Strategic HRM

PGDM
MSRIM
Dr.H.Muralidharan

Ref: SHRM Charles Greer

 What is strategy?
What is strategy?
Is it a plan?
Does it refer to how we will obtain the ends we
seek? Is it a position taken?
Just as military forces might take the high ground
prior to engaging the enemy,
might a business take the position of low-cost
provider?
does strategy refer to perspective, to the view one
takes of matters, and to the purposes, directions,
decisions and actions stemming from this view?
Does strategy refer to a pattern in our decisions and
actions?
does repeatedly copying a competitors new product
offerings signal a "me too" strategy?
Ref: SHRM Charles Greer
 Strategy is
Strategy is all these
it is perspective, position, plan, and pattern.
Strategy is the bridge between policy or high-order goals on
the one hand and tactics or concrete actions on the other.
Strategy and tactics together straddle the gap between ends
and means.
strategy is a term that refers to a complex web of thoughts,
ideas, insights, experiences, goals, expertise, memories,
perceptions, and expectations that provides general guidance
for specific actions in pursuit of particular ends.
Strategy is at once the course we chart, the journey we
imagine and, at the same time, it is the course we steer, the
trip we actually make. Even when we are embarking on a
voyage of discovery, with no particular destination in mind,
the voyage has a purpose, an outcome, an end to be kept in
view. Ref: SHRM Charles Greer
 Meaning
Strategy is a term that comes from the
Greek strategia, meaning "generalship."
In the military, strategy often refers to
maneuvering troops into position before
the enemy is actually engaged

Ref: SHRM Charles Greer

 definitions in use
Some of the definitions in use include the
following:
Strategy is that which top management does that is
of great importance to the organization.
Strategy refers to basic directional decisions, that is,
to purposes and missions.
Strategy consists of the important actions necessary
to realize these directions.
Strategy answers the question: What should the
organization be doing?
Strategy answers the question: What are the ends
we seek and how should we achieve them?

Ref: SHRM Charles Greer

 What is strategic
management?
A continuous, iterative process aimed at
keeping an organization as a whole
appropriately matched to its environment
(Samuel C. Certo and J. Paul Peter, Strategic Management)
Keeping the business in tune with
management and marketing forces both
outside and inside the firm

Ref: SHRM Charles Greer

 Competitive strategy
Competitive strategy leads to competitive
advantage
Generates supernormal ROI
Offers services of value
Uses cost effective technology
Avoids erosion of competitive advantage by
exploiting and developing a technological base

Ref: SHRM Charles Greer

Stages in Strategic management

Strategic analysis
Environmental analysis
Establish organizational direction
Strategy formulation
Strategy implementation
Strategic control

Ref: SHRM Charles Greer

 Strategy & HRM ? NEED FOR STRATEGIC HRM

Physical assets are viewed as investments

Can
superior technology
Superior facility
Superior product
Bring about and more importantly sustain competitive
advantage?
Physical facilities can be duplicated, cloned or
reverse engineered and they no longer provide
competitive advantage
Ref: SHRM Charles Greer
 Strategy & HRM ? NEED FOR STRATEGIC HRM

Cost of employees as variable cost of production.

No formal recognition of human resource as a key
resource
No recognition of firms contribution to training
Cost of recruitment, training and replacement
ROI for investments in human resources
maintainable advantage usually from outstanding
depth in selected human skills, logistics
capabilities, knowledge bases
Ref: SHRM Charles Greer
 HRM Changing times?

Views of employees as cost center is changing

Selection process
Induction and training process
Education
Retention - negative impact of employee turn over
Compensation
Innovation and learning cost of un recorded knowledge

Ref: SHRM Charles Greer

 strategic HRM

HRM is a strategic tool only if it contributes

to the bottom line. The question is; Does it?
Forecasts of shifts in skill needs from manual
to cerebral
Human Resources needs to looked at from an
Investment perspective.

Ref: SHRM Charles Greer

 Strategic analysis HRM
To be competitive, organizations in many
industries must have highly skilled.
Knowledgeable workers. They must also have a
relatively stable labour force since employee
turnover works directly against obtaining the kind
of coordination and organizational learning that
leads to fast response and high-quality products
and services
- Edward Lawler
Ref: SHRM Charles Greer
 Human resources
Investment considerations
Management values
Risk return on investments
Economic rationale for investment in
training
Utility theory
Outsourcing as an alternative to investment in
Human resources

Ref: SHRM Charles Greer

 Human resources
Investment considerations
Management values Values, Philosophies of
management / senior managers.
Risk return on Cost center
investments HR cost center
Replaceable resource
Economic rationale for Investment
investment in training HR value adder
Utility theory Critical resource
KEY personnel
Outsourcing as an Enhances human capital/
alternative to prevents depletion
investment in Human
BPL, Govt,Vs Infosys, Vs
resources Reliance, TCS
Education, training, reward,
promotion.

Ref: SHRM Charles Greer

 Human resources
Investment considerations
Management values The employers do not own the
resource in which they have
Risk return on invested.
investments Returns must be great enough
Economic rationale for to overcome the risks
Cash outlays to maintain no
investment in training layoff policy, the benefits are
Utility theory not easily quantified
Outsourcing as an Incur costs in short run for long
alternative to term strategic benefit.
investment in Human Flexible committed work force
resources Better organizational culture
Reliance communication

Bond money

Ref: SHRM Charles Greer

 Human resources
Investment considerations
Management values Human capital theory
Empr Not to bear the cost of Gen
Risk return on training as the employees transfer skills
developed at employers expense.
investments General training
Economic rationale for OJT, Tuition fee reimbursement
Recoup cost of general training
investment in training [loyalty, flexibility]

Utility theory Specific training

Outsourcing as an
alternative to
investment in Human
resources
Employee related
Cost of mobility, relocation,
residence, children's education and
other psychological issues,
new salary lower/ greater
LAY OFF

Ref: SHRM Charles Greer

 Human resources
Investment considerations
Management values Utility of each HR
Risk return on activity [attempts to determine
investments economic value of human resource
programs activities and procedures]
Economic rationale for
investment in training Recruitment process
Employee with higher
Utility theory
productivity
Outsourcing as an
alternative to Performance appraisal
investment in Human Return on output
resources Return on sales
Advt, training, special roles,

Ref: SHRM Charles Greer

 Human resources
Investment considerations
Where world class capabilities and
Management values strategic advantage cannot be
developed.
Risk return on The resources devoted to perform
investments the service internally is greater than
those needed when outsourced
Economic rationale for Excessive dependence on suppliers
investment in training can be avoided.
Salary, executive search, HRIS,
Utility theory Benefits administration etc are
Outsourcing as an outsourced
Key areas viz., performance
alternative to appraisal, employee relations and
investment in Human labour relations are retained by
resources companies.

Ref: SHRM Charles Greer

 Investments in training and
development
Investments in employability
Who moved my cheese?/ Jack Welch
the building was still standing , but the people were gone.

Employers have responsibility to ensure they are getting the best

results from each employee before terminating them. (the
employer will have to coach, counsel and train the employee and
also take advantage of the same.
Current practices
OJT
MDP
Prevention of skill obsolescence M,NC, CNC/ soft wares domain / telecommunication
Reduction of career plateauing narayan murthy / VRS, golden hand shake /

Ref: SHRM Charles Greer

 Investment practices for improved retention
Organizational cultures emphasizing interpersonal
relationship values
Effective selection procedures
Compensation and benefits
Job enrichment and job satisfaction
Practices providing work life balance
Organizational direction creating confidence in
the future
Retention of technical employee
Other practices in facilitating retention
Opportunities for training, growth, new learning, liberal
transfer policies

Ref: SHRM Charles Greer

 Investments in job-secure work forces
Recognition of the costs of downsizing and lay offs
Bumping less senior employees
Reduced productivity

Cost of training the incumbent, wage supplement

Costs relating to termination of employees
Separation payments, higher rates for unemployment
compensation, Depletion of the firms investment in training
employees.
Administrative costs
Human resource processing activities, Clerical expenses, cost
of conducting medical examination of laid off employees,
increased supervisory obligations for managers of reassigned
employees.
Intangible costs
Morale, disruption of efficiencies in work processes,
Accidents, Depletion of goodwill, irregular age distribution

Ref: SHRM Charles Greer

 Investments in job-secure work forces

Avoiding business cycle-based layoffs

Alternatives to layoffs
When down turn is of short duration
Block / shut off inflow of personnel into the
organization attrition brings down the cost
Redeployment of current employees
Curtailment of sub contractors and reallocate the work
to permanent employees
Sharing of economic loss wipro
Fewer work days
Employment guarantees
The work effort and job security relationship
The less secure the greater is the flexibility and
productivity
Ref: SHRM Charles Greer
 Ethical implications of employment
practices

Job security
Performance pressures
Compensation
Work environment

Ref: SHRM Charles Greer

 Non-traditional investment
approaches
Investment in (disabled) Differently-abled
employees
Investments in employee health
Countercyclical hiring technical personnel .

Ref: SHRM Charles Greer

 Exercise = Identify the type of investment

Employment security
Self-managed teams and decentralization of decision-
making
Extensive training and development
Continuous improvement HR programs
Reduced status distinctions and barriers
Sharing of financial and performance information
Trust between management and employees at all
organizational levels
Communication in global markets
Efficient and effective use of new information
technologies

Ref: SHRM Charles Greer

 ECC recognises that people are the real source of competitive
advantage. It is through people that ECC delivers total customer
satisfaction. An extensive and rigorous recruitment process ensures
quality induction. L&T's Graduate Engineer Trainee recruitment
process covers India's major engineering colleges and
institutions. Programmes, plant visits and comprehensive
information-sharing facilitate induction.
The basic principles of ECC's Human Resources policies include
Recruitment based solely on merit by following well-defined and
systematic selection procedures without discrimination
Sustain motivated and quality work force through appropriate and fair
performance evaluation, reward and recognition systems
Identify training needs within the Organisation and design and
implement those need based training programmes resulting in
continuous upgradation of knowledge, skills and attitudes of the
employees
Maintain a quality Human Resource Management System to meet the
international standards as per ISO 9001. Plan, design, train, equip
and motivate the department staff to meet this standard of
expectation.
ECC's Work Culture
Work culture emphasises:
Freedom to experiment
Continuous learning and training
Transparency
Quality in all aspects of work
Ref: SHRM and
Rewards based on performance potential
Charles Greer
Stages in Strategic management
Strategic analysis
Environmental analysis
human resource environment
human resource legal environment
Establish organizational direction
Strategy formulation
Human resource planning
Strategy implementation
Work force utilisation and employment practices
Reward and development system
Strategic control
Performance impact of human resource practices
Human resource evaluation
Ref: SHRM Charles Greer
 The human resource
environment
Global changes
WTO, GATT, EU, G&, G10 etc.
Boarders and barriers
E-commerce, M-commerce
Emerging markets, new markets.
Technology
Demography
Culture
Etc.
The imperative >>HR focus

Ref: SHRM Charles Greer

 The human resource environment
-General environment
Technology and organisational structure
Worker values and attitudinal trends
Management trends
Demographic trends
Trends in utilisation of human resources
International developments

Ref: SHRM Charles Greer

 The human resource environment
-General environment
Influence of technology
Technology and
HRIS
organisational structure Redeployment of HR staff to
Worker values and operating units
New organisational structures
attitudinal trends (Short / accountability)
Management trends Unbounded corporations
Virtual corporations /
Demographic trends networked organisations
Cellular organisations/guilds
Trends in utilisation of Respondent organisations/
human resources supply niche components
Stimulus for entrepreneurial
International business
developments
Ref: SHRM Charles Greer
 The human resource environment
-General environment
Technology and
organisational structure
Worker values and
attitudinal trends
Management trends
Demographic trends
Trends in utilisation of
human resources
International
developments
Ref: SHRM Charlesfamily,
Ethical/moral issues
(older generation blaming
younger generation)
Time spent on work/ leisure
Work enjoyment / satisfaction
/appeals
Loyalty of employees
Location near / far
Age
Younger no loyalty and expect
none
New employee Perception
before joining and after joining
the job (extrinsic to intrinsic)
(image, induction and orientation,
socialization process)
Emphasis on core values, cultures,
Greer social service)
 The human resource environment
-General environment
Technology and Management of diversity
Work teams
organisational structure
Virtual teams
Worker values and Human resource outsourcing
attitudinal trends Open book management
Management trends TQM
Integrated manufacturing
Demographic trends
Reengineering
Trends in utilisation of Management of professionals
human resources Managing of aftermath of Mrg
International & Aqui
developments
Ref: SHRM Charles Greer
 The human resource environment
-General environment
Technology and Aging work force (HMT)
organisational structure
Baby boom-US, China
Worker values and
attitudinal trends Labour Shortages
Management trends Racial diversity
Demographic trends Occupational
Trends in utilisation of distribution for women
human resources
Dual career couples
International
developments
Ref: SHRM Charles Greer
 The human resource environment
-General environment
Technology and Telecommuting /
organisational structure working from home
Worker values and
Relocation from work
attitudinal trends
Management trends Growing use of
Demographic trends temporary and
Trends in utilisation of contingent workers
human resources Employee leasing
International
developments
Ref: SHRM Charles Greer
 The human resource environment
-General environment
Technology and NAFTA
organisational structure
EU
Worker values and
attitudinal trends GATT
Management trends WTO
Demographic trends G7
Trends in utilisation of
human resources
International
developments
Ref: SHRM Charles Greer
 The human resource environment
-Legal environment
An overview of Industrial Relations Climate
Emerging trends and paradigm shifts towards
Employee Relations
Employee Relations Policy
Implications of:
Employment Related Legislations
Payment Related Legislations
Social Security Related Legislations
Welfare Related Legislations

Ref: SHRM Charles Greer

 The human resource environment
-Legal environment
Equal employment opportunity for women.
Age, gender discrimination, promiscuous gender based
harassment. Promiscuity, Dealing with incidences, pregnancy
discrimination, Disability discrimination, Religious discrimination,
Reservations and protection, health care benefits, family and
medical leave.
Employee relations
Negligent hiring, immigration, Employment at will, Drug testing,
Safety
Labour relations and collective bargaining.
Emerging issues
Strategic impact of the legal environment
Ref: SHRM Charles Greer
 Labour Legislations in India
The Apprentices Act, 1961
The Bonded Labour System (Abolition)
Act, 1976
The Child Labour (Prohibition &
Regulation) Act, 1986
The Children (Pledging of Labour) Act,
1933
The Contract Labour (Regulation &
Abolition) Act, 1970
The Employees Provident Funds and
Misc. Provisions Act,1952
The Employees State Insurance Act,
1948
The Employers Liability Act, 1938
The Employment Exchange (Compulsory
Notification of Vacancies) Act, 1959
The Equal Remuneration Act, 1976
The Factories Act, 1948
The Workmen's Compensation Act, 1923
The Weekly Holidays Act, 1942
Ref: SHRM Charles Greer
The Industrial Disputes Act
The Industrial Employment (Standing
Orders) Act,1946
The Inter-state Migrant Workmen
(Regulation of Employment and
Conditions of Service) Act, 1979
The Labour Laws (Exemption from
Furnishing Returns & Maintaining
Registers by Certain Establishments)
Act, 1988
The Maternity Benefit Act, 1961
The Minimum Wages Act, 1948
The Payment of Bonus Act, 1965
The Mines Act,1952
The Payment of Gratuity Act, 1972
The Payment of Wages Act, 1936
The Sales Promotion Employees
(Conditions of Service) Act, 1976
The Shops and Establishments Act, 1953
The Trade Union Act, 1926
 Labour legislations
The term `labour legislation is used to
cover all the laws which have been
enacted to deal with employment and
non-employment wages, working
conditions, industrial relations, social
security and welfare of persons
employed in industries.

Ref: SHRM Charles Greer

 Need for labour legislation in India:
Organized industry in a planned economy calls for the
spirit of co-operation and mutual dependence for
attaining the common purpose of greater, better and
cheaper production. Since this has not been happening
voluntarily, the need for State intervention.
The need for labour legislation may be summarized as
under:
Necessary for the health, safety, and welfare of workers;
Necessary to protect workers against oppressive terms as
individual worker is economically weak and has little
bargaining power;
To encourage and facilitate the workers in the
organization;
To deal with industrial disputes;
To enforce social insurance and labour welfare schemes.
In India, labour legislation is treated as an arm of the
State for the regulation of working and living conditions
of workers.
Ref: SHRM Charles Greer
 Principles of labour legislation

Social Justice:
Social Equity
Standards in terms of living, position in
society etc. of the working population.
National Economy
International Uniformity

Ref: SHRM Charles Greer

 Principles of labour legislation
Social Justice:
Social Equity
Standards in terms of living,
position in society etc. of
the working population.
National Economy
International Uniformity
Ref: SHRM Charles Greer
The essence of democracy
is ensuring social justice to
all sections of the
community.
This demands the
protection of those who
cannot protect themselves.
In modern industrial set-
up, workers, left to
themselves, are unable to
protect their interest.
Therefore, the State has to
intervene to help them by
granting them freedom of
association, the power of
collective bargaining and by
providing for mediation or
arbitration in the case of
industrial conflict.
 Principles of labour legislation
Social Justice: Legislation based on this
Social Equity principle provides for
Standards in terms of living, achievement of definite
position in society etc. of standards.
the working population. EQUAL REMUNERATION
ACT
National Economy
Specific provisions of
International Uniformity law such as in
factories act
Work timings
Work environment
Dangerous machines act

Ref: SHRM Charles Greer

 Principles of labour legislation
Social Justice: These standards for the
Social Equity working class can be
Standards in terms of living, achieved by bringing
position in society etc. of about changes in the Law
the working population. of our land.
Power to change the
National Economy Law is exercised by the
International Uniformity government.
Existing laws may be
amended to meet the
changed standards.
ESI
EPF
Minimum wages

Ref: SHRM Charles Greer

 Principles of labour legislation
Social Justice:
Social Equity
Standards in terms of living,
position in society etc. of
the working population.
National Economy
International Uniformity
Ref: SHRM Charles Greer
Measures have to be
provided through
legislation to:
Ensure normal growth
of industry for the
benefit of the nation as
a whole
Satisfy the physical and
intellectual needs of the
citizens
Ensure the growth of
industrial efficiency such
as to adjust the wage
system with a view to
increase the productivity
and prosperity of the
workers
 Principles of labour legislation
Social Justice:
Social Equity
Standards in terms of living,
position in society etc. of
the working population.
National Economy
International Uniformity
Ref: SHRM Charles Greer
ILO Since its inception,
securing minimum
standards (for the working
population worldwide) on
a uniform basis in respect of
all labour matters has been
the main objective of ILO.
o To this end, conventions
are passed at the
conferences of ILO.
As a member of the ILO,
adopting these conventions
would require appropriate
legislation to be brought
about.
The influence of
international labour
conventions has been
significant in shaping the
course of labour legislation
in India.
 Legal environment
- Bench mark
Obey the Law. Law is societys codification of
right and wrong; Play by the rules
It is important to perform in a manner consistent
with expectations of government and the law.
It is important to comply with various national and
supra-national laws and regulations.
It is important to be a law-abiding corporate
citizen.
It is important that a successful firm be defines as
one that fulfils its legal obligations.
It is important to provide goods and services that
at least meet the minimal legal requirements.
Ref: SHRM Charles Greer
 Strategy formulation
What are the purpose(s) and objective(s) of
the organization?
Where is the organization presently going?
What critical environmental factors does the
organization currently face?
What can be done to achieve organizational
objectives more effectively in the future?

Ref: SHRM Charles Greer

 Strategy formulation process
Development of organizational philosophy and
mission statement
Environmental scanning
Analysis of SWOT
Formulation of strategic objectives
Generation of alterative strategy
Evaluation and selection of strategies
Informal / incremental strategic planning
Managed/logical incremental planning

A strategy is the pattern or plan that integrates

Ref: SHRM an Greer
Charles organisations major goals, policies,
and action sequences into a cohesive whole
Competitive strategy in Business
Units
Periodic forward scanning
Analysis based on longer time frame
Communication about goals and resource
allocation
Framework for short-term plan evaluation and
integration
Decisional criteria framework for short term
decision making
PLANNING IN SBUS
Base strategy will be integrated with functional specializations to
exploit the opportunity seen by the strategy and achieve the goals.
Low cost leadership, differentiation,
Ref: SHRM Charles Greer niche
 Value Chain Analysis
Primary activities Secondary Activity
Inbound logistics Procurement
Operations Human Resource
Outbound logistics Management
Marketing and Technology
sales Development
Service Infrastructure

Ref: SHRM Charles Greer

Steps in Value Chain Analysis
Value chain analysis can be broken down
into a three sequential steps:
1. Break down a market/organisation into its key
activities under each of the major headings in
the model (primary activities / secondary
activities)
2. Assess the potential for adding value via cost
advantage or differentiation, or identify current
activities where a business appears to be at a
competitive disadvantage;
3. Determine strategies built around focusing on
activities where competitive advantage can be
sustained
Ref: SHRM Charles Greer
 HR strategy ?
'a human resource system that is tailored to the
demands of the business strategy'
-Miles and Snow 1984
'the pattern of planned human resource activities
intended to enable an organization to achieve its
goals'
- Wright and McMahan 1992
the pattern planned human resource deployments
and activities intended to enable an organisation to
achieve its goals
Ref: SHRM Charles Greer
 SHRM concern
SHRM concern is to ensure
HR management is fully integrated with the
strategy and strategic needs of the firm
HR policies cohere across policy areas and
areas of hierarchy
HR practices are adjusted and used by line
manages and employees as part of their
everyday work

Ref: SHRM Charles Greer

 Strategic HRM (IMPORTANCE)

Needs investment ROI

Cost of investment
Reduction in total Labour cost
Efficiency in operation
Optimal use of human resources
A source of competitive advantage
Technical skills (pace of technological change)
Knowledge and capabilities
Management of critical and Difficult HR areas
Management of change (Resistance to change)
Lack of trust
Antagonistic labour
Motivational problems
Management relations
Economic turbulence
Within the country (turbulence)
Globalisation
Dramatically changing demographics
Differences in workforce values
Strategic human resource management and HRP are considered important
to manage uncertainties; HR is integrated with strategy; Integrating and
aligning HR function with strategy
Ref: SHRM Charles Greer
 Benefits of SHRM
1. Identifying and analysing external opportunities and
threats that may be crucial to the company's success.
2. Provides a clear business strategy and vision for the
future.
3. To supply competitive intelligence that may be useful
in the strategic planning process.
4. To recruit, retain and motivate people.
5. To develop and retain of highly competent people.
6. To ensure that people development issues are
addressed systematically.
7. To supply information regarding the company's
internal strengths and weaknesses.
8. To meet the expectations of the customers effectively.
9. To ensure high productivity.
10. To ensure business surplus thorough competency

Ref: SHRM Charles Greer

 Theoretical frame work of SHRM

Firm strategy Institutional /

Political forces

Resource dependence
Resource institutional
based view
of the firm HRM Practices
Behavioral
Cybernetics
approach
Agency/transaction costs
Firm level outcomes
HR Capital pool HR behaviors (performance,
satisfaction,
(Skills, abilities) absenteeism etc)
Ref: SHRM Charles Greer
 Theoretical frame work of SHRM
Strategy driven
Resource based view
Competitive advantage based on unique allocation of resources {selection
/Compensation package} (TCS)
Behavioral view
Control and influence the behaviors of individuals (Infosys)
Cybernetics systems
Adoption or abandonment of practices based on feedback on contributions to
strategy (Bosch MICO)
Agency/transactions cost view
Use of control systems, performance evaluation and reward systems etc
(In the absence of performance evaluation strategy may not be pursued)

Non-Strategy driven
Resource dependence and power theories
Power and politics= legislation, unionization, control of resources, expectations of
social responsibility.
Institutional theory
In appropriate performance evaluation dimensions (inertia / rational decision
making.appraisal

Ref: SHRM Charles Greer

 International strategy
Multinational, global and transnational
strategies
Strategic alliances
Sustainable global competitive advantage
Globally competent managers
Location of production facilities

Ref: SHRM Charles Greer

Human resource contributions
to strategy
Environmental scanning and competitive
advantage
Implementation of resource reallocation
decisions Slide >

Lead time for dealing with labour shortages.

..

Ref: SHRM Charles Greer

Industry matrix < Back

Ref: SHRM Charles Greer

 Other issues
Strategy driven role behaviors and practices
Innovation cooperation, group oriented, long term appraisal system, generalized skill
development, broad career path, compensation approaches accentuating internal equity flexible
compensation packages including stock ownership
quality enhancement- employment security guarantees. Extensive training programs,
participative decision making (process orientation)
cost reduction performance evaluation system emphasizing results in the short term. Virtually
no training programs, very specialized jobs, narrow specialized career jobs,Procedure for
continual tracking of wage rates in the labour market.

Strategic human resource activity typology

Relational : transactional $ High : low strategic value Slide >
Classifying human resource types
Jeffrey sonnenfeld and Maury peiperl Slide
Miles and snow: Defenders, prospectors, analyzers and reactors
Network organization and strategy
Integration of strategy and human resource planning
Evolution of strategy and human resource planning integration.
Evolution of linkages between Strategic business planning and HRM
Administrative linkage, one way HR is involved in implementation, two way- involved HRM
and strategic business plans, integrated
Determinants of integration
Conditions under whichRef: SHRM Charles
determinants may notGreer
be appropriate. *
 HUMAN RESOURCE ACTIVITY TYPOLOGY

High Performance enhancement

Consulting
Staffingplanning
Employee relations
Benefits of planning Labour negotiations
Retirement planning Executive compensation
Employee development
Compliance
Management development
Recruitment interviewing
Strategic value of
activity < IMPORTANT TO EXECUTIVES >
Payroll
Benefits administration
Recruitmentinformation processing
Retirement administration
Employee records Employee assistance programs
Relocation administration
Recruitment information processing

Low
< IMPORTANT TO EMPLOYEES >

Back Transactional TypeofCharles

Ref: SHRM HR activity
Greer Relationship
Classifying human resource types * BACK

Ref: SHRM Charles Greer

Benefits of integrating HRP with Strategic
planning
Generates more solutions to complex
organizational problems
Ensures consideration of human resources in
organizational goal setting process
Ensures consideration of human resources in
assessment of organizational abilities to
accomplish goals and implement strategies
Reciprocal integration prevents strategy
formulation based on personal
rigidities/preferences
Facilitates concurrent consideration of strategic
plans and managerial succession.
Ref: SHRM Charles Greer
Strategic components of HRM
relevant to internal fit
Management awareness
Management of the function
Portfolio of programs
Personnel skills
Information technology
Awareness of the environment

Ref: SHRM Charles Greer

 HR Practitioners Role
The HR managers have keen role in the effective planning and
implementation of the policies and decisions that in tune with the
business changes.
They should act as strategic partners and be proactive in their role than
mere reactive, passive spectators.
The HR managers should understand how far their decisions
contribute to business surplus incorporating human competency and
performance to the organisation.
Strategic HR managers need a change in their outlook from seeing
themselves as relationship managers to strategic resource managers.
Kossek (1987, 1989) argues that major HRM innovations occur when senior
management takes the lead and adoption of innovative SHRM practices is
dependent on the nature of relationship of the HR Department with the CEO and
the line managers.
Legge (1978) commenting on the actions of the personnel practitioner in the
innovation process suggests that adoption of an innovation by an organization
depends largely on HR practitioners' credibility with information and resource
providers.
HR Department and HR managers in these innovative organizations play a
strategic role (Ulrich, 1997) linking the HR strategy with the business
strategy of the organization.
A crucial aspect concerning SHRM is the concepts of fit and flexibility.
The degree of fit determines the human resource system's integration with
organization strategy. ItRef:
is SHRM
the role of HR Managers to ensure this fit in
Charles Greer
between Human Resource System with the Organization Strategy.
 Requirements for SHR-Managers

Information management skills

Planning skills
Management skills
Integration skills
Change management skills

Ref: SHRM Charles Greer

 Human resource planning
Strategic role of HRP
Over view of HRP
Managerial issues in planning
Selecting forecasting technique
Forecasting the supply of human resources
Forecasting the demand for human
resources
Ref: SHRM Charles Greer
 Human resource planning
Strategic role of HRP
Over view of HRP
Managerial issues in
planning
Selecting forecasting
technique
Forecasting the supply of
human resources
Forecasting the demand
for human resources
Ref: SHRM Charles Greer
Developmental planning
for strategic leadership
Assessment of strategic
alternatives
Adding value
Contribution to strategic
human resource
management
Strategic salary planning.
 Human resource planning
Strategic role of HRP
Over view of HRP
Managerial issues in
planning
Selecting forecasting
technique
Forecasting the supply of
human resources
Forecasting the demand
for human resources
Ref: SHRM Charles Greer
Steps in HRP
Interfacing strategic planning and
scanning the environment
Taking an inventory of the companies
current human resources.
Forecasting the demand for human
resources
Forecasting the supply of human
resources both from within the
organization and from the external labor
market
Comparing the forecast of demand and
supply
Planning the actions needed to deal with
anticipated shortages or overages
Feeding back such information into the
strategic management process
 Human resource planning
Strategic role of HRP Planning in a context
Over view of HRP of change
Managerial issues in Responsibility for
planning
human resource
Selecting forecasting
planning
technique
Forecasting the supply of Failure to plan for
human resources human resources
Forecasting the demand
for human resources
Ref: SHRM Charles Greer
 Human resource planning
Strategic role of HRP Personal implications
Over view of HRP Changing receptivity
Managerial issues in towards planning
planning
Stricter legislations for
Selecting forecasting lay off etc
technique
Other issues
Forecasting the supply of
human resources Mind set of work force
and related actions.
Forecasting the demand
for human resources
Ref: SHRM Charles Greer
 Human resource planning
Strategic role of HRP
Over view of HRP
Managerial issues in
planning
Selecting forecasting
technique
Forecasting the supply of
human resources
Forecasting the demand
for human resources
Ref: SHRM Charles Greer
Purpose of planning
Organisational
characteristics
Industry characteristics
Environmental turbulence
Other consideration
Technique of forecasting
Cost
Accuracy
 Human resource planning
Strategic role of HRP Replacement charts Mgr posi

Over view of HRP Human resurce inventories

Managerial issues in Succession planning
planning Markov analysis .
Selecting forecasting Renewal models age cohorts, internal
mobilization

technique Computer simulation

Forecasting the supply of Regression analysis
human resources Trend extrapolation
Forecasting the demand Utilisation of supply
for human resources forecasting techniques

Ref: SHRM Charles Greer

 Human resource planning
Strategic role of HRP
Over view of HRP
Managerial issues in
planning
Selecting forecasting
technique
Forecasting the supply of
human resources
Forecasting the demand
for human resources
Ref: SHRM Charles Greer
Heuristics, Rule of
thumb and the Delphi
technique
Operations research
and management
science technique
Regression analysis
Utilisation of demand
forecasting technique
Trend extrapolation
 Markov analysis back

Distri Job 1 27 .66 .11 .09 .03 .02 .09

bution
of Job 2 41 .15 .60 .08 .06 .01 .10
emplo
yees Job 3 55 .03 .08 .55 .13 .10 .11
in
time Job 4 64 .00 .09 .18 .54 .03 .16
Job 5 73 .00 .08 .10 .17 .45 020
260 26 44 55 57 41 37
Job 1 Job 2 Job 3 Job 4 Job 5 exit

Ref: SHRM Charles Greer

 Strategy formulation process
Development of organizational philosophy and
mission statement
Environmental scanning
Analysis of SWOT
Formulation of strategic objectives
Generation of alterative strategy
Evaluation and selection of strategies
Informal / incremental strategic planning
Managed/logical incremental planning

A strategy is the pattern or plan that integrates

Ref: SHRM an Greer
Charles organisations major goals, policies,
and action sequences into a cohesive whole
 Strategy implementation
work force utilization and employment practices

Efficient utilization of human resources

Dealing with employee shortages
Selection of employees
Dealing with employee surpluses

Ref: SHRM Charles Greer

 Strategy implementation
work force utilization and employment practices

Efficient utilization of Cross training and flexibility in

assigning work
human resources Using work teams
Dealing with Requirements for effective
teams
employee shortages Forming
Selection of Storming
Norming
employees performing
Operating on a non union basis
Dealing with
employee surpluses

Ref: SHRM Charles Greer

 Strategy implementation
work force utilization and employment practices

Efficient utilization of Strategic recruiting

human resources Special recruiting for
Dealing with minorities and women
employee shortages workers
Selection of Flexible retirement as
employees a source of labour
Dealing with Managing vendors of
employee surpluses outsourced functions

Ref: SHRM Charles Greer

 Strategy implementation
work force utilization and employment practices

Efficient utilization of Managing vendors of

outsourced functions
human resources Making the outsourcing
Dealing with decision
Selecting and negotiating
employee shortages with outsourcing vendors
Selection of Managing the outsourcing
transactions
employees Managing vendor
Dealing with relationships
Monitoring and evaluating
employee surpluses vendor performance

Ref: SHRM Charles Greer

 Strategy implementation
work force utilization and employment practices

Efficient utilization of Reliability and validity

human resources Predictive validity
Concurrent validity
Dealing with Content validity
employee shortages Job analysis
Selection of KSA

employees Interviews
Dealing with Behavioural interviews
employee surpluses Testing
Assessment centres
Ref: SHRM Charles Greer
 Strategy implementation
work force utilization and employment practices

Efficient utilization of Redeployment and

human resources retraining
Dealing with Early retirement
employee shortages Retreat from
employment security
Selection of
policy
employees
Downsizing and
Dealing with layoffs
employee surpluses Termination strategies

Ref: SHRM Charles Greer

 Strategy implementation
work force utilization and employment practices

Efficient utilization of Downsizing and layoffs

Findings
human resources Co are not well prepared
6 months to 1 year co indicators
Dealing with do not improve profits, ROI,
Stock prices, expense ratios
employee shortages

Survivors syndrome
Myth of job security exploded
(Who moved my cheese)
Selection of Sustained improvement can be
brought about only with
employees improvements in productivity,
quality and effectiveness and
Dealing with integrate reductions in head count
with planned changes in the way
the work is designed.
employee surpluses Downsizing in not a one time
quick fix solution to enhance
competitiveness. is a part of
continuous improvement.
Ref: SHRM Charles Greer
 Strategy implementation
work force utilization and employment practices

Efficient utilization of Downsizing and layoffs

Guide lines for conduct of layoffs
human resources Give early warnings /
announcements of layoffs
Dealing with Soften the impact with
compensation and benefits
employee shortages Utilise the services of
outplacement firms
Selection of Supply retraining services

employees Provide equitable and decent

treatment to laid off employees
Ensure supportive treatment of
Dealing with

survivors

employee surpluses Maintain a cooperative approach

with unions
Uphold obligation to the
community
Ref: SHRM Charles Greer
 Special implementation
challenges
Career path for technical professionals
Dual career couples
Strategy implementation system Reward
and development systems
Strategically oriented performance management
system
Strategically oriented compensation systems
Employee development

Ref: SHRM Charles Greer

 Strategy implementation system
Reward and development systems

Performance measurement
Strategically oriented approaches
performance MBO
management system Graphic scale rating
Narratives
Strategically oriented BARS
Behavioral observation scales
compensation systems 360 degree feedback
Employee Performance evaluation of
executives
development Effectiveness of performance
measurement.

YOU GET WHAT YOU MEASURE, YOU MEASURE WHAT YOU VALUE, YOU
Ref: SHRM Charles Greer
CAN NOT CONTROL WHAT YOU CANNOT MEASURE.
 Strategy implementation system
Reward and development systems

Strategically oriented Traditional

performance compensation systems
management system Job analysis > job evaluation >
salary/wage hierarchy
Strategically oriented Point system
Factor comparison system
compensation systems Hybrid system
Employee Internal equity
> Wage surveys to establish
development external equity.

Ref: SHRM Charles Greer

 Strategy implementation system
Reward and development systems

Strategically oriented Traditional compensation

systems
performance Inadequacies
management system Wage for know-how not
given
Strategically oriented Compensated for specific

compensation systems job only

Impact of collective

Employee bargaining on wage

structures.
development Does not work well with
managers and
professionals

Ref: SHRM Charles Greer

 Strategy implementation system
Reward and development systems

Strategically oriented Skill based pay

performance Broad banding
management system Team based pay
Strategically oriented
Variable compensation
compensation systems
Executive
Employee
compensation
development

Ref: SHRM Charles Greer

 Strategy implementation system
Reward and development systems

Strategically oriented Training programs

performance Training methods
Apprenticeships
management system
Management development
Strategically oriented
Management development
compensation systems for international
Employee assignments
Product life cycle and
development
managerial fit
PLC, Evolutionary stage >
Steady state
Development Vs selection
Ref: SHRM Charles Greer
 The performance impact of
human resource practices
Individual high performance practices
Limitations of individual practices
Evolution of practices
Systems of high performance human resource
practices
Individual best practices Vs systems of practices
Universal practices Vs contingency perspectives

Ref: SHRM Charles Greer

 The performance impact of
human resource practices
Individual high performance Seven management
practices practices that enhance
Limitations of individual performance Jefrey Pfeffer
1. Employment security
practices 2. Selective hiring of new personnel
Evolution of practices 3. Self managed teams and
decentralization of decision
Systems of high performance making as basic principle of org
design
human resource practices
4. Comparatively high
Individual best practices Vs compensation on organizational
performance
systems of practices 5. Extensive training
Universal practices Vs 6. Reduced status distinctions and
barriers
contingency perspectives 7. Extensive sharing of financial and
performance information.

Ref: SHRM Charles Greer

 The performance impact of
human resource practices
Individual high performance
practices
Limitations of individual
practices
Evolution of practices
Systems of high performance
human resource practices
Individual best practices Vs
systems of practices
Universal practices Vs
contingency perspectives
Ref: SHRM Charles Greer
Compensation
High compensation linked to organisational
performance
Incentive based compensation
Profit sharing
Team based compensation
Diversity
Employment
Countercyclical hiring,
downsizing, early retirement
programs, employment security,
human resource outsourcing.
Industrial relations
Decertification of union
bargaining agent
Positive labour relations
Strikes, lockouts
Internal labour market
 The performance impact of
human resource practices
Individual high performance
practices
Limitations of individual
practices
Evolution of practices
Systems of high performance
human resource practices
Individual best practices Vs
systems of practices
Universal practices Vs
contingency perspectives
Ref: SHRM Charles Greer
motivation
Decentralized decision
making
Self managed teams
Open book management
Reduced status differentials or
symbolic egalitarianism
Performance management
Staffing
Cognitive tests, staffing
selectivity, CEO succession
insider outsider, yield analysis
of recruiting sources
Training
 The performance impact of
human resource practices
Individual high performance
practices
Limitations of individual
practices
Evolution of practices
Systems of high performance
human resource practices
Individual best practices Vs
systems of practices
Universal practices Vs
contingency perspectives
Each practice has a
different kind of impact on
individual workers if
possible to address at
individual levels the same
may be done.
Results of studies that give
positive or negative
indication can not be taken
as absolute

Ref: SHRM Charles Greer

 The performance impact of
human resource practices
Individual high performance HR practices are path
practices dependant. They consist of
Limitations of individual policies that are developed
practices
over time and cannot be
Evolution of practices
simply purchased in the
Systems of high performance
human resource practices
market by competitors.
Individual best practices Vs
systems of practices
Universal practices Vs
contingency perspectives

Ref: SHRM Charles Greer

 The performance impact of
human resource practices
Individual high performance
practices
Limitations of individual
practices
Evolution of practices
Systems of high performance
human resource practices
Individual best practices Vs
systems of practices
Universal practices Vs
contingency perspectives
Ref: SHRM Charles Greer
Has positive impact
Commitment oriented systems
Decentralized decision making, general
training, Highly skilled employees,
High wages - bonuses
Human capital enhancement
Comprehensive training, BARS,
Technical and problem solving skills,
selective staffing
Human resource administrative system
Hourly pay, individual equity,
individual incentive, result based
performance appraisal
Motivation and commitment system
Receptiveness to new training,
compensation contingent on firms
performance, extent of status
differentials
Skills and organizational structures
Attitude survey, access to grievance
procedures, formal job anasysis, info
sharing
 The performance impact of
human resource practices
Individual high performance Mxed evidence and
practices response
Limitations of individual Some individual practices
practices have had positive impact
Evolution of practices Systems of practices have
Systems of high performance both
human resource practices Adoption
Individual best practices Vs Implementation
systems of practices fit
Universal practices Vs
contingency perspectives

Ref: SHRM Charles Greer

 The performance impact of
human resource practices
Individual high performance Have their own
practices applicability
Limitations of individual Evidence for success of
practices both
Evolution of practices Greater evidence for
Systems of high performance contingency
human resource practices
Individual best practices Vs
systems of practices
Universal practices Vs
contingency perspectives

Ref: SHRM Charles Greer

 Human Resource Evaluation
Overview of evaluation
Approaches to evaluation
Prevalence of evaluation
Evaluating strategic contributions of
traditional areas
Evaluating strategic contributions in
emerging areas
Ref: SHRM Charles Greer
 Human Resource Evaluation
Overview of evaluation Scope of evaluation
Approaches to evaluation Strategic impact
Prevalence of evaluation Level of analysis
Evaluating strategic Criteria
contributions of traditional Level of constituents
areas Ethical dimensiona
Evaluating strategic
contributions in emerging
areas

Ref: SHRM Charles Greer

 Human Resource Evaluation
Overview of evaluation Audit approaches
Approaches to evaluation Analytical approaches
Prevalence of evaluation Quantitative and
Evaluating strategic qualitative measures
contributions of traditional Balance scorecard
areas perspective
Evaluating strategic Benchmarking
contributions in emerging Industry influences
areas

Ref: SHRM Charles Greer

 Human Resource Evaluation
Overview of evaluation Little
Approaches to evaluation Results not revealed
Prevalence of evaluation
Evaluating strategic
contributions of traditional
areas
Evaluating strategic
contributions in emerging
areas

Ref: SHRM Charles Greer

 Human Resource Evaluation
Overview of evaluation HRP
Approaches to evaluation Staffing
Prevalence of evaluation Training
Evaluating strategic Performance evaluation
contributions of systems
traditional areas Compensation systems
Evaluating strategic Utility analysis
contributions in emerging labour and employee
areas relations

Ref: SHRM Charles Greer

 Human Resource Evaluation
Overview of evaluation Equal employment
Approaches to evaluation opportunity and
Prevalence of evaluation
management of diversity
Quality readiness
Evaluating strategic
contributions of traditional
areas
Evaluating strategic
contributions in emerging
areas

Ref: SHRM Charles Greer

 Thank you
Issues to be taken into consideration

Ref: SHRM Charles Greer