Developing a HRM Strategy

8/8/2019 Developing a HRM Strategy

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Developing a HRM strategy


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y Faced with rapid change organizations need to develop a morefocused and coherent approach to managing people. In just thesame way a business requires a marketing or information

technology strategy it also requires a human resource or peoplestrategy.


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y In developing such a strategy two critical questions must beaddressed.

1. What kinds of people do you need to manage and run your

business to meet your strategic business objectives?2. What people programs and initiatives must be designed and

implemented to attract, develop and retain staff tocompete effectively?


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In order to answer these questions four key dimensions of anorganization must be addressed. These are:

y

Culture: the beliefs, values, norms and management style of theorganization

y O rganization: the structure, job roles and reporting lines of the organization

y P eople: the skill levels, staff potential and managementcapability

y H uman resources systems: the people focused mechanismswhich deliver the strategy - employee selection, communications,training, rewards, career development, etc.


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Ch aracteristics of a virtual organizationy Flexi work and flexi timey Part time worky Job sharingy Home based workingy Dependent on ITy Loose org boundariesy Mutli-skillingy Goal directedy Consumer centered


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y Frequently in managing the people element of their businesssenior managers will only focus on one or two dimensions

and neglect to deal with the others. Typically, companiesreorganize their structures to free managers from bureaucracy and drive for more entrepreneurial flair butthen fail to adjust their training or reward systems.

y If you require an organization which really values quality andservice you not only have to retrain staff, you must alsoreview the organization, reward, appraisal andcommunications systems.


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y The pay and reward system is a classic problem in this area.Frequently organizations have payment systems which are

designed around the volume of output produced. If you then seekto develop a company which emphasizes the product's qualityyou must change the pay systems. Otherwise you have acontradiction between what the chief executive is saying about

quality and what your payment system is encouraging staff to do.y There are seven steps to developing a human resource strategyand the active involvement of senior line managers should besought throughout the approach.


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S teps in developing HRM strategy


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S tep 1: Get t h e 'big picture'

U nderstand your business strategy.y Highlight the key driving forces of your business. What are

they? e.g. technology, distribution, competition, the markets.y

What are the implications of the driving forces for the peopleside of your business?

y What is the fundamental people contribution to bottom line business performance?


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S tep 2: Develop a Mission S tatement orS tatement of Intent

That relates to the people side of the business.Do not be put off by negative reactions to the words or

references to idealistic statements - it is the actual process of

thinking through the issues in a formal and explicit mannerthat is important.y What do your people contribute?


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S tep 3: Conduct a SWOT analysis of t h eorganization

Focus on the internal strengths and weaknesses of the people side of the business.

y Consider the current skill and capability issues.Vigorously research the external business and market environment. High

light the opportunities and threats relating to the people side of the business.y What impact will/ might they have on business performance?y Consider skill shortages?y The impact of new technology on staffing levels?

From this analysis you then need to review the capability of your personneldepartment. Complete a SWOT analysis of the department - consider indetail the department's current areas of operation, the service levels andcompetences of your personnel staff.


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S tep 4: Conduct a detailed h umanresources analysis

Concentrate on the organization's COPS (culture, organization,people, HR systems)

y Consider: Where you are now? Where do you want to be?y

What gaps exists between the reality of where you are nowand where you want to be?

Exhaust your analysis of the four dimensions.


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S tep 5: Determine critical peopleissues

Go back to the business strategy and examine it against yourSWOT and COPS Analysis

y Identify the critical people issues namely those people issues

that you must address. Those which have a key impact on thedelivery of your business strategy.y Prioritize the critical people issues. What will happen if you

fail to address them?

Remember you are trying to identify where you should befocusing your efforts and resources.


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Once you have worked through the process it should then bepossible to translate the action plan into broad objectives. Thesewill need to be broken down into the specialist HR Systems areasof:

y employee training and developmenty management developmenty organization developmenty performance appraisaly employee rewardy employee selection and recruitmenty

manpower planningy communicationDevelop your action plan around the critical issues. Set targets and

dates for the accomplishment of the key objectives.


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S tep 7: Implementation and evaluation

of t h e action plansy The ultimate purpose of developing a human resourcestrategy is to ensure that the objectives set are mutuallysupportive so that the reward and payment systems areintegrated with employee training and career developmentplans.

y There is very little value or benefit in training people only tothen frustrate them through a failure to provide ample careerand development opportunities.


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MERGER S AND ACQUIS ITIO NSy A merger is a combination of two or more businesses in which one

acquires the assets and liabilities of the other in exchange for stockor cash or both.

y Example Reliance petro with Reliance industries, Compaq withHP etc.

y On the other hand, an Acquisition or a takeover is defined as theattempt of one firm to acquire ownership or control over anotherfirm against the wishes of the latters management.

y Eg. Acquisition of CMC by TCS.y HR managers play a very significant role in Mergers and

Acquisitions.


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y HR managers help the top management in assessing pension, PF,labour contracts etc. HR strategies include:-

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Improving employee morale, managing and unifying the culturaldiversity, counselling the employees regarding resistance to change,and adoption of the new system so that the employees get over theirfear of loosing jobs.

y Work pressures through open communication.y Integrating the two wage structures, benefit programmes, seniority

etc.y For retrenchment of surplus staff, HR managers prepare equitable

packages and provide outplacement assistance.y Create a new organisation structure that does not exist in either of the

company.y Asses the strengths of both the companies and strengthen them

further.


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y Horizontal Integration It aims at related diversification. Eg. Coca-cola diversified to produce mineral water Kinley. HR strategies areto train and develop the existing employees in the area of the new business.

y Conglomerate diversification It is diversification into unrelatedactivity to the original business of the company. Eg. Gujarat Gas Ltd.Created another business unit Gujarat finance company Ltd. HRM has

to be totally new that would match the requirements of the business.y Joint Ventures They are partnerships in which two or more firms

carry out a specific project. They can be temporary, complete orpartial. Eg. Maruti & Suzuki. HRM ahs to concentrate on managingthe cultural diversity and train employees in the new technology.

y Retrenchment Strategies this includes turnaround strategies,liquadation strategy etc.


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y Liquadation strategies include retrenchment, cut in salaries, long leavewithout pay, reducing managerial staff etc.

SBU level strategies and relevant HR strategies:y Low cost leadership: companies aggresively seek efficiencies in all

operations including HR to gain an edge over the competitors.y

Differentiation strategy: It involves an attempt of the company toproduce the product different from its competitors.. HR strategiesinclude developing creative skills of the employees through training.

y Focus/Niche strategy: it focuses or concentrates on a specific marketor customer group. HR strategies: high participation, narrow careerpaths etc.


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Competency Mapping Competency mapping is the process of identification,evaluation of employees competencies and organizationalrequirements and establishing perfect collaboration among

them.


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Employee Referrals

Organizations employ the candidates suggested by the presentemployees judge the candidates suitability to the job in terms

of attitude and emotions. This practice is called employeereferrals.


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y Job enrichment it loads the job vertically. It refers to adding

up more duties and responsibilities that will provide for skillvariety, task identity, task significance, autonomy and feedback on job performance.

y

Job sharing the arrangement of sharing one job by two ormore part time employees is called job sharing.


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J ob analysis to team analysisy Team description team description is an organized,

factual statement of the duties and responsibilities of acomplete team.

y Team specification team specification pertains tominimum acceptable human qualities and relationshipnecessary to perform all kinds of activities of the team


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y Employee empowerment it refers to enabling a lower levelemployee to make all decisions required for carrying out hisduties or discharge his responsibilities, on his own andimplement them.

y Telecommuting telecommuting is the use of personalcomputers, networks and other communication technology like

fax, telephone, e-mail etc to do work in the home which isgenerally done in the work place.


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E- business and HRM strategyy E-job design and job analysisy E-human resource planningy E-recruitmenty E-selectiony E-performance managementy E-training and development


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THANK YOU

Developing a HRM Strategy

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