What is Strategic HRM?
Strategic
human resource
management: The pattern of
planned human resource
deployments and activities
intended to enable an
organization to achieve its
strategic goals.
Strategic HRM
To
be strategic, the HR function should
Have direct, integral involvement in strategy
formulation and implementation.
Know what employee skills, behaviors, and
attitudes are needed to support strategic plan.
Develop those skills, behaviors, and attitudes
among employees.
Components of the Strategic
Management Process
1.
Strategy Formulation:




Strategic planning group decides on a
strategic direction
Defining the company's mission and goals
Identify external opportunities and threats
Identify internal strengths and
opportunities for growth
Strategy Formulation
External
analysis
Opportunities
Threats
Mission
Strategic
Choice
Goals
Internal
analysis
Strengths
Weaknesses
McGraw-Hill/Irwin
© 2006 The McGraw-Hill Companies, Inc. All rights reserved.
Components of the Strategic
Management Process
2. Strategy Implementation:




Follow through on the chosen strategy.
Includes structuring the organization,
allocating resources,
Involves ensuring that the firm has skilled
employees in place
Utilizes reward system that align employee
behavior with the strategic goals.
Model of the Strategic Management
Process
Strategy Implementation
HR Practices
Strategy Formulation
External
Analysis
Opportunities
Threats
Mission
Goals
Strategic
Choice
Internal
Analysis
Strengths
Weaknesses
McGraw-Hill/Irwin
Human
Resource
Needs
Skills
Behavior
Culture
Recruiting,
Training,
Performance management,
Labor relations,
Employee relations,
Job analysis
Job design,
Selection,
Development,
Pay structure,
Incentives,
Benefits
Human
Resource
Capability
Skills,
Abilities,
Knowledge
Firm
Performance
Productivity,
Quality,
Profitability
Human
Resource
Actions
Behaviors,
Results
© 2006 The McGraw-Hill Companies, Inc. All rights reserved.
Levels of HRM integration in
Strategy Formulation
Administrative Linkage — Lowest level; HRM focused on day-to-day
activities. No input from the HRM function to the company's strategic
plan.
 One-Way Linkage — The strategic business planning function
develops the plan and then informs the HRM function of the plan. HRM
helps with implementation.
 Two-Way Linkage — HR issues considered during the strategy
formulation process. HR function provides input on potential strategic
choices and helps implement chosen option.
 Integrative Linkage — Continuing, rather than sequential, interaction.
HR is an integral member of the strategic planning team.

Strategy Formulation
 Five
relevant components:
 Mission:
statement of the organization's reasons for being.
 Goals: what the organization hopes to achieve in the medium-to
long-term future
 External analysis consists of examining the organization's
operating environment to identify strategic opportunities and threats.
 Internal analysis attempts to identify the organization's strengths
and weaknesses.
 Strategic choice is the organization's strategy, which describes the
ways the organization will attempt to fulfill its mission and achieve
its long term goals.
Strategy Implementation
Organizational
structure
Types of
Information
Product
market
strategy
Task design
Performance
Reward
systems
Selection,
training, and
development
of people
Strategic Types
Generic Strategies —
competitive advantage comes
from creating value by:
Porter's
reducing
costs or
charging a premium price for
a differentiated product or
service (differentiation).
HRM and Strategic Types
Different
strategies call for different types of
employees.
Role
behaviors are the behaviors required of an
individual in his or her role as a jobholder in a
social work environment.
 Cost
strategy calls for efficiency--carefully define the
skills employees need. Seek employees’ cost-saving
ideas.
 Differentiation firms need creative risk takers.
The Role of HR in Providing a
Competitive Advantage
Emergent
Strategies - Those that evolve from the
grass roots of the organization.
 What
actually is done versus what is planned.
 HR plays an important role in facilitating the
communication of emergent strategies between levels in
the hierarchy.
Enhancing
 By
Firm Competitiveness
developing a rich pool of talent, HR can assure the
company's ability to adapt to a dynamic environment.
Competencies of Strategic Human
Resource Consultants
Four
basic competencies:
 Business
Competencies: Understand company's
economic and financial capabilities.
 Professional/Technical Knowledge: In HR practices
 Change Management or Organizational Development
Techniques: Ability to diagnose need for change;
develop and implement the appropriate intervention.
 Integration Competencies: Holistic perspective with
the skills of a specialist in the above three areas.
Human Resource Competencies
Professional and
Technical
Knowledge
Business
Competence
HR Professional
Integration
Competence
Ability to
Manage Change