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Strategic role of HRM

Submitted By
Md. Habibur Rahman ID Number: 41222009 Batch: 22nd

Submitted To:

r!". Dr. #era$u% H!&ue '!urse (it%e: H)MAN R*#O)R'* MANA+*M*N( De,artment !" Mar-eting )ni.ersit/ !" Dha-a

(he human res!urce management that aims t! im,r!.e the ,r!ducti.e c!ntributi!n !" indi.idua%s 0hi%e simu%tane!us%/ attem,ting t! attain !ther s!cieta% and indi.idua% em,%!/ee !b$ has underg!ne drastic change 0ith the ,assing !" /ears. 1e a%% -n!0 that HRM is c!ncerned 0ith the 2,e!,%e2 3 -ee,ing the "act in mind that HRM he%,s in ac&uiring4 de.e%!,ing4 stimu%ating 3 retaining the !utstanding em,%!/ees as it b!th e""ecti.eness 3 e""icienc/ t! the 0!r-ing !" the !rgani5ati!n4 it has been started being used strategica%%/ 3 is n!0 termed as Strategic human resource management. Defining SHRAM: 6 Organi5ati!na% use !" em,%!/ees t! gain !r -ee, a c!m,etiti.e ad.antage against c!m,etit!rs. 6 In.! a%igning in.! h!0 ,e!,%e are managed 0ith !rgani5ati!na% missi!n and !b$ In t!da/s "%attened4 d!0nsi5ed 3 high6,er"!rming !rgani5ati!ns4 high%/ trained 3c!mmitted em,%!/ees 6 n!t machines 6 are !"ten the "irm7s c!m,etiti.e -e/. erha,s the m!st drastic change in HRM7s r!%e t!da/ is its gr!0ing in.!%.ement in de.e%!,ing 3 im,%ementing the c!m,an/7s strateg/. In !rder t! understand the m!dern as,ect !" HR i.e. #HRM4 %ets discuss the terms 0hich 0!u%d he%, us in understanding the c!nce,t:

Core Competency can be de"ined as 6 A uni&ue ca,abi%it/ in the !rgani5ati!n that creates high .a%ue and that di""erentiates the !rgani5ati!n "r!m its c!m,etiti!n. Mission #tatement e8,%ains ,ur,!se and reas!n "!r e8istence9 it is usua%%/ .er/ br!ad4 but n!t m!re than a c!u,%e !" sentences 3 it as "!undati!n "!r !rgani5ati!n d!es. Strategy the c!m,an/7s ,%an !" h!0 it 0i%% ba%ance its interna% strengths 30ea-nesses 0ith e8terna% !,,!rtunities 3 threats in !rder t! maintain a c!m,etiti.e ad.antage4 ear%ier this r!%e 0as ,er"!rmed b/ the %ine managers4 but n!0 it is carried b/ the HR manager.

#trategies increasing%/ de,end !n strengthening !rgani5ati!na% c!m,etiti.eness 3 !n bui%ding c!mmitted 0!r- teams and these ,ut HR in a centra% r!%e. In the "ast changing4 g%!ba%%/ c!m,etiti.e 3 &ua%it/ !riented industria%!nment4 it:s !"ten the "irm:s em,%!/ees ; its human res!urces 6 0h! ,r!.ide the c!m,etiti.e -e/. And s! n!0 it is a demand !" the time t! in.!%.e HR in the ear%ier stages !" de.e%!,ment 3im,%ementing the "irm7s strategic ,%an4 rather than t! %et HR react t! it. (hat means n!0 the r!%e !" HR is n!t $ust t! im,%ement the things !ut but a%s! t! ,%an !ut in such a manner that the em,%!/ees can be strategica%%/ used t! get edge !.er the c!m,etit!rs4 -ee,ing in mind the "act that this is the !n%/ res!urce <H)MAN#=4 0hich cann!t be du,%icated b/ the c!m,etit!rs. The changing role of HRM: (he r!%e !" human res!urce management is changing 3 is changing .er/ "ast4 t! he%, c!m,anies achie.e their g!a%s. HRM has g!ne thr!ugh man/ ,hases 6 "r!m hiring 3"iring t! re%ati!nshi, bui%ding4 "r!m there t! legislation role4 3 n!0 its r!%e is shi"ting "r!m ,r!tect!r 3 screener t! strategic ,artner 3 as a change agent. Model of strategic management In the descri,ti.e and ,rescri,ti.e management te8ts4 strategic management a,,ears as a c/c%e in 0hich se.era% acti.ities "!%%!0 and "eed u,!n !ne an!ther. (he strategic management ,r!cess is t/,ica%%/ br!-en d!0n int! "i.e ste,s: 1. Missi!n and g!a%s . *!nmenta% ana%/sis !. #trategic "!rmu%ati!n ". #trategic im,%ementati!n #. #trateg/ e.a%uati!n (he "irst ste, in the strategic management m!de% begins 0ith seni!r managers e.a%uating their ,!siti!n in re%ati!n t! the !rgani5ati!ns current mission and goals. (he missi!n describes the !rgani5ati!ns .a%ues and as,irati!ns9 it is the directi!n in 0hich seni!r management is g!ing. +!a%s are the desired ends s!ught thr!ugh the actua% !,erating ,r!cedures !" the !rgani5ati!n and t/,ica%%/ describe sh!rt6term measurab%e !utc!mes. Environmental analysis %!!-s at the interna% !rgani5ati!na% strengths and 0ea-nesses and the e8terna%!nment "!r !,,!rtunities and threats. (he "act!rs that are m!st im,!rtant t! the !rgani5ati!ns "uture are re"erred t! as

strategic "act!rs and can be summari5ed b/ the acr!n/m #1O(6 Strengths4 $ea-nesses4 %,,!rtunities and Threats

The Strategic Management )rocess includes: 6De"ine the business its missi!n 6 er"!rm e8terna% and interna% audits 6 (rans%ate the missi!n int! strategic g!a%s 6 "!rmu%ate the strateg/ t! achie.e the strategic g!a%s 6 Im,%ement the strateg/ 6 *.a%uate ,er"!rmance !" #trategic Management

Figure 31
2005 Prentice Hall Inc. All rights reserved. 37

*enefits of a Strategic Approach to HR: >?aci%itates de.e%!,ment !" high6&ua%it/ 0!r-"!rce thr!ugh "!cus !n t/,es !" ,e!,%e and s-i%%s needed

>?aci%itates c!st6e""ecti.e uti%i5ati!n !" %ab!r4 ,articu%ar%/ in industries 0here %ab!r is genera%%/ greatest c!st >?aci%itates ,%anning and assessment !"!nmenta% uncertaint/4 and ada,tati!n !" !rgani5ati!n t! e8terna% "!rces >#uccess"u% #HRM e""!rts begin 0ith identi"icati!n !" strategic needs >*m,%!/ee ,artici,ati!n is critica% t! %in-ing strateg/ and HR ,ractices >#trategic HR de,ends !n s/stematic and ana%/tica% mindset >'!r,!rate HR de,artments can ha.e im,act !n !rgani5ati!n7s e""!rts t! %aunch strategic +actor lin,ages of HR plans and strategies:

+i.en diagram ,resents .ari!us "act!rs that ha.e an im,act !n HR ,%ans and #trateg/ and h!0 are the/ inter%in-ed 0ith each !ther. (heir interacti!ns and im,act !n each e%ement and the resu%ting change in HR %an and ,!%ic/ is a%s! indicated c%ear%/. (here are s! man/ bene"its "r!m #trategic r!%es !" human res!urce management t! the !rgani5ati!n it can he%, the !rgani5ati!n t! achie.e their g!a%s m!re e""ecti.e%/ and m!re e""icient%/. Such as: HR Managers in the I( industr/ must st!, thin-ing !" transacti!na% issues %i-e .acati!ns4 hand%ing r!utine &ueries !n re%!cati!n4 c!m,%iance4 time sheets4 s,ending &ua%it/ time !n !nes c!m,ensati!n4 discussi!ns based !n

bi%%ing4 and bench issues. Instead the/ need t! start thin-ing !" e""icient assessment s/stems t! create em,%!/ee .a%ue resu%ting in ,r!"itabi%it/ and enhancing shareh!%der .a%ue. At Tech (alley InfoTech 0e are engaged 0ith Transtec Hundred c%ients 0here in !ur HR gets in.!%.ed in an e.a%uati!n ,r!cess at regu%ar inter.a%s 0ith the c%ient t! meet mutua% e8,ectati!ns. (! discuss a "e0 !" th!se: 1= #ta""ing 2= @ess!ns @earnt A= @earning and de.e%!,ment e""!rts t! acc%imate and -ee, in tune 0ith techn!%!g/ and d!main -n!0%edge. 4= H!0 has the c!m,etiti!n "ared at the c%ient %!cati!nB C= An/ ne0 HR initiati.e underta-en b/ @3( In"!(ech. D= H!0 d!es (ech .a%%e/ In"!(ech integrate !nsite hires 0ith their !""sh!re ass!ciatesB E= Areas !" im,r!.ement. F= (ime @ines "!r im,%ementing the "eedbac- gi.en at the time !" re.ie0. In e""ect the ab!.e is a c%ear6cut e8am,%e !" h!0 0e manage !ur intangib%e assets4 a%!ng 0ith managing c%ient e8,ectati!ns. (here"!re HR "uncti!ns re&uire a t!ta%%/ di""erent set !" s-i%%s than managing ,e!,%e in a traditi!na% "act!r/!nment.

Research Methodology
Recent%/4 Ma8im '!nsu%ting inter.ie0ed 20 '*Os !" ?(#* AC0 c!m,anies in the Bang%adesh and "!und that !n%/ "!ur -ne0 e8act%/ h!0 man/ ,e!,%e

0!r-ed in their res,ecti.e head !""ices. A%s!4 $ust "!ur '*Os -ne0 h!0 much their head !""ices c!st t! run each /ear. Acc!rding t! A"5a% Ahmed4 a artner at Ma8im '!nsu%ting: GOur stud/ sh!0s that at m!st BD c!r,!rate head&uarters4 unnecessar/ %a/ers !" c!m,%e8it/ and bureaucrac/ !"ten accumu%ate !.er time. (his is an area that man/ !" the ?(#*AC0 are set t! re.ie0 in 200F 0ith a .ie0 t! "inding c!st6sa.ings. (he "act that s! "e0 !" the 'hie" *8cess 0e inter.ie0ed "!r !ur stud/ 0ere sure e8act%/ h!0 man/ ,e!,%e 0!r-ed at head !""ice is a c%ear indicati!n that there7s s!me seri!us h!use-ee,ing t! be d!ne.H +ranted this 0as an e8treme%/ sma%% stud/ and must be regarded as i%%ustrati.e rather than de"initi.e. But4 ne.erthe%ess4 0hat ,art sh!u%d HR managers ,%a/ in such Ih!use-ee,ing: e8ercisesB It seems that "ina%%/ seni!r managers 6 s!me !" them4 at %east 6 are 0i%%ing t! gi.e HR managers a signi"icant r!%e in strategic decisi!ns. But h!0 man/ human res!urce managers -n!0 h!0 t! "u%"i%% that r!%eB ears Jearns <200A:4= te%%s the ta%e !" a 0!r-sh!, e8ercise "!r seni!r human res!urce managers 0hen ,artici,ants 0ere gi.en a mi%itar/ scenari!. Brie"%/4 the/ 0ere as-ed t! en.isage that the/4 and a th!usand s!%diers under their c!mmand4 had been dr!,,ed behind enem/ %ines ; 0ith n! in"!rmati!n ab!ut their !,,!siti!n. 1hat 0!u%d the/ d!B (he "irst res,!nse he recei.ed 0as 7 I:d retreat:. Jearns c!mments: 71h/ d!es this res,!nse "r!m an HR ,ers!n n!t sur,rise meB7 It d!esn7t sur,rise me either because s! man/ HR managers are used t! !,erating s!me!ne e%se7s strateg/4 rather than ,artici,ating .ig!r!us%/ in their !rgani5ati!ns7 strategic decisi!ns. N!ting that 7business ,artner7 and 7strategic thin-er7 ha.e "eatured as the m!st im,!rtant r!%es in s!me recent sur.e/s !" human res!urce management4 Kamr!& and O.erh!t <2004= !bser.e that 7there7s s!mething e8c%usi.e and ambigu!us ab!ut this 0ide%/ t!uted g!a% !" bec!ming a strategic business ,artner7. (he/ cite a recent c!n"erence !n the "uture !" HR 0here a ,ane% !" human res!urce e8,erts came !ut 0ith the statement that 7I can7t de"ine it4 but I -n!0 it 0hen I see it7 0hen as-ed t! de"ine the term 7strategic business ,artner:.

Measuring the effecti(eness of HRM Is measurement at the r!!t !" the ,r!b%emB Are HR managers measuring the 0r!ng thingsB One c!mm!n a,,r!ach is t! use a 7Ba%anced

#c!recard7 0hich inc%udes a range !" HR measures as 0e%% as the m!re traditi!na% "inancia% and !ther metrics. +ubman <2004= "ee%s that 7t!! man/ HR sc!recards "!cused !n !,erati!na% metrics: (ime t! hire4 c!st ,er hire4 ,ercentage !" a,,raisa%s c!m,%eted4 etc. 1hi%e im,!rtant t! trac-4 these -inds !" measures 0i%% n!t get HR t! the strategic ,artner r!%e. (he/ !n%/ rein"!rce the .ie0 !" HR as an administrati.e "uncti!n. Je/ HR measures needed t! be centra% t! business success.: M!re bene"icia%%/4 acc!rding t! +ubman4 HR managers sh!u%d "!cus instead !n the same t0! ma$!r issues as their "inancia% c!%%eagues: return and gr!0th. 7HR6things7 can !n%/ create ec!n!mic .a%ue "r!m three s!urces: > *m,%!/ee turn!.er and retenti!n > r! 6 re.enue against em,%!/ee c!sts > *8,enditure !n the HR "uncti!ns and re%ated acti.ities r!.iding measures "!r these three e%ements d!es n!t re&uire an/ 7r!c-et science: because the/ re%ate t! three "ami%iar HR g!a%s: 1. Attracting4 de.e%!,ing and retaining sta"" 2. A%igning4 engaging4 measuring and re0arding ,er"!rmance A. '!ntr!%%ing !r reducing HR c!sts HR6re%e.ant measures "!r gr!0th are tric-ier and need t! be tai%!red t! the !rgani5ati!ns7 indi.idua% situati!n. +rubman that HR measures can be de.ised that4 %i-e mar-et share4 can indicate trends and "!recasts "!r im,r!.ed re.enue in the "uture. He argues that the "!%%!0ing are the m!st signi"icant gr!0th6re%ated human res!urce measures at ,resent: 6 @eadershi, de.e%!,ment4 t! be measured in terms !" uni&ue candidates read/ t! assume e8ecuti.e and !ther ma$!r r!%es 6 *ngagement 6 %e.e%s !" em,%!/ees7 inte%%ectua% and em!ti!na% c!mmitment t! their 0!r-. 6 Di.ersit/4 ,articu%ar%/ the number !" 0!men and ethnic min!rit/ em,%!/ees c!ming thr!ugh the s/stem !r 7ta%ent ,i,e%ine7. (am-in et a% <200F= used a set !" criteria described as the 74A m!de%7 <Access4 Abi%it/4 Attitudes4 A,,%icati!n= in their stud/ !" a%m!st A000 British !rgani5ati!ns and "!und that the use !" 7bund%es7 !" HR ,ractices ,r!duced im,r!.ed

,er"!rmance and ,r!"itabi%it/. (he/ suggest a number !" issues that HR managers sh!u%d "!cus !n: *eha(ing proacti(ely 1eiss <2000= argues that HR managers must dem!nstrate the abi%it/ t! ,r!.ide stimu%ating ideas and cha%%enge decisi!ns that d! n!t ha.e business .a%ue. (! d! this4 the/ need t! ,er"!rm at the same inte%%ectua% %e.e% as their c!%%eagues in an e8ecuti.e meeting. M!st im,!rtant%/4 the/ need t! 0ear a 7business hat7 rather than a 7HR hat: !ther0ise the/ 0i%% be re%egated t! the traditi!na% administrati.e !r tactica% <sec!nd6%e.e%= r!%e that has bede.i%ed the human res!urce "uncti!n "!r decades. 1eiss c!nsiders that HR managers need t! dem!nstrate the "!%%!0ing t! sh!0 their abi%it/ t! add .a%ue: 6 Br!ad understanding !" the business4 thus he%,ing the human res!urce "uncti!n t! c!ntribute t! the !.era%% directi!n !" the c!m,an/. 6 Jn!0%edge !" h!0 a%% acti.ities needs t! a%ign4 enab%ing the c!m,an/ t! ma8imi5e the success !" its strategic 6 r!"essi!na%ism in in.esting in human ca,ita% and HR ,r!cesses4 a%%!0 he%,ing t! guide em,%!/ees and the !rgani5ati!n7s decisi!n ma-ing. 6 A uni&ue ,ers,ecti.e4 a%%!0ing the HR "uncti!n t! bec!me an 7ideas merchant7 s! that ,e!,%e and the !utc!mes !" !rgani5ati!na% ,r!cesses can be made int! strategic ad.antages.

Suggestion 2HR needs t! -ee, m!.ing itse%" "!r0ard4 t!0ard the strategic ,artner r!%e4 b/ bec!ming better ,r!"it6and6%!ss business %eaders. Be the !nes t! %ead c!m,anies bac- int! thin-ing e8terna%%/4 ab!ut cust!mers and mar-ets4 and h!0 t! create uni&ue .a%ue "!r them. 1hat a sur,rising and ,!0er"u% r!%e that 0!u%d be "!r HR %eadersL #tart measuring HR im,acts !n rea% business resu%ts4 n!t HR acti.ities. Instead !" measuring time t!

hire4 measure the ,e!,%e as,ects !" !,ening u, a ne0 mar-et returns the/ generate.2

and the

Conclusion Idea%%/ HR 3 t!, management 0!r- t!gether t! "!rmu%ate the c!m,an/7s !.era%% business strateg/9 that strateg/ then ,r!.ides the "rame0!r0ithin 0hich HR acti.ities such as recruiting 3 a,,raising must be cra"ted. I" it is d!ne success"u%%/4 it sh!u%d resu%t !ut in the em,%!/ee c!m,etencies 3 beha.i!r that in turn sh!u%d he%, the business im,%ement its strategies 3 rea%i5e its g!a%s. Acc!rding t! an e8,ert 2the human res!urces management s/stem must be tai%!red t! the demands !" business strateg/H. In !rder t! be success"u% the em,%!/ees sh!u%d be de.e%!,ed in such a manner that the/ can be the c!m,etiti.e ad.antage4 3 "!r this the human res!urce management must be an e&ua% ,artner in b!th the "!rmu%ati!n 3 the im,%ementati!n !" the c!r,!rate 3 c!m,etiti.e strategies.

*i&liography: 1. #trategic Human res!urce management -ohn *ratton . #trategic Human Res!urce management -effrey A. Mello. !. .u&man/ 0. <2004= 7HR #trateg/ and %anning: ?r!m Birth t! Business Resu%ts4 HR. Human Res!urce %anning4 M!%. 2E4 Iss.14 ,, 1A6 24. ". 1earns/ ). <200A= HR #trateg/: Business ?!cused Indi.idua%%/ 'entered4 Butter0!rth6Heinemann #. To2ers Da(id42Human Res!urce Management essa/s2 3. Armstrong/ Michael 4 5536 A Handb!!- !" Human Res!urce Management ractice <10th *d.=. @!nd!n

7. *.1. GHRM #trategic "!r c!m,etiti.e Ad.antageH