Strategic HRM PGDM MSRIM Dr.H.Muralidharan Ref: SHRM Charles Greer.
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Transcript of Strategic HRM PGDM MSRIM Dr.H.Muralidharan Ref: SHRM Charles Greer.
Strategic HRMStrategic HRM
PGDMMSRIM
Dr.H.Muralidharan
Ref: SHRM – Charles Greer
What is strategy?What is strategy? What is strategy?
– Is it a plan? – Does it refer to how we will obtain the ends we
seek? Is it a position taken? – Just as military forces might take the high ground
prior to engaging the enemy, – might a business take the position of low-cost
provider? – does strategy refer to perspective, to the view one
takes of matters, and to the purposes, directions, decisions and actions stemming from this view?
– Does strategy refer to a pattern in our decisions and actions?
– does repeatedly copying a competitor’s new product offerings signal a "me too" strategy?
Ref: SHRM – Charles Greer
Strategy isStrategy is Strategy is all these— it is perspective, position, plan, and pattern. Strategy is the bridge between policy or high-order goals on
the one hand and tactics or concrete actions on the other. Strategy and tactics together straddle the gap between ends
and means. strategy is a term that refers to a complex web of thoughts,
ideas, insights, experiences, goals, expertise, memories, perceptions, and expectations that provides general guidance for specific actions in pursuit of particular ends.
Strategy is at once the course we chart, the journey we imagine and, at the same time, it is the course we steer, the trip we actually make. Even when we are embarking on a voyage of discovery, with no particular destination in mind, the voyage has a purpose, an outcome, an end to be kept in view. Ref: SHRM – Charles Greer
MeaningMeaning
Strategy is a term that comes from the Greek strategia, meaning "generalship." In the military, strategy often refers to maneuvering troops into position before the enemy is actually engaged
Ref: SHRM – Charles Greer
definitions in usedefinitions in use Some of the definitions in use include the
following: – Strategy is that which top management does that is
of great importance to the organization. – Strategy refers to basic directional decisions, that is,
to purposes and missions. – Strategy consists of the important actions necessary
to realize these directions. – Strategy answers the question: What should the
organization be doing? – Strategy answers the question: What are the ends
we seek and how should we achieve them?
Ref: SHRM – Charles Greer
What is strategic What is strategic management?management?
A continuous, iterative process aimed at keeping an organization as a whole appropriately matched to its environment (Samuel C. Certo and J. Paul Peter, Strategic Management)
Keeping the business in tune with management and marketing forces both outside and inside the firm
Ref: SHRM – Charles Greer
Competitive strategyCompetitive strategy
Competitive strategy leads to competitive advantage– Generates supernormal ROI– Offers services of value– Uses cost effective technology– Avoids erosion of competitive advantage by
exploiting and developing a technological base
Ref: SHRM – Charles Greer
Stages in Strategic managementStages in Strategic management
Strategic analysis– Environmental analysis– Establish organizational direction
Strategy formulationStrategy implementationStrategic control
Ref: SHRM – Charles Greer
Strategy & HRM ?Strategy & HRM ? – NEED FOR STRATEGIC HRM – NEED FOR STRATEGIC HRM
Physical assets are viewed as investments Can
– superior technology– Superior facility– Superior product
Bring about and more importantly sustain competitive advantage?
Physical facilities can be duplicated, cloned or reverse engineered and they no longer provide competitive advantage
Ref: SHRM – Charles Greer
Strategy & HRM ?Strategy & HRM ? – NEED FOR STRATEGIC HRM – NEED FOR STRATEGIC HRM
Cost of employees as variable cost of production.– No formal recognition of human resource as a key
resource– No recognition of firms contribution to training– Cost of recruitment, training and replacement– ROI for investments in human resources
“maintainable advantage usually from outstanding depth in selected human skills, logistics capabilities, knowledge bases
Ref: SHRM – Charles Greer
HRM – HRM – Changing times?Changing times?
Views of employees as cost center is changing Selection process Induction and training process Education Retention - negative impact of employee turn over
Compensation Innovation and learning – cost of un recorded knowledge
Ref: SHRM – Charles Greer
strategic HRM strategic HRM
HRM is a strategic tool only if it contributes to the bottom line. The question is; Does it?– Forecasts of shifts in skill needs from manual
to cerebral– Human Resources needs to looked at from an
Investment perspective.
Ref: SHRM – Charles Greer
Strategic analysis HRMStrategic analysis HRM
“To be competitive, organizations in many industries must have highly skilled.
Knowledgeable workers. They must also have a relatively stable labour force since employee
turnover works directly against obtaining the kind of coordination and organizational learning that leads to fast response and high-quality products
and services” - Edward Lawler
Ref: SHRM – Charles Greer
Human resourcesHuman resourcesInvestment considerationsInvestment considerations
Management valuesRisk return on investmentsEconomic rationale for investment in
trainingUtility theory
– Outsourcing as an alternative to investment in Human resources
Ref: SHRM – Charles Greer
Human resourcesHuman resourcesInvestment considerationsInvestment considerations
Management values Risk return on
investments Economic rationale for
investment in training Utility theory
– Outsourcing as an alternative to investment in Human resources
Values, Philosophies of management / senior managers.
Cost center– HR cost center– Replaceable resource
Investment– HR value adder– Critical resource
KEY personnel– Enhances human capital/
prevents depletion
BPL, Govt,Vs Infosys, Vs Reliance, TCS
Education, training, reward, promotion.
Ref: SHRM – Charles Greer
Human resourcesHuman resourcesInvestment considerationsInvestment considerations
The employers do not own the resource in which they have invested.
Returns must be great enough to overcome the risks
Cash outlays to maintain no layoff policy, the benefits are not easily quantified
Incur costs in short run for long term strategic benefit.
– Flexible committed work force– Better organizational culture
Reliance communication Bond money
Management values Risk return on
investments Economic rationale for
investment in training Utility theory
– Outsourcing as an alternative to investment in Human resources
Ref: SHRM – Charles Greer
Human resourcesHuman resourcesInvestment considerationsInvestment considerations
Human capital theory– Empr Not to bear the cost of Gen
training as the employees transfer skills developed at employers expense.
General training – OJT, Tuition fee reimbursement– Recoup cost of general training
[loyalty, flexibility] Specific training Employee related
– Cost of mobility, relocation, residence, children's education and other psychological issues,
– new salary lower/ greater LAY OFF
Management values Risk return on
investments Economic rationale for
investment in training Utility theory
– Outsourcing as an alternative to investment in Human resources
Ref: SHRM – Charles Greer
Human resourcesHuman resourcesInvestment considerationsInvestment considerations
Utility of each HR activity [attempts to determine economic value of human resource programs activities and procedures]
– Recruitment process Employee with higher
productivity– Performance appraisal
Return on output Return on sales
– Advt, training, special roles,
Management values Risk return on
investments Economic rationale for
investment in training Utility theory
– Outsourcing as an alternative to investment in Human resources
Ref: SHRM – Charles Greer
Human resourcesHuman resourcesInvestment considerationsInvestment considerations
Where world class capabilities and strategic advantage cannot be developed.
The resources devoted to perform the service internally is greater than those needed when outsourced
Excessive dependence on suppliers can be avoided.
Salary, executive search, HRIS, Benefits administration etc are outsourced
Key areas viz., performance appraisal, employee relations and labour relations are retained by companies.
Management values Risk return on
investments Economic rationale for
investment in training Utility theory
– Outsourcing as an alternative to investment in Human resources
Ref: SHRM – Charles Greer
Investments in training and Investments in training and developmentdevelopment
Investments in employability– Who moved my cheese?/ Jack Welch –
• the building was still standing , but the people were gone.
– Employers have responsibility to ensure they are getting the best results from each employee before terminating them. (the employer will have to coach, counsel and train the employee and also take advantage of the same.
Current practices– OJT– MDP– Prevention of skill obsolescence M,NC, CNC/ soft wares domain / telecommunication
– Reduction of career plateauing narayan murthy / VRS, golden hand shake/
Ref: SHRM – Charles Greer
Investment practices for improved retentionInvestment practices for improved retention Organizational cultures emphasizing interpersonal
relationship values Effective selection procedures Compensation and benefits Job enrichment and job satisfaction Practices providing work life balance Organizational direction creating confidence in
the future Retention of technical employee Other practices in facilitating retention
– Opportunities for training, growth, new learning, liberal transfer policies
Ref: SHRM – Charles Greer
Investments in job-secure work forcesInvestments in job-secure work forces Recognition of the costs of downsizing and lay offs
– Bumping less senior employees Reduced productivity Cost of training the incumbent, wage supplement
– Costs relating to termination of employees Separation payments, higher rates for unemployment
compensation, Depletion of the firms investment in training employees.
– Administrative costs Human resource processing activities, Clerical expenses, cost
of conducting medical examination of laid off employees, increased supervisory obligations for managers of reassigned employees.
– Intangible costs Morale, disruption of efficiencies in work processes,
Accidents, Depletion of goodwill, irregular age distribution
Ref: SHRM – Charles Greer
Investments in job-secure work forcesInvestments in job-secure work forces
Avoiding business cycle-based layoffs Alternatives to layoffs
– When down turn is of short duration– Block / shut off inflow of personnel into the organization –
attrition brings down the cost– Redeployment of current employees– Curtailment of sub contractors and reallocate the work to
permanent employees– Sharing of economic loss – wipro– Fewer work days
Employment guarantees The work effort and job security relationship
– The less secure the greater is the flexibility and productivity
Ref: SHRM – Charles Greer
Ethical implications of employment Ethical implications of employment practicespractices
Job securityPerformance pressures CompensationWork environment
Ref: SHRM – Charles Greer
Non-traditional investment Non-traditional investment approachesapproaches
Investment in (disabled) Differently-abled employees
Investments in employee healthCountercyclical hiring – technical personnel .
Ref: SHRM – Charles Greer
ExerciseExercise = Identify the type of investment = Identify the type of investment
Employment security Self-managed teams and decentralization of decision-
making Extensive training and development Continuous improvement HR programs Reduced status distinctions and barriers Sharing of financial and performance information Trust between management and employees at all
organizational levels Communication in global markets Efficient and effective use of new information technologies
Ref: SHRM – Charles Greer
ECC recognises that people are the real source of competitive advantage. It is through people that ECC delivers total customer satisfaction. An extensive and rigorous recruitment process ensures quality induction. L&T's Graduate Engineer Trainee recruitment process covers India's major engineering colleges and institutions. Programmes, plant visits and comprehensive information-sharing facilitate induction.
The basic principles of ECC's Human Resources policies include Recruitment based solely on merit by following well-defined and
systematic selection procedures without discrimination Sustain motivated and quality work force through appropriate and fair
performance evaluation, reward and recognition systems Identify training needs within the Organisation and design and implement
those need based training programmes resulting in continuous upgradation of knowledge, skills and attitudes of the employees
Maintain a quality Human Resource Management System to meet the international standards as per ISO 9001. Plan, design, train, equip and motivate the department staff to meet this standard of expectation.
ECC's Work Culture Work culture emphasises:· Freedom to experiment· Continuous learning and training · Transparency· Quality in all aspects of work· Rewards based on performance and potential
Ref: SHRM – Charles Greer
Stages in Strategic managementStages in Strategic management Strategic analysis
– Environmental analysis human resource environment human resource legal environment
– Establish organizational direction Strategy formulation
– Human resource planning Strategy implementation
– Work force utilisation and employment practices– Reward and development system
Strategic control– Performance impact of human resource practices– Human resource evaluation
Ref: SHRM – Charles Greer
The human resource The human resource environment environment
Global changes– WTO, GATT, EU, G&, G10 etc.
Boarders and barriers E-commerce, M-commerce Emerging markets, new markets. Technology Demography Culture
Etc….– The imperative >>‘HR focus’
Ref: SHRM – Charles Greer
The human resource environment The human resource environment -General environment-General environment
Technology and organisational structureWorker values and attitudinal trendsManagement trendsDemographic trendsTrends in utilisation of human resourcesInternational developments
Ref: SHRM – Charles Greer
The human resource environment The human resource environment -General environment-General environment
Technology and organisational structure
Worker values and attitudinal trends
Management trends Demographic trends Trends in utilisation of
human resources International
developments
Influence of technology HRIS Redeployment of HR staff to
operating units New organisational structures
(Short / accountability)– Unbounded corporations– Virtual corporations /
networked organisations– Cellular organisations/guilds – Respondent organisations/
supply niche components Stimulus for entrepreneurial
business
Ref: SHRM – Charles Greer
The human resource environment The human resource environment -General environment-General environment
Technology and organisational structure
Worker values and attitudinal trends
Management trends Demographic trends Trends in utilisation of
human resources International
developments
Ethical/moral issues (older generation blaming
younger generation) Time spent on work/ leisure Work enjoyment / satisfaction /appeals Loyalty of employees
– Location near / far Age
– Younger no loyalty and expect none
– New employee Perception before joining and after joining the job (extrinsic to intrinsic)
(image, induction and orientation, socialization process)
Emphasis on core values, cultures, family, social service)
Ref: SHRM – Charles Greer
The human resource environment The human resource environment -General environment-General environment
Management of diversity Work teams Virtual teams Human resource outsourcing Open book management TQM Integrated manufacturing Reengineering Management of professionals Managing of aftermath of Mrg
& Aqui
Technology and organisational structure
Worker values and attitudinal trends
Management trends Demographic trends Trends in utilisation of
human resources International
developments
Ref: SHRM – Charles Greer
The human resource environment The human resource environment -General environment-General environment
Aging work force (HMT)
Baby boom-US, China Labour Shortages Racial diversity Occupational
distribution for women Dual career couples
Technology and organisational structure
Worker values and attitudinal trends
Management trends Demographic trends Trends in utilisation of
human resources International
developments
Ref: SHRM – Charles Greer
The human resource environment The human resource environment -General environment-General environment
Telecommuting / working from home
Relocation from work Growing use of
temporary and contingent workers
Employee leasing
Technology and organisational structure
Worker values and attitudinal trends
Management trends Demographic trends Trends in utilisation of
human resources International
developments
Ref: SHRM – Charles Greer
The human resource environment The human resource environment -General environment-General environment
NAFTA EU GATT WTO G7
Technology and organisational structure
Worker values and attitudinal trends
Management trends Demographic trends Trends in utilisation of
human resources International
developments
Ref: SHRM – Charles Greer
The human resource environment The human resource environment -Legal environment-Legal environment
An overview of Industrial Relations Climate Emerging trends and paradigm shifts towards
Employee Relations Employee Relations Policy Implications of:
– Employment Related Legislations – Payment Related Legislations – Social Security Related Legislations – Welfare Related Legislations
Ref: SHRM – Charles Greer
The human resource environment The human resource environment -Legal environment-Legal environment
Equal employment opportunity for women.– Age, gender discrimination, promiscuous gender based
harassment. Promiscuity, Dealing with incidences, pregnancy discrimination, Disability discrimination, Religious discrimination, Reservations and protection, health care benefits, family and medical leave.
Employee relations– Negligent hiring, immigration, Employment at will, Drug testing,
Safety Labour relations and collective bargaining. Emerging issues Strategic impact of the legal environment
Ref: SHRM – Charles Greer
Labour Legislations in IndiaLabour Legislations in India The Apprentices Act, 1961 The Bonded Labour System
(Abolition) Act, 1976 The Child Labour (Prohibition &
Regulation) Act, 1986 The Children (Pledging of Labour)
Act, 1933 The Contract Labour (Regulation &
Abolition) Act, 1970 The Employees Provident Funds and
Misc. Provisions Act,1952 The Employees State Insurance Act,
1948 The Employers Liability Act, 1938 The Employment Exchange
(Compulsory Notification of Vacancies) Act, 1959
The Equal Remuneration Act, 1976 The Factories Act, 1948 The Workmen's Compensation Act,
1923 The Weekly Holidays Act, 1942
The Industrial Disputes Act The Industrial Employment
(Standing Orders) Act,1946 The Inter-state Migrant Workmen
(Regulation of Employment and Conditions of Service) Act, 1979
The Labour Laws (Exemption from Furnishing Returns & Maintaining Registers by Certain Establishments) Act, 1988
The Maternity Benefit Act, 1961 The Minimum Wages Act, 1948 The Payment of Bonus Act, 1965 The Mines Act,1952 The Payment of Gratuity Act, 1972 The Payment of Wages Act, 1936 The Sales Promotion Employees
(Conditions of Service) Act, 1976 The Shops and Establishments Act,
1953 The Trade Union Act, 1926 Ref: SHRM – Charles Greer
Labour legislationsLabour legislations
The term `labour legislation’ is used to cover all the laws which have been enacted to deal with “employment and non-employment” wages, working conditions, industrial relations, social security and welfare of persons employed in industries.
Ref: SHRM – Charles Greer
Need for labour legislation in India:Need for labour legislation in India: Organized industry in a planned economy calls for the
spirit of co-operation and mutual dependence for attaining the common purpose of greater, better and cheaper production. Since this has not been happening voluntarily, the need for State intervention.
The need for labour legislation may be summarized as under:– Necessary for the health, safety, and welfare of workers;– Necessary to protect workers against oppressive terms as
individual worker is economically weak and has little bargaining power;
– To encourage and facilitate the workers in the organization;
– To deal with industrial disputes;– To enforce social insurance and labour welfare schemes.
In India, labour legislation is treated as an arm of the State for the regulation of working and living conditions of workers.
Ref: SHRM – Charles Greer
Principles of labour legislationPrinciples of labour legislation Social Justice: Social Equity Standards in terms of living, position in
society etc. of the working population. National Economy International Uniformity
Ref: SHRM – Charles Greer
Principles of labour legislationPrinciples of labour legislation Social Justice: Social Equity Standards in terms of living,
position in society etc. of the working population.
National Economy International Uniformity
– The essence of democracy is ensuring social justice to all sections of the community.
– This demands the protection of those who cannot protect themselves.
– In modern industrial set-up, workers, left to themselves, are unable to protect their interest.
– Therefore, the State has to intervene to help them by granting them freedom of association, the power of collective bargaining and by providing for mediation or arbitration in the case of industrial conflict.
Ref: SHRM – Charles Greer
Principles of labour legislationPrinciples of labour legislation Social Justice: Social Equity Standards in terms of living,
position in society etc. of the working population.
National Economy International Uniformity
Legislation based on this principle provides for achievement of definite standards.– EQUAL REMUNERATION
ACT– Specific provisions of
law – such as in factories act
– Work timings– Work environment– Dangerous machines act
Ref: SHRM – Charles Greer
Principles of labour legislationPrinciples of labour legislation Social Justice: Social Equity Standards in terms of living,
position in society etc. of the working population.
National Economy International Uniformity
These standards for the working class can be achieved by bringing about changes in the Law of our land.– Power to change the
Law is exercised by the government.
– Existing laws may be amended to meet the changed standards.
ESI EPF Minimum wages
Ref: SHRM – Charles Greer
Principles of labour legislationPrinciples of labour legislation Social Justice: Social Equity Standards in terms of living,
position in society etc. of the working population.
National Economy International Uniformity
Measures have to be provided through legislation to:– Ensure normal growth
of industry for the benefit of the nation as a whole
– Satisfy the physical and intellectual needs of the citizens
– Ensure the growth of industrial efficiency such as to adjust the wage system with a view to increase the productivity and prosperity of the workers
Ref: SHRM – Charles Greer
Principles of labour legislationPrinciples of labour legislation Social Justice: Social Equity Standards in terms of living,
position in society etc. of the working population.
National Economy International Uniformity
ILO Since its inception, securing minimum standards (for the working population – worldwide) on a uniform basis in respect of all labour matters has been the main objective of ILO.o To this end, conventions are passed at the conferences of ILO.– As a member of the ILO,
adopting these conventions would require appropriate legislation to be brought about.
– The influence of international labour conventions has been significant in shaping the course of labour legislation in India.
Ref: SHRM – Charles Greer
Legal environmentLegal environment- Bench mark- Bench mark
Obey the Law. Law is society’s codification of right and wrong; Play by the rules
• It is important to perform in a manner consistent with expectations of government and the law.
• It is important to comply with various national and supra-national laws and regulations.
• It is important to be a law-abiding corporate citizen. • It is important that a successful firm be defines as one that fulfils
its legal obligations. • It is important to provide goods and services that at least meet
the minimal legal requirements.
Ref: SHRM – Charles Greer
Strategy formulationStrategy formulation
What are the purpose(s) and objective(s) of the organization?
Where is the organization presently going? What critical environmental factors does the
organization currently face? What can be done to achieve organizational
objectives more effectively in the future?
Ref: SHRM – Charles Greer
Strategy formulation processStrategy formulation process Development of organizational philosophy and
mission statement Environmental scanning Analysis of SWOT Formulation of strategic objectives Generation of alterative strategy Evaluation and selection of strategies
Informal / incremental strategic planning– Managed/logical incremental planning
A strategy is the pattern or plan that integrates an organisation’s major goals, policies, and action sequences into a cohesive whole
Ref: SHRM – Charles Greer
Competitive strategy in Business Competitive strategy in Business UnitsUnits
Periodic forward scanning Analysis based on longer time frame Communication about goals and resource allocation Framework for short-term plan evaluation and
integration Decisional criteria framework for short term decision
making PLANNING IN SBU’S
– Base strategy will be integrated with functional specializations to exploit the opportunity seen by the strategy and achieve the goals.
– Low cost leadership, differentiation, niche
Ref: SHRM – Charles Greer
Value Chain AnalysisValue Chain Analysis Primary
activities– Inbound logistics– Operations– Outbound
logistics– Marketing and
sales– Service
Secondary Activity– Procurement – Human
Resource Management
– Technology Development
– Infrastructure
Ref: SHRM – Charles Greer
Steps in Value Chain Steps in Value Chain AnalysisAnalysis
Value chain analysis can be broken down into a three sequential steps:1. Break down a market/organisation into its key
activities under each of the major headings in the model (primary activities / secondary activities)
2. Assess the potential for adding value via cost advantage or differentiation, or identify current activities where a business appears to be at a competitive disadvantage;
3. Determine strategies built around focusing on activities where competitive advantage can be sustained
Ref: SHRM – Charles Greer
HR strategy ?HR strategy ?
'a human resource system that is tailored to the demands of the business strategy' -Miles and Snow 1984
'the pattern of planned human resource activities intended to enable an organization to achieve its goals' - Wright and McMahan 1992
“the pattern planned human resource deployments and activities intended to enable an organisation to
achieve its goals”
Ref: SHRM – Charles Greer
SHRM concernSHRM concern
SHRM concern is to ensure– HR management is fully integrated with the
strategy and strategic needs of the firm– HR policies cohere across policy areas and
areas of hierarchy– HR practices are adjusted and used by line
manages and employees as part of their everyday work
Ref: SHRM – Charles Greer
Strategic HRMStrategic HRM (IMPORTANCE) (IMPORTANCE)
Needs investment –ROI Cost of investment Reduction in total Labour cost Efficiency in operation Optimal use of human resources
A source of competitive advantage Technical skills (pace of technological change) Knowledge and capabilities
Management of critical and Difficult HR areas Management of change (Resistance to change) Lack of trust Antagonistic labour Motivational problems Management relations
Economic turbulence Within the country (turbulence) Globalisation Dramatically changing demographics Differences in workforce values
Strategic human resource management and ∟ HRP are considered important to manage uncertainties; HR is integrated with strategy; Integrating and aligning HR function with strategyRef: SHRM – Charles Greer
Benefits of SHRMBenefits of SHRM1. Identifying and analysing external opportunities and
threats that may be crucial to the company's success.2. Provides a clear business strategy and vision for the
future.3. To supply competitive intelligence that may be useful in
the strategic planning process.4. To recruit, retain and motivate people.5. To develop and retain of highly competent people.6. To ensure that people development issues are
addressed systematically.7. To supply information regarding the company's internal
strengths and weaknesses.8. To meet the expectations of the customers effectively.9. To ensure high productivity. 10. To ensure business surplus thorough competency
Ref: SHRM – Charles Greer
HRM Practices
Firm strategy Institutional / Political forces
HR Capital pool(Skills, abilities)
HR behaviorsFirm level outcomes
(performance, satisfaction,
absenteeism etc)
Resource based view of the firm
Cybernetics
Agency/transaction costs
Resource dependence institutional
Behavioral approach
Theoretical frame work of SHRM
Ref: SHRM – Charles Greer
Theoretical frame work of SHRM Strategy driven
– Resource based view Competitive advantage based on unique allocation of resources {selection
/Compensation package} (TCS)– Behavioral view
Control and influence the behaviors of individuals (Infosys)– Cybernetics systems
Adoption or abandonment of practices based on feedback on contributions to strategy (Bosch – MICO)
– Agency/transactions cost view Use of control systems, performance evaluation and reward systems etc
– (In the absence of performance evaluation strategy may not be pursued)
Non-Strategy driven – Resource dependence and power theories
– Power and politics= legislation, unionization, control of resources, expectations of social responsibility.
– Institutional theory– In appropriate performance evaluation dimensions (inertia / rational decision
making.appraisal
Ref: SHRM – Charles Greer
International strategyInternational strategy
Multinational, global and transnational strategies
Strategic alliancesSustainable global competitive advantageGlobally competent managersLocation of production facilities
Ref: SHRM – Charles Greer
Human resource contributions Human resource contributions to strategyto strategy
Environmental scanning and competitive advantage
Implementation of resource reallocation decisions Slide >
Lead time for dealing with labour shortages.
..
Ref: SHRM – Charles Greer
Industry matrix < Back
Ref: SHRM – Charles Greer
Other issuesOther issues Strategy driven role behaviors and practices
– Innovation – cooperation, group oriented, long term appraisal system, generalized skill development, broad career path, compensation approaches accentuating internal equity flexible compensation packages including stock ownership
– quality enhancement- employment security guarantees. Extensive training programs, participative decision making (process orientation)
– cost reduction – performance evaluation system emphasizing results in the short term. Virtually no training programs, very specialized jobs, narrow specialized career jobs,Procedure for continual tracking of wage rates in the labour market.
Strategic human resource activity typology– Relational : transactional $ High : low strategic value Slide >
Classifying human resource types Jeffrey sonnenfeld and Maury peiperl Slide Miles and snow: Defenders, prospectors, analyzers and reactors
Network organization and strategy Integration of strategy and human resource planning
– Evolution of strategy and human resource planning integration. Evolution of linkages between Strategic business planning and HRM
– Administrative linkage, one way – HR is involved in implementation, two way- involved HRM and strategic business plans, integrated– Determinants of integration
Conditions under which determinants may not be appropriate.
Ref: SHRM – Charles Greer
HUMAN RESOURCE ACTIVITY TYPOLOGY
Staffing planningBenefits of planningRetirement planningCompliance
Performance enhancementConsultingEmployee relationsLabour negotiationsExecutive compensationEmployee developmentManagement developmentRecruitment interviewing
< IMPORTANT TO EXECUTIVES >PayrollBenefits administrationRetirement administrationEmployee recordsRelocation administrationRecruitment information processing
< IMPORTANT TO EMPLOYEES >
Recruitment information processingEmployee assistance programs
Strategic value of activity
Low
High
RelationshipTransactional Type of HR activityBack Ref: SHRM – Charles Greer
Classifying human resource types *Classifying human resource types *BACK
Ref: SHRM – Charles Greer
Benefits of integrating HRP with Strategic Benefits of integrating HRP with Strategic planningplanning
Generates more solutions to complex organizational problems
Ensures consideration of human resources in organizational goal setting process
Ensures consideration of human resources in assessment of organizational abilities to accomplish goals and implement strategies
Reciprocal integration prevents strategy formulation based on personal rigidities/preferences
Facilitates concurrent consideration of strategic plans and managerial succession.
Ref: SHRM – Charles Greer
Strategic components of HRM Strategic components of HRM relevant to internal fitrelevant to internal fit
Management awarenessManagement of the functionPortfolio of programsPersonnel skillsInformation technologyAwareness of the environment
Ref: SHRM – Charles Greer
HR Practitioners Role HR Practitioners Role The HR managers have keen role in the effective planning and
implementation of the policies and decisions that in tune with the business changes. – They should act as strategic partners and be proactive in their role than mere
reactive, passive spectators.– The HR managers should understand how far their decisions contribute to
business surplus incorporating human competency and performance to the organisation.
– Strategic HR managers need a change in their outlook from seeing themselves as relationship managers to strategic resource managers.
Kossek (1987, 1989) argues that major HRM innovations occur when senior management takes the lead and adoption of innovative SHRM practices is dependent on the nature of relationship of the HR Department with the CEO and the line managers.
Legge (1978) commenting on the actions of the personnel practitioner in the innovation process suggests that adoption of an innovation by an organization depends largely on HR practitioners' credibility with information and resource providers.
– HR Department and HR managers in these innovative organizations play a strategic role (Ulrich, 1997) linking the HR strategy with the business strategy of the organization.
– A crucial aspect concerning SHRM is the concepts of fit and flexibility. The degree of fit determines the human resource system's integration with organization strategy. It is the role of HR Managers to ensure this fit in between Human Resource System with the Organization Strategy.
Ref: SHRM – Charles Greer
Requirements for SHR-ManagersRequirements for SHR-Managers
Information management skillsPlanning skillsManagement skillsIntegration skillsChange management skills
Ref: SHRM – Charles Greer
Human resource planningHuman resource planning
Strategic role of HRPOver view of HRPManagerial issues in planningSelecting forecasting techniqueForecasting the supply of human resourcesForecasting the demand for human
resources
Ref: SHRM – Charles Greer
Human resource planningHuman resource planning Strategic role of HRP Over view of HRP Managerial issues in
planning Selecting forecasting
technique Forecasting the supply of
human resources Forecasting the demand
for human resources
Developmental planning for strategic leadership
Assessment of strategic alternatives
Adding value Contribution to strategic
human resource management
Strategic salary planning.
Ref: SHRM – Charles Greer
Human resource planningHuman resource planning Strategic role of HRP Over view of HRP Managerial issues in
planning Selecting forecasting
technique Forecasting the supply of
human resources Forecasting the demand
for human resources
Steps in HRP– Interfacing strategic planning and
scanning the environment– Taking an inventory of the companies
current human resources.– Forecasting the demand for human
resources– Forecasting the supply of human resources
both from within the organization and from the external labor market
– Comparing the forecast of demand and supply
– Planning the actions needed to deal with anticipated shortages or overages
– Feeding back such information into the strategic management process
Ref: SHRM – Charles Greer
Human resource planningHuman resource planning Strategic role of HRP Over view of HRP Managerial issues in
planning Selecting forecasting
technique Forecasting the supply of
human resources Forecasting the demand
for human resources
Planning in a context of change
Responsibility for human resource planning
Failure to plan for human resources
Ref: SHRM – Charles Greer
Human resource planningHuman resource planning Strategic role of HRP Over view of HRP Managerial issues in
planning Selecting forecasting
technique Forecasting the supply of
human resources Forecasting the demand
for human resources
Personal implications Changing receptivity
towards planning– Stricter legislations for
lay off etc Other issues
– Mind set of work force and related actions.
Ref: SHRM – Charles Greer
Human resource planningHuman resource planning Strategic role of HRP Over view of HRP Managerial issues in
planning Selecting forecasting
technique Forecasting the supply of
human resources Forecasting the demand
for human resources
Purpose of planning Organisational
characteristics Industry characteristics Environmental turbulence Other consideration
– Technique of forecasting– Cost– Accuracy
Ref: SHRM – Charles Greer
Human resource planningHuman resource planning Strategic role of HRP Over view of HRP Managerial issues in
planning Selecting forecasting
technique Forecasting the supply of
human resources Forecasting the demand
for human resources
Replacement charts Mgr posi
Human resurce inventories Succession planning Markov analysis …. Renewal models
age cohorts, internal mobilization
Computer simulation Regression analysis Trend extrapolation
– Utilisation of supply forecasting techniques
Ref: SHRM – Charles Greer
Human resource planningHuman resource planning Strategic role of HRP Over view of HRP Managerial issues in
planning Selecting forecasting
technique Forecasting the supply of
human resources Forecasting the demand
for human resources
Heuristics, Rule of thumb and the Delphi technique
Operations research and management science technique
Regression analysis– Utilisation of demand
forecasting technique– Trend extrapolation
Ref: SHRM – Charles Greer
Markov analysis Markov analysis back
Distribution of employees in time
Job 1 27 .66 .11 .09 .03 .02 .09Job 2 41 .15 .60 .08 .06 .01 .10Job 3 55 .03 .08 .55 .13 .10 .11Job 4 64 .00 .09 .18 .54 .03 .16Job 5 73 .00 .08 .10 .17 .45 020
260 26 44 55 57 41 37Job 1 Job 2 Job 3 Job 4 Job 5 exit
Ref: SHRM – Charles Greer
Strategy formulation processStrategy formulation process Development of organizational philosophy and
mission statement Environmental scanning Analysis of SWOT Formulation of strategic objectives Generation of alterative strategy Evaluation and selection of strategies
Informal / incremental strategic planning– Managed/logical incremental planning
A strategy is the pattern or plan that integrates an organisation’s major goals, policies, and action sequences into a cohesive whole
Ref: SHRM – Charles Greer
Strategy implementationStrategy implementationwork force utilization and employment practiceswork force utilization and employment practices
Efficient utilization of human resourcesDealing with employee shortagesSelection of employeesDealing with employee surpluses
Ref: SHRM – Charles Greer
Strategy implementationStrategy implementationwork force utilization and employment practiceswork force utilization and employment practices
Efficient utilization of human resources
Dealing with employee shortages
Selection of employees
Dealing with employee surpluses
Cross training and flexibility in assigning work
Using work teams– Requirements for effective
teams Forming Storming Norming performing
Operating on a non union basis
Ref: SHRM – Charles Greer
Strategy implementationStrategy implementationwork force utilization and employment practiceswork force utilization and employment practices
Efficient utilization of human resources
Dealing with employee shortages
Selection of employees
Dealing with employee surpluses
Strategic recruiting Special recruiting for
minorities and women workers
Flexible retirement as a source of labour
Managing vendors of outsourced functions
Ref: SHRM – Charles Greer
Strategy implementationStrategy implementationwork force utilization and employment practiceswork force utilization and employment practices
Managing vendors of outsourced functions
– Making the outsourcing decision
– Selecting and negotiating with outsourcing vendors
– Managing the outsourcing transactions
– Managing vendor relationships
– Monitoring and evaluating vendor performance
Efficient utilization of human resources
Dealing with employee shortages
Selection of employees
Dealing with employee surpluses
Ref: SHRM – Charles Greer
Strategy implementationStrategy implementationwork force utilization and employment practiceswork force utilization and employment practices
Efficient utilization of human resources
Dealing with employee shortages
Selection of employees
Dealing with employee surpluses
Reliability and validity– Predictive validity– Concurrent validity– Content validity
Job analysis KSA
Interviews Behavioural interviews Testing Assessment centres
Ref: SHRM – Charles Greer
Strategy implementationStrategy implementationwork force utilization and employment practiceswork force utilization and employment practices
Redeployment and retraining
Early retirement Retreat from
employment security policy
Downsizing and layoffs
Termination strategies
Efficient utilization of human resources
Dealing with employee shortages
Selection of employees
Dealing with employee surpluses
Ref: SHRM – Charles Greer
Strategy implementationStrategy implementationwork force utilization and employment practiceswork force utilization and employment practices
Downsizing and layoffs– Findings
Co are not well prepared 6 months to 1 year co indicators
do not improve –profits, ROI, Stock prices, expense ratios
Survivors syndrome Myth of job security exploded
(Who moved my cheese) Sustained improvement can be
brought about only with improvements in productivity, quality and effectiveness and integrate reductions in head count with planned changes in the way the work is designed.
Downsizing in not a one time quick fix solution to enhance competitiveness. –is a part of continuous improvement.
Efficient utilization of human resources
Dealing with employee shortages
Selection of employees
Dealing with employee surpluses
Ref: SHRM – Charles Greer
Strategy implementationStrategy implementationwork force utilization and employment practiceswork force utilization and employment practices
Downsizing and layoffs– Guide lines for conduct of layoffs
Give early warnings / announcements of layoffs
Soften the impact with compensation and benefits
Utilise the services of outplacement firms
Supply retraining services Provide equitable and decent
treatment to laid off employees Ensure supportive treatment of
survivors Maintain a cooperative approach
with unions Uphold obligation to the
community
Efficient utilization of human resources
Dealing with employee shortages
Selection of employees
Dealing with employee surpluses
Ref: SHRM – Charles Greer
Special implementation Special implementation challengeschallenges
Career path for technical professionalsDual career couplesStrategy implementation system – Reward
and development systems Strategically oriented performance management
system Strategically oriented compensation systems Employee development
Ref: SHRM – Charles Greer
Strategy implementation system Strategy implementation system – Reward and development systems– Reward and development systems
Performance measurement approaches
– MBO– Graphic scale rating– Narratives– BARS– Behavioral observation scales– 360 –degree feedback
Performance evaluation of executives
Effectiveness of performance measurement.
YOU GET WHAT YOU MEASURE, YOU MEASURE WHAT YOU VALUE, YOU CAN NOT CONTROL WHAT YOU CANNOT MEASURE.
Strategically oriented performance management system
Strategically oriented compensation systems
Employee development
Ref: SHRM – Charles Greer
Strategy implementation system Strategy implementation system – Reward and development systems– Reward and development systems
Strategically oriented performance management system
Strategically oriented compensation systems
Employee development
Traditional compensation systems
– Job analysis > job evaluation > salary/wage hierarchy
Point system Factor comparison system Hybrid system
– Internal equity– > Wage surveys to establish
external equity.
Ref: SHRM – Charles Greer
Strategy implementation system Strategy implementation system – Reward and development systems– Reward and development systems
Traditional compensation systems
– Inadequacies Wage for know-how not
given Compensated for specific
job only Impact of collective
bargaining on wage structures.
Does not work well with managers and professionals
Strategically oriented performance management system
Strategically oriented compensation systems
Employee development
Ref: SHRM – Charles Greer
Strategy implementation system Strategy implementation system – Reward and development systems– Reward and development systems
Skill based pay Broad banding Team based pay Variable
compensation Executive
compensation
Strategically oriented performance management system
Strategically oriented compensation systems
Employee development
Ref: SHRM – Charles Greer
Strategy implementation system Strategy implementation system – Reward and development systems– Reward and development systems
Strategically oriented performance management system
Strategically oriented compensation systems
Employee development
Training programs Training methods Apprenticeships Management development Management development
for international assignments Product life cycle and
managerial fit– PLC, Evolutionary stage >
Steady state– Development Vs selection
Ref: SHRM – Charles Greer
The performance impact of The performance impact of human resource practiceshuman resource practices
Individual high performance practices Limitations of individual practices Evolution of practices Systems of high performance human resource
practices Individual best practices Vs systems of practices Universal practices Vs contingency perspectives
Ref: SHRM – Charles Greer
The performance impact of The performance impact of human resource practiceshuman resource practices
Seven management practices that enhance performance –Jefrey Pfeffer1. Employment security2. Selective hiring of new personnel3. Self managed teams and
decentralization of decision making as basic principle of org design
4. Comparatively high compensation on organizational performance
5. Extensive training6. Reduced status distinctions and
barriers 7. Extensive sharing of financial and
performance information.
Individual high performance practices
Limitations of individual practices
Evolution of practices Systems of high performance
human resource practices Individual best practices Vs
systems of practices Universal practices Vs
contingency perspectives
Ref: SHRM – Charles Greer
The performance impact of The performance impact of human resource practiceshuman resource practices
Compensation– High compensation linked to organisational
performance– Incentive based compensation– Profit sharing– Team based compensation
Diversity Employment
– Countercyclical hiring, downsizing, early retirement programs, employment security, human resource outsourcing.
Industrial relations– Decertification of union
bargaining agent– Positive labour relations– Strikes, lockouts
Internal labour market
Individual high performance practices
Limitations of individual practices
Evolution of practices Systems of high performance
human resource practices Individual best practices Vs
systems of practices Universal practices Vs
contingency perspectives
Ref: SHRM – Charles Greer
The performance impact of The performance impact of human resource practiceshuman resource practices
motivation – Decentralized decision
making– Self managed teams– Open book management– Reduced status differentials
or symbolic egalitarianism Performance management Staffing
– Cognitive tests, staffing selectivity, CEO succession insider outsider, yield analysis of recruiting sources
Training
Individual high performance practices
Limitations of individual practices
Evolution of practices Systems of high performance
human resource practices Individual best practices Vs
systems of practices Universal practices Vs
contingency perspectives
Ref: SHRM – Charles Greer
The performance impact of The performance impact of human resource practiceshuman resource practices
Individual high performance practices
Limitations of individual practices
Evolution of practices Systems of high performance
human resource practices Individual best practices Vs
systems of practices Universal practices Vs
contingency perspectives
Each practice has a different kind of impact on individual workers – if possible to address at individual levels the same may be done.
Results of studies that give positive or negative indication can not be taken as absolute
Ref: SHRM – Charles Greer
The performance impact of The performance impact of human resource practiceshuman resource practices
Individual high performance practices
Limitations of individual practices
Evolution of practices Systems of high performance
human resource practices Individual best practices Vs
systems of practices Universal practices Vs
contingency perspectives
HR practices are path dependant. They consist of policies that are developed over time and cannot be simply purchased in the market by competitors.
Ref: SHRM – Charles Greer
The performance impact of The performance impact of human resource practiceshuman resource practices
Has positive impact Commitment oriented systems
– Decentralized decision making, general training, Highly skilled employees, High wages - bonuses
Human capital enhancement– Comprehensive training, BARS,
Technical and problem solving skills, selective staffing
Human resource administrative system– Hourly pay, individual equity,
individual incentive, result based performance appraisal
Motivation and commitment system– Receptiveness to new training,
compensation contingent on firms performance, extent of status differentials
Skills and organizational structures– Attitude survey, access to grievance
procedures, formal job anasysis, info sharing
Individual high performance practices
Limitations of individual practices
Evolution of practices Systems of high performance
human resource practices Individual best practices Vs
systems of practices Universal practices Vs
contingency perspectives
Ref: SHRM – Charles Greer
The performance impact of The performance impact of human resource practiceshuman resource practices
Individual high performance practices
Limitations of individual practices
Evolution of practices Systems of high performance
human resource practices Individual best practices Vs
systems of practices Universal practices Vs
contingency perspectives
Mxed evidence and response
– Some individual practices have had positive impact
– Systems of practices have both
Adoption Implementation fit
Ref: SHRM – Charles Greer
The performance impact of The performance impact of human resource practiceshuman resource practices
Individual high performance practices
Limitations of individual practices
Evolution of practices Systems of high performance
human resource practices Individual best practices Vs
systems of practices Universal practices Vs
contingency perspectives
Have their own applicability
– Evidence for success of both
– Greater evidence for contingency
Ref: SHRM – Charles Greer
Human Resource EvaluationHuman Resource Evaluation
Overview of evaluationApproaches to evaluationPrevalence of evaluationEvaluating strategic contributions of
traditional areasEvaluating strategic contributions in
emerging areas
Ref: SHRM – Charles Greer
Human Resource EvaluationHuman Resource Evaluation Overview of evaluation Approaches to evaluation Prevalence of evaluation Evaluating strategic
contributions of traditional areas
Evaluating strategic contributions in emerging areas
Scope of evaluation Strategic impact Level of analysis Criteria Level of constituents Ethical dimensiona
Ref: SHRM – Charles Greer
Human Resource EvaluationHuman Resource Evaluation Overview of evaluation Approaches to evaluation Prevalence of evaluation Evaluating strategic
contributions of traditional areas
Evaluating strategic contributions in emerging areas
Audit approaches Analytical approaches Quantitative and
qualitative measures Balance scorecard
perspective Benchmarking Industry influences
Ref: SHRM – Charles Greer
Human Resource EvaluationHuman Resource Evaluation Overview of evaluation Approaches to evaluation Prevalence of evaluation Evaluating strategic
contributions of traditional areas
Evaluating strategic contributions in emerging areas
Little Results not revealed
Ref: SHRM – Charles Greer
Human Resource EvaluationHuman Resource Evaluation Overview of evaluation Approaches to evaluation Prevalence of evaluation Evaluating strategic
contributions of traditional areas
Evaluating strategic contributions in emerging areas
HRP Staffing Training Performance evaluation
systems Compensation systems Utility analysis labour and employee
relations
Ref: SHRM – Charles Greer
Human Resource EvaluationHuman Resource Evaluation Overview of evaluation Approaches to evaluation Prevalence of evaluation Evaluating strategic
contributions of traditional areas
Evaluating strategic contributions in emerging areas
Equal employment opportunity and management of diversity
Quality readiness
Ref: SHRM – Charles Greer
Thank youThank you
Issues to be taken into consideration
Ref: SHRM – Charles Greer