character and creates competitive advantage

Jay Barney: Competitive Advantage arises first when firms within an industry are heterogeneous with respect to the strategic resources they control and second when these resources are not perfectly mobile across firms and thus heterogeneity can be long lasting.
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Concepts of SHRM (Contd.)

Resource Based View (Contd.)
Jay Barney (Contd.): Creating sustained competitive advantage therefore depends on the unique resources and capabilities that a firm brings to competition in its environment. These resources include experience, knowledge, judgment, risk taking propensity and wisdom of individuals associated with a firm Attributes required by a firm to create competitive advantage: 1. 2. 3. 4.
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Valuable Rare Imperfectly imitable Non-substitutable

Concepts of SHRM (Contd.)

Resource Based View (Contd.)
Wright and McMahan Competitive advantage through human resources arises because: 1.

2.

There is heterogeneity in their availability in the sense of the differences that exist between them across firms in an industry and They are immobile in the sense that competing firms may be unable to recruit them.

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Concepts of SHRM (Contd.)

Resource Based View (Contd.)
Wright and McMahan (Contd.) Criteria governing resource's ability to provide competitive advantage: 1. 2. 3. 4.

The resource must add positive value to the firm The resource must be unique or rare amongst current and potential competitors The resource must be imperfectly imitable The resource cannot be substituted with another resource by competing firms

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Concepts of SHRM (Contd.)

Resource Based View (Contd.)
Wright and McMahan (Contd.) Boxall and Purcell:

Resource based HRM can produce HR Advantage. The aim is to develop strategic capability. This means strategic fit between resources and opportunities, obtaining added value from the effective deployment of resources, and developing people who can think and plan strategically in the sense that they understand key strategic issues and ensure that what they do supports the achievement of the businesss strategic goals

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Concepts of SHRM (Contd.)

Resource Based View (Contd.)
This approach highlights the importance of

a human capital management approach to HRM and provides the justification for investing in people through resourcing, talent management and learning and development programmes as a means of enhancing competitive advantage.

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Concepts of SHRM (Contd.)

Strategic Fit
Wright and McMahan Two dimensions that distinguish strategic HRM: 1. 2.

Vertical Horizontal

Strategic Flexibility
Ability of a firm to respond and adapt to the

changes in its competitive environment. Environmental differences affect flexibility strategy

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Stable, predictable envt narrow range of skills and narrow range of behavior Dynamic, unpredictable envt. organic HR systems

Perspectives of SHRM

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Perspectives on Strategic HRM

1. The universalistic perspective Some HR practices are better than the others and all

organizations should adopt these best practices. There is universal relationship between individual best practices and firm performance
1. The contingency perspective Organizations HR policies must be consistent with

other aspects of the organization

1. The configurational perspective Holistic approach
Independent variables HR practices and

Dependent variable Organizational Performance

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Perspectives on Strategic HRM (Contd.)

3. The configurational perspective (Contd.) Richardson and Thompson: Best Practice Approach (Universalistic) Best Fit Approach (Contingency) Bundling (Configurational)

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Perspectives on Strategic HRM (Contd.)

3. The configurational perspective (Contd.) BEST PRACTICE APPROACH Assumption There is a set of best HRM practices and adopting them will inevitably lead to superior organizational performance. List of best practices:

As per Pfeffer: 1. Employment and security 2. Selective hiring 3. Self-managed teams 4. High compensation contingent to performance 5. Training to provide a skilled and motivated workforce 6. Reduction of status differentials 7. Sharing information

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Perspectives on Strategic HRM (Contd.)

3. The configurational perspective (Contd.) BEST PRACTICE APPROACH

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As per Guest: 1. Selection and the careful use of selection tests to identify those with potential to make a contribution 2. Training, and in particular a recognition that training is an ongoing activity 3. Job design to ensure flexibility, commitment and motivation, including steps to ensure that employees have the responsibility and autonomy fully to use their knowledge and skills 4. Communication to ensure that a two-way process keeps everyone fully informed 5. Employee share ownership programmes to increase employees awareness of the implications of their actions on the financial performance of the firm

Perspectives on Strategic HRM (Contd.)

3. The configurational perspective (Contd.) BEST PRACTICE APPROACH

Delery and Doty seven Strategic HR practices: 1. Internal career ladders 2. Formal training systems 3. Results-oriented appraisal 4. Performance based compensation 5. Employment security 6. Employee voice 7. Broadly defined jobs

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Perspectives on Strategic HRM (Contd.)

3. The configurational perspective (Contd.)

BEST FIT APPROACH

HR strategies should be contingent on the context, circumstances of the organization and its type Vertical integration Models: 1.

Life cycle Model

Development of a firm takes place in four stages Startup, growth, maturity and decline Baird & Meshoulam: HRs effectiveness depends on its fit with the organizations stage of development. As the organization grows and develops, HRM programmes, practices and procedures must change to meet its needs. Consistent with growth and development models it can be suggested that human resource management develops through a series of stages as the organization becomes more complex
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Perspectives on Strategic HRM (Contd.)

3. The configurational perspective (Contd.) BEST FIT APPROACH (Contd.)
Models (Contd.): 1. Life cycle Model (Contd.)

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o Buller and Napier: Start-up phase HRM may be loose and informal Growth phase Formal structure and functional specialties; role of HR attract the right kinds and numbers of people; talent management; performance management; learning & development and; reward policies and practices Maturity Phase HR may be less innovative and more inclined to consolidate and develop existing practices rather than create new

Perspectives on Strategic HRM (Contd.)

3. The configurational perspective (Contd.) BEST FIT APPROACH (Contd.)
Models (Contd.): 2. Competitive strategy

o Porter: 1. Innovation Strategy 2. Quality Strategy 3. Cost leadership o Schuler & Jackson : - effectiveness can be increased by systematically melding human resource practices with the selected competitive strategy

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Perspectives on Strategic HRM (Contd.)

3. The configurational perspective (Contd.) BEST FIT APPROACH (Contd.) Models (Contd.): 2.

Competitive strategy

INNOVATION STRATEGY Jobs that require close interaction and coordination among groups of individuals

QUALITY STRATEGY Relatively fixed and explicit job descriptions

COST LEADERSHIP STRATEGY Relatively fixed and explicit job descriptions

PAs that are more likely to High levels of employee reflect longer term and participation group based achievements Jobs that allow employees 39 to develop skills that can A mix of group and individual criteria for PA

Narrowly designed jobs & career paths that encourage specialization. Short term and results oriented PAs Close monitoring of market pay levels in use

Perspectives on Strategic HRM (Contd.)

3. The configurational perspective (Contd.) BEST FIT APPROACH (Contd.) Models (Contd.): 2.

Competitive strategy

INNOVATION STRATEGY Compensation systems that emphasize internal equity rather than external or market based equity Pay rates that tend to be low but allow employees to be stockholders and have more freedom to choose the mix of components
40 Broad career paths to

QUALITY STRATEGY Relative egalitarian treatment of employees and some guarantees of employee security Extensive and continuous training and development of employees

COST LEADERSHIP STRATEGY Minimal levels of employee T & D

Practices that maximize efficiency by providing means for mgmt to monitor and control closely the activities of employees

reinforce the development

Perspectives on Strategic HRM (Contd.)

3. The configurational perspective (Contd.) BEST FIT APPROACH (Contd.)
Models (Contd.): 3. Strategic configuration

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Miles and snow identified four types or organizations, viz.: 1. Prospectors 2. Defenders 3. Analyzers 4. Reactors Delery and Doty organizations should align their HR systems with the strategy linked to their organization. Two types of systems: 1. Market type system (for Prospector) 2. Internal System (for Defender)

Perspectives on Strategic HRM (Contd.)

3. The configurational perspective (Contd.) BUNDLING
Development and implementation of several HR practices

together so that they are interrelated and therefore complement and reinforce each other. Practices within bundles are interrelated and internally consistent and more is better with respect to the impact on performance, because of the overlapping and mutually reinforcing effect of multiple practices The aim is to achieve high performance through coherence

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Strategic Role of HR

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Strategic Role of HR
SHRM involves the development of consistent, aligned

collection of practices, programs, and policies to facilitate the achievement of the organizations strategic objectives Strategic Partner Model: David Ulrich HR should deliver results that enrich the organizations

value to its customers, investors and employees. This can be accomplished in four ways: 1. By HR becoming partner with senior and line managers 2. By HR becoming an expert in the way work is executed 3. By HR becoming a champion for employees, working to

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increase employee contribution and commitment to the organization 4. By HR becoming an agent of continuous transformation that shapes processes and culture to improve an organizations capacity for change

Strategic Role of HR (Contd.)

Strategic Focus Strategic Partner Change Agent

Systems Administrati ve Expert Employee Champion Operational Focus

People

Possible roles assumed by HR

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(Framework developed by David Ulrich)

Strategic Role of HR (Contd.)

Roles (Contd.): 1. Strategic Partner
Partner in strategy execution Responsible for organizational architecture and

structure Conduct org audit to identify those components that need to be changed to facilitate strategy execution identify methods for renovating the parts of the organizational architecture take stock of its own work and set priorities to ensure delivery of results
1. Administrative expert
Shed their image of rule making police while ensuring

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that the required routine work still gets done effectively and efficiently. Requires rethinking or improving traditional HR functions

Strategic Role of HR (Contd.)

Roles (Contd.): 3. Employee Champion
Ensuring that employees are fully engaged in and

committed to the organization Partnering with line managers Employees advocate

3. Change Agent
Build the organizations capability to embrace and

capitalize on new situations, ensuring that change initiatives are defined, developed and delivered in a timely manner

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Strategic Role of HR (Contd.)

HR Roles in knowledge based economy as per

Lengnick-Hall: 1. Human Capital Steward

Creation of an environment and culture in which

employees voluntarily want to contribute their ideas, skills and energy. Human capital is not owned by the organization and thus CA can be maintained when best employees are recruited, motivated and retained
1. Knowledge Facilitator
Procurement of the necessary employee knowledge

and skill sets that allow information to be acquired, developed, and disseminated, providing a competitive advantage
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Strategic Role of HR (Contd.)

HR Roles in knowledge based economy as per

Lengnick-Hall (Contd.): 3. Relationship Builder

Development of structure, work practices and

organizational culture that allow individuals to work together, across departments and functions
3. Rapid deployment specialist
Creation of organization structure and HR systems that

are fluid and adaptable to rapid change in response to external Os & Ts

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Strategic Role of HR (Contd.)

SHRM Critical Competencies

(For HR to be a true Business Partner) 1. Strategic Contribution 2. Business Knowledge 3. Personal Credibility 4. HR delivery 5. HR technology

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Strategic Role of HR (Contd.)

Strategic Role of HR Directors

Promotes the attainment of organizations business goals by:

Developing and implementing HR strategies that are integrated with the business strategy and are coherent and mutually supportive Ensuring that a strategic approach is adopted by the HR function that supports the business and adds value

Strategic Role of Heads of HR Functions

Attainment of organizational 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 Attainment of business goals of the organizational unit or function in which they operate Delivering effective HR services within their functions or as members of an HR service centre.

Strategic Role of HR Business Partners

Strategic Contribution of HR Advisors/Assistants

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Strategic vs. Traditional HR

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Strategic vs. Traditional HR

BASIS Responsibility for HR Focus Role of HR Initiatives Time horizon Control Job Design Key investments Accountability Traditional HR Staff specialists Employee relations Transactional, change follower and respondent Slow, reactive, fragmented Short-term Bureaucratics roles, policies, procedures Tight division of labor, independence, specialization Capital, products Cost center Strategic HR Line managers Partnerships with internal and external customers Transformational, change leader and initiator Fast, proactive, integrated Short, medium, long as required Organic flexible, whatever is necessary to succeed Broad, flexible, cross-training, teams People, knowledge Investment center

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Strategy Driven Role Behaviors

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Strategy Driven Role Behaviors

Competitive strategies require different human

resource practices & different role behaviors

INNOVATION STRATEGY QUALITY STRATEGY COST LEADERSHIP STRATEGY Short term focused Risk averse Predictable results oriented Comfortable working by themselves

HR BEHAVIORS: Cooperative Highly creative Oriented toward the longrun Risk takers Comfortable with ambiguity (J & J, HP, 3M)
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Place emphasis on production/service processes Risk reduction Predictability (L. L. Bean, Toyota, Corning Glass)

Strategy Driven Role Behaviors (Contd.)

INNOVATION STRATEGY QUALITY STRATEGY COST LEADERSHIP STRATEGY

HR PRACTICES: Group oriented, long-term appraisal systems Generalized skill development and broad career paths Employment security guarantees Extensive training programmes PfM Systems emphasizing results in the short term Virtually no training programmes Very specialized jobs Narrow and specialized career paths Procedures for continual tracking of wage rates in the labor market

Participative decision Compensation approaches making accentuating internal equity Flexible compensation packages

Refer Slides 39 & 40

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Strategic Typology of HR Activities

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Strategic Typology of HR Activities

High

Staffing Planning Benefits Planning Retirement Planning Compliance

Performance Enhancement

Consulting Employee Relations Labor Negotiations Executive Compensation Employee Development

Strategic Value of Activity

Management Development Recruitment Interviewing

Important to Executives

payroll Benefits administration Retirement administration Employee records Relocation administration

Recruitment information processing

Employee Assistance Programmes

Low
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Recruitment Information Processing

Strategic Staffing Policies

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Strategic Staffing Policies

External FORTRESS (Companies with dysfunctional strategies) HR Strategy : Retrenchment Entry : Recruitment Development : Retention of Core Talent Source Of Labor Exit : Frequent Layoffs CLUB (Low cost producer) HR Strategy : Retention Entry : early Career Development : As generalists, slow paths Internal Exit : Low turnover, Retirement BASEBALL TEAM (Innovation Strategy) HR Strategy : Recruitment Entry : Recruit at all career stages Development : On-the-job, little formal training Exit : High turnover, employer career paths ACADEMY (Focused Strategy; Niches; Both pdt innovators & competitors in long run) HR Strategy : development Entry : strictly early career Development : Extensive training for specific jobs, elaborate career paths/job ladders Exit : low turnover, retirement, dismissal for poor performance 60

Barriers to SHRM

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Barriers to Strategic HRM

1. Short term mentality (focus on current performance) 2. Inability of HR to think strategically 3. Lack of appreciation of what HR can contribute 4. Failure to understand general managers role as an

HR manager 5. Difficulty in quantifying many HR outcomes 6. Perception of human assets as higher-risk investments 7. Incentives for change that might rise

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Challenges to SHRM

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Challenges to Strategic HRM

Four major challenges: 1. Technological Advancement 2. Increasing attention to ethical behavior 3. Demographics and Diversity 4. Globalization

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Challenges to Strategic HR (Contd.)

Technological Advancement Process by which inputs from the organizations

environment are transformed into outputs Includes tools, machinery, equipment, work procedures and employee knowledge & skills Impact of technology on organizations: Requires changes in skills and work habit of employees Elimination of some lower-level positions and layers of

management Less hierarchy, more collaboration

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Challenges to Strategic HR (Contd.)

Technological Advancement (Contd.) Issues for Integrating New Technologies: -

Consideration of Adopting a New Technology STRATEGIC ISSUES

Impact on productivity Impact on quality of output Impact on timing/delivery

STRATEGIC HR ISSUES
Necessary

of output Cost of equipment/technology Adequacy of current facilities New market opportunities afforded 66

expansion/contraction of workforce Training needed to utilize new technology Costs for hiring, severance, training Effective management of change Impact on work group dynamics

Challenges to Strategic HR (Contd.)

Technological Advancement (Contd.) HR Issues and Challenges related to Technology 1. Telecommuting

The process by which employees work from home 2/3rds of the Fortune 100 companies currently have telecommuting programmes Benefits: Retention aid Flexible work environment enables employees to balance multiple role Helps employers to retain their investments in employees in situations where the employees need to relocate Creates flexibility in recruiting Increases productivity

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Challenges to Strategic HR (Contd.)

Technological Advancement (Contd.) HR Issues and Challenges related to Technology

(Contd.)
1. Telecommuting (Contd.)

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Issues: Difficulty in performance monitoring (Have clear performance measurement systems) Difficulty in deciding number and kind of employees to be offered the telecommuting programme; and creation of additional need for strategies to avoid resentment or morale problems amongst nonparticipants (Pay attention to individual employee characteristics; select employees who have strong organizational and time management skills)

Challenges to Strategic HR (Contd.)

Technological Advancement (Contd.) HR Issues and Challenges related to Technology

(Contd.)
1. Telecommuting (Contd.)

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Issues (Contd.): Expenditure on purchasing equipment for employees home office; Liability for injuries incurred while working at home and Investments in networking systems (Appropriate technology feasibility assessment) Managers resistance in having direct reports away from office (Training programmes for telecommuters and supervisors covering issues such as goal setting, time management and project reporting)

Challenges to Strategic HR (Contd.)

Technological Advancement (Contd.)
HR Issues and Challenges related to Technology (Contd.) 2. Workplace Monitoring & surveillance Benefits of the internet: Enhancement of employees abilities to do their job More comprehensive and faster data collection Supports telecommuting Conduct of personal work at job when performing duties during non-work time Monitoring Software to track internet use Detrimental effect on employee privacy, morale and loyalty Requires: Communication of monitoring policy to the employees Consent from employees To be minimum and consistent with business necessity
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Challenges to Strategic HR (Contd.)

Technological Advancement (Contd.)

HR Issues and Challenges related to Technology (Contd.)

3.

E-HR Aims at leveraging of technolgy to deliver HR solutions that brings about convergence in human capital, processes, data and tools as a catalyst towards achieving business strategies Types

Operational payroll, employee data, etc. Relational recruitment, training, performance management, etc. Transformational knowledge management, strategic reorientation, etc.

Advantages

collection of information as the basis for strategic decision-making integral support for the management of human resources and all other basic and support processes within the company prompt insight into reporting and analysis
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Challenges to Strategic HR (Contd.)

Technological Advancement (Contd.)
HR Issues and Challenges related to Technology (Contd.)
3. E-HR (Contd.)

Advantages (Contd.)

a more dynamic workflow in the business process, productivity and employee satisfaction a decisive step towards a paperless office lower business costs

Disadvantages

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Can alienate staff members that need personal support Reduces the need for managers to interact with staff (i.e. less face-time and increased risk of 'losing touch' with staff) Subject to corruption/hacking/data losses

Challenges to Strategic HR (Contd.)

Technological Advancement (Contd.)
HR Issues and Challenges related to Technology (Contd.)
3. E-HR (Contd.)

Issues

Resistance of employees and line managers Getting support from small components of the company Guaranteeing security and confidentiality

Example: - Dow Chemicals, ABN-AMRO, Ford Motor Company, IBM

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Challenges to Strategic HR (Contd.)

Increasing attention to ethical behavior Ethics are not universally defined but rather subject

to personal values and convictions Subjectively assessed Ethical concern: Off the duty behavior Ownership of work Fairness of non-compete clauses

Solution CODE OF ETHICS

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Challenges to Strategic HR (Contd.)

Demographics and Diversity Managing Diversity is a strategic process to manage

a diverse workforce including the fight against stereotypes, prejudice and all kind of discrimination due to the individual perceptions and assumptionsin the manner to maximize the benefit and minimize barriers of different opinions, behavior and attitudes of human beings within a company Diversity with regards to: Generational Diversity Baby Boomers, Gen X, Gen Y Individuals with Disability Sexual Orientation Personal and family life cycle dynamics, etc.
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Challenges to Strategic HR (Contd.)

Demographics and Diversity (Contd.)

Person al

Individual Dimensions of Diversity

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Race Residen ce Work Related: Age Motivation Hobbies Personality Religion Work ethic Family Experience Status Attitudes Gender Job responsibilities Marital Employment status Status Sexual Ethnicit Orientation Physical y Ability

Challenges to Strategic HR (Contd.)

Demographics and Diversity (Contd.) Need for managing Diversity: 1. A Social Responsibility 2. An Economic Payback 3. A Resource Imperative 4. A Legal Requirement 5. A Marketing Strategy 6. A Business Communications Strategy 7. A Capacity-building Strategy

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Challenges to Strategic HR (Contd.)

Demographics and Diversity (Contd.) Strategic Management of Diversity: 1. Determine why diversity is important for the organization 2. Articulate how diversity relates to the mission and strategic objectives of the organization 3. Define diversity and determine how inclusive its efforts will be 4. Make a decision as to whether special effort should be extended to attract a diverse workforce 5. Assess how existing employees, customers, and other constituencies feel about diversity 6. Determine specific types of diversity initiatives that will be undertaken
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Challenges to Strategic HR (Contd.)

Demographics and Diversity (Contd.) HR Managers need to (Strategic Response to

Diversity at Workplace): Embrace Diversity Recruit Broadly Select Fairly Provide Orientation & Training Sensitize all Employees Strive to be Flexible Seek to Motivate Individually Encourage employees to embrace diversity

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Challenges to Strategic HR (Contd.)

Globalization Global HRM differs from Domestic HRM: Broader range of functional areas More involvement in the employees personal life Different HR systems for different locations More complex external constituencies Heightened exposure to risks (viz., health & safety of employee & family, legal issues, possible terrorism & human & financial consequences of mistakes) Strategic HR Issues in Global Assignments
Next Slide

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(Contd.)
Globalization (Contd.) Strategic HR Issues in Global Assignments (Contd.)
GLOBAL BUSINESS STRATEGY Export Subcintract/license JV Subsidiary National Culture

Local Culture

Corporate Culture

Strategic HR Issues Managing

Purpose of Expatriati on Selection Employee Family Orientation Employee & Family HQ Staff PM Compensation Labor Relations Ongoing Training Level of Stdzn Ethnocentric Polycentric Regiocentric Geocentric Expats Repatriat ion

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Outcomes of SHRM

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Outcomes of Strategic HR
Increased Performance Customer & Employee Satisfaction Enhanced Shareholder Value

through

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Effective management of staffing, retention and turnover through selection of employees that fit with both strategy and culture Cost-effective utilization of employees through investment in identified human capital with potential for high retention Integrated HR programs and policies that clearly follow from corporate strategy Facilitation of change and adaptation through a flexible, more dynamic organization Tighter focus on customer needs, key and emerging markets, quality

Model of SHRM

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Model of SHRM
External environment Competition Government Regulation Technology Market Trends Economic Trends Corpora te Strateg y Busines s Unit Strateg y Internal environment Culture Structure Politics Employee Skills Past Strategy 85 Employee Separatio n Laws regulating Employmen t Staffing

HR Strategy HR planning Design of jobs and work systems What workers do What workers need How jobs interface with others Training

PM HRIS Compensati on

IR

Linking People with the Strategic needs of the Business - The 5 P Model

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Linking People with the Strategic needs of the Business - The 5 P Model
Organizational Strategy Initiates the process of identifying strategic business needs and provides specific qualities to them Strategic Business Needs Expresses in mission statements or vision statements and translated into strategic business objectives SHRM Activities
HR Philosophy HR Policies
Expresses how to treat and value Expressed in statements defining business values & culture people Expressed as shared values (guidelines)

Internal Characteristics

External Characteristics

HR Programs
Articulated as HR strategies

Establishes guidelines for action on people-related business issues and HR programs

HR Practices

Coordinates effort to facilitate change to address major people HR Processes related business issues 87 the formulation and implementation of other activities For Motivates needed role behaviors For leadership, managerial and operational roles