Technological University of the

Philippines
Graduate School Program

Strategic HRM
Strategy Formulation and Implementation
Strategic Management Process
HRM Function in Strategy Formulation

By : Jessie R. Ortiz

Strategic HRM
Strategic management is the process of analyzing
the competitive situation of the company, the company
develops strategic goals, and develop a plan of action
and the allocation of resources that will help the
company achieve goals.
Strategic human resource management is the
pattern of planned human resource deployment and
activities intended to enable an organization to achieve
its goals.

Components of the Strategic Management Process

1. Strategy Formulation: Strategic planning group
decided to define the strategic direction of the
company's mission and objectives, the external
opportunities and threats, and internal strengths and
weaknesses.
2. Implementation Strategy: The organization follows
through on a strategy that has been selected. This
includes the organizational structure, allocating
resources, ensuring that corporations have skilled
employees in place, and develop employees'
behavior recognition systems that align with targets
strategies

Model Strategic Management Process

Mission

Strategy Formulation

Strategy Implementation

External
Analysis
Opportunities
Threats

HR Practices

Goals

Strategic
Choice

Internal
Analysis
Strengths
Weaknesses

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

Human
Resource
Actions
Behaviors,
Results

Firm
Performance
Productivity,
Quality,
Profitability

The role of HRM Function in Strategy Formulation

Illustrations that accurately reflects the establishment
of an enterprise is "to what the company will persevere
and always compete in the industrial world?
The management team has an important role in
organizing strategy formulation process. Specific
organizational purpose also allows the management
team to develop a role in the process of organizational
change management is the primary responsibility of
the organization to be formulated strategy for the
enterprise.

 How does the process of decision-making

strategies in the management of a
company?

the 4 level of integration between CRM

functionality and Strategy Management
Functions
1. Administrative Linkage
2. One-way Linkage
3. Two-way Linkage
4. Integrative Linkage

A. Administrative Linkage
In administrative linkage (the lowes level of
integration), the HRM functions attention is focused
on day to day activities in this level of integration,
the HRM departement is completely divorced of any
component of the strategy management process in
both strategy formulation and strategy
implementation. The departement I administrative
work needs

A. Administrative Linkage
In one - way linkage, The firm, sstrategic business planning
function develops the strategic plan and then informs the HRM
functions of the plan.Although one-way linkage does recognize
the importance human resources in implementingthe strategic
plan. This level of integration often leads strategic to strategic
plans that company cannot succesfully implement
Two Way linkage, allows for consideration of human
resources issues during the strategy formulation process. This
Integration occurs in three sequential steps Then HRM
executives analyze the human resource implications of the
various strategies, presenting the results of this analysis to the
strategic planning team. The strategic planning function and
the HRM function are interpendent in two-way linkage.

Integrative Linkage
Integrative linkage is dynamic and multifaceted, based
on continuing rather than sequential interraction. Thus,
in strategic HRM, the HRM function is involved in both
strategy formulation and strategy implementation.In
addition HRM practices must be designed to elicit
actions from employees in the company. In the next,
HRM can provid a competitive advantage in the
strategic management process.

B. Strategy Formulation
Five major components of the strategic management process are
1.Goals
Are what it hopes to achieve in the medium to long-term future.
2. External analysis
External analysis consists of examining the organizations operating
environment to identify the strategic opportunities and threats.
3. Internal analysis
Attempts to identify the organizations strengths and weaknesses.
4. Strategic choice
The organizations strategy; the ways an organization will attempt to fulfill
its mission and achieve its long term goals
5. Mission
Mission of Merck is to provide society with superior products and services
innovations and solutions that improve the quality of life and satisfy
customer needs

Technological University of the

Philippines
Graduate School Program

STRATEGY
IMPLEMENTATION

HRM Practice
The HRM function can be thought of as
having six menus of HRM practices, from
which companies can choose the ones
most appropriate for implementing their
strategy.

Emergent strategies

HRM Practice
Recruitment
Training
Performance
management
Labor Relation
Employee Relation

Strategic
Choice

Human
Resource
Needs
Skills
Behaviors
Culture

Human
Resource
Capability
Skills
Abilities
knowledge

Job Analysis
Job Design
Selection
Development
Pay Structure
Incentives
Benefits

Human
Resource
actions
behaviors
Results
(productivity,
Absenteeism
Turnover)

Firm
Performance
Productivity
Quality
profitability

Each of these menus refers to a particular

functional area of HRM :

1.
2.
3.
4.
5.
6.

Job analysis / design

Recruitment / selection
Training and development
Performance management
Pay structure / incentives / benefits
Labor employee relations

1. Job Analysis and Design

Job analysis is the process of getting detailed
information about jobs
Job design is the process of defining the way work
will be peformed and the tasks that will be required
in a given job.

Job Analysis and Design

few tasks
many tasks
simple tasks
complex tasks
few skills required
many skilss required
Specific job descriptions
general job description

2. Employee Recruitment and Selection

Recruitment is the process through which the

organization seeks applicants for potential
employment.
Selection is the process by which an organization
attempts to identify applicants with the necessary
knowledge, skills, abilities, and other characteristic
that will help it achieve its goals.

3. Employee Training and Development

Training refers to a planned effort to facilities the
learning of job related knowledge, skills, and
behavior by employees.
Development is the acquisition of knowledge, skills,
and behaviors that improve an employees ability to
meet changes in job requirements and in client and
customer demands.

4. Performance management
Performance management is used to ensure that
employees activities and outcomes are congruent
with the organizations objectives.
It entails specifying those activities and outcomes
that will result in the firms successfully
implementing the strategy.

5. Pay structure, Incentives & Benefits

The pay system has an important role in
implementing strategies.
First, a high level of pay and / or benefits elative to
that of competitors can ensure that the company
attracts and retains high quality employee.
Second, by tying pay to performance, the company
can elicit specific activities and levels of
performance from employees.

6. Labor and employee Relations

The relationship between management and
employees can strongly affect the companys
potential for competitive advantage.
Companies can choose to treat employees as an
asset that requires investment of resources or as an
expense to be minimized.

Strategic types
Two generic strategies proposed by Poter :
1. Cost
Value can be created by reducing cost. The
overall cost leadership strategy focuses on
becoming the lowest cost producer in an industry.
2. Differentiating
Value can be created by differentiating a product
or service in such a way that it allows the
company to charge a premium price relative to its
competitors.

 HRM Needs in Strategic Types

Role Behaviors
Role behaviors are the behaviors required of
an individual in his or her role as a job holder in
a social work environment.

Five possible categories of directional strategies:

Concentration Strategies
Require that the company maintain the current skills that exist
in the organization.
Internal Growth Strategies
Require that a company constantly hire, transfer, & promote
individuals.
Mergers and Acquisitions
Require training in conflict.
Dowsizing
Require open communication with remaining employees to
build their trust & commitment rather than with holding
information.
Strategy Evaluation & Control
Require constantly monitor the effectiveness of both the
strategy & the implementation process.

The Role of Human Resources in Providing

Strategic Competitive Advantage:

Emergent Strategies
Consist of the strategies that evolves from the
grassroots of the organization and can be thought of
as what organization actually do.
Enhancing Competitiveness
Develop a human capital pool that gives the company
the unique ability to adapt to an ever-changing
environment.

Summary
Human resources are the most important asset
they are also the single largest controllable cost
within the firms business model.
HRM function needs to be integrally involved in
the formulation of strategy to identify the people
related business issues the company faces.
Once the strategy has been determine, HRM has
the profound impact on the implementation of the
plan by developing and aligning HRM practices
that ensures that the company has motivated
employees with the necessary skills.

Thank You!