STRATEGIC HUMAN

RESOURCE MANAGEMENT

DISCUSSION

What is meant by the term Strategic Human

Resource Management and how has it been
used to study the employment relationship?

What is Strategy?

Strategy
Strategy is planning that allows you
to delight your customers.
Strategy is about getting customers
and keeping them.
Drucker: The purpose of a business is
to create a customer.
Product first, not profits

Strategy
The process of strategy includes:
Analysis
Formulation
Implementation

Strategic Planning and Analysis

Planning how to delight customers requires
these steps:
Scanning the overall environment
Scanning and researching the industry
environment
Researching direct competitors
Researching your organization's skills and
resources
Analyzing current strategy
And, most important, knowing what will delight
your customers before they know it

The Five Competitive Forces That Shape Strategy, Michael Porter, Harvard Business Review, January 2008.

Operational Effectiveness Is Not

Strategy
Concentration on core competencies
and competitive positioning via
benchmarking can lead companies
down the path toward mutually
destructive competition.
Companies must distinguish between
operational effectiveness and
strategy and not confuse them.
What is Strategy, Michael Porter, Harvard Business Review, November 1996, Reprint # 96608

Operational Effectiveness Is Not

Strategy
Operational effectiveness is necessary to
compete but not sufficient to win.
A company can outperform others and win only
if it can establish a difference that it can sustain
a differential competitive advantage.
In the past barriers to entry were the primary
competitive advantage.
Now, it's better products and service.

Operational effectiveness means doing things

better than competitors, strategic positioning
means doing things different from competitors
and having better products and service.

Generic Strategies
There are three generic (primary)
strategies:
Differentiation
Focus (niche)
Cost leadership

These definitions characterize

strategic positions at the simplest
and broadest levels.

Concept of strategy
The direction and scope of an
organization over the long term.
It should match the resources of the
organization to its changing
environment (markets, customers
and other stakeholders).
Strategy determines the direction
where the organization is going

What gives the firm competitive

advantage?

Unique
(differentiation,
focus)
Hard to copy
Sustainable
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Process of strategic HRM

Groups of HRM Activities

Planning
Human
Resources
Maintaining
High
Performance

Motivating
Employees

Groups of
Activities

Attracting
Human
Resources
Placing,
Developing &
Evaluating

Strategic HRM

Linked to the strategic needs of an organization

Human resource strategies and tactics must be
mutually consistent
Reflects the organizational mission and
strategy

Steps in Strategic HRM

Environmental
Environmental
Analysis
Analysis

Organizational
Organizational
Mission
Mission &
&
Goals
Goals
Analysis
Analysis

Analysis
Analysis of
of
Organizational
Organizational
Strengths
Strengths &
&
Culture
Culture

Analysis
Analysis of
of
Organizational
Organizational
Strategies
Strategies

Choice
Choice &
&
Implementation
Implementation
Of
Of HR
HR
Strategies
Strategies

Review
Review &
&
Evaluation
Evaluation
of
of HR
HR
Strategies
Strategies

Models of HRM used while developing HR

strategies
The high commitment management model
The high performance management model.
The high involvement model.

The high commitment management model

Approaches to achieve high commitment :

Development of career ladder and emphasis on trainability

High level of functional flexibility (flexible JDs)
Reduction of hierarchies and ending status differentials.
Heavy reliance on team structure (information, Structuring work)
and problem solving)
Policy of no compulsory lay-offs,and permanent employment
guarantees,use of temporary labour during demand fluctuation.
New forms of assessment and payment systems merit pay, profit
sharing.
High involvement of employees in quality management.

High performance management model

The approaches to achieve :
Mgmt. clearly defines what it needs in the form of new methods
of working and results expected .
Mgmt. sets goals and standards for success.
Multi-skilling & carefully selected equipment which is flexible.
Self managed teams with supportive managers.
Good communication system
Training on the basis of an assessment of training needs.
Payment based on skill and on team performance
Peer performance review process .

High involvement management model

Approach :
Employee as a partner in the enterprise and share
organization's mission, vision and objectives.
Good communication and involvement

The competitive strategy approach (Schuler &

Jackson) related to Porters competitive strategy
Innovation strategy
Quality enhancement strategy
Cost leadership strategy

Innovation strategy
Role Behavior:
A high degree of creative behavior and longer
focus
A relatively high degree of cooperative,
interdependent behavior
Greater degree of risk taking
A high tolerance of ambiguity and unpredictability.

Quality enhancement strategy

Role behavior:
High concern for quality, process
Low risk-taking activity
High levels of commitment

Cost leadership strategy

Role behavior :

Primary concerns for results

Low risk taking activity
A relatively short term focus
Modest concern for quality

Barriers to Strategic HR

Copyright 2002 SouthWestern. All rights

reserved.

427

Copyright 2002 SouthWestern. All rights

reserved.

428

Copyright 2002 SouthWestern. All rights

reserved.

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