SHRD-UNIT IV

4.1. HRD STRATEGIES FOR COMPETITIVE ADVANTAGE:

1. Implementing a Culture of Recognition
Employees begin to care when they feel the company cares for them. Get to know your team
members as individuals. Give them an opportunity to share what they are passionate about
outside of work. Learn about their hobbies and interests, and use this information when
setting up your rewards and recognition program. We are quicker to identify and address
issues than recognize excellence. The right recognition program is a secret weapon for
boosting your team’s loyalty and engagement.
Devote extra energy to creating systematic ways to praise members of your teams for good
performance. When employees feel emotionally connected to their team and the goals of the
organization, they are more likely to go the extra mile.
2. Hiring for the 360-Degree Fit
If any are misaligned, the employee’s long-term outlook with the company becomes hazy at
best. It is unrealistic to expect continued performance from someone whose interests and
personality traits are mismatched with the job specifications, even though technical
competence may appear on point.
The negative impact of employee turnover and the positive value of employee
retention cannot be understated. Employee replacement costs can climb as high as 50 to 60
percent of the employee’s annual salary.
Employees who fit their jobs well and enjoy the environment in which they work are more
likely to stay. We tend to receive more satisfaction from jobs that match not only our skills
but also interests and personality traits. The process by which we match candidates is the
most critical (and controllable) part in developing a well-functioning team. Although the right
skillset may seem like the most critical factor in determining a good fit, it is not the case.
Skills can be acquired, but personalities cannot.
3. Employee Engagement: Know Where You Stand
An engaged culture tends to bring greater productivity, higher customer satisfaction levels,
less absenteeism, less employee turnover, more unsolicited employment applications, and a
greater share price increase.
There is a distinct correlation between a culture of engagement and a company’s
performance. According to a recent Gallup poll of almost 50,000 workplaces, those with the
highest levels of employee engagement outperformed others in a number of critical areas.
Knowing the correlation between engagement and performance, businesses should act
promptly if they want to boost their output and gain a competitive edge. You can’t design and
implement an employee engagement strategy, though, without knowing where you stand first.
When faced with subpar results, take the time to survey your employees before selecting a
new option to increase engagement.
An Investment that Always Pays Off
No matter how good your product is, or how solid your business strategy appears to be, you
need a great team to design the product, continuously develop it, aggressively sell it, and
deliver exceptional customer service for repeat business.
Your team is an indisputable driver of your company’s long-term success and your true
competitive advantage. Your people will determine how far you go, how fast you grow, and
how successful you become. They will make the difference between surviving and thriving.
Invest in your people. As employee engagement begins to grow and become part of the
heartbeat of your company, the positive impact will be significant.
4. Maximizing and Optimizing Operations- Whether your goal is to achieve quality,
quantity, or efficiency, ensuring you have the right people in the right positions is critical for

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achieving business operations goals that are linked to profitability. In addition, a workforce
plan can accomplish this objective. Workforce planning also includes conducting an
inventory of your current talent and identifying gaps in technical skills that relate to the areas
of importance. Once these gaps have been identified, then creating a plan to either develop
employees within your organization or hire from the outside to minimize the gaps.
Other strategies
HR can use data to analyse turnover rates and determine where problems may lie, thus
allowing the company to more quickly find issues and get them resolved. For example, if the
data show that most turnovers is from new hires, the team can focus on what problems may
be the cause of that. Or if the data show that one group has a higher turnover rate than the rest
of the business, focus can be turned there.
HR can help managers source the right talent to get the skills the company needs to grow and
be competitive. HR expertise can allow the organization to know where to look for
specialized talent when needed. (If your organization doesn’t already assess which talent
streams are best utilized for different types of candidates, you can start now!)
HR can provide insight into the going market rates for talent and what it might take to get
high-quality hires on board. HR can review the competitive talent landscape and determine
what compensation strategy will be best aligned with company goals.
HR can give insights into how other organizations within your industry are structured—there
may be information that can be useful in determining which positions the company still needs
to create or fill to become or remain competitive.
HR can use data to show how the skill sets of the employees are evolving over time, and to
show business leaders where skills gaps may exist so those gaps can be addressed
proactively.
HR can also design employee development pathways that take into account the strategic and
long-term needs of the organization, ensuring that key employees get the right training before
it must be utilized. This impacts retention and improves the skill sets for the organization as a
whole, all while ensuring the organization is addressing big-picture competitive issues
proactively.
HR can use data to find potential employee issues before they become problematic. By
tracking employee engagement scores over time, for example, HR can discover when
engagement levels are waning—hopefully before they have a significant impact on morale
and turnover—so the organization can take action sooner rather than later.
HR can put together succession plans that take into account the organization’s strategic
goals. This can allow the organization to remain competitive even when there is turnover in
key roles. (This is a critical time when a less organized company may falter.)
HR can analyze which employees are high performers and alert the management about who
should be fast-tracked for promotions and new projects.
HR guidance on legal issues can keep the organization out of costly legal problems. This not
only saves the company money but it can also save the company from major setbacks.

4.2. ORGANIZATIONAL STRATEGIES BASED ON HUMAN RESOURCES,

An organizational strategy is a long-term plan that allocates how a company plans to use its
resources to support business activities. It serves as guidance for how a company can achieve
its objectives. Companies use these strategies to help them meet their goals and develop
strategic plans. Organizational strategies often include detailed assessments outlining what
the company needs to accomplish.
Here are some strategies:
 Talent acquisition: Recruiting and selecting critical talent, and developing the skills
of current employees

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  Performance: Establishing accountability for business results, and aligning reward
systems with changing priorities
 Employee engagement: Involving employees in business planning, and building
effective communication and coaching systems
 Compensation: Offering competitive salaries and benefits packages
 Culture: Building values and principles to sustain long-term growth, and prioritizing
employee health and mental wellbeing
 Onboarding and offboarding: Ensuring positive experiences for new and departing
employees
 Hiring: Practicing diversity and inclusion
 Career development: Offering opportunities for growth and professional
development

4.3 PRODUCTIVITY AS AN HR BASED STRATEGY,

Human resources (HR) can improve employee productivity through a variety of strategies,
including:
Setting goals
Clearly communicate goals for individuals, teams, and the organization. Encourage
employees to prioritize and set clear goals.
Providing training
Offer training and development opportunities to help employees improve their skills and
efficiency.
Creating a positive work environment
Promote a healthy and positive work environment, and minimize distractions.
Providing feedback
Provide constructive feedback and support to help employees improve their performance.
Prioritizing employee well-being
Make employee health and wellness a priority.
Promoting diversity
Ensure fair and equal treatment of all employees, and promote diversity policies.
Providing the right tools
Provide employees with the tools and technology they need to be productive.
Reducing noise
Reduce noise levels in the office, or provide quiet spaces for work that requires
concentration.
Regularly assessing
Regularly assess what's working and what's not, and adapt strategies based on employee
feedback.
Other strategies include:
a. Offering incentives for improved productivity
b. Respecting employees and their work
c. Praising and rewarding hard work
d. Minimizing meetings with little value
e. Ensuring clear communication channels
f. Strong people management practices

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4.4 QUALITY AND SERVICES AS HR BASED STRATEGIES.

Here are some human resource (HR) strategies that can help improve service quality:
 Recruitment: Hire quality staff to deliver services
 Retention: Find ways to keep high-performing employees
 Teamwork: Encourage effective teamwork among service employees
 Training and development: Provide training and development to support quality
initiatives
 Rewarding quality: Use reward schemes to support quality initiatives
 Support systems: Provide the needed support systems
 Communication: Be dedicated to communication
 Growth opportunities: Provide growth opportunities such as ongoing education
 Socially responsible hiring: Have socially responsible hiring and employee retention
policies
 Fair HR policies: Implement fair HR policies and strategies
 Positive work relationships: Use training to cultivate, motivate, and retain quality
staff
 Treat staff with respect: Interact with staff fairly, politely, honestly, and with respect
and dignity
Total Quality Management (TQM) is a management approach that focuses on long-term
success through customer satisfaction. TQM involves all employees participating in
improving processes, products, services, and the culture.

4.5 MANAGEMENT OF HUMAN RESOURCE SURPLUS AND SHORTAGE

Human resource planning (HRP) is a tool that can help businesses manage the balance of
employees they have and the ones they need. HRP can help businesses avoid shortages and
surpluses, which can both lead to problems:
Shortages
Can lead to employees working extra hours, which can cause stress and substandard work.
Surpluses
Can lead to job title replication, which can cause confusion and conflict. Surpluses can also
increase the cost of running a business.
Here are some steps in developing an HRP strategy:
1. Analyze the current labor supply
2. Determine future labor needs
3. Balance labor needs with supply
4. Develop and implement the HR plan
Some strategies for managing a staffing shortage include:
 Acting on employee feedback
 Reskilling and up skilling initiatives
 Promoting work-life balance
 Improving company culture
 Increasing perks and benefits
 Hiring short-term workers

4.6 WORK FORCE REDUCTION AND REALIGNMENT, DOWNSIZING AND

OUTPLACEMENT SERVICES,

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Workforce reduction and realignment, also known as downsizing, is a strategic process that
companies use to reduce their workforce size. It can involve layoffs, furloughs, temporary
layoffs, or natural attrition. The goal is to:
 Save costs
 Realign operations with business goals
 Maintain enough resources to continue operations
 Enhance efficiency
 Cut costs
 Maintain competitiveness
To ensure a smooth transition for employees and the organization, companies can:
a. Plan ahead: Assess teams, identify critical positions and departments, and develop
criteria for making layoff decisions
b. Be transparent: Keep HR and business leaders open and transparent to reduce
rumors and preserve employee trust
c. Focus on all employees: Have a strategy for maintaining trust after major reductions
in force
d. Use outplacement services: These services provide professional support to departing
employees to help them transition to new job opportunities
e. Avoid discrimination: Determine if certain groups of employees are affected more
than others
f. Consider legal, financial, and human impacts: Ensure a well-planned approach that
considers these impacts

4.7 HR PERFORMANCE AND BENCH MARKING, RETENTION OF HUMAN

RESOURCES, ITS DETERMINANTS AND RETENTION MANAGEMENT
PROCESS,
HR PERFORMANCE
HR performance is a measure of the efficiency and quality of a company's human resources
function. It involves all the resources used to improve HR productivity and efficiency.
HR plays a vital role in performance management, which can help drive organizational
success. HR can:
Design performance management systems
HR can design systems that are effective and help enhance employee engagement and
productivity.
Provide feedback
HR can facilitate continuous feedback and provide regular performance feedback
throughout the year.
Focus on employee development
HR can focus on employee development and provide support and direction to help
employees improve their performance.
Set key performance indicators
HR can set key performance indicators (KPIs) for each employee, based on their role,
position, and current missions.
Provide tools
HR can provide the tools employees need to benefit from performance management
processes.
Some performance criteria that can be used include:
a. Quality of work

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 b. Execution and organization
c. Progress and growth
d. Resiliency
e. Communication
f. Job knowledge
g. Teamwork
h. Problem-solving

BENCH MARKING
HR benchmarking is a process that compares an organization's HR metrics against industry
standards to evaluate performance and identify areas for improvement. It can help
organizations:
Identify strengths and weaknesses
Benchmarking can help organizations identify areas where they excel and areas that need
improvement.
Set goals
Benchmarking can help organizations set realistic goals for improvement.
Develop strategies
Benchmarking can help organizations develop targeted strategies to enhance their HR
practices.
Share knowledge
Benchmarking can facilitate knowledge sharing and encourage organizations to stay
informed about emerging trends.

Benchmarking usually involves comparing similar metrics and characteristics internally and
externally. For example, organizations can compare HR metrics such as employee turnover
rates, time-to-hire, or training investment against industry norms.

Some challenges of benchmarking include:

 Comparing organizations with fundamental differences can be challenging.
 Raw numbers don't always give a complete picture of what's going on.
 Not all terminology is used identically from organization to organization.
To be successful when benchmarking HR data, it's important to have a thorough
understanding of the organization's strategy, plans, and goals. It's also important to include
individuals from different departments in the benchmarking process.

RETENTION OF HUMAN RESOURCES

What Is Employee Retention?
Employee retention is a phenomenon where employees choose to stay on with their current
company and don’t actively seek other job prospects. The opposite of retention is turnover,
where employees leave the company for a variety of reasons.
Retention is defined as the process by which a company ensures that its employees don’t quit
their jobs. Every company and industry has a varying retention rate, which indicates the
percentage of employees who remained with the organization during a fixed period.
DETERMINANTS OF RETENTION

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Factors Affecting Employee Retention
Multiple factors help in an personnel decision-making process to continue with or quit an
organization. Knowing these causes is the essential step in developing efficient retention
tactics.
Compensation and Benefits
Proper compensation, including salary, bonuses, and benefits, is a crucial element that keeps
staff in a company. Employees prefer to stay with organizations that not only offer adequate
compensation but also provide a wide range of benefits such as health insurance, retirement
plans and other perks that boost their job contentment and monetary stability. Moreover,
clarity regarding rewards for outstanding performance can enhance their notion of
impartiality and equality within the firm.
Work-Life Balance
The capacity to harmonize work responsibilities with personal life markedly impacts
employee retention. Flexible working schedules, the option for remote work, and generous
leave policies enable employees to effectively juggle their personal and professional duties,
thus elevating their propensity to remain with the company. Creating a culture that genuinely
respects personal time and discourages burnout is pivotal for fostering long-term loyalty.
Career Development Opportunities
Furnishing avenues for professional and career development is a cardinal factor in employee
retention. Corporations that prioritize learning and development efforts, Set forth explicit
career routes, and strenuously support employees’ ambitions for career advancement tend to
be skilled in keeping their proficient individuals. Advocating for mentorship programs and
providing positions that inspire employees can also enhance staff engagement and
enthusiasm.
Recognition and Appreciation
The sense of being valued and acknowledged plays an integral role in employee retention.
Continuous recognition, whether through accolades, public acclaim, or performance-driven
incentive systems, heightens team camaraderie and encourages employees to maintain their
allegiance to the company. Establishing a milieu where each employee’s input is noted and
esteemed can markedly improve their belongingness and gratification.
Company Culture and Values
A supportive and diverse workplace environment that harmonizes with employees’ individual
values is vital for retention. Employees are more inclined to stay dedicated to companies
where they experience a profound sense of fellowship and conformity with the institution’s
mission and values. Attempts to form a diverse and helpful workplace where every person
feels cherished can considerably reinforce retention.
Leadership and Management
Competent leadership and nurturing management are necessary for employee retention.
Managers who advocate honest communication, offer positive criticism, and forge
relationships grounded in esteem and faith are important for shaping a workplace ambiance
that promotes enduring attachment. Leadership that is approachable and reactive to employee
needs can hugely escalate gratification and fidelity among co-workers.
Employee Engagement and Retention
Engagement and retention are closely correlated; betrothed employees are more likely to be
happy with their jobs and less inclined to pursue employment elsewhere. Factors affecting
employee engagement incorporate purposeful tasks, meaningfulness, autonomy, and the
nature of interactions with coworkers and supervisors.

RETENTION MANAGEMENT PROCESS,

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Key steps to creating a successful employee retention strategy
1. Develop a positive workplace culture
A positive workplace culture is one of the most important factors employees consider when
deciding whether to stay with an employer. And though employers may be eager to make
whatever changes necessary to ensure their culture is excellent, they can’t effectively develop
their culture if they don’t understand it. So, before taking steps to make changes, be sure to
research your workplace culture to understand where it stands.
Common ways of researching organizational culture include:
 Conducting employee engagement surveys followed up with focus groups of
employees run by external facilitators.
 Reviewing ratings and employee reviews on websites like Glassdoor.
 Reviewing the organization’s mission and value statements.
 Ensuring exit interviews include questions directly related to organizational culture.
2. Design an effective onboarding experience
A well-designed onboarding experience can make or break an employee’s decision to stay
with the organization. In fact, around 70% of employees decide whether they’re going to
stay—or leave—within their first 30 days of work.
Onboarding is pivotal because it serves as the employee’s first impression of the organization
as their new employer, and it communicates to the employee what kind of support they’ll
receive to succeed. Onboarding is even more important for remote employees, who are more
likely to feel lonely and less integrated into a team without proper onboarding.
3. Improve line management skills
The quality of line management and the working relationship between an employee and their
manager are often a major influence on an individual’s decision to stay or leave the
organization. According to research from Boston Consulting Group, great managers are
associated with a ―72% reduction in attrition when comparing employees who are very
satisfied with their managers with those who are very unsatisfied.‖
4. Prioritize employee well-being
Research into the financial benefits for employers of investing in employee well-being is at
an early stage, but initial studies suggest that the return on investment is quantifiable and
directly affects the bottom line. One of the less direct costs of poor employee well-being is
increased employee turnover.
Holistic well-being
Workplace health promotion should be more than a series of standalone initiatives. While it is
important to introduce well-being programs focused on individual well-being, for example
smoking-cessation or healthy-eating campaigns, employers should embrace a holistic
approach that acknowledges the combined impact of a range of factors on employee well-
being, including environmental, organizational and societal factors.
The role of managers
Ensuring a mentally healthy workplace is key to improving employee well-being, and in turn,
retention. Line managers play a key role in this endeavor. However, many line managers find
it difficult to have conversations about sensitive issues.
5. Build a culture of recognition
Recognition can have a significant impact on how engaged employees feel at work, and a
lack of recognition can have a detrimental impact on employee turnover. An employee who
feels that their efforts go unrecognized is more likely to move on, potentially resulting in the
loss of a valuable member of staff.
6. Offer learning and skill-building opportunities
Your organization will benefit from a competitive advantage if you develop your workforce –
from apprentices through to future business leaders.

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Access to learning and development opportunities not only enables employees to improve
their knowledge and skills, but it can also increase their engagement. It can also be a useful
tool in retaining staff in a time of skills shortages.
7. Investigate all possible flexible work options
The experience of working from home, forced on many people by the COVID-19 pandemic,
has dramatically changed attitudes towards flexible working. Based on their experiences and
business needs, many employers have now implemented a full or partial switch to remote or
hybrid work. Employers have also implemented other flexible arrangements, such as
compressed hours (full-time hours over fewer days), annualized hours (fixed number of
annual hours with core hours), job sharing and changes to start and finish times (flex time).
8. Develop meaningful communication between the organization and employees
Two-way communication with employees is key to building trust and ensuring transparency
in both good and challenging times for the organization. Generally, your organization should
aim to communicate information about its activities to all employees on a regular basis. You
should also encourage employees to provide ideas and feedback to management on all
aspects of its operations.

4.8 DECISION ABOUT COMPENSATION LEVELS AND COMPETENCY BASED

PAY.
DECISION ABOUT COMPENSATION LEVELS
Productivity of workers– Productivity-based compensation helps derive the best results.
The higher the productivity of employees, the more should be the compensation.
Ability to pay– If your company has high profitability, you can pay better compensation
and retain your employees and vice versa.
Government Policies– Government also has certain policies to protect employee interests.
The employer has to pay the employees as per governmental regulations and provide benefits
such as PF, medical insurance, gratuity, and pension.
Labour Unions– They also play an essential role in ensuring employees get a fair wage.
They fight with the employers for the employee’s rights and wage revision.
Cost of Living– Cost of living also influences compensation to a large extent. An employee
based in a city with a high cost of living needs a higher salary and vice versa.
Demand and Supply of Labour– It is one of the most important factors that affect the
compensation of employees. If the demand is more than the supply, the compensation will be
higher.
Industry Standards– No employee would like to join a company whose compensation is
below the industry standards. Therefore you need to analyse the standard market rates of
different roles and pay your employees accordingly.

COMPETENCY BASED PAY

What is competency-based pay?
An organization that uses competency-based pay structures compensates employees based on
their obtained skills and competencies in the workplace, compared to traditional pay
structures, which compensate employees based on job title, seniority, or position. This
approach encourages employees to improve their skills and knowledge. It is usually used in
fields that require specialized knowledge.
As an example, you might have an accountant with over 25 years of experience within the
organization who prepares and maintains financial reports. Another employee with five years
of experience performs the same duties. These two employees are paid the same amount, as
the competencies required are the same.

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What are the main elements of competency-based pay?
 Knowledge: This is the information an employee has accumulated throughout their
career and education.
 Skills: This is an employee’s ability to apply the knowledge to different work
situations. It describes what an employee is capable of doing.
Together, knowledge and skills form an employee’s competencies. These elements are
usually listed in a job description.

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