m Strategic human resource management is designed to help

companies best meet the needs of their employees while

promoting company goals. Human resource management
deals with any aspects of a business that affects
employees, such as hiring and firing, pay, benefits, training,
and administration. Human resources may also provide
work incentives, safety procedure information, and sick or
vacation days

m Strategic human resource management is the proactive

management of people. It requires thinking ahead, and
planning ways for a company to better meet the needs of its
employees, and for the employees to better meet the needs
of the company.
 his can affect the way things are done at a business site,
improving everything from hiring practices and employee
training programs to assessment techniques and discipline

m When creating a human resources plan, it is important to

consider employees may want or need and what the
company can reasonably supply. A larger company can
usually afford training and benefit programs that smaller
companies cannot afford to offer. his does not mean that a
smaller company should not engage in strategic human
resource management. Providing specialized on-site
training, even if provided by senior members of the
company, and offering one-on-one assessment and
coaching sessions, can help employees reach peak
performance rates
á An important aspect of strategic human resource
management is employee development. his process
begins when a company is recruiting and interviewing
prospective employees. Improved interviewing techniques
can help to weed out applicants that may not be a good
match for the

á After being hired on, a strong training and mentoring

program can help a new member of the staff get up to
speed on company policies and any current or ongoing
projects they will be working on. o help employees
perform at their best, a company can follow up with
continual training programs, coaching, and regular
assessment. Investing in the development of its employees
can allow a company to turn out more consistent products
 The changing role of HRM:
m he 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:
Organizational use of employees to gain or keep a
competitive advantage against competitors.
Involves aligning initiatives involving how people are
managed with organizational mission and objectives.
m In today's flattened, downsized & high-performing
organizations, highly trained & committed §
§§± not
machines ± are often the firm's competitive key.
m Perhaps the most drastic change in HR's role today is its
growing involvement in developing & implementing the
company's strategy.
m 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
Hendry and Pettigrew (1986) put forward four meanings of
SHRM:
1.he use of planning in human resource management

2.An integrated approach to the design and

implementation of HR systems

3.Matching HRM policies and activities with the business

strategy of the organization

4.Viewing people as a strategic resource for the

achievement of competitive advantage
ΠOnce the business strategy has been
determined, an HR strategy is implemented to
support the chosen competitive strategy.
Œ §
 
  § 

level strategy.
ΠIn this sense, a HR strategy is concerned with
the challenge of matching the ›hiloso›hy,
›olicies, ›rogrammes, ›ractices and
›rocesses ± the µfive Ps¶
m The major objectives of SHRM are as follows:
Πo ensure the availabilty of a skilled committed and
highly motivated workforce in the organization to
achieve sustained competitive advantage

Πo provide direction to the organization so that both

the business needs of the organization and the
individual and collective needs of its workforce are
met

Πhis is achieved by developing and implementing HR

practices that are strategically aligned
Πhe extent of application of SHRM within organizations as well
as the form and content of SHRM vary from one organization to
another

ΠHRM is practiced in only those organizations that have a clearly

articulated corporate or business strategy

ΠOrganizations who do not have a corporate plan cannot have

SHRM

ΠIn such organization HR personnel carry out the traditional

administrative and service roles-not concerned with strategic
business issues
Π(SHRM)Strategic human resource management
deals with macro concerns such as
Πquality
Πommitment
Πperformance
Πculture
Πmanagement development
ΠIt defines the areas in which specific HR strategies
need to be developed
Œ strategic HRM¶ is an outcome: µas organizational
m systems designed to achieve sustainable
competitive advantage through people¶. For
others, however, SHRM is viewed as a process,
µthe process of linking HR practices to business
strategy¶ (Ulrich, 1997,)
 ŒStrategichuman resource management and traditional
HR functions differ in several ways(adapted from Mellow
2003)
Traditional HRM SHRM

Responsibility for HR Staff personnel in the HR Line managers,all

programmes department managers responsible for
people are HR managers
Focus of activities Employees relations, Partnerships with internal
motivation,productivity,complia and external customers
nce with laws
Role of HR Reactive and transactional Proactive and
transformational,change
leader
Initiative for change Slow,piecemeal,fragmented,not Fast,flexible,systematic,
integrated with larger issues change initiatives
implemented in concert
with other HR systems
 Traditional HRM SHRM

ime horizon Short term onsider various time

frames as necessary
(short,medium,or long)

ontrol Bureaucratic control through Organic control through

rules ,procedures and policies
Job design Focus on scientific
management principles-division design,flexibility,teams and
of labour,independence and
specialization
Importance investments apital ,products,technology
and finance
flexibility as few restrictions
on employee behaviour as
possible
Broad job
groups and cross -training
eople and their
nowledge,s ills and
abilities

Accountability ost centre Investment centre

 ΠDifference between SHRM and HR
Strategies(adapted from Armstrong 2000
SHRM HR Strategies

A general approach to strategic Outcome of the general SHRM approach

management of human resources

Aligned with the organizational intention Focus on specific organizational

about its future direction intentions about what needs to be done

Focus on long term people issue Focus on specific issues that facilitate the
achievement of corporate strategy

Defines the areas in which specific HR Human resource strategy decisions are
strategies need to be developed derived from SHRM

Focus on macro concerns such as

structure culture

Strategic HRM decisions are built into the

strategic business plan
There are three levels
of strategic ›lanning -

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Prof. S. Pattnaik
m orporate-level strategy
· Identifies the portfolio of businesses that, in total,
comprise the company and the ways in which these
businesses relate to each other.
Ô Diversification strategy
Ô Vertical integration strategy
Ô Geogra›hic ex›ansion strategy

Prof. S. Pattnaik
m Business-level/competitive strategy
· Identifies how to build and strengthen the
business¶s long-term competitive position in
the marketplace.
Ô £ost leadershi›
Ô Differentiation
Ô Focus

Prof. S. Pattnaik
 m Functional strategies
· Identify the basic courses of action
that each department will pursue in
order to help the business attain its
competitive goals.

Prof. S. Pattnaik
£ommon Organizational
HR Strategies
£haracteristics

Œ Intense su›ervision of Œ Detailed work ›lanning

labor Œ Em›hasis on technical
ΠTight cost control qualifications and skills
requiring frequent, Œ Em›hasis on job-s›ecific
detailed control re›orts training
Œ Low-cost distribution Œ Em›hasis on job-based
system ›ay
Œ Structured organization Œ Use of ›erformance
and res›onsibilities a››raisal as a control
ΠProducts designed for device
ease in manufacture
Prof. S. Pattnaik
 £ommon Organizational HR Strategies
£haracteristics
ΠStrong marketing
Œ Em›hasis on
abilities
innovation and
ΠProduct engineering flexibility
Œ £or›orate re›utation Œ Broad job classes
for quality or
Œ Loose work ›lanning
technological
ΠExternal recruitment
leadershi›
ΠTeam-based training
Πmenities to attract
highly skilled labor, Œ Em›hasis on
scientists, or creative individual- based ›ay
›eo›le.
Prof. S. Pattnaik
£ommon Organizational
HR Strategies
£haracteristics

£ombination of cost-
£ombination of HR
leadershi› and
differentiation strategies of the
strategy directed at other two strategies.
a ›articular strategic
target.

Prof. S. Pattnaik
 Fit Economic
Pers›ective Pers›ective

SHRM

Functional Ty›ological
Pers›ective Pers›ective
m Fit Pers›ective: Human Resources Should
be integrated with the strategic planning process
of the firm.
m Functional Pers›ective: an organization
performs best when each departmental unit
maximizes its contributions limited to its unique
areas of expertise.
m Economic Pers›ective: Human resources are a
unique and distinguishable source of competitive
advantage.
m Ty›ological Pers›ective: here are 3 distinct
types of HR strategies: Inducement, investment,
involvement.
m Inducement:
1. It mainly focus on price and quantity.
2. Discourages innovation
3. Decision making power highly centralized.
4. Loyalty and commitment rewarded to discourage
employee turnover.
m Investment:
1. It focus on differentiation: quality, features or service
rather than price.
2. Organization has a tall structure.
3. reativity and initiative rewarded
4. HR strategy encourages creativity, initiative and high
performance standards.
m Involvement:
1. It focus on innovation & flexibility
2. ontinuously focus on differentiated products and
services.
3. Flat structure of the organisation.
4. Decision making is pushed down to the lowest levels
5. Performance rewarded by compensation that links
personal outcomes to the org. performance.
1. Identifying and analyzing external opportunities and threats that may
be crucial to the company's success.
2. Provides a clear business strategy and vision for the future.
3. o supply competitive intelligence that may be useful in the strategic
planning process.
4. o recruit, retain and motivate people.
5. o develop and retain of highly competent people.
6. o ensure that people development issues are addressed
systematically.
7. o supply information regarding the company's internal strengths
and weaknesses.
8. o meet the expectations of the customers effectively.
9. o ensure high productivity.
10. o ensure business surplus thorough competency
1.Inducing the vision and mission of the change effort.
2. High resistance due to lack of cooperation from the
bottom line.
3. Interdepartmental conflict.
4. Plans that integrate internal resource with external
requirements.
5. Limited time, money and the resources.
6. Presence of an active labour union.
7. Rapid structural changes.
m As global business competition shifts from efficiency to innovation and
from enlargement of scale to creation of value, management needs to
be oriented towards the strategic use of human resources.
m Strategic human resources management practices enhance employee
productivity and the ability of agencies to achieve their mission.
m Integrating the use of personnel practices into the strategic planning
process enables an organization to better achieve its goals and
objectives.
m ombining human resource practices, all with a focus on the
achievement of organizational goals and objectives, can have a
substantial affect on the ultimate success of the organization.
m o manage future operations effectively, it is essential that companies
produce "business leaders" and "innovators" through SHRM Approach