HRM and Strategy: Strategic Planning- the evolving / Strategic role of Human Resource Management.
Barriers to Strategic HR. Strategic reorganization of HR function
• Strategic Human Resource Management
– Involves aligning initiatives involving how people are managed with organizational
mission and objectives
• Strategic Management Process
– Determining what needs to be done to achieve corporate objectives, often over 3 - 5
years
– Examining organization and competitive environment
– Establishing optimal fit between organization and its environment
– Reviewing and revising strategic plan
Models of Strategy
• Industrial Organization (I/O) Model
– External environment is primary determinant of organizational strategy rather than
internal decisions of managers
– Environment presents threats and opportunities
– All competing organizations control or have equal access to resources
– Resources are highly mobile between firms
– Organizational success is achieved by:
• Offering goods and services at lower costs than competitors
• Differentiating products to bring premium prices
• Resource-Based View (RBV)
– An organization’s resources and capabilities, not external environmental conditions,
should be basis for strategic decisions
– Competitive advantage is gained through acquisition and value of organizational
resources
– Organizations can identify, locate and acquire key valuable resources
– Resources are not highly mobile across organizations, and once acquired are retained
– Valuable resources are costly to imitate and non-substitutable
Contrasting the Two Approaches
• Research provides support for both positions
• What drives strategy?
– I/O: External considerations
– RBV: Internal considerations
• I/O: Strategy drives resource acquisition
• RBV: Strategy determined by resources
The Process of Strategic Management
• Mission statement
• Environmental analysis
• Organizational self-assessment
• Establishing goals and objectives
Benefits of a Strategic Approach to HR
• Facilitates development of high-quality workforce through focus on types of people and skills
needed
• Facilitates cost-effective utilization of labor, particularly in service industries where labor is
generally greatest cost
• Facilitates planning and assessment of environmental uncertainty, and adaptation of
organization to external forces
The Five P’s Model of SHRM
• Philosophy
– Statements of how organization values and treats employees; essentially culture of the
organization
• Policies
– Expressions of shared values and guidelines for action on employee-related business
issues
• Programs
– Coordinated and strategized approaches to initiate, disseminate, and sustain strategic
organizational change efforts necessitated by strategic business needs
• Practices
– HR practices motivate behaviors that allow individuals to assume roles consistent with
organization’s strategic objectives
– Three categories of roles:
• Leadership
• Managerial
• Operational
• Processes
– Continuum of participation by all employees in specific activities to facilitate formulation
and implementation of other activities
Strategic Human Resource Management
• Involves development of consistent, aligned collection of practices, programs, and policies to
facilitate achievement of strategic objectives
• Requires abandoning mindset and practices of “personnel management,” and focusing on
strategic issues, rather than solely on operational issues
• Integration of all HR programs within larger framework, facilitating mission and objectives
• Writing down strategy facilitates involvement and buy-in of senior executives and other
employees
Possible Roles Assumed by HR Function
HR Roles in Knowledge-Based Economy
• Human capital steward
– Creates an environment and culture in which employees voluntarily contribute skills,
ideas, and energy
– Human capital is not “owned” by organization
• Knowledge facilitator
– Procures necessary employee knowledge and skill sets that allow information to be
acquired, developed, and disseminated
– Provides a competitive advantage
– Must be part of strategically designed employee development plan
• Relationship builder
– Develops structure, work practices, and culture that allow individuals to work together
– Develops networks that focus on strategic objectives
• Rapid deployment specialist
– Creates fluid and adaptable structure and systems
– Global, knowledge-based economy mandates flexibility and culture that embraces
change
SHRM Critical Competencies
• HR’s success as true strategic business partner dependent on five specific competencies:
– Strategic contribution - development of strategy
– Business knowledge - understanding nuts and bolts of organization
– Personal credibility - measurable value demonstrated in programs and policies
– HR delivery - serving internal customers through effective and efficient programs
– HR technology - using technology to improve organization’s management of people
Lepak & Snell’s Employment Models
Traditional HR V/S Strategic HR
Barriers to Strategic HR partner
• Short-term mentality/focus on current performance
• Inability of HR to think strategically
• Lack of appreciation for what HR can contribute
• Failure to understand line managers’ role as an HR manager
• Difficulty in quantifying many HR outcomes
• Perception of human assets as higher-risk investments
• “Incentives” for changes that might arise
Outcomes of Strategic HR
Model of Strategic HR Management
Strategic HR as Organizational Learning
• Stages of knowledge management
– Generating or capturing knowledge
– Structuring and providing value to gathered knowledge
– Transferring knowledge
– Establishing mechanisms for use and reuse of knowledge for individuals and groups
Knowledge Management Cycle
