STRATEGIC HUMAN RESOURCE MANAGEMENT 2

2 OBJECTIVES Understand the Scope of SHRM Factors Influencing SHRM Linking of Corporate Strategies to HR Functions Understand the New Role of HR

2 STRATEGIC HUMAN RESOURCE MANAGEMENT Strategic management is drafting, implementing and evaluating cross-functional decisions that will enable an organization to achieve its long-term objectives. (David, 1989)

2 Two Views of Strategy (i)Strategies are plans made by top managers and their corporate strategy advisors (ii)Strategy is a matter of policy and it precedes action (iii) Strategy and implementation are separate Mainstream view- Strategy as a plan

2 STRATEGIC HUMAN RESOURCE MANAGEMENT Two Views of Strategy (i) Strategies are more usefully seen as the outcome of both planned and unplanned activities (ii) Policies often emerge out of actions that have already been taken (iii) Strategy and implementation tend to happen simultaneously Processual view- Strategy as a pattern

Table 2.1 Defining Human Resources and Strategic Human Resource Management Human ResourcesStrategic Human Resource Management The efforts, skills or capabilities that people contribute to an employing organization to enable it to continue its existence. The general direction followed by an organization in how it secures, develops and from time to time dispenses with human resources to help it continue in the long-term.2 STRATEGIC HUMAN RESOURCE MANAGEMENT

Exhibit 2.1 The Scope of SHRM Scope Ranges of SHRM From such matters as: The overall organizational structure Merger & acquisition Recruitment policies To: Employees’ punching cards The smoking/non-smoking policy Casuals on Saturdays2 STRATEGIC HUMAN RESOURCE MANAGEMENT

Figure 2.1 HR Strategy: Strategic Fit2 STRATEGIC HUMAN RESOURCE MANAGEMENT

Table 2.2 Two Key and Alternative Human Resourcing Principles2 STRATEGIC HUMAN RESOURCE MANAGEMENT Direct control/low commitmentIndirect control/high commitment Employees given little discretion, closely supervised Employees ‘empowered’ encouraged to use discretion and monitored Limited ‘psychological’ commitment sought from employees High ‘psychological’ commitment sought from employees

2 STRATEGIC HUMAN RESOURCE MANAGEMENT Key factors influence the HR system External environment Changing workforce Organization culture Organization structure Technology

2 STRATEGIC HUMAN RESOURCE MANAGEMENT STRATEGIC HRM MODELS (i)Life Cycle Model (ii) Competitive Advantage Model

2 STRATEGIC HUMAN RESOURCE MANAGEMENT Life Cycle Model Introductory stage Growth stage Maturity stage Decline stage

2 STRATEGIC HUMAN RESOURCE MANAGEMENT Competitive Advantage Model (Porter,1985) (i)Cost leadership, (ii) Differentiation, and (iii) Focus. Three Major Parameters:

Table 2.3 Best Practice Approaches to SHRM Arthur(1992)Broadly Defi ne Jobs, Employee Participation, Formal Dispute Resolution, Information Sharing, Highly Skilled Workers, Self-Managed Teams, Extensive Skills Training, High Wages, Salaried Workers, Stock Ownership1 Pfeffer(1995)Employment Security, Selectivity in Recruiting, High Wages, Incentive Pay, Employee Ownership, Information Sharing Participation and Empowerment, Self Managed Teams Training and Skill Development, Cross- Utilization and Cross Training, Symbolic Egalitarianism, Wage Compression, Promotion from Within2 Huselid(1995)Personnel Selection, Performance Appraisal, Incentive Procedures, Information Sharing, Attitude Assessment, Labor/Management Participation, Recruiting Intensity, Training Hours, Promotion Criteria (Seniority Vs. Merit)3 Mac Duffie (1995)Work Leaves, Problem Solving Groups, Employee Suggestions, Job Orientation, Decentralization, Recruitment and Hiring, Contingent Compensation, Status Differentiation, Training of New Employees, Training of Experienced Employees4 Pfeffer & Veiga (1999) Employment Security, Selective Hiring, Self-Managed Teams and Decentralization. Comparatively High Compensation, Contingent on Organizational Performance, Extensive Training, Reduction of Status Differences, Sharing Information52 STRATEGIC HUMAN RESOURCE MANAGEMENT

2 SHRM AND FUNCTIONS OF HRM Human Resource Planning Recruitment Selection Performance Appraisal and Management Training & Development Compensation

2 STRATEGIC HUMAN RESOURCE MANAGEMENT Role of Strategic HRM Strategic Partner Administrative Expert Employee Champion Company Champion Change Agent

2 STRATEGIC HUMAN RESOURCE MANAGEMENT The Top Ten Trends: 1. Rise in health care costs 2. Focus on domestic safety and security 3. Use of technology to communicate with employees 4. Growing complexity of legal compliance 5. Use of technology to perform transactional HR functions 6. Focus on global security 7. Preparing for the next wave of retirement/labour shortage 8. Use and development of e-learning 9. Exporting US manufacturing jobs to developing countries 10. Changing definition of family