Rajendra singh Ifim b-school

strategic role of HRM

Abstract

Strategic Roles of Human Resources Management is to planned human resources development and activities intended to enable an organization to achieve its goal. The strategic roles of human resource management to formulate company strategic and implement those activities through HR activities. HR metrics is about measuring and managing the linkages between the initiatives and key challenges that are strategic to the business. In this report we will see how strategic roles of human resource management effect entire strategical decisions of an organization. By a strategic approach to HRM, we are referring to a managerial process requiring human Resource (HR) policies and practices to be linked with the strategic objectives of the Organization. Here we will discuss different models of human resources strategic roles played by human resource mangers to achieve organization goals efficiently and effectively. We will see the relationship between different cluster of HR practices and organizational performance. HRM helps in acquiring, developing, stimulating & retaining the outstanding employees as it gives both effectiveness & efficiency to the working of the organization, it has been started being used strategically.

Introduction
The human resource management that aims to improve the productive contribution of individuals while simultaneously attempting to attain other societal and individual employee objectives has undergone drastic change with the passing of years. We all know that HRM is concerned with the "people" & keeping the fact in mind that HRM helps in acquiring, developing, stimulating & retaining the outstanding employees as it gives both effectiveness & efficiency to the working of the organization, it has been started being used strategically & is now termed as Strategic human resource management. Defining SHRM: o Organizational use of employees to gain or keep a competitive advantage against competitors. o Involves aligning initiatives involving how people are managed with organizational mission and objectives. In today's flattened, downsized & high-performing organizations, highly trained & committed employees not machines are often the firm's competitive key. Perhaps the most drastic change in HR's role today is its growing involvement in developing & implementing the company's strategy. In order to understand the modern aspect of HR i.e. SHRM, lets discuss the terms which would help us in understanding the concept: o Core Competency can be defined as - A unique capability in the organization that creates high value and that differentiates the organization from its competition. o Mission Statement explains purpose and reason for existence; it is usually very broad, but not more than a couple of sentences & it serves as foundation for everything organization does. o Strategy: the company's plan of how it will balance its internal strengths & weaknesses with external opportunities & threats in order to maintain a competitive advantage, earlier this role was performed by the line managers, but now it is carried by the HR manager. Strategies increasingly depend on strengthening organizational competitiveness & on building committed work teams, & these put HR in a central role. In the fast changing, globally competitive & quality oriented industrial environment, it's often the firm's employees its human resources who provide the competitive key. And so now it is a demand of the time to involve HR in the earlier stages of development & implementing

the firm's strategic plan, rather than to let HR react to it. That means now the role of HR is not just to implement the things out but also to plan out in such a manner that the employees can be strategically used to get edge over the competitors, keeping in mind the fact that this is the only resource (HUMANS), which cannot be duplicated by the competitors. The changing role of HRM: The role of human resource management is changing & is changing very fast, to help companies achieve their goals. HRM has gone through many phases from hiring & firing to relationship building, from there to legislation role, & now its role is shifting from protector & screener to strategic partner & as a change agent. Model of strategic management In the descriptive and prescriptive management texts, strategic management appears as a cycle in which several activities follow and feed upon one another. The strategic management process is typically broken down into five steps: 1. Mission and goals 2. Environmental analysis 3. Strategic formulation 4. Strategy implementation 5. Strategy evaluation. The first step in the strategic management model begins with senior managers evaluating their position in relation to the organizations current mission and goals. The mission describes the organizations values and aspirations; it is the organizations raison dtre and indicates the direction in which senior management is going. Goals are the desired ends sought through the actual operating procedures of the organization and typically describe short-term measurable outcomes (Daft, 2001). Environmental analysis looks at the internal organizational strengths and weaknesses and the external environment for opportunities and threats. The factors that are most important to the organizations future are referred to as strategic factors and can be summarized by the acronym SWOT Strengths, Weaknesses, Opportunities and Threats.

Objective
The Strategic Management Process includes: 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 Strategy is a multi-dimensional concept going well beyond traditional competitive strategy concepts. Strategies are broad statements that set a direction. Strategies are a specific, measurable, obtainable set of plans carefully developed with involvement by an institution's stakeholders. These action statements are linked to an individual or individuals who are accountable and empowered to achieve the stated result in a specific desired timeframe. They are patterns of action, decisions, and policies that guide a group toward a vision or goals. The Stage in the Process of Strategic Management: Mission statement- Business definition and future plan for success. Environmental analysis- OT analysis and preparing to meet environmental pressures. Organizational self-assessment- SW analysis and chalking road map for attaining goals. Establishing goals and objectives- Laying concrete figures that will help in benchmarking the performance. These benchmarks will lead to the development of strategy that will decide how the company intends to meets its environmental challenges with given environmental and resource constraints in the time to come.

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 * Successful SHRM efforts begin with identification of strategic needs * Employee participation is critical to linking strategy and HR practices * Strategic HR depends on systematic and analytical mindset * Corporate HR departments can have impact on organization's efforts to launch strategic initiatives. Factor Linkages of HR Plans and Strategies:

Given diagram presents various factors that have an impact on HR plans and Strategy and how are they interlinked with each other. Their interactions and impact on each element and the resulting change in HR Plan and policy is also indicated clearly. There are so many benefits from Strategic roles of human resource management to the organization it can help the organization to achieve their goals more effectively and more efficiently. Example:HR Managers in the IT industry must stop thinking of transactional issues like vacations, handling routine queries on relocation, compliance, time sheets, spending quality time on ones compensation, discussions based on billing, and bench issues. Instead they need to start thinking of efficient assessment systems to create employee value resulting in profitability and enhancing shareholder value.

At L&T InfoTech we are engaged with Fortune Hundred clients wherein our HR gets involved in an evaluation process at regular intervals with the client to meet mutual expectations. To discuss a few of those: 1) Staffing 2) Lessons Learnt 3) Learning and development efforts to acclimate and keep in tune with technology and domain knowledge.

4) How has the competition fared at the client location? 5) Any new HR initiative undertaken by L&T InfoTech. 6) How does L&T InfoTech integrate onsite hires with their offshore associates? 7) Areas of improvement. 8) Time Lines for implementing the feedback given at the time of review. In effect the above is a clear-cut example of how we manage our intangible assets, along with managing client expectations. Therefore HR functions require a totally different set of skills than managing people in a traditional factory environment.

Research Methodology
Recently, Maxxim Consulting interviewed 20 CEOs of FTSE350 companies in the UK and found that only four knew exactly how many people worked in their respective head offices. Also, just four CEOs knew how much their head offices cost to run each year. According to Claire Arnold, a Partner at Maxxim Consulting: "Our study shows that at most UK corporate headquarters, unnecessary layers of complexity and bureaucracy often accumulate over time. This is an area that many of the FTSE350 are set to review in 2008 with a view to finding cost-savings. The fact that so few of the Chief Execs we interviewed for our study were sure exactly how many people worked at head office is a clear indication that there's some serious housekeeping to be done." Granted this was an extremely small study and must be regarded as illustrative rather than definitive. But, nevertheless, what part should HR managers play in such 'housekeeping' exercises? It seems that finally senior managers - some of them, at least - are willing to give HR managers a significant role in strategic decisions. But how many human resource managers know how to fulfill that role? Paul Kearns (2003: 4) tells the tale of a workshop exercise for senior human resource managers when participants were given a

military scenario. Briefly, they were asked to envisage that they, and a thousand soldiers under their command, had been dropped behind enemy lines - with no information about their opposition. What would they do? The first response he received was 'I'd retreat'. Kearns comments: 'Why does this response from an HR person not surprise me?' It doesn't surprise me either because so many HR managers are used to operating someone else's strategy, rather than participating vigorously in their organizations' strategic decisions. Noting that 'business partner' and 'strategic thinker' have featured as the most important roles in some recent surveys of human resource management, Jamroq and Overhot (2004) observe that 'there's something elusive and ambiguous about this widely touted goal of becoming a strategic business partner'. They cite a recent conference on the future of HR where a panel of human resource experts came out with the statement that 'I can't define it, but I know it when I see it' when asked to define the term 'strategic business partner.' Measuring the effectiveness of HRM Is measurement at the root of the problem? Are HR managers measuring the wrong things? One common approach is to use a 'Balanced Scorecard' which includes a range of HR measures as well as the more traditional financial and other metrics. Gubman (2004) feels that 'Too many HR scorecards focused on operational metrics: Time to hire, cost per hire, percentage of appraisals completed, etc. While important to track, these kinds of measures will not get HR to the strategic partner role. They only reinforce the view of HR as an administrative function. Key HR measures needed to be central to business success.' More beneficially, according to Gubman, HR managers should focus instead on the same two major issues as their financial colleagues: return and growth. 'HR-things' can only create economic value from three sources:

Employee turnover and retention Productivity - revenue against employee costs Expenditure on the HR function and related activities

Providing measures for these three elements does not require any 'rocket science' because they relate to three familiar HR goals: 1. Attracting, developing and retaining staff 2. Aligning, engaging, measuring and rewarding performance 3. Controlling or reducing HR costs HR-relevant measures for growth are trickier and need to be tailored to the organizations' individual situation. Grubman believes that HR measures can be devised that, like market share, can indicate trends and forecasts for improved revenue in the

future. He argues that the following are the most significant growth-related human resource measures at present:

Leadership development, to be measured in terms of unique candidates ready to assume executive and other major roles. Engagement - levels of employees' intellectual and emotional commitment to their work. Diversity, particularly the number of women and ethnic minority employees coming through the system or 'talent pipeline'.

Tamkin et al (2008) used a set of criteria described as the '4A model' (Access, Ability, Attitudes, Application) in their study of almost 3000 British organizations and found that the use of 'bundles' of HR practices produced improved performance and profitability. They suggest a number of issues that HR managers should focus on: Behaving proactively Weiss (2000) argues that HR managers must demonstrate the ability to provide stimulating ideas and challenge decisions that do not have business value. To do this, they need to perform at the same intellectual level as their colleagues in an executive meeting. Most importantly, they need to wear a 'business hat' rather than a 'HR hat' otherwise they will be relegated to the traditional administrative or tactical (second-level) role that has bedevilled the human resource function for decades. Weiss considers that HR managers need to demonstrate the following to show their ability to add value:

Broad understanding of the business, thus helping the human resource function to contribute to the overall direction of the company. Knowledge of how all activities need to align, enabling the company to maximize the success of its strategic initiatives. Professionalism in investing in human capital and HR processes, allowing HR to help guide employees and the organization's decision making. A unique perspective, allowing the HR function to become an 'ideas merchant' so that people and the outcomes of organizational processes can be made into strategic advantages.

Suggestion
"HR needs to keep moving itself forward, toward the strategic partner role, by becoming better profit-and-loss business leaders. Be the ones to lead companies back into thinking externally, about customers and markets, and how to create unique value for them. What a surprising and powerful role that would be for HR leaders! Start measuring HR impacts on real business results, not HR activities. Instead of measuring time to hire, measure the people aspects of opening up a new market and the returns they generate."

Conclusion
Ideally HR & top management work together to formulate the company's overall business strategy; that strategy then provides the framework within which HR activities such as recruiting & appraising must be crafted. If it is done successfully, it should result out in the employee competencies & behavior that in turn should help the business implement its strategies & realize its goals. According to an expert "the human resources management system must be tailored to the demands of business strategy". In order to be successful the employees should be developed in such a manner that they can be the competitive advantage, & for this the human resource management must be an equal partner in both the formulation & the implementation of the corporate & competitive strategies.

Reference:1) Supreet Ahluwalia Senior Lecturer Department of Business Manipal University Dubai Campus 2) Prof. Dileep Kumar M. Ex-Professor Symbiosis (SCMHRD, SCDL), IIIT, SCMLD, SBS 3) Strategic Human resource management John Bratton. 4) Strategic Human Resource management Jeffrey A. Mello. 5) Gubman, E. (2004) 'HR Strategy and Planning: From Birth to Business Results', HR. Human Resource Planning, Vol. 27, Iss.1, pp 13-24. 6) SiliconIndia Magazine. 7) Kearns, P. (2003) HR Strategy: Business Focused Individually Centred, Butterworth-Heinemann. 8) Towers, David. "Human Resource Management essays". 9) Armstrong, Michael (2006). A Handbook of Human Resource Management Practice (10th ed.). London. 10) B.K.,HRM Strategic for competitive Advantage