Strategic Human Resource Management
Strategy
Abell’s (1993) ‘ mastering the present and
pre-empting the future.
Strategy
It is forward looking.
It is about deciding where you want to go
and how you mean to get there.
Strategy formulation
The process of deciding on a strategic
direction by defining a company’s mission and
goals, its external opportunities and threats,
and its internal strengths and weaknesses
Formulation of Strategy
It is a process for developing a sense of direction and
ensuring strategic fit.
Whittington model
1. Define the mission
2. Set objectives
3. SWOT
4. Analyze existing strategies
5. Define the light of the analysis
Formulation of Strategy
6. Define the key strategic issues
7. Determine corporate and functional
strategies
8. Prepare integrated strategic plans for
implementing strategies.
9. Implement the strategies
10. Monitor implementation and revise.
Concept of SHRM
Strategic HRM is an approach that defines
how the organization’s goals will be achieved
through people by means of HR strategies and
integrated HR policies and practices.
Strategic HRM focuses on actions that
differentiate the firm from its competitors.
Fitting HR characteristics to
competitive strategies
• Innovation Strategy
• Quality Strategy
• Cost Leadership Strategy
Challenges related to technology
•
•
•
•
•
Telecommuting
Employee Surveillance and Monitoring
e-HR
Ethical Behavior
Intrapreneurship at intel- New Business
Initiative (NBI)
• Workforce Demographic changes and diversity
Challenges in SHRM- demographics changes on job satisfaction
A shifting Industrial Base
Age
Gender
Immigration
Company size
Communication
Work/life balance
Relationship with supervisor
Career development and opportunities
Job security
Benefits and Compensation
5- P Model
•
•
•
•
•
HR Philosophy
HR Policies
HR Programs
HR Practices
HR Processes
Traditional HR Vs strategic HR
Responsibility for HR
Staff specialistsLine managers
Focus
Employee relations - internal /external customers
Role of HR
Transactional, change follower, and respondent
Transformational, change leader, and initiator
Initiatives
Slow, reactive, fragmented
Fast , proactive, integrated
Traditional HR Vs strategic HR
Time horizon
short term
short, medium, long
Control
Bureaucratic-roles, policies, procedures
Organic- flexible
Job design
Tight division of labor, independence, specialization
Broad, flexible, cross-training, teams
Key investments
Capital , Products
People, Knowledge
Accountability
Cost center
Investment center
Barriers to strategic HR
• Short term mentality/ focus on current
performance
• Inability of HR to think strategically
• Lack of appreciation of what HR can contribute
• Failure to understand general manager’s role as
an HR manager
• Difficulty in quantifying many HR outcomes
• Perception of human assets as higher-risk
investments
• Incentives for change that might arise
Best- HR Practices
General Electric (GE)
Leadership Programme
Succession Planning
Learning and Development
360 degree performance appraisal
Regular employee satisfaction surveys
Flattened organization structure
Best- HR Practices
WIPRO
1. Recruitment
2. Succession Planning
3. Rigorous Leadership Training Programme
4. Open and Transparent
5. Family like work atmosphere
INFOSYS
1. Competency based HR Practices
2. Promoting based on competencies
3. Continuous appraisal Process
4. Developing Training programmes
Best- HR Practices
South West Airlines
- ‘LUV’ & ‘FUN’
- Value creating
-Value capturing
-Value sharing
- Rigorous Training Programme
-Treat employees well
Best- HR Practices
• IBM
Developing Leaders
Classroom and internet courses
Work-life balance
Variable pay program based on Individual
performance.
Changing Technology- Strategy
• Hero Honda
Employment engagement
Developing leadership skills through broad vision
Family like work atmosphere
Uniformity in Dress codes
Best- HR Practices
• Caterpillar
Welfare and Fringe benefits
Incentive (Profit sharing)
Flexible hours
Food Coupon Pass
On –the- job and Off-the –job Training
Best- HR Practices
• TCS
-Competency Mapping exercises
- Balanced Scorecard
- Benchmarking of remuneration Strategies with
that of the industry
- Performance Linked Variable Compensation
Others
Diversity in the work place (Intel)
HPWS (high performance work systems)
HR Value chain-employee, organizational,
financial& accounting and market based
Intelligence Vs Conscientiousness
Sarasota Memorial Hospital
“Pillars of exellence”
Service, people, quality, finance and growth
Cross functional teams
Leadership development
Service recovery
Reward and recognition
Inpatient, outpatient satisfaction
Customer satisfaction increased from 43% to
97%
First Tennessee National Corporation
HR
-Maximize Financial performance
-Demonstrate to shareholders the value added
benefits of HR programs and policies
-Strategic Partnership-HR and finance
HR Strategies
•
•
•
•
•
•
•
HR Strategies
Purpose
Types
Main areas in Which HR Strategies are developed
Criteria for an effective HR Strategy
Development of HR Strategy
Implementation of HR Strategy
HR roles at Mercantile Bank
•
•
•
•
Strategic partner
Change agent
Administrative expert
Employee Champion
-1990’s strategically redesigned its HR functions
-record keeping and compliance
-streamlining work processes, eliminating
unnecessary activities
-reevaluating technology, outsourcing non
strategic functions.
-39 M& A’s
Barriers to strategic HR
• Short term mentality/focus on current
performance
• Inability of HR to think strategically
• Lack of appreciation of what HR can contribute
• Failure to understand general manager’s role as
an HR manager
• Difficulty in quantifying many HR outcomes
• Perception of human assets as higher-risk
investments
• Incentives for change that might arise
Strategic reorganization of the HR at GE
• Decentralization
• 3T’s- technology ,talent and transformation.
Design of work systems
Job Enlargement
IBM
-Product quality
-Reduction in idle time
Eli Lilly Pharma
-Salary increases
-Promotions
-Career development opportunities
Design of work systems
• Job enrichment
• Job rotation
U.S. and Japanese Culture
1. Conflict and conformity
2. Power and hierarchy
3. Time orientation
4. Cultural and demographic homogeneity
Employment Law
• EEOC pay’s $1 million to the victims of sexual
harassment case.
• Equal Pay Act
• Racial Discrimination at Coca-cola
Staffing
• Kroger Co -1,400 supermarkets , 200,000
employees -45 min
• Turnover Cost differs based on sectors
• Recruiting- Temporary versus Permanent
employees
- Internal versus External Recruiting
Recruiting
Internal
-Advantages
Have performance data available
Motivational
Less training/socialization time
Faster
Less Expensive
-Disadvantages
Possible Politics
“Loser” effects
Inbreeding
Promotions chain
Recruiting
External
Advantages
Fresh ideas and viewpoints
Expand Knowledge base
Disadvantages
Unknown entities
Detrimental to internal applicants
Training and socialization
Time consuming
Can be expensive
Recruiting
When and how extensively to recruit
Stages of Recruiting Process which takes 15
weeks.
Accept Job Offer
10
Receive job offer
15
Attend Second Interview
30
Invited to Second Interview
40
Invited to first interview
60
Applicants
120
Recruiting
Methods
word of mouth
internet
J & J (employee referral)
Staffing at St.Peter’s Health Care
- nurses biding for shifts at a rate/hr
Outsourced Recruitment at Kellogg
College Recruiting via Internships at Microsoft
Call – Center Staffing at Capital One-VISA credit cards ,
consumer Master Card –extensive assessments in
selection.
Training and Development
• Benefits of Training and Development
• Planning and Strategizing Training
• Integrating Training with Performance systems
and compensation
• *Marketing Products
• *e-Training
• *Boot camp (exposed and committed to
culture)
T &D
T & D framework
Plan
Do
Check
Act
Targeting and the four P’s of Training level
analysis
Place
on-the-job
off- the –job
Equipment required
T &D
• Product
purpose, content , constraint, Presentation
option
• Promotion
Strategic Planning Involvement
Company newsletter
Personal communication
Word-of-mouth
• Price (budget)
Employees
materials
Equipment
Travel
Employee Separation
Layoffs at Kodak
Range of services
Allowance of two weeks’ pay for each year of
employment
retained medical, dental, and life insurance for
four months;
outplacement counseling; and a retraining
allowance of up to $5000 for schooling.