Session Two Changing Environment and Strategic HRM. Jayendra Rimal

Visioning Exercise In your opinion, How can Nepal build a resilient future to prepare for disasters like the April 2015 earthquake? (Resilience defined as “the ability of a system, community or society exposed to hazards to resist, absorb, accommodate to and recover from the effects of a hazard in a timely and efficient manner”. United Nations International Strategy for Disaster Reduction) Guidelines (or you can make your own):   Envision a future Determine strategies and activities. These could be based on social, human, physical, financial, and natural systems   What resources will be required?   What challenges may be encountered? How will these be overcome?   What will the desired outcomes? (maximum one page)

The Strategic Management Process,….. Strategic management is the process of identifying and executing the organisation’s strategic plan, by matching the company’s capabilities with the demands of its environment. Strategic plan asks “ Where are we now as a business, where do we want to be and how should we get there“ ? The process:   Define the current business: Establishing vision and mission   Perform external and internal audits: Conduct SWOT (strength, weakness, opportunity and threats) analysis   Formulate new business and mission statement: Based on situation analysis, what should the new business be, in terms of what products it will sell, where it will sell and how its products/services will differ from competitors 12 June, 2016Jayendra Rimal3

The Strategic Management Process Translate the mission into strategic goals: Operationalising into aims and objectives Formulate strategies to achieve strategic goals: It shows how the organisation will move from the business it is in now to the business it wants to be in Implement the strategies: Translating the strategies into action and results through systems, procedures and processes Evaluate performance: Assessing progress towards strategic goals and taking corrective action, if needed 12 June, 2016Jayendra Rimal4

Strategic Human Resource Framework Strategic HRM is formulating and executing HR policies and practices that produce employee competencies and behaviors the company needs to achieve its strategic aims through: Business Strategy: What is our strategy? How do we succeed based on customer needs, competition, government regulations, environmental conditions etc.? Organizational Capabilities: In order to implement the business strategy, what are the critical organizational capabilities we need to develop? E.g. Speed in reacting to change, competitive mind set, innovation, quality etc. Human Resource Practices: How should HR practices be designed and delivered to build these organizational capabilities? How do we motivate and build our leadership capabilities? How do we empower people so that they can contribute while building these capabilities? 12 June, 20165Jayendra Rimal

Strategic HR Practices That Effective Firms Adopt,…. Financial incentives for excellent performance Organizational practices that recognize employee efforts Rigorous recruitment and selection activities Higher than average wages Employees share ownership plans (ESOP) Extensive information sharing Decentralization of decision making and empowerment Self managing teams Investment in training and development 12 June, 20166Jayendra Rimal

Strategic HR Practices That Effective Firms Adopt Undertake job rotation Elimination of status symbol More compressed distribution of salary scales Promotions from within A long term perspective that is well understood Measurement of HR practices and policy implementations A coherent view of employment relations (Source: Competitive Advantage Through People: Unleashing the Power of the Workforce; Prof. Jeffrey Pfeffer) 12 June, 2016Jayendra Rimal7

2-8 International HR Management Strategies,…. Four general International HRM strategies: Ethnocentric—foreign subsidiaries have little autonomy, operations are typically centralized, and major decisions are made at the corporate headquarters key positions in management are held by parent company nationals (PCNs) Polycentric—foreign subsidiaries are treated as a distinct entity with some level of decision-making authority initially PCNs fill strategic upper-level management positions. host country nationals (HCNs) fill middle and lower-level management positions, eventually training and moving upward to take over for PCNs 12 June, 2016Jayendra Rimal

2-9 International HR Management Strategies Geocentric—relationships between headquarters and foreign subsidiaries tend to be extremely collaborative, with each participant contributing important information, perspective, and decision-making factors best person is found to fill the position, regardless of what country they come from. Regiocentric— that is vested with considerable power to manage its operations and operates very collaboratively and independently with the subsidiaries with the region scaled-down version of the geocentric model with strong regional headquarters 12 June, 2016Jayendra Rimal

12 June, Jayendra Rimal Thank You