Strategic Human Resource

Management
Unit II
 Principles
Workforce Planning: Workforce planning is the
continual process of aligning the needs and priorities of
your organization with those of your workforce in order to
meet goals and objectives as well as regulatory
requirements. Having tools that allow them to track time
and progress on projects, as well as communicate with all
pertinent colleagues or managers, will help ensure a
streamlined workflow. An effective system will also allow
you to build an inclusive culture for contingency workers.
 Principles
Competency Management: It can be difficult to keep track
of the performance of all of your employees, especially if
many of them rarely come into the office. A competency
management program allows your HR team to collect
observable skills, behaviors, and attitudes that impact the
work your people do. Not only will it allow you to track
this, but it will also help you put roadmaps in place to help
your team increase their productivity and job satisfaction.
With project management tools, easy access to training and
collaborative meetings, and instant communication, you can
ensure you are not only observing how your team is
operating as a whole, but also set expectations and help your
workers exceed them.
 Principles
Performance Management: How do you and your HR
team plan, monitor, and review an employee’s work
objectives and goals? How do you help them increase
their overall contribution to the team’s success? Do you
do so effectively with both in-office employees and
remote team members?
Performance management across the board is critical to the
success of your business. An effective system will allow
you to identify and assist under-performers, reward high
producers, and always have a good idea of where your
company stands and how to get to the next level.
 Principles
Compensation Planning and Strategy: If your HR team is
trying to schedule, track, and compensate a large workforce
with varying skill levels, pay grades, and specialties, they may
be wasting hours of the company’s time by trying to do so
without proper tools. An online system that helps them
perform compensation planning and strategy will promote
fairness and consistency in their policies while ensuring that
all employees are paid based on industry standards and other
factors that are in their compensation agreement.
With features such as shift scheduling, time tracking, project
management, and schedule management accessible right from
their personal smart devices, the proper system will save your
entire organization time and money.
 Principles
Time and Expense Management: Managing the hours
worked by your team and the expenses involved in travel,
overtime, unnecessary hours worked, and supplies is vital
to your overall bottom line. The easier you can make time
tracking and schedule management for your team, the
more accurate and accountable they will become. By
offering your HR team benefits such as employee
rostering software and instant access to employee
schedules, you can help them do their jobs more
efficiently.
 Principles
Learning: Education and training are of the utmost
importance to your organization, but it can be difficult to
offer these resources to remote employees. Create training
materials that are readily available on the web can help
expand the skill set and knowledge base of your entire
workforce. Employees can access them anywhere or
anytime that works best for them, encouraging them to
take part in continuous education when it fits into their
schedules.
 Principles
Recruitment: Your company’s recruitment efforts will
begin targeting more millennials as they enter the
workforce in record numbers. To get this younger
generation of workers on board, you’ll need to offer
flexible, mobile work options as millennials want to work
when they want and from where they want.
When you have the proper tools in place, not only will you
be able to attract these new team members, but you’ll also
be able to engage them and provide them with the type of
environment they need to be productive.
 Principles
Contingent Workforce Management: Your contingent
workforce consists of independent contractors, temporary
workers, freelancers, consultants, and remote workers, and
it’s likely that it will continue to grow as technology
improves. It’s important to build an inclusive culture for
contingent workers that offers the same resources, levels
of communication, and benefits as your other team
members.
Tools that allow for shift scheduling, project management,
and online training will help them feel like part of the
team and overall vision of the company.
 Principles
Organization Visualization: Seeing your company as a
whole is an important step to effectively managing your
team as well as planning for the future. The proper
planning tools can help you bring everything into focus in
one easy-to-use platform, allowing you to make
adjustments, create goals, and properly manage your
business as it grows and evolves.
Conclusion: Strategic human capital management plan
will mean the difference between failure and success for
your company. Utilize a system that allows you to put the
ten above strategic principles into place and you will set
your business up for capitalizing on the future.
 The Best Practice Approach
This approach is based on the assumption that there is a set of
best HRM practices that are universal in the sense that they are
best in any situation, and that adopting them will lead to
superior organizational performance.
A number of lists of ‘best practices’ have been produced, the
best known of which was produced by Pfeffer (1998a), namely:
1. employment security;
2. selective hiring;
3. self-managed teams;
4. high compensation contingent on performance;
5. training to provide a skilled and motivated workforce;
 The Best Practice Approach
6. reduction of status differentials;
7. sharing information.
The following list was drawn up by Guest (1999):
1. Selection and the careful use of selection tests to identify those with potential to
make a contribution.
2. Training, and in particular a recognition that training is an ongoing activity.
3. Job design to ensure flexibility, commitment and motivation, including steps to
ensure that employees have the responsibility and autonomy fully to use their
knowledge and skills.
4. Communication to ensure that a two-way process keeps everyone fully informed.
5. Employee share ownership programmes to increase employees’ awareness of the
implications of their actions on the financial performance of the firm.
 Delery and Doty (1996) identified seven strategic HR practices, i.e. ones that are
related to overall organizational performance: the use of internal career ladders,
formal training systems, results-oriented appraisal, performance-based compensation,
employment security, employee voice and broadly defined jobs.
 Limitations of The Best Practice Approach
In accordance with contingency theory, which emphasizes the
importance of interactions between organizations and their
environments so that what organizations do is dependent on the
context in which they operate, it is difficult to accept that there is
any such thing as universal best practice. What works well in one
organization will not necessarily work well in another because it
may not fit its strategy, culture, management style, technology or
working practices. However, a knowledge of what is assumed to be
best practice can be used to inform decisions on what practices are
most likely to fit the needs of the organization, as long as it is
understood why a particular practice should be regarded as a best
practice and what needs to be done to ensure that it will work in
the context of the organization.
 The Best- Fit Approach
The best fit approach is in line with contingency theory. It
emphasizes that HR strategies should be congruent with
the context and circumstances of the organization. ‘Best
fit’ can be perceived in terms of vertical integration or
alignment between the organization’s business and HR
strategies.
There are three models, namely: lifecycle, competitive
strategy, and strategic configuration.
 The Best- Fit Approach
The lifecycle best fit model: The lifecycle model is based on
the theory that the development of a firm takes place in four
stages: start-up, growth, maturity and decline. This is in line
with product lifecycle theory.
The basic premise of this model was expressed by Baird and
Meshoulam (1988) as follows: Human resource management’s
effectiveness depends on its fit with the organization’s stage of
development. As the organization grows and develops, human
resource management programmes, practices and procedures
must change to meet its needs. Consistent with growth and
development models it can be suggested that human resource
management develops through a series of stages as the
organization becomes more complex.
 The Best- Fit Approach
Best fit and competitive strategies: Three strategies
aimed at achieving competitive advantage have been
identified by Porter (1985):
1. Innovation – being the unique producer.
2. Quality – delivering high quality goods and services to
customers.
3. Cost leadership – the planned result of policies aimed at
‘managing away expense’
 The Best- Fit Approach
Strategic configuration: Another approach to best fit is the
proposition that organizations will be more effective if they
adopt a policy of strategic configuration (Delery and Doty,
1996) by matching their strategy to one of the ideal types
defined by theories such as those produced by Miles and Snow
(1978). This increased effectiveness is attributed to the internal
consistency or fit between the patterns of relevant contextual,
structural and strategic factors.
 The Best- Fit Approach
Miles and Snow (1978) identified four types of organizations, classifying the first
three types as ‘ideal’ organizations:
1. Prospectors, which operate in an environment characterized by rapid and
unpredictable changes. Prospectors have low levels of formalization and
specialization and high levels of decentralization. They have relatively few
hierarchical levels.
2. Defenders, which operate in a more stable and predictable environment than
prospectors and engage in more long-term planning. They have more mechanistic
or bureaucratic structures than prospectors and obtain coordination through
formalization, centralization, specialization and vertical differentiation.
3. Analysers, which are a combination of the prospector and defender types. They
operate in stable environments like defenders and also in markets where new
products are constantly required, like prospectors. They are usually not the
initiators of change like prospectors but they follow the changes more rapidly than
defenders.
4. Reactors, which are unstable organizations existing in what they believe to be an
unpredictable environment. They lack consistent well-articulated strategies and do
not undertake long-range planning.
 Bundling
‘Bundling’ is the development and implementation of
several HR practices together so that they are inter-related
and therefore complement and reinforce each other. This is
the process of horizontal integration, which is also referred
to as the use of ‘complementarities’ .
The aim of bundling is to achieve high performance through
coherence. Coherence exists when a mutually reinforcing set
of HR policies and practices have been developed that
jointly contribute to the attainment of the organization’s
strategies for matching resources to organizational needs,
improving performance and quality and, in commercial
enterprises, achieving competitive advantage.
Bundling
The process of bundling HR strategies is an important
aspect of the concept of strategic HRM. In a sense,
strategic HRM is holistic; it is concerned with the
organization as a total system or entity and addresses
what needs to be done across the organization as a
whole. It is not interested in isolated programmes and
techniques, or in the ad hoc development of HR
practices.
 Bundling
Bundling can take place in a number of ways. For example, competency
frameworks can be devised that are used in assessment and development
centres and to specify recruitment standards, identify learning and
development needs, indicate the standards of behaviour or performance
required and serve as the basis for human resource planning. They could
also be incorporated into performance management processes in which the
aims are primarily developmental and competencies are used as criteria for
reviewing behaviour and assessing learning and development needs. Job
evaluation could be based on levels of competency, and competency-based
pay systems could be introduced. Grade structures can define career ladders
in terms of competency requirements (career family structures) and thus
provide the basis for learning and development programmes. They can serve
the dual purpose of defining career paths and pay progression opportunities.
The development of high-performance, high-commitment or high-
involvement systems is in effect bundling because it groups a number of HR
practices together to produce synergy and thus makes a greater impact.
Concept of SHRM
The concept of strategic HRM appears to be based on the belief that
the formulation of strategy is a rational and linear process. This indicates that the
overall HR strategy flows from the business strategy and generates specific HR
strategies in key areas. The process takes place by reference to systematic reviews
of the internal and external environment of the organization, which identify the
business, organizational and HR issues that need to be dealt with.

But strategic HRM in real life does not usually take the form of a formal, well
articulated and linear process that flows logically from the business strategy. The
research conducted by Gratton et al (1999) in eight British organizations
established that ‘In no case was there a clearly developed and articulated strategy
that was translated into a mutually supportive set of human resource initiatives or
practices.’ Strategic fit is a good idea but one that is difficult to attain.
Strategic HRM is in some ways an attitude of mind that expresses a way of doing
things.
Thank You