Strategic Human Resource Management (SHRM)

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Prashant Sagar: HRM-Sem II

Prashant Sagar: HRM-Sem II

SHRM: Meaning

Strategic human resource management is a process of aligning HR strategies with the business strategy to accomplish the performance goals through the employees competency and commitment.

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SHRM V/S HRM

Area Human Resources Focus Type of action Performance area Level of operation Business Undestanding Allignment with business Strategy Aim
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SHRM Precious Resource Business level-Broad outcome Proactive-Trend Setter Entire organizationDeveloping strategic competencies Functions at TOP Level Understanding of Operational aspect is important Business Strategy & HR Strategy are supplimentry to each other Gaining Competitive advantage is priority

HRM Tool of Production HR Level-Narrow outcome Reactive-Traditional Functional Level-HR Sppecific Functions at Lower level Understanding of operational level is not priority Only accomplishment of HR goals set by business unit Managing routine is the priority

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Steps in Strategic Management Process Determination of vision and mission.

1.

Vision Statement conveys the future it envisages & short/Long term goals. Mission Statement declares the purpose of organization. Vision & Mission Statement provides guidelines for strategic planning,

2.

Analyzing the environment.

Collecting, Analyzing and providing information for tactical or strategic reasons. Keeping watch on changing internal & external environment & its impact on organization.

3.

Strategy formulation.
Determining course of action for achieving organizational objectives

4.

Strategy implementation.
Ascertaining ways in which current activities are carried out & than II decides changes required for effective implementation

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Levels of strategy

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Corporate level strategy

Corporate level strategy

Topmost level of strategy making, It focuses on the value creation for entire organization. Wide range of decision affecting the entire organization are taken under corporate level strategy.

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Corporate level strategy (contd.)

Component of Corporate level strategy
1.

Growth strategy focuses on the development and accomplishment of growth objectives.

1.

Concentration or Diversification strategy

2.

Portfolio strategy focuses on the determination of the portfolio of business units for the organization based on risk and return of each unit.

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Parenting strategy focuses on the allocation of resources and development of organizational capabilities & optimum efficiency across the business units. Prashant Sagar: HRM-Sem II
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Business level strategy

Business level strategy focuses mostly on creating and sustaining competitive advantage for products through one or more of distinguishing factors like price/cost leadership and product differentiation.

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Functional level strategy

At the functional level, specific strategies are made for the functional activities of the organization. This strategy may encompass production, marketing, purchase, finance, HR, research and development, and other similar activities of the firm.

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Models of strategic formulation

High involvement management model High commitment management model High performance management model

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Models of strategic formulation

High involvement management model This model aims at creating an environment that facilitates the continuous exchange of information between the superiors and the subordinates.

Employees are treated as partners. Mgt becomes aware of employees expectation while sharing information about goals, mission & standard practices adopted by the organization
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Models of strategic formulation

High commitment management model

This model aims at obtaining voluntary commitment from employees by adopting mutually beneficial HR practices. Organization is competing on the basis of quality rather than cost: Skilled human resources are given prime importance. Such organizations have flexible work practices together with effective reward practices
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Models of strategic formulation

High performance management model

This model aims at constantly improving the performance of individuals and the organization. A high-performance management is achieved by continuously educating the employees and improving their skills. It works well in learning organizations with dynamic and fluid organization structure
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Models of strategic human resource management

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Prashant Sagar: HRMSem II

Business-oriented model

It focuses on factors contributing to competitive advantage to the firm. This model aims at value creation by developing a HR system that creates and sustains the competitive advantage through human resources.

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Strategic fit model

This model focuses on matching the HR capabilities and resources with the external opportunities.

HR strategies are highly integrated with Business Strategies It also focuses on developing HR practices in such a way that they complement one another.

Two types of strategic fits are:

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Strategic Labour Allocation Process Model

This method focuses on the interdependences among HR strategies, business strategies and organizational changes. This model acknowledges HRM as a continuous process of balancing the demand for and the supply of labour.

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Benefits of strategic HRM

Achieves cost-effective engagement of labour. Meets the changing needs and expectations of the customers effectively. Necessities the development of clear-cut goals, direction and future focus to the entire organization. Facilitates the planning and execution of organizational changes in a timely and effective manner.

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Benefits of strategic HRM

Ensure the optimum utilization of organizational resources. Helps in developing, managing and sustaining the skills and knowledge of its human resources. Enhances the coordination among the various functional centers and the top management. Facilitates the continuous scanning of external environment.

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Barriers to an effective SHRM

Absence of long-term orientation. Lack of strategic reasoning. Lack of adequate support from top management. Resistance from labour unions. Fear of failure. Rigidity of HR practices. Fear of attrition. Absence of measurement techniques.

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Important Questions
1.

Explain in detail the strategic role of human resource management Explain in detail Three Models of strategic human resource management

2.

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