STRATEGIC HUMAN RESOURCE MANAGEMENT

STRATEGIC HUMAN RESOURCE MANGEMENT

INTRODUCTION
Strategy is basically the creation of missions, setting of organizational objectives with full consideration of external and internal forces, formulation of specific policies to achieve objectives, and the assurances of implementation of the policies with a view to making it certain, and the purposes and objectives of the organization are achieved.
The integrative framework has been offered recently by Yeung and Berman. This framework identifies three paths through which HR practices can contribute to the business performance

1. By building original capabilities 2. By improving employee satisfaction

3. By shaping customer and shareholder satisfaction

STRATEGIC HUMAN RESOURCE MANGEMENT

HOW HR WILL CREATE VALUE:

Business strategy
Leads to Dictate

Business plans
Enumerates

Identify

Review

Performance Measures

Development Need

Achievements define

Tap Potential

Resource Requirements

Outsource specialist Succession Planning

Attracts and retains

Enhances

Improved individual and organizational performance

Rewards and recognization

Results in

STRATEGIC HUMAN RESOURCE MANGEMENT

INTRODUCTION
Cynthia Fisher has classified strategies into two categories

1. Growth-prospector-high-tech-entrepreneur strategies 2. Mature-defenders-cost-efficiency strategies

STRATEGIC HUMAN RESOURCE MANGEMENT

TRADITIONAL HR VS STRATEGIC HR
A traditional approach to HR was basically managing human resource by specialists in line with the rules and acts of the organization and laws of the land.

A strategic approach places the responsibly for managing people mostly on the line managers who basically manage their people at work.

The aim of strategic HR is to function as a business partner in aligning the HR activities with the business strategy of the organization.

Strategic HRM encompasses all those activities affecting the behavior of individuals in their effort to formulate and implement the strategic needs of the business.

STRATEGIC HUMAN RESOURCE MANGEMENT

TRADITIONAL HR VS STRATEGIC HR
Traditional HR Accountability Importance HR specialists Managing people to facilitate the activities Strategic HR Line managers & HR specialists HR strategy formulation and implementation in alignment with organizational strategy Strategic business partners Proactive, businessoriented results People ad organizations development in line with the business objectives

Role of HR

Custodian of HR policy implementation and compliance Ritualistic, reactive activities People development

Approach Orientation Major functions

STRATEGIC HUMAN RESOURCE MANGEMENT

ROLE OF HR IN STRATEGY FORMULATION

In 1997, Essar Steel started realizing that the HR strategy needs to be aligned with the business strategy. They formulated the entire human resource development function based on the corporate and business strategy. The concerned areas were identified in different works department and extensive training was designed and conducted in-house for two years.

Moreover, unique executive leadership camp and customer orientation programmes of ESSAR during 1997 and 1999 held them to achieve success in enhancing performance in the highly competitive steel market.

STRATEGIC HUMAN RESOURCE MANGEMENT

ROLE OF HR IN STRATEGY FORMULATION

Another initiative has been taken by Mr. K.K. Nohria who became the President and Managing Director of Crompton Greaves in 1985 when the companys performance was at its lowest level ever. He attributed the declining performance of the company to respond to changing environmental conditions. To successfully respond to the challenges of a buyers market and the need for diversified growth, K K Nohria believed that Crompton first and foremost required a new attitude and a set of values towards business. He travelled to all the divisions and regional offices to meet with the employees and a time to cover 1000 officers during the year.

He encouraged managers to do the same at lower levels so that workers were also engaged in this dialogue.

STRATEGIC HUMAN RESOURCE MANGEMENT

ROLE OF HR IN STRATEGY FORMULATION

The primary purpose of these visits was to unite the employees of the firm around a shared vision for renewal and to make them feel that they were working for a company. This made the people to realize that the top management is approachable and also had a clear point of view and vision. The main message in the communication was excellence improvement was defined in qualitatively measurable terms. Quality was measured by 1. 2. 3. 4. The number of customer returns and complaints Test-bed rejection rate in-process rejection Incoming inspection rejection.

The ultimate target was zero defects

STRATEGIC HUMAN RESOURCE MANGEMENT

ROLE OF HR IN STRATEGY FORMULATION

In case of poor performance, failures were considered as a result of the fault not only of the subordinates but also of their managers. He believed that when workers failed, managers should not blame the workers, but should question themselves. The organization also held the quality circle and value engineering convention. Involvement and training targets were benchmarked with the best practices of Japanese companies. The performance evaluation system was open transparent and fair. Towards this end, the marketing regions rank order, the product divisions in terms of their ability to satisfy the customer needs.

The product division in turn were asked to rate the marketing regions in terms of their efforts at promoting and selling their products.

STRATEGIC HUMAN RESOURCE MANGEMENT

ROLE OF HR IN STRATEGY FORMULATION

These peer ranking were tabulated and presented at one of the quarterly reviews attended by the top management group. Managers those who did not improve, even after being given help, were not fired but rather were deprived of status and responsibility or were kept in the organization as decorative pieces. These initiatives improved the performance of Crompton significantly.

The Indian Oil Corporation, a fortune 500 company, also had adopted HRD as a strategic focus group and a means for strategy implementation in 1983.
The interventions that were adopted by HR managers included improving and strengthening of certain HRM systems like transfer, training, recruitment and performance appraisal.

STRATEGIC HUMAN RESOURCE MANGEMENT

CONTINDENCY OR STRUCTURAL APPROACH TO STRATEGY

The discussion of formulating corporate strategies concludes with a review of the situational nature of strategy formulation.

Basically, the idea states that what is good for one company may not be good for another.
The proper strategy is determined by its unique interval characteristics like organizational dynamics, culture, politics, etc., and its specific environmental opportunities and threats. This is true of companies in the same industry what is right for ESSAR may not be right for Ispat or Jindal, and vice versa.