Module I

Definition
• “(S)trategic HRM is about how the
employment relationships for all employees
can be managed in such a way as to
contribute optimally to the organization’s goal
achievement.”
 Strategic Human Resource
Management
 Involves the development of a consistent, aligned
collection of practices, programs, and policies to
facilitate the achievement of the organization’s
strategic objectives.
 Requires abandoning the mind set and practices
of “personnel management” and focusing on
strategic issues than operational issues.
 Integration of all HR programs within a larger
framework, facilitating the organization’s mission
and its objectives.
• Strategic Human Resource Management
– Involves aligning initiatives involving how people
are managed with organizational mission &
objectives
• Strategic Management Process
– Determining what needs to be done to achieve
corporate objectives over 3 - 5 years
– Examining organization & competitive
environment
– Establishing optimal fit between organization & its
environment
– Reviewing & revising strategic plan
Competitive advantage through people?
Competitive advantage allows a firm to gain an
edge over its rivals when competing. It comes
from a firm’s unique ability to perform activities
more distinctively and more effectively than
rivals. HR can be a source of competitive
advantage when the talents of people working in
the firm are valuable, rare; difficult to imitate and
well organized to deliver efficient and effective
results.
• Realizing the growing importance of HR, a new
line of thinking emerged elevating the status of
HR to that of a strategic partner both in the
formulation of a firm’s strategic as well as in the
implementation of business activities. SHRM,
simply stated, is the linkage of HRM with strategic
goals and objectives with a view to improve
business performance and develop organizational
cultures that foster innovation and flexibility.
Strategic HR differs radically from traditional HR
in a number of ways:
Barriers to Strategic HR
Five Critical Business Challenges

Globalization

Profitability through Growth

Technology

Intellectual Capital

Change, Change, and More Change

 HR as Strategy Execution Partner
• HR is responsible for defining an organizational
structure as the model for the company’s way
of doing business.
• HR must be accountable for conducting an
organizational audit.
• HR is to identify methods to renovate part of
the organizational architecture.
• HR must take stock of its own work and set
clear priorities.
 HR PRACTICES LINKED WITH COMPETITIVE STRATEGY

 Recruitment
 Training
 Career Path
 Promotions
 Socialization
 Openness