STRATEGIC HUMAN RESOURCE MANAGEMENT

THE CONCEPT OF HRM AND SHRM

Chapter 01
By: Wendell L. French
& Michael Armstrong

Management:
It is the process of achieving organizational goals through four major functions, planning, organizing, leading and controlling. By: Kathryn M. Bartol

Planning

Organizing

Management Functions
Controlling Leading

Planning: The process of setting goals and deciding how best to achieve them.
IMPORTANT TERMS Goal Strategy Planning and Forecasting Ambiguity, uncertainty and Risk

Organizing: Determining what tasks are to be done, who is to do them, how the tasks are to be grouped, who reports to whom, and where decisions are to be made.
Hierarchy Span of Management Chain of Command

Leading:
A function that includes motivating employees, directing others, selecting the most effective communication channels, and resolving conflicts.
Leadership Leader

Controlling:
Monitoring activities to ensure they are being accomplished as planned and correcting any significant deviations.
PERT

Management:
The process of achieving organizational goals by effectively and efficiently through planning, organizing, leading and controlling the organization's human, physical, financial and information resources.

Human Resources Management:

It refers to the utilization of human resources more effectively and efficiently for the achievement of organizational goals.

 Efficiency:
Doing things right
Getting the most output for the least inputs

Effectiveness:
Doing the right things
Attaining organizational goals

Human Resources Management:

HRM refers to the philosophy, policies, procedures and practices related to the management of people within an organization.
Philosophy

By: Wendell L. French

Policy
Procedure Rule

Employee

Assist employees in achieving their personal goals. Worker performance may decline or employees may leave the organization if employee objectives are not considered.

Organization

Contribute to organizational effectiveness. Means of helping the organization to achieve its primary objectives. Provide level of service appropriate to the organizations needs.

Society

Should respond to the needs and challenges of society. Minimize negative impacts of these demands on the organization. HR strategies need to reflect societys concerns e.g. ecological.

Strategic Management:
The ongoing process of formulating, implementing and controlling broad plans to guide the organization in achieving its strategic goals, given its internal and external environment.
Strategic goals

Strategic Human Resource Management (SHRM): Strategic human resource management can be defined as the linking of human resources with strategic goals and objectives in order to improve business performance and develop innovative organizational culture that foster innovation and flexibility.
Creativity
Innovation Intelligence

THE AIM OF STRATEGIC HRM: The basic aim of strategic HRM is to develop strategic capability by ensuring that the organization has the skilled, committed and well motivated employees to achieve the competitive advantage.

Development of consistent, aligned collection of practices, programs, and policies to facilitate achievement of strategic objectives. Put extra efforts for personnel management, and focusing on strategic issues, rather than solely on operational issues.
Integration of all HR (strategies, tactics, and) programs within the larger framework, facilitating mission and objectives. Writing down strategy facilitates involvement and buy-in of senior executives and other employees.

Effective Management of Staffing, Retention and Turnover, through selection of employees that fit both the strategy and the organizational culture.

Cost effective utilization of employees through investment (T&D) in identified human capital with potential for high retention.
Integrated HR Programs and policies that clearly follow from Corporate Strategy.

Facilitation of change and adoption through a flexible, more dynamic organization.

Tighter focus on Customer needs, key and emerging markets, and quality.

To have

Customer & Employee Satisfaction

Increased Performance

Enhanced Shareholder Value

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Chapter 02

MUTUAL RELATIONSHIP B/W STRATEGIC MANAGEMENT AND STRATEGIC HRM

It results in higher organizational performance. It requires that managers examine and adapt to business environment changes. It coordinates diverse organizational units, helping them focus on organizational goals.

It is very much involved in the managerial decisionmaking process.

Step 1: Identifying the organizations current mission, goals, and strategies Step 2: Doing an external analysis

The environmental scanning of specific and general environments

Focuses on identifying opportunities and threats Step 3: Doing an internal analysis

Assessing organizational resources, capabilities, and activities

Step 4: Formulating strategies

Develop and evaluate strategic alternatives Select appropriate strategies for all levels in the organization that provide relative advantage over competitors Match organizational strengths to environmental opportunities Correct weaknesses and guard against threats

Step 5: Implementing strategies Implementation: effectively fitting organizational structure and activities to the environment. Step 6: Evaluating results How effective have strategies been? What adjustments, if any, are necessary?

Organizational Mission, Goal and strategy Analysis

Environmental Analysis

Analysis of Organizational Strengths & Culture

Analysis of Organizational Strategies

Choice & Implementation of HR Strategies

Review & Evaluation of HR Strategies

CORPORATE-LEVEL STRATEGY:
A Type of strategy that addresses what the business the organization will operate, how the strategies of those businesses will be coordinated to strengthen the organizations competitive position, and how resources will be allocated among the business.

GRAND STRATEGY:
A Master strategy that provides the basic strategic direction at the corporate level. Grand strategy can be grouped into three basic categories: Growth, Stability, and defensive strategy.

FORMULATING CORPORATE-LEVEL STRATEGY

GROWTH

CONCENTRATION FORWARD VERTICAL INTEGRATION BACKWARD INTEGRATION DIVERSIFIACTION

CONGLOMERATE DIVERSIFICATION

INTEGRATION

GRAND STRATEGIES

STABILITY HARVEST

COCENTRIC DIVERSIFICATION

TURNAROUND

DEFENSIVE

DIVESTITURE

BANKCRUPCY

LIQUIDATION

GROWTH STRATEGY: Strategy that involve organizational expansion along

some major dimension.

Concentration: It focuses on the growth of single product or service or small number of closely related products or service. Vertical Integration: Effecting growth through the production of inputs previously provided by supplier or through the replacement of customers role.
Forward Integration Backward Integration

GROWTH STRATEGY: Strategy that involve organizational expansion along

some major dimension.

STABILITY STRATEGY: A strategy that involves maintaining the status quo or growing in a methodical but slow manner.

DEFENSIVE STRATEGY: Strategy that focus on the desire or need to reduce the organizational operations usually through cost and or assets reductions.

Harvest: Minimizing investments while attempting to maximize

short-run profits and cash flow.

Divestiture: Organizations selling or divesting of a business or part

of a business.

Turnaround: Reverse the negative trend and restore the

organization to appropriate level of profitability.

Bankruptcy: Organization that is unable to pay its debts and seek

court protection from creditors and from certain contract obligations.

Liquidation: Selling or dissolving an entire organization .

Business (or Competitive) Strategy: A strategy focused on how an organization should compete in each of its SBUs (strategic business units).

Competitive Advantage: An organizations distinctive competitive edge.

Quality as a Competitive Advantage:

Differentiates the firm from its competitors. Can create a sustainable competitive advantage. Represents the companys focus on quality management to achieve continuous improvement and meet customers demand for quality.

Cost Leadership Strategy:

Seeking to attain the lowest total overall costs relative to other industry competitors.

Differentiation Strategy:
Attempting to create a unique and distinctive product or service.

Focus Strategy:
Using a cost or differentiation advantage to exploit a particular market segment rather a larger market.

New Directions in Organizational Strategies

e-business Customer service Innovation

 Create knowledge bases that employees can tap into anytime, anywhere. Turn customers into collaborative partners who help design, test, and launch new products. Become virtually paperless in specific tasks such as purchasing and filing expense reports.

Manage logistics in real time

Change the nature of work tasks throughout the organization.

Giving the customers what they want. Communicating effectively with them. Providing employees with customer service training.

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