Strategic hrm

1. Strategic HRM
KULDEEP MATHUR
M.B.A. JIWAJI UNIVERSITY GWALIOR

2. “People with credentials are often outperformed
by those with a passionate commitment for
something”
Anonymous
“Successful Companies of the 21st Century will
be those who do the best job of capturing.
Storing and leveraging what their employees
know”
- Lew Platt, Hewlett-Packard

3. With the boom in the economy and growth of the
knowledge economy, HR has taken on a new
avatar. As the focus moves from traditional brick
and mortar organizations to more ‘people-oriented
business’ like IT-ITES, media, retail, health care,
hotels etc, HR has become significant in nature
and management of its role in an organization. As
the competitive advantage of organization has
moved from machines and production to the
expertise and creativity of its people, HR has a
large role to play in attracting, motivating and
finally, retaining these very people.

4. Human resource personnel will have to take on
the role of a strategist and an enabler for the
organization to face the next wave of changes that
are mind boggling & complex.

5. The role of human resource management in
organizations has been evolving dramatically in
recent years. The days of human resources
management in organizations has been evolving
dramatically in recent years. The days of human
resources as the “personnel management” –
performing recordkeeping, paper pushing, file
maintenance, and other largely clerical
functions – are over. Any organization that
continues to utilize its HR function solely to
perform these administrative duties doesn’t
understand the contributions that HR can make to
an organization’s performance. In the most

6. successful, profit making organizations, HR is
increasingly being seen as a critical strategic
partner and assuming far-reaching and
transformational roles and responsibilities.

7. Traditional HR versus Strategic HR
Traditional HR Strategic HR
Responsibility for HR Staff specialists Line managers
Focus Employee relations Partnerships with internal and
external customers
Role of HR Transactional, change follower, and
respondent
Transformational, change
leader, and initiator
Initiatives Slow, reactive, fragmented Fast, proactive, integrated
Time horizon Short-term Short, medium, long
Control Bureaucratic –roles, policies, procedures Organic – flexible, whatever is
necessary to succeed
Job design Tight division of labor, independence,
specialization
Broad, flexible, cross-training,
teams
Key investments Capital, products People, knowledge
Accountability Cost center Investment center

8. There has been a paradigm change in functioning
& role of HR as strategic partner.
Taking a strategic approach to human resource
management involves abandoning the mindset
and practices of “personnel management” and
focusing more on “strategic issues than
operational & routine issues”.
Strategic human resource management realizes
that people make or break an organization
because all decisions made regarding finance,
marketing, operations, or technology are made by
an organization’s people.

9. Strategic human resource management involves
the development of a consistent, aligned
collection of practices, programs, and policies
to facilitate the achievement of the
organization’s strategic objectives. It considers
the implications of corporate strategy for all HR
systems within an organization by translating
company objectives into specific people
management systems.

10. External Environment
Competition
Government regulation
Technology
Market trends
Economic
Corporate
Strategy
Business
Unit
Strategy
Internal Environment
Culture
Structure
Politics
Employee skills
Past strategy
Employee
Separation
Laws
Regulating
Employment
HR Strategy
HR planning
Design of jobs & and
work systems
What worker do
What workers need
How jobs interface with
others
HR
Information
Systems
Staffing
Training
Performance
Management
Compensation
Labor
Relations
Strategic Human Resource Management

11. Increased
Performance
Enhanced
Shareholders Value
Customer and
Employee Satisfaction
through
• Effective management of staffing, retention, and turnover through selection of employees
that fit with both strategy and culture
• Cost-effective utilization of employees through investment in identified human capital with
potential for high retention
• Integrated HR programs and policies that clearly follow from corporate strategy
• Facilitation of change and adaptation through a flexible, more dynamic organization
• Tighter focus on customer needs, key and emerging markets, quality
Outcomes of Strategic HR

12. Probably the single most important caveat of
strategic human resource management is that
there is no one best way to manage people in any
given organization

13. Establishing a strong HR strategy that is clearly
linked to the organization’s strategy is not
enough. HR strategy needs to be
communicated, practiced, and – perhaps most
important – spelled out and written down.
Strategic HR can be contrasted to the more
traditional administrative focus of HR through an
examination of different roles that HR can play in
an organization. It has shifted from “cost &
examples” to value added & wealth creation.

14. Strategic
planning
Service delivery
Administration
Cost Value added
10%
30%
60% 10%
30%
60%
HR Cost and value added

15. Designing Strategic HR Strategies -
(A) Strategy Architect
• Developing & linking/ aligning HR strategies with
organizational strategies
• Sustaining Strategic agility
• Engaging customers – internal as well external
(B) Talent Manager/ Org Designer
• Planning Ensuring today’s and tomorrow’s talent
• Developing talent/Nurturing talent
• Shaping organization – flexible, responsive etc.
• Fostering communication
• Designing rewards systems++

16. (c) Operational Executor
• Designing new workplaces practices
• Implementing workplace policies / practices
• Advancing HR Technology

17. (D) Credible Activist
• Deliverables than doubles
• Delivering results with integrity
• Sharing information
• Building relationships of trust
• Doing HR with attitude
(E) Culture and Change Steward
• Facilitating change
• Valuing culture
• Crafting culture
• Personalizing culture

18. Human Capital Pool *
Knowledge
Skill
Ability
Employee Relationships
and Behaviors
Psychological Contracts
Job Related/Required
Organizational
Citizenship
People Management Practices
Staffing Training Rewards Appraisal
Work Design Participation Recognition Communication
The basic strategic HRM Components

19. *
•Optimizing the human capital through Development
•Optimizing the human capital through Talent Management

20. To integrate HR into a business performance
measurement system, managers must identify the
points of intersection between HR and the
organization’s strategy implementation plan.
These points are strategic HR deliverables
namely those outcomes of the HR architecture
that serve to execute the firm’s strategy. This is in
contrast to HR doables that focus on HR
efficiency and activity counts. These deliverables

21. are of two categories , viz, performance drivers
and enablers. HR performance drivers are people
related capabilities or assets such as employee
productivity or employee satisfaction. These
drivers are not generic; it is company specific.
Enablers are methods which reinforce
performance drivers. A single performance driver
may have several enablers.

22. HR Roles in a knowledge-based economy
• Human capital steward
• Knowledge facilitator
• Relationship builder
• Rapid deployment specialist

23. The human capital steward role involves the
creation of an environment and culture in which
employees voluntarily want to contribute their
skills, ideas, and energy. This is based on the
premise that, unlike raw materials, plant, and
equipment, human capital is not “owned” by the
organization; it can move freely from organization
to organization at the employee’s whim. A
competitive advantage can be maintained only
when the best employees are recruited, duly
motivated, and retained.
The knowledge facilitator role involves the
procurement of the necessary employee
knowledge and skill sets that allow information to

24. be acquired, developed, and disseminated,
providing a competitive advantage. This process
can succeed only as part of a strategically
designed employee development plan, whereby
employees teach and learn from each other and
knowledge sharing is valued and rewarded.
The relationship builder role involves the
development of structure, work practices, and
organizational culture that allow individuals to
work together, across departments and
functions. To ensure competitiveness, networks
need to be developed that focus on the strategic
objectives of the organization and how synergies
and teamwork

25. that lead to outstanding performance are valued
and rewarded.
The rapid deployment specialist role involves the
creation of an organization structure and HR
systems that are fluid and adaptable to rapid
change in response to external opportunities
and threats. The global, knowledge-based
economy changes quickly and frequently and
success in such an environment mandates
flexibility and a culture that embraces change.
The first, strategic contribution, requires the
development of strategy, connecting organizations

26. to external constituents, and implementing
systems that align employee performance with
company strategy.
The second, business knowledge, involves
understanding the nuts and bolts of the
organization’s operations and leveraging this
knowledge into results.
The third, personal credibility, requires that
measurable value be demonstrated in
programs and policies implemented.
The fourth, HR delivery, involves serving
internal customers through effective and
efficient programs related to staffing,
performance management, and employee
development.

27. The fifth, HR technology, involves using technology to
improve the organization’s management of its people
Critical HR Competencies required by HR Executives
Competencies to Master
“Competence in the absence of strategy
is like acting without an audience”
David Ulrich
• Knowing how to reduce costs
• Improve service in non-core functions of the business
• Provide defined career ladder to people
• Cross sell service
• Ability to assess why a void exists in a business
• Recruiting and retaining top talent
• To strive for operational excellence and discipline

28. Barriers to Strategic HR
• Short-term mentality/ focus on current performance
• Inability of HR to think strategically
• Lack of appreciation of what HR can contribute
• Failure to understand general manager’s role as an HR
manager
• Difficulty in quantifying many HR outcomes
• Perception of human assets as higher-risk
investments
• Incentives for change that might arise

29. Consistently find resistance toward resources
being allocated to programs that have less
tangible, measurable benefits than those that do.
Another barrier to strategic HR is the fact that
human assets aren’t owned by organizations
and, therefore, are perceived as a higher risk
investment than capital assets.
Finally, strategic HR may be resisted because of
the incentives for change that might arise.

30. Dave Ulrich outlines five areas HR can measure to demonstrate
results
• Productivity measures – output per unit of input. Improvements in
these areas might be traced back to increased training, improved
work structure and so on.
• Process measures, such as improving systems and workflow
• HR costs and/or benefits for any specific initiatives.
• Employee retention, morale, commitment and skills.
• Capabilities of the organization, such as speed (response time)
learning, shared mind set and accountability.
It is time to elevate HR to a new playing field, and measuring results
may be the only credible way for HR to truly step up to it.
Once they have developed good business relationships throughout
the Organization, and the value add is seen by the people, HR
Managers will become involved to help the organization move
towards a vision created for the new millennium.

31. The preparation for this process of completion is also known
as “Future”.
“With strength of a character,
nothing is impossible, when
your heart expands, to
embrace the impossible,
you are able to lead the path…”
Tao
The quest for achieving excellence through people in the
future continues….