HR STRATEGY
FORMULATION PROCESS
Facilitators:
Basanta Raj Sigdel
Santosh Koirala
Environment Analysis
2
Analysis and diagnosis of an
organization, often referred to as an
Organization Audit or SWOT analysis
 Undertaken to assess an organization’s
ability to deal with its Internal and
External Environment by identifying its
Strengths, Weaknesses, Opportunities
and Threats

Internal Environment
Organisation / Supply side analysis
3
An analysis of internal organizational
factors which reviews and investigates
the prevailing processes, resources and
performance of organization. The
analysis identifies major strengths and
weaknesses - of all the key functional
elements (Structure, Functions, HR, Finance, IT,
Rules, Procedures, etc.).
External Environment
4
Demand side analysis
Covers the various stakeholders outside the
organization. The analysis indicates the
opportunities and threats faced by the
organisation from its relationship with external
stakeholders. Major categories of external
environment:
1. Forces and trends – PEST
2. Clients, customers, or payers
3. Actual or potential competitors or
collaborators
SWOT Profile
5
SWOT Profile- an example
6
Internal
1.
2.
3.
4.
5.
Mandate / Vision /
Mission
Structure
Systems / Processes
Organizational resources
Performance / outputs
Strengths

External
Political
2. Economic
3. Social
4. Technological
1.
Qualified and
trained health
professionals
Weaknesses

Opportunities

Health sector as
one of the
priorities of
government
Mobilization of
health
professionals
to remote area
Threats

Retaining
competent
health
professionals in
the country
Considerations
7
SWOT as very meaningful tool rather
than a causal ‘warm-up’ for strategy
formulation
 Use precise, verifiable statements ("Cost
advantage of Rs……/unit in sourcing
resources x", rather than "Good value for
money")- be specific

Considerations
8
Reduce long lists of factors, and prioritize
them, so that you spend your time thinking
about the most significant factors.
 Make sure that options generated are
carried through to later stages in the
strategy formation process.

Considerations
9
Apply it at the right level - for example,
we might need to apply SWOT Analysis
at service-line level, rather than at the
much vaguer whole organization level.
 Use it in conjunction with other strategy
tools (e.g. Core Competence Analysis) so
that you get a comprehensive picture of
the situation you're dealing with.

Strategic Issue
10

Fundamental policy questions or critical
challenges that affect
o An organization’s mandates, mission and values
o Organization/management
o Costs, financing
o Services
o Consumers, users…. About which something can
be done.
John M. Bryson, Strategic Planning for Public and Nonprofit Organizations: A Guide to Strengthening and
Sustaining Organizational Achievement, rev. ed. (San Francisco: Jossey-Bass, 1995), 30.
Strategic issue- example
11
1.
2.
How to provide basic health services to
all Nepalese at their doorsteps?
How to improve sanitary condition of
hospitals?
Prioritization of Issues
12
Urgency
 Potential impact
 Actionable/feasible
 Resources
 Stakeholder readiness
 Integration
 Importance

13
Mission, Vision and Objectives
Mission
14



Encapsulates the values and articulates
the overall, long-term objective.
Brief statement that reflects the core
values of an organization.
Communicates an organization’s longterm objectives – why the organization
exists.
Mission- an example
15
Providing basic health services
to all citizens

Vision
16



A vision is a dream or picture of future success.
A Vision statement outlines what the
organization wants to be in certain future point
of time. It is a source of inspiration, and gives
shape and direction to the organization’s
future.
“Vision binds people together around a
common identity and sense of destiny”
- Peter Senge
Vision- an example
17
All Nepali having basic health
services at their doorsteps.

Setting Objectives
18

To reach the envisioned state and
accomplish mission, what we want to
achieve (objectives/goals) in the following
four dimensions
o Service recipients/consumers
o Financial (investments and return)
o Internal processes
o Learning and growth
Setting Objectives
19

Set few objectives in each of the
dimensions, for example:
o Enhance research and development
capacity of DoHS.
Strategy Formulation
20
Strategic options
Strategy evaluation and
selection
Strategic plan preparation

Strategy Choice
21
Feasibility
 Cost
 Quality
 Acceptability
 Reversibility, etc.

Considerations
22
Organizational competence and resources to
capture opportunities
 Environmental threats to its long term well
being
 Personal values and aspirations of managers
 Societal obligations and ethical
considerations
 Organizational culture

Strategy- example
23

Fostering institutional networking
and coordination
Strategic Plan
24
Resources
Objective Strategy Measures/ Target
Initiatives
Indicators
What Who When
Improve
health
service
Increase
number
of
health
professi
onals
Decreased 10 %
Doctorby
Patient
2017
ratio
Increa
se the
numb
er of
stude
nts /
seats
MoH 2014
P,
Pvt.
Sect
or
Budget,
Infrastruct
ure, RP
Critical
Success
Factors
MoF,
Availabilit
y of RP,
Involvemen
t of Pvt.
Sector,
Govt.
policy
Formulation of HR Strategy
25
HR strategy can influence as well as be
influenced by organizational strategy
 More likely to follow the organizational
strategies- dominated by service/market
and financial considerations
 The process involves generating strategic
HRM options and making appropriate
choices

HR Strategy formulation method
26
Assess feasibility
 Determine desirability
 Determine goals
 Decide means of achieving goals

HR strategy formulation approach
27
Best practices of HRM (universal, and
contingent)
 Best fit: HR strategies appropriate to the
circumstances of organization including
culture, operational processes and external
environment
 Configurational (bundling): bundle of HR
practices- horizontal integration- will lead to
greater performance and strategic fit

Implementation
28

However
beautiful the
strategy, you
should
occasionally look
at the results.
- Winston Churchill
Gap in implementation
29

Rhetoric and reality in the area of human
resource management, between HRM
theory and HRM practice, between what
the HR function says it is doing and how
that practice is perceived by employees,
and between what senior management
believes to be the role of the HR function,
and the role it actually plays.
Gap in implementation
30






the tendency of employees in diverse organizations only to accept
initiatives they perceive to be relevant to their own areas;
the tendency of long-serving employees to cling to the status quo;
complex or ambiguous initiatives may not be understood by
employees or will be perceived differently by them, especially in
large, diverse organizations;
it is more difficult to gain acceptance of non-routine initiatives;
employees will be hostile to initiatives if they are believed to be in
conflict with the organization’s identity, e.g. downsizing in a culture of
‘job-for-life’;
the initiative is seen as a threat;
Gap in implementation
31
inconsistencies between corporate strategies
and values;
 the extent to which senior management is
trusted;
 the perceived fairness of the initiative;
 the extent to which existing processes could
help to embed the initiative;
 a bureaucratic culture that leads to inertia

The big question: WHY CHANGE
INITIATIVES FAIL?
32
Change management will fail when one is
STUPID:
Sponsorship not forthcoming
Team member do not function as agents of
change
Unclear vision and commitment
Poorly planned change programme
Inappropriate / insufficient communication
Don’t take account of culture
The SUCCESS Principle
33
Shared vision
Understand the organization
Cultural alignment
Communication
Experience help where necessary / Executive
support
Strong leadership
Stakeholder buy-in / Systematic planning /
Short-term wins
Reflection/feedback
34
Basanta Raj Sigdel
Santosh Koirala
The story continues…
35