Aligning HR with strategy

Chapter: 02, By: Monica Belcourt

Strategic Human Resources Planning
 CHAPTER CONTENTS
Human Resource Management, Strategic Human Resource
Management, Human Resource Planning, Strategic Human Resource
Planning
Importance of strategic HR planning.
Strategic Human Resource Planning risk.
Characteristics of an effective HR strategy.
HR is a business or strategic partner?
Strategic HR planning model.

2
 Q. HUMAN RESOURCE MANAGEMENT

 The policies and practices involved in carrying out the “people” or

human resource aspects of a management position, including
recruiting, screening, training, rewarding, and appraising.
 HRM is an umbrella that encompasses the following terms:
 HR Practices- recruitment, selection and appraisal.
 HR Policies- that direct and partially constrain the development of
specific practices and
 HR philosophies- which specify the values that inform an
organization’s policies and practices
3
 Q. STRATEGIC HUMAN RESOURCE MANAGEMENT

 Strategic HRM is a set of distinct but interrelated

practices, policies and philosophies whose goal is to
enable the achievement of the organizational strategy.
 The linking of HRM with strategic goals and objectives
in order to improve business performance and develop
organizational cultures that foster innovation and
flexibility.

4
Q. HUMAN RESOURCE PLANNING?

 HR Planning is a process by which an organization

ensures that it has the right number and kinds of
people, at the right time, at the right place, capable of
effectively and efficiently completing those tasks that
will help the organization to achieve its overall
strategic objectives.

5
Q. STRATEGIC HUMAN RESOURCE PLANNING?
Strategic HR Planning

Forecast HR requirements Forecast HR availability

(demand) (supply)

Yes Match? No

Develop programs to Develop programs to

increase supply or reduce decrease supply or increase
demand demand

6
 THE IMPORTANCE OF STRATEGIC HR PLANNING
There are at least two reasons why strategic HR planning is so important:
1. Employees help an organization achieve success because they are
strategic resources .
2. The planning process itself results in improved goal attainment.
( improve org. performance, shape employee behavior )
Human capital:
 Human capital is the sum of employees knowledge,
skills, experience and commitment invested in the
organization.
7
Q. SHRP SEEMS BENEFICIAL BUT SOME RESEARCHER POINT OUT THAT
THERE ARE COSTS. (

 It includes the involved in making

decision.
Greater potential for .
Impossible to employees.
with employee reactions that may be
incompatible with industry conditions.

8
Q. LINKING HR PROCESSES TO STRATEGY

The basic premise is that every HR policy and practice must

directly support the organization’s strategy and objectives. This
does not happen as frequently as it should.

In the worst-case scenario, HR plans are developed as an

afterthought and separately from organizational strategy. They
are not relevant to the business and are seen as important only
by the HR people.

9
Q. ALIGNING HR STRATEGY WITH BUSINESS STRATEGY CAN
BE DONE IN ONE OF THE FOLLOWING PLANS:

1. Start with organizational strategy and then create HR

strategy
2. Start with HR competencies and then skill corporate
strategies based on these competencies.
3. Do a combination of both in a form of reciprocal
relationship.

10
 Q. CORPORATE STRATEGY LEAD TO HR STRATEGY

 Corporate strategy: Low labor cost

 HR strategy : HR policies and practices must align with corporate
strategy.
 This model assume that People are more adjustable than strategy.
 If the workers can not adjust to a new strategy, they are terminated in
a massive restructuring.
 Large org. seem to prefer this approach : making the resources fit with
strategy.
 Within this approach employees are considered means to an end not
part of the strategy formulation equation.
11
Q. HR COMPETENCIES LEAD TO BUSINESS STRATEGY.
 A competing views status that an organization cannot
implement a strategy if it does not have the human resources
necessary .
 In the late 1990s, companies were scrambling/ mixing up to
find high-tech workers in order to enable them to launch web-
based services and product.

12
 Q. WHY IS HR NOT A STRATEGIC PARTNER?

1. Top managers don’t see a need. They don’t see HR as a profession.

2. HR personnel are seen as personnel experts not experts in the
business.
3. HR information is useful to HR but incompatible with business needs.
4. HR professionals are unable to think strategically because they have
an incomplete understanding of the business.
5. Senior managers lack appreciation for the role that HR can play in
enabling the organization to achieve its goals. HR is seen as an
adversary, demanding unnecessary bureaucratic work in the
managers day to day jobs.
13
6. It is difficult to count benefits of HR programs
7. HR assets are not owned by the org., so no invest.
8. Few functional managers see themselves as HR managers.
They have functional responsibilities, but do not see that the
principal role of management is to manage people.
9. Business managers have a short-term focus with an emphasis
on current performance. Quarterly results are important even
through some investments in training and culture
development won’t pay off for years
14
 Q. WHEN HR BECOME A STRATEGIC PARTNER?
1. Do you understand the business?
2. Do you know What financial indicators are important to the
company ?
3. Who are your customers and what is your competitive advantage
?
4. Do you know what the corporate plan is ?
5. Can you quickly list the major initiatives of your org.?
6. Do you align HR programs, policies and practices with org.
strategies and goals ?
15
7. How can HR position assist the org. to succeed ?
8. Are the people management processes focused and measured
on deliverables and not functions?
9. Does HR report on effectiveness or just efficiencies?
10. Are major org. decisions make with your input?
Count the number of times you answered yes. The higher the number the
greater the likelihood that you are a strategic partner or have the
ability to be one.
Question: IS HR A BUSINESS PARTNER OR STRATEGIC
PARTNER?
16
 Q. WAYS TO BECOME INVOLVED IN THE STRATEGIC PLANNING
PROCESS

1. Member in the executive team:

2. Review/React linkage: In this method HR managers have the
opportunity to review strategic plans before they are implemented.
They can then approve or modify them.
3. Integrative linkage: interaction between the members of the executive
committee and the HR director . Example: when env. Turbulent (
competition , rapid tec. Change and changing labor market
demographics) resulting in difficulties recruiting the right kinds of
people. Multiple dept.-multiple strategic plan and multiple Strategic HR
plan is required.
17
 Q. CHARACTERISTICS OF AN EFFECTIVE HRM STRATEGY

 The purpose of HR strategy is to capitalize on the distinctive

competencies of the organization and add value through the effective
use of human resources. It appears that effective HRM strategies include
the following:
 External and Internal fit, and
 Focus on results

HR programs must align with or fit the overall strategy of the

organization .If the business strategy is to differentiate the from its
competitors based on superior service, then selection and training
programs should be developed to hire and train people in the skills.

18
 We look at two types of internal fit:
1. a fit with other functional areas, such as marketing, and
2. a fit among all HR programs .
If the marketing department is developing an advertising plan that promises
24 hour access to customer service representatives.

The hard work of deciding on strategy is not its formulation but its implementation
and the tracking of results. Many HR managers do not have the resources or skills to
see if the goals have been achieved.
 As James Harrington say, Measurements are keys. If we cannot measure it, We
cannot control it. If we cannot control it, then we cannot manage it.
19
20
 The model we are using is based on generic
corporate and business strategies linked with
complex bundled HR policies and practices.
Our perspective builds on earlier HR planning
models (right numbers in the right places at
the right time).

21
1. Monitor, identify and analyze external environment factors
influencing issues for the organization in order to develop
strategies.
2. Develop a tentative corporate or business strategy.
3. Assess the relative strengths and weaknesses of the
organization's human resources, using forecasting and
analysis techniques.
4. Develop strategic plans for each division that are consistent
with the overall strategic thrust and that ensure a fit with
related components across functional areas.
22
5) Identify HR policies and practices that will increase
the likelihood of achieving the strategy and
implement them.
6) Measure results and modify plans as necessary.
7) Thus, at the most senior levels of the corporations,
HR professionals move from a policing role to the
role of strategic partner.
23
 Assignment
Case : A New Vision of HR

24