STRATEGIC

HUMAN RESOURCES
MANAGEMENT

Saurabh
FN-102
Nikhil FN121
Vishal DM176
Srikanth

HUMAN RESOURCE MANAGEMENT FUNCTION

Training &
Developm
ent

Planning
Manpower

Hire
People

Managi
ng
Change

Appraising
Performanc
e

Managing
Attrition

BUSINESS STRATEGY

External

Mission

Program

Environmental Scanning

Strategy Formulation

Objectives

Internal

Strategies

Strategy Implementation

Budgets

Evaluation and Control

Performance

Policies

Procedures

RATEGY + HUMAN RESOURCE MANAGEMENT = STRATEGIC HRM

Linking HRM with strategic goals and objectives to

improve business performance and develop
organizational cultures fostering innovation and
flexibility
Defines the organisations intentions and plans on how
its business goals should be achieved through people
Identify Employee Competencies and Behaviors that HR
must deliver to achieve the strategy

HRS STRATEGIC ROLE

Strategy
Strategy
Formulation
Formulation Role
Role
Supplying
Supplying
competitive
competitive
intelligent
intelligent regarding
regarding
the
the external
external
environment
environment
Supplying
Supplying
information
information
regarding
regarding the
the
companys
companys internal
internal
human
human strengths
strengths
and
and weaknesses
weaknesses
Showing
Showing how
how the
the
firms
firms HR
HR activities
activities

Strategy
Strategy Execution
Execution
Role
Role
Formulating
Formulating HR
HR
Policies
Policies &
& Activities
Activities
that
that will
will lead
lead to
to
required
required Employee
Employee
Competencies
Competencies and
and
Behaviors
Behaviors to
to achieve
achieve
strategic
strategic goals
goals
Creating
Creating and
and
sustaining
sustaining
competitive
competitive
advantage
advantage
Conceptualizing
Conceptualizing and
and
executing
executing

Evolution of Strategic HRM

Early 20th
century

Staffing
function

People
treated as
commodities
No attention paid
to sensitivity

1950s

Personnel
department

Hiring,
compensation,
benefits
Talent
availability

1970s

Human
Resource
department

1990s

Strategic
HRM

Happy employee Administrative

productive
to strategic
employee
Department still
administrative

Linking HR
policies with
company goals

Why SHRM is getting attention now?

Decline in
employee
loyalty

Globalizati
on
Outsourcing
-Increased
Competition

War for
top talent

Decline in
customer
loyalty

Why SHRM
now?

Increased
pace of
technologi
cal change

SHRM in Whirlpool

1990s

Sales at a standstill
Reason being stagnation in
product line

HR Strategy

Invited ideas from all

employees
Best 25 sent to Italy
headquarters
Brainstorming sessions
to come up with new
ideas

Company
Goals
Innovation to be embedded
as a core competency
Increase in sales
Increase in customer loyalty

Results

Revenues from
innovative products up
80 times in a course of 4
years
Share price doubled in
the same period
Increase in customer
loyalty

Point of
difference

TRADITIONAL HRM

STRATEGIC HRM
Partnership with internal
and external customers

Focus

Employee relations

Role of HR

Transactional, change follower Transformational, change

and respondent
leader and initiator

Initiatives

Slow, reactive, fragmented

Fast, proactive, integrated

Time horizon

Short term

Short, medium, long

Job design

Tight division of labour,

independence, specialisation

Broad, flexible, crosstraining teams

Key
investments

Capital, products

People, knowledge

Accountability

Cost centre

Investment centre

Organizations and their

strategies
General
Electric

Be number one or number two in

every industry in which we
compete, or get out

Walmart

Low prices, every day

3M
TCS
Longo
Toyota

Foster innovation

Corporate vision To be among

global top 10 companies by 2010.

To serve a highly diversified

customer base

Organisatio
nal
Strategies

- Intense supervision of labor

- Tight cost control requiring

frequent, detailed control reports
- Low-cost distribution system
- Products designed for ease in
manufacture.
- Strong marketing abilities
- Product engineering
- Corporate reputation for quality or
technological leadership
- Amenities to attract highly skilled
labor, scientists, or creative people.

- Combination of cost-leadership
and differentiation strategy directed
at a particular strategic target

HR
Strategie
s
- Detailed work planning
- Emphasis on job-specific
training
- Emphasis on job-based pay
- Use of performance appraisal as a
control device
- Emphasis on innovation & flexibility
- Broad job classes
- External recruitment
- Team-based training
- Emphasis on individual- based pay

- Combination of HR strategies of the

other two strategies

st
Co ers
ad
le hip
r
fe
Di e n io
t
tia n
cu
Fo
s

Cost of HR vs Value added by HR

COST
10%
30%
60%

HR
HR ACTIVITY
ACTIVITY

VALUE
ADDED

Strategic
Strategic
(Planning)
(Planning)

60%

Operational
Operational
(Service
(Service delivery)
delivery)

30%

Administrative
Administrative
(Record
(Record keeping
keeping and
and
Compliance)
Compliance)

10%

TRANSCENDING FROM HRM TO SHRM

Recognize the
roadblocks and
political landmines
Know what you
stand for and what
you believe in, have
courage to follow
them
Asses & upgrade HR
talent
Change some key
leaders, make
series of hires at
early and midcareer
levels, develop
skills at existing
levels
Clarify the roles of
generalist and
specialist, Design
the structure of
your new
organization

Asses organizations
readiness for
change
To position the
change effort with
appropriate focus

Institutionalize
framework
Is it widely used,
recognized and
reinforced. Does it
provide a high level
understanding of
the role
Understand senior
HRs role and
clarify line
managers role
Facilitating
leadership sessions
and engaging top

Tasks of HR as
change agent
Look afresh, know
reality, bridge gap,
align line
leadership, identify
needed resources

Create a human and

organizational plan
What do I want to
do? What I can do?
What I am expected
to do?

Hewitt Best Employers 2009

Top five organizations

HCL Technologies
Hindustan Zinc Ltd.
Taj Hotel Resorts & Palaces
Cisco Systems
ITC-Welcomegroup

SURVEY STATISTICS

1.Employee
engagement
Able to Engage
passionte employees
algined with
organisation goals

SURVEY STATISTICS

2. Stronger Cultural
Alignment
Resulting more
productive beahviour
4.Better
Financial
Results

3. Strong
Reputation
Helps in retaining and
attracting employees.
91% will like to
recommend their firm
to their friends
compared to 77%.

Strategic HR Consultancy firms

Need for Consultancies

Rein in cost protecting bottom line
Provides tailored employee
communication
Improve performance of company
Outsourcing
Concentrate your core competencies
Concentrate and customer satisfaction
and new products and services.
Better and faster solution.

The Road Ahead

Management will continue to emphasize the need to pay

attention to the organization and human issues.

HR leaders will become increasingly strategic and

increasingly efective business leaders.

The administrative components will become

separated from HR.

New attention will be paid to employee relations and

workforce planning.

THANK YOU
Strategic thinking in HR is a choice that
organizations make. There is a wide gap between
theorization and implementation. This gap can
only be reduced with practical testing of the HR
philosophy and its core values.