Strategic HR Development

Lecture slides for Chapter 10

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 Objectives
• Objectives of this lecture are to understand the
difference between a conventional HR
development and a strategic HR development
and how a strategic Hr development could be
embedded in a development process consisting
of choice of employee, setting of development
goal, use of developmental infrastructure and
administration of a developmental programme.

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 Sources of competitive
advantage
• Heterogeneity in organizational competencies
across organizations;
• This can be built through
– Strategic acquisition of critical employee resources
that others cannot do;
– Development of additional competencies through a
process that is unique to one’s own organization;
– By linking developmental activities with HR outcomes
in other areas of HR functions. This linkage process
could be unique to one’s own.

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Macro Plan for Strategic
Development
Labor market
Regulation
competition

HR
Business Organization Strategy
policy

Technology Internal
Social
Of employment HR
forces
contract Environment

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 HR strategy and Macro
developmental plan
• Developing competency of select group of employees:
– Example: In 1990’s Govt. went for managerial training of middle level
scientists in many national laboratories because there was the feeling
that lack of business knowledge was affecting their interaction with
industry and consequent development of technology from research
outputs.
• Increasing organizational stock of human capital
– Example: Many companies while going for increasing outsourcing may
implement ERP system for managing their supply chain. This may
require major training of all officers even though all of them may not use
the ERP system
• Setting guideline for Creating HR based competitive advantage:
This is done by linking actions in various areas of HR.
– Structure, recruitment, performance management, reward and
compensation system, work system.

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 Imbedding HR development plan
within HR system

Recruitment Developmental Structure Performance

management Compensation
plan plan

Work
system

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 Vignette 1: Unrelated Diversification
in Banking Industry
• In the seventies and eighties many nationalized banks went for
creating a separate staff training department. They were expanding
in new areas and acquiring manpower at a first pace.
• In the nineties the same banks tried to turn their staff training centre
into a full fledged management institute. Example: Union Bank of
India, Canara bank. Why?
• In mid-eighties and early nineties many banks went for manpower
reduction through VRS. As a result, their manpower demography
became very skewed. They were trying to acquire skilled manpower
from open market but were quite worried that they may not get
adequate number of officers with prior exposure in new areas e.g.
technology, computerization and new way of doing banking.

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 HR developmental process
• The factors that contribute to
development;
– Employees;
– Choice of developmental goal;
– Developmental infrastructure or tools;
– Programme administration

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 Choice of employee for
development
• This can be done
– By knowing employee career goals;
– By knowing employee current job profile and
performance;
– By knowing future requirements of the
organizations.

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 Contents of a Developmental
Plan
• Technical expertise or functional skill:
– How jobs in different functional areas are executed;
• Relational skill or human skill:
– Recognizing importance of human element in working in an organization
• Team orientation:
– Sharing role, responsibility and credit with others;
• Leadership skill:
• diagnostic, problem solving, and administrative skills, Interpersonal empathy and influence,
general management skill, network building capability, personal integrity, self-motivation, stress
tolerance.
• Innovativeness:
– Ability to recognize commercial potential of new idea and willingness to take the risk of going
for it.
• Flexible career goal:
– Willingness to accept any job irrespective of its technical or managerial complexities and
risks.
• Organizational value:
• With new strategy the value system may change. This may require extensive developmental
programme to educate key managers on new value. Example: Bank nationalization and new
value of the banking industries.
• Human Resource Expertise:
• Right HR system is essential for HR based competitive advantage. But this cannot happen if
the managers show no interest in learning the basics of HR system

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 Developmental Tools or
infrastructure
• Job Types;
• Learning methods;
• Organizational actions;
• Developer or mentor;
• Off the job developmental resources.

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 Tools of Development: Job
Types
• Identify jobs and positions to be used for
development;
– Positions that deals mainly with machines and
objects;
– Positions that deals with other human beings;
– Positions that deals with information.

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 Tools for Development:
Learning methods
• Cognitive tools or Learning
through acquisition of knowledge:
– Technical education, Reading books, job manual, Orientation
training, Company career information

• Behavioral tools or Learning

through action:
– On job training, apprentice, Role playing, behavioral modeling,
Socialization, Career counseling.

• Environmental tools or learning by

meeting demand from others:
– Job Challenge, job feedback, job autonomy, peer interaction,
Team building, task force, project team, Matrix management,
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 Tools of Development:
Organizational action
• Job assignment in right sequence: Job Rotation
– Departmental transfer from structured to unstructured
areas;
• Team assignment in right sequence: Stage
based assignment
– Stage-1: Passive learning from observation of others
actions
– Stage 2: Active learning through group based actions
– Stage-3: Active learning through self-action

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 Sequences of job rotation
• From structured to unstructured:
• Structured functions:
– Accounting, finance, production and operation,
systems, material and stores management;
• Unstructured functions:
– Human resource management, general
administration, communication, strategy, customer
relations, marketing, purchase, contract management.
Technology management, quality management

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 Tools of Development:
Developer or mentor
• Identify the managers who have been very
successful in developing others. Based on
career of managers in the past you may
be able to spot such managers.

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 Tools of Development:
Using Off the job resources
• Off the job learning opportunities could
work as a complementary factor in
employee learning.
• Two sources of learning:
– Learning through analysis: Problem transfer
from work place to learning place. Building
models to facilitate analysis;
– Learning through synthesis: Acquiring
generalized concepts built from the
experience of others;
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 Maximizing benefits of Off the
job learning
• Use multiple learners with similar work backgrounds:
– A shared learning provide scope for enhancement.
• Use post learning work to consolidate learning benefits:
– Without practice off the job acquired information may not
register.
• Follow active learning pedagogy:
– Bring action during learning.
• Combine learning with career planning and preferences
of learners:
– Without right alignment between career goals of the learners and
the goals of the programme there may not be any learning

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 Limitation of Internal hr
Development Strategy
• Limitation due to major change in external environment of an
industry:
– A declining industry will have great difficulty to motivating their
employees to acquire new expertise.
• Limitation due to organizational size:
– Small organization cannot have the required job variety for hr
development;
• Limitation due to organizational life cycle:
– An organization in its declining stage of life cycle may have limited
resources for development;
• Limitation due to national culture:
– High power distance oriented culture place heavy limitation on
internal career development.

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 Overcoming limitation:
Stretching the boundary
• Strategic alliance with academic and training
institutes for creating proprietary human capital;
– Daimler Chrysler alliance with Pune Polytechnique;
• Strategic alliance with other company for
overcoming market size limitations;
– Wipro alliance with Nissan, Loreal, Schneider Electric
and Alcan for management dev. program
• Internal process change to minimize cultural
effects:
– Use positional power only in inter-organizational
negotiation and less in internal transactions.

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 Programme administration
• Learning stage:
– New knowledge is acquired either through action or
through a formal learning programme.
• Action stage:
– A learner should get an opportunity to act according
to new learning.
• Measurement stage:
– Gain from the programme should be assed.
– Performance, attitude, adaptability, satisfaction;
• Feedback stage for reinforcement:
– Feedback both to the learners as well as to the
trainers to be given.
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 Key Learning
• Strategic development of human resource
requires long term oriented plan;
• Human resource could be developed using three
kinds of tools viz. cognitive, behavioral and
environmental.
• Strategic hr development is more effective when
other hr functions are considered simultaneously.
• While planning for internal development of hr one
must factor certain limitation posed by
organizational size, company life cycle, industry
choice and national cultural orientation and its
effects on employee career plan.
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