HUMAN RESOURCE MANAGEMENT

Evolution of the HR Function

Commodity concept Factor of Production concept Goodwill concept Paternalism Humanitarian concept Human resource concept Partnership concept

Other things being equal

Perf = f (A,M,E) MOTIVATION
Job enrichment Promotions Coaching Feedback Rewards

ABILITY ENVIRONMENT
Management philosophy Culture Empowerment Recruitment Selection Training Development

The Bottomline
Getting results
The bottom line of managing

HR creates value by engaging in activities that produce the employee behaviors the company needs to achieve its strategic goals.

The Strategic Role of Human Resource Management

Strategy
Strategy is deciding where to go and the means to get there. Strategy is a declaration of intent.

Some Organisational Strategies

Company General Electric Wal-Mart 3M

Strategic Principle Be number one or number two in every industry in which we compete, or get out Low prices, every day Foster innovation

Strategic Planning
There are three levels of strategic planning Corporate Strategy

Business Strategy

Business Strategy

Business Strategy

Functional Strategies

Types of Strategic Planning

Corporate-level strategy
Identifies the portfolio of businesses that, in total, comprise the company and the ways in which these businesses relate to each other.
Diversification strategy Vertical integration strategy Consolidation strategy Geographic expansion strategy

Types of Strategic Planning (contd) Business-level/competitive strategy

Identifies how to build and strengthen the businesss long-term competitive position in the marketplace.
Cost leadership Differentiation Focus

Types of Strategic Planning (contd)

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

Business Strategy = Overall Cost Leadership

Common Organizational Characteristics Intense supervision of labor Tight cost control requiring frequent, detailed control reports Low-cost distribution system Structured organization and responsibilities Products designed for ease in manufacture
Prof. S. Pattnaik

HR Strategies Detailed work planning Emphasis on technical qualifications and skills Emphasis on job-specific training Emphasis on job-based pay Use of performance appraisal as a control device

Business Strategy = Differentiation

Common Organizational Characteristics Strong marketing abilities Product engineering Corporate reputation for quality or technological leadership Amenities to attract highly skilled labor, scientists, or creative people.
Prof. S. Pattnaik

HR Strategies Emphasis on innovation and flexibility Broad job classes Loose work planning External recruitment Team-based training Emphasis on individualbased pay

Business Strategy = Focus

Common Organizational Characteristics Combination of costleadership and differentiation strategy directed at a particular strategic target. HR Strategies

Combination of HR strategies of the other two strategies.

Prof. S. Pattnaik

Achieving Strategic Fit

Michael Porter
Emphasizes the fit point of view that all of the firms activities must be tailored to or fit its strategy

Gary Hamel and C. K. Prahalad

Argue for stretch in leveraging resources supplementing what you have and doing more with what you have

STRATEGIC HUMAN RESOURCE MANAGEMENT

Linking HRM with strategic goals and objectives to improve business performance and develop organizational cultures fostering innovation and flexibility. Defines the organisations intentions and plans on how its business goals should be achieved through people.

Linking Corporate and HR Strategy

External environment

Formulate Business Strategy

Internal Strengths & Weaknesses

Identify Employee Competencies and Behaviors that HR must deliver to achieve the strategy Formulate HR Policies & Activities that will lead to these Employee Competencies and Behaviors

HRs Strategic Roles

Identify the human issues that are vital to business strategy. Help establish and execute strategy. Provide alternative insights. Are centrally involved in creating responsive and market-driven organizations. Conceptualize and execute organizational change.

HRs Strategy Formulation Role

HR helps top management formulate strategy in a variety of ways by.
Supplying competitive intelligence regarding the external environment Supplying information regarding the companys internal human strengths and weaknesses. Showing how the firms HR activities can and do contribute to creating value for the company.

HRs Strategy Execution Role

The HR departments strategies, policies, and activities must make sense in terms of the companys corporate and competitive strategies, and they must support those strategies.

Implications of SHRM
Successful SHRM efforts begin with identification of strategic needs. Employee participation is critical to linking strategy and HR practices. Strategic HR depends on a systematic and analytical mindset. Corporate HR departments can have an impact on their organizations efforts to launch strategic initiatives.

Cost of HR vs Value added by HR

COST 10% HR ACTIVITY Strategic (Planning) Operational (Service delivery) Administrative (Record keeping and Compliance) VALUE ADDED 60%

30%

30%

60%

10%

Human Resource Competencies

BUSINESS MASTERY Business acumen Customer orientation External relations HR MASTERY Knowledge of policies and mastery of practice in HR systems CHANGE MASTERY Problem solving skills Innovation & Creativity

PERSONAL CREDIBILITY Trust Courage Lived values

Harvard model of HR
Stakeholder Interests HR strategy and policy choices Situational factors HR Outcomes
Commitment Congruence Cost effectiveness

Long-term Consequences for Individual, Organisation, Society

Things to Remember as We Move through the course

HR management: the responsibility of every manager HR practices today must address several basic issues including
Improving competitiveness Globalizing Technology and internet-based advances Contributing to strategic success