THE PRACTICE OF STRATEGIC HUMAN Athena Jan I. Derayunan, Ph.D.

RESOURCE MANAGEMENT
HR STRATEGIES

HR strategies set out what the organization intends to do about its human resource
management policies and practices and how they should be integrated with the business
strategy and each other.
They are described by Dyer and Reeves (1995) as ‘internally consistent bundles of human
resource practices.
Because all organizations are different, all HR strategies are different.
There is no such thing as a standard strategy and has many variations.
The purpose of HR strategies is to articulate what an organization intends to do about its
human resource management policies and practices now and in the longer term, bearing in
mind the dictum of Fombrun et al (1984) that business and managers should perform well in
the present to succeed in the future.
There is no great strategy, only great execution (Gratton, 2000).
HR STRATEGIES

human capital management – obtaining, analysing and reporting on data, which

inform the direction of value-adding people management strategic, investment and
operational decisions;
high-performance management – developing and implementing high- performance
work systems;
corporate social responsibility – a commitment to managing the business ethically in
order to make a positive impact on society and the environment;
organization development – the planning and implementation of programs designed
to enhance the effectiveness with which an organization functions and responds to
change;
engagement – the development and implementation of policies designed to
increase the level of employees’ engagement with their work and the organization;
HR STRATEGIES CONTINUED…
knowledge management – creating, acquiring, capturing, sharing and using
knowledge to enhance learning and performance;
resourcing – attracting and retaining high-quality people;
talent management – how the organization ensures that it has the talented
people it needs to achieve success;
learning and development – providing an environment in which employees are
encouraged to learn and develop;
reward – defining what the organization wants to do in the longer term to
develop and implement reward policies, practices and processes that will
further the achievement of its business goals and meet the needs of its
stakeholders;
employee relations – defining the intentions of the organization about what
needs to be done and what needs to be changed in the ways in which the
organization manages its relationships with employees and their trade unions.
 HR STRATEGIES CONTINUED…
Five fundamental questions that need to be asked in formulating HR strategies have been
posed by Becker and Huselid (1998):

1.What are the firm’s strategic objectives?

2.How are these translated into unit objectives?
3.What do unit managers consider are the ‘performance drivers’ of those objectives?
4.How do the skills, motivation and structure of the firm’s workforce influence these
performance drivers?
5.How does the HR system influence the skills, motivation and structure of the workforce?
 HR STRATEGIES CONTINUED…
6 step approach is proposed by Gratton (2000):

1. Build the guiding coalition – involve people from all parts of the
business.
2. Image the future – create a shared vision of areas of strategic
importance.
3.Understand current capabilities and identify the gap – establish where
the organization is now and the gap between aspirations for the future
and the reality of the present.
4.Create a map of the system – ensure that the parts can be built into a
meaningful whole.
HR STRATEGIES CONTINUED…
5. Model the dynamics of the system – ensure that the dynamic
nature of the future is taken into account.
6. Bridge into action – agree the broad themes for action and the
specific issues related to those themes, develop guiding principles,
involve line managers and create cross-functional teams to identify
goals and performance indicators.
HR STRATEGIES CONTINUED…
There is no standard model of how an HR strategy should be set out. It all depends
on the circumstances of the organization.
The following are the typical areas that may be covered in a written strategy:
1. Basis:
– business needs in terms of the key elements of the business strategy;
– environmental factors and analysis (SWOT/PESTLE);
– cultural factors: possible helps or hindrances to implementation.
2. Content: details of the proposed HR strategy.
3. Rationale: the business case for the strategy against the background of business
needs and environmental/cultural factors.
HR STRATEGIES CONTINUED…
4. Implementation plan:
– action program;
– responsibility for each stage;
– resources required;
– proposed arrangements for communication, consultation, involvement and training;
– project management arrangements.
HR STRATEGIES CONTINUED…
5. Costs and benefits analysis: an assessment of the resource implications of the plan
(costs, people and facilities) and the benefits that will accrue, for the organization as
a whole, for line managers and for individual employees (so far as possible these
benefits should be quantified in terms of return on investment or value added).
HR STRATEGIES CONTINUED…
Because strategies tend to be expressed as abstractions, they must be translated into
programs with clearly stated objectives and deliverables.
Getting strategies into action is not easy.
The problem with strategic HRM as noted by Gratton et al (1999) is that too often
there is a gap between what the strategy states will be achieved and what actually
happens to it
HR STRATEGIES CONTINUED…
Factors identified by Gratton et al that contribute to creating this gap included:
the tendency of employees in diverse organizations only to accept initiatives they
perceive to be relevant to their own areas;
the tendency of long-serving employees to cling to the status quo;
complex or ambiguous initiatives may not be understood by employees or will be
perceived differently by them, especially in large, diverse organizations;
it is more difficult to gain acceptance of non-routine initiatives;
HR STRATEGIES CONTINUED…
employees will be hostile to initiatives if the initiatives are believed to
be in conflict with the organization’s identity, eg. downsizing in a culture
of job-for-life;
the initiative is seen as a threat;
inconsistencies between corporate strategies and values;
the extent to which senior management is trusted;
the perceived fairness of the initiative;
the extent to which existing processes could help to embed the initiative;
a bureaucratic culture that leads to inertia.
HR STRATEGIES CONTINUED…
Other major barriers include failure to understand the strategic needs of the
business, inadequate assessment of the environmental and cultural factors
that affect the content of the strategies, and the development of ill-
conceived and irrelevant initiatives, possibly because they are current fads or
because there has been an ill-digested analysis of best practice that does not
fit the organization’s requirements.
These problems are compounded when insufficient attention is paid to prac- tical
implementation problems
HR STRATEGIES CONTINUED…
To overcome these barriers it is necessary to:
1. conduct a rigorous preliminary analysis of needs and requirements;
2. formulate the strategy;
3. enlist support for the strategy;
4. assess barriers;
5. prepare action plans;
6. project- manage implementation;
7. follow up and evaluate progress so that remedial action can be taken as
necessary.
STRATEGIC ROLE OF HR
Work of HR practitioners can be divided into two main areas:
1. Transactional activities consist of the service delivery aspects of HR – recruitment,
training, dealing with people issues, legal compliance and employee services
2. HR strategic activities support the achievement of the organization’s goals and
values and involve the development and implementation of forward-looking HR
strategies that are integrated with one another and aligned to business objectives.
- HR strategic activities also involve HR practitioners working with their line
management colleagues in the continuous development and implementation of the
business strategy.
STRATEGIC ROLE OF HR
Strategic Partner Model:
HR practitioners share responsibility with their line management colleagues for the
success of the enterprise.
The David Ulrich model
David Ulrich (1998) argued that HR professionals carry out the following proactive
roles as champions of competitiveness in creating and delivering value:
1.strategic partners helping the business to successfully implement strategy;
2.administrative experts improving organizational efficiency by re-engineering the HR
function and other work processes;
STRATEGIC ROLE OF HR
3. employee champions maximizing employee commitment and competence and
their overall responsiveness to change;
4. change agents delivering organizational transformation and culture change.

This model was reformulated by Ulrich and Brockbank in 2005 to list the
following roles:
Strategic partner – consists of multiple dimensions: business expert, change agent,
strategic HR planner, knowledge manager and consultant; combining them to
align HR systems to help accomplish the organization’s vision and mission, helping
managers to get things done, and disseminating learning across the organization.
STRATEGIC ROLE OF HR

Employee advocate – focuses on the needs of today’s

employees through listening, understanding and empathizing.
Human capital developer – in the role of managing and
developing human capital (individuals and teams), focuses on
preparing employees to be successful in the future.
Leader – leading the HR function, collaborating with other functions and providing
leadership to them, setting and enhancing the standards for strategic thinking and
ensuring corporate governance.
STRATEGIC ROLE OF HR
Functional expert – concerned with the HR practices that are central
to HR value, acting with insight on the basis of the body of
knowledge possessed. Some are delivered through administrative
efficiency (such as technology or process design), and others
through policies, menus and interventions. Necessary to distinguish
between the foundation HR practices – recruitment, learning and
development, rewards, etc – and the emerging HR practices such
as communications, work process and organization design, and
executive leadership development.
STRATEGIC ROLE OF HR
STRATEGIC ROLE OF HR DIRECTORS
1) developing and implementing HR strategies that are integrated with the business
strategy and are coherent and mutually supportive;
2) ensuring that a strategic approach is adopted by the HR function that supports
the business and adds value.
To carry out this role the HR director should:
understand the strategic goals of the organization;
appreciate the business imperatives and performance drivers relative to these goals;
STRATEGIC ROLE OF HR
comprehend how sustainable competitive advantage can be obtained through the
human capital of the organization and know how HR practices can contribute to the
achievement of strategic goals;
contribute to the development of the business strategy on an ‘outside-in’ basis as
described- emphasizing how the organization’s distinctive human resources can make
an impact;
contribute to the development for the business of a clear vision and a set of
integrated values;
ensure that senior management understands the HR implications of its business
strategy;
STRATEGIC ROLE OF HR
be aware of the broader context (the competitive environment and the business, economic,
social and legal factors that affect it) in which the organization operates;
understand the kinds of employee behavior required successfully to execute the business
strategy;

think in terms of the bigger and longer-term picture of where HR should go and how to get
there;

believe in and practice evidence-based management;

be capable of making a powerful business case for any proposals on the development of HR
strategies.
STRATEGIC ROLE OF HR
STRATEGIC ROLE OF HEADS OF HR FUNCTIONS

The strategic role of heads of HR functions is fundamentally the same for their
function as that of HR directors for the whole organization.
They promote the achievement of the organization’s business goals by developing
and implementing functional strategies that are aligned with the business strategy
and integrated with the strategies for other HR functions and adopt a strategic
approach in the sense of ensuring that HR activities support the business and add
value.
IMPACT OF STRATEGIC HRM

HR IMPACTS ON
ORGANIZATIONAL
PERFORMANCE
HR IMPACTS ON
ORGANIZATIONAL
PERFORMANCE
HR IMPACTS ON
ORGANIZATIONAL
PERFORMANCE
IMPACT OF STRATEGIC HRM
IMPACT OF STRATEGIC HRM
STRATEGIC HRM ACTIONS
Formulating HR strategy
- Taking into account Tyson and Witcher’s (1994) point that you can only study HR
strategy in the context of business strategies, the processes of formulating both
business and HR strategies in a number of organizations.

(For formulating HR strategy, read Armstrong, M. [2008] pages 86-96 for different
examples)
STRATEGIC HRM ACTIONS
In all the organizations referred in pages 86-96:
there is a well-defined corporate or business strategy, although the extent to which it
is formalized varies;
HR strategy is seen as part of the business strategy;
HR strategy or policy issues appeared to be of interest to all members of the board
and, contrary to popular opinion, that includes the finance director.
STRATEGIC HRM ACTIONS
The content of HR strategies
- In the research conducted by Armstrong and Long (1994) it was assumed that the
basis of any approach an organization used to develop and implement HR strategies
would be the philosophy of influential members of the top team on managing people.
- Questions can be asked about the traditional or underlying philosophy, the extent to
which it is still relevant, and the directions in which it might usefully change.
STRATEGIC HRM ACTIONS
Corporate Issues
1. Vision and mission - strategic HRM is concerned with the people implications of top
management’s vision of the future of the organization and the mission it is there to
fulfil.
- HR strategies, like those of all the other functions, are there to support the realization
of the vision and mission of the organization and the achievement of its goals.
2. Organization - HR strategy may address such issues as structure, teamworking,
performance or quality and customer care.
STRATEGIC HRM ACTIONS
To summarize, the most characteristic features of strategic HRM in action in the case
study organizations mentioned above were that:
a clear and purposeful corporate or business strategy exists;
the HR strategies in most cases are fully integrated and owned by the
whole of the top management team;
the HR strategies are very much concerned with developing the organization and the
people in it.
END OF PRESENTATION