Strategic Human Resources Management

(STHURM230)
2 Semester AY 2020-2021
nd

3rd Phase (April 21 to May 29, 2021)

What are Strategies?

 Strategy is a multi-dimensional concept going well beyond traditional competitive

strategy concepts.
 Strategies are broad statements that set a direction.
 Strategies are a specific, measurable, obtainable set of plans carefully developed
with involvement by an institution's stakeholders.
 These action statements are linked to an individual or individuals who are
accountable and empowered to achieve the stated result in a specific desired
timeframe.
 They are patterns of action, decisions, and policies that guide a group toward a
vision or goals.

Strategic human resource management is designed to help companies best

meet the needs of their employees while promoting company goals. Human resource
management deals with any aspects of a business that affects employees, such as hiring
and firing, pay, benefits, training, and administration. Human resources may also provide
work incentives, safety procedure information, and sick or vacation days.

Strategic human resource management is the proactive management of

people. It requires thinking ahead, and planning ways for a company to better meet the
needs of its employees, and for the employees to better meet the needs of the company.
This can affect the way things are done at a business site, improving everything from
hiring practices and employee training programs to assessment techniques and discipline.

But what exactly is SHRM (Strategic Human Resource Development), what

are its key features and how does it differ from traditional human resource
management?
SHRM or Strategic human resource management is a branch of Human resource
management or HRM. It is a fairly new field, which has emerged out of the parent
discipline of human resource management.
Human Resource Management

Many great scholars had defined human resource management in different ways and
with different words, but the core meaning of the human resource management deals
with how to manage people or employees in the organization.

Edwin Flippo defines- Human Resource Management as “planning, organizing, directing,

controlling of procurement, development, compensation, integration, maintenance and
separation of human resources to the end that individual, organizational and social
objectives are achieved.”

The National Institute of Personnel Management (NIPM) of India has defined human
resources – personal management as “that part of management which is concerned with
people at work and with their relationship within an enterprise. Its aim is to bring together
and develop into an effective organization of the men and women who make up enterprise
and having regard for the well – being of the individuals and of working groups, to enable
them to make their best contribution to its success.”

According to Decenzo and Robbins, “Human Resource Management is concerned with

the people dimension” in management. Since every organization is made up of people,
acquiring their services, developing their skills, motivating them to higher levels of
performance and ensuring that they continue to maintain their commitment to the
organization is essential to achieve organizational objectives. This is true, regardless of
the type of organization – government, business, education, health or social action”.

Human Resource Management is the process of recruiting, selecting, inducting

employees, providing orientation, imparting training and development, appraising the
performance of employees, deciding compensation and providing benefits, motivating
employees, maintaining proper relations with employees and their trade unions, ensuring
employees safety, welfare and healthy measure, in compliance with labor laws of the
land and finally following Orders/Judgement of the concern High Court and Supreme
Court, if any.
Human Resource Management involves management functions like planning, organizing,
directing and controlling.
 It involves procurement, development, maintenance of human resource
 It helps to achieve individual, organizational and social objectives
 Human Resource Management is a multidisciplinary subject. It includes the study
of management, psychology, communication, economics and sociology.
 It involves team spirit and team work.
 It is a continuous process.

Human resource management as a department in an organization handles all aspects of

employees and has various functions like human resource planning, conducting Job
analysis, recruitment and conducting job interviews, selection of human resources,
orienting, training, compensating, providing benefits and incentives, appraising, retaining,
career planning, quality of work life, employee discipline, sexual harassments, human
resource auditing, maintenance of industrial relationship, looking after the welfare of the
employees and safety issues , communicating with all employees at all levels and
maintaining awareness of and compliance with local, state and federal labor laws.

The historical rule of thumb for Human Resource staffing requirements is one full-time
professional Human Resource person should be hired for every 100 employees. The
actual ratio for a business can vary depending upon factors such as the degree of HR
centralization, the geographic distribution of the employees served, the sophistication
level of the employees, and the relative complexity of the organization.

What is the importance of Human Resource?

Behind production of every product or service there is an human mind, effort and man
hours (working hours). No product or service can be produced without help of human
being. Human being is fundamental resource for making or construction of anything.
Every organization desire is to have skilled and competent people to make their
organization competent and best.
Among the five Ms’ of management, i.e., men, money, machines, materials, and methods,
HRM deals about the first M, which is men. It is believed that in the five Ms’, "men" is not
so easy to manage. "every man is different from other" and they are totally different
from the other Ms’ in the sense that men possess the power to manipulate the other Ms.
Whereas, the other Ms’ are either lifeless or abstract and as such, do not have the power
to think and decide what is good for them.
Why do we call it as Human Resource Management?
Human: refers to the skilled workforce in an organization.
Resource: refers to limited availability or scarce.
Management: refers how to optimize and make best use of such limited or scarce resource
so as to meet the organization goals and objectives.
Therefore, human resource management is meant for proper utilization of available
skilled workforce and also to make efficient use of existing human resource in the
organization.

Evolution of an employee
Past Future

Work 9 to 5 Work anytime

Work in an office Work anywhere and from

anywhere

Use company equipment Use your own modern gadgets

and requirements

Focused on inputs Focused on outputs

Climb the corporate ladder Create your own ladder for

career

Pre-defined work Customized work

Hoards information Shares information

No voice Can become a leader

Focused on knowledge Focused on adaptive learning

"The automation of factories has already decimated jobs in traditional manufacturing, and
the rise of artificial intelligence is likely to extend this job destruction deep into the middle
classes, with only the most caring, creative or supervisory roles remaining"
-British theoretical physicist Stephen Hawking

It is undisputed fact that humans are being replaced by artificial intelligence which are in
the form of robots. But all jobs cannot be handed over to Robots, to say in other words
robots have its own limitations and all roles cannot be handled by robots. Though British
theoretical physicist Stephen Hawking, Cambridge professor expressed about
destruction of middle-class jobs due to raise of artificial intelligence, he still felt that
natural intelligence or need for application of human mind is inevitable in certain roles.

Definition of SHRM

Strategic human resource management can be defined as the linking of human

resources with strategic goals and objectives in order to improve business performance
and develop organizational culture that foster innovation, flexibility and competitive
advantage. In an organization SHRM means accepting and involving the HR function as a
strategic partner in the formulation and implementation of the company's strategies
through HR activities such as recruiting, selecting, training and rewarding personnel.
Strategic human resource management has been defined as “the linking of HRM with
strategic goals and objectives in order to improve business performance and develop
organizational cultures that foster innovation and flexibility.”
- It is “the pattern pf planned human resource deployments and activities
intended to enable an organization to achieve its goals.
Strategic HR means accepting the HR function as strategic partner in both the
formulation of the company’s strategies, as well as in the implementation of those
strategies through HR activities such as recruiting, selecting, training, and rewarding
personnel.
The term HR strategies refers to the specific HR courses of action the company
uses to achieve its aims.
Strategic human resource management is the connection between a company’s
human resources and its strategies, objectives, and goals. The aim of strategic human
resource management is to:
 Advance flexibility, innovation, and competitive advantage.
 Develop a fit for purpose organizational culture.
 Improve business performance.

How SHRM differs from HRM

In the last two decades there has been an increasing awareness that HR functions
were like an island unto itself with softer people-centered values far away from the hard
world of real business. In order to justify its own existence HR functions had to be seen
as more intimately connected with the strategy and day to day running of the business
side of the enterprise. Many writers in the late 1980s, started clamoring for a more
strategic approach to the management of people than the standard practices of
traditional management of people or industrial relations models. Strategic human
resource management focuses on human resource programs with long-term objectives.
Instead of focusing on internal human resource issues, the focus is on addressing and
solving problems that affect people management programs in the long run and often
globally. Therefore, the primary goal of strategic human resources is to increase
employee productivity by focusing on business obstacles that occur outside of human
resources. The primary actions of a strategic human resource manager are to identify key
HR areas where strategies can be implemented in the long run to improve the overall
employee motivation and productivity. Communication between HR and top
management of the company is vital as without active participation no cooperation is
possible.

Key Features of Strategic Human Resource Management

The key features of SHRM are:

 There is an explicit linkage between HR policy and practices and overall
organizational strategic aims and the organizational environment
 There is some organizing schema linking individual HR interventions so that they
are mutually supportive
 Much of the responsibility for the management of human resources is devolved
down the line.

Approaches of the SHRM

 attempts to link Human Resource activities with competency based performance
measures
 attempts to link Human Resource activities with business surpluses or profit
These two approaches indicate two factors in an organizational setting. The first one is
the human factor, their performance and competency and the latter is the business
surplus. An approach of people concern is based on the belief that human resources are
uniquely important in sustained business success. An organization gains competitive
advantage by using its people effectively, drawing on their expertise and ingenuity to
meet clearly defined objectives. Integration of the business surplus to the human
competency and performance required adequate strategies. Here the role of strategy
comes into picture. The way in which people are managed, motivated and deployed, and
the availability of skills and knowledge will all shape the business strategy. The strategic
orientation of the business then requires the effective orientation of human resource to
competency and performance excellence.
Benefits of SHRM
1. Identifying and analyzing 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

Barriers of SHRM
Barriers to successful SHRM implementation are complex. The main reason is a lack of
growth strategy or failure to implement one. Other major barriers are summarized as
follows:
1. Inducing the vision and mission of the change effort.
2. High resistance due to lack of cooperation from the bottom line.
3. Interdepartmental conflict.
4. The commitment of the entire senior management team.
5. Plans that integrate internal resource with external requirements.
6. Limited time, money and the resources.
7. The statusquo approach of employees.
8. Fear of incompetency of senior level managers to take up strategic steps.
9. Diverse work-force with competitive skill sets.
10. Fear towards victimization in the wake of failures.
11. Improper strategic assignments and leadership conflict over authority.
 12. Ramifications for power relations.
13. Vulnerability to legislative changes.
14. Resistance that comes through the legitimate labor institutions.
15. Presence of an active labor union.
16. Rapid structural changes.
17. Economic and market pressures influenced the adoption of strategic HRM.
18. More diverse, outward looking approach.

Seven steps to Strategic Human Resource Management

Strategic Human Resource Management is key for the retention and development of
quality staff. It’s likely that employees will feel valued and want to stay with a company
that places a premium on employee retention and engagement. Before you implement
strategic human resource management, you will need to create a strategic HR planning
process using the steps below:
1. Develop a thorough understanding of your company’s objectives
2. Evaluate your HR capability
3. Analyze your current HR capacity in light of your goals
4. Estimate your company’s future HR requirements
5. Determine the tools required for employees to complete the job
6. Implement the human resource management strategy
7. Evaluation and corrective action

1. Develop a thorough understanding of your company’s objectives

Since the success of strategic HR is dependent on how well it links to your company’s
goals, you need to have a thorough understanding of your aims, objectives, and mission.
You’ll need to be able to articulate both your short and long-term plans for growth to the
relevant HR personnel. Ensuring clear communication of your company’s goals will make
it easier for HR personnel to formulate an effective resource management strategy.

2. Evaluate your HR capability

Evaluating your current HR capabilities will enable you to understand the employees you
have and how they contribute to fulfilling your goals and objectives. Additionally, you
should also undertake a skills inventory for every employee. Skills inventories help you to
discover which employees are experts in particular areas.
It also helps you to identify the employees who have an interest in being trained in a
particular aspect of your company. A great time to assess skills is during a performance
review. However, the traditional performance review is dying.

3. Analyze your current HR capacity in light of your goals

An assessment of your HR capacity will help you to recognize barriers and implement a
plan of action to capitalize on opportunities and effectively deal with threats. Strategic
HR personnel will analyze the number of employees as well as their skills and will work
with senior leadership to identify ways to better equip employees to serve the needs of
your company.

4. Estimate your company’s future HR requirements

After an analysis of your company’s employees and skills has been done in relation to
your objectives, it’s time to forecast your HR needs. The forecast should be done in
relation to:
 Demand – A prediction needs to be made in relation to the number of employees
with the associated skills that will be required in order for your company’s future
needs to be met.
 Supply – Looks at the employees and skills that are currently available to help
your company achieve its strategic goals.
Forecasting your company’s future HR requirements also determines the following:
 New jobs and roles required to secure the future of the company.
 Skills required by current employees to undertake the responsibilities of new jobs
and roles.
 Whether your employees’ expertise are being sufficiently utilized.
 Whether current HR personnel and practices can accommodate the company’s
growth.

5. Determine the tools required for employees to complete the job

HR personnel need to liaise with the appropriate departments to find out how the tools
used by employees impact on their ability to perform their roles. For example, an audit of
hardware and software can be undertaken jointly with the I.T department to identify
gaps in tools that will facilitate a more organized workforce.
For example, where a company employs hourly staff, it’s crucial to utilize workforce
management software. This software manages important HR functions such as
scheduling, holiday entitlement, and sick leave management.
Deputy provides the functionality to effortlessly manage your employees’ hours and time.
This enables your employees to focus on the tasks identified in the strategic HR plan that
have a direct impact on growing your company. Sign up for a free trial and see how
Deputy can support your strategic human resources management.

6. Implement the human resource management strategy

After the analysis and forecast of your company’s HR requirements have been completed,
it’s time to start the process of expanding your workforce and developing current
workers to equip your company for future growth. You can achieve the implementation
of your human resource management strategy by doing the following:
 Start with the recruitment stage – At this point, HR professionals begin searching
for candidates who possess skills that have been identified during the HR
strategic planning process.
 Organize a selection process – Interviews and other selection criteria take place
at this time. Interview questions such as “what are your salary requirements?”
and relevant tests will be used to assess whether the candidate is suitable to carry
out the role.
 Begin hiring applicants – Your company will make the candidate a job offer after
all appropriate checks have been carried out.
 Design onboarding and training – Employee Onboarding is a key determining
factor as to whether an employee remains with a company. A comprehensive
onboarding and training package must be put in place to increase employee
retention. Once you have onboard your employees well, another important step
to retaining them is to keep them engaged! Easier said than done, but our guide
on employee engagement will help! You can download it by clicking the button
below:

7. Evaluation and corrective action

HR personnel should decide on a timeline to carry out a strategic HR management review.
This review will track the progress made and also identify areas for improvement. The
review should be measured against whether changes are helping your company to
achieve their goals. Corrective action must be taken if strategic human resource
management is failing to meet its objectives.

Why Is Human Resource Management Important to All Managers?

Why are these concepts and techniques important to all managers? ' Perhaps it's easier
to answer this by listing some of the personnel mistakes you don't want to make while
managing. For example, you don't want to:
1. Hire the wrong person for the job.
2. Experience high turnover
3. Have your people not doing their best
4. Waste time with useless interviews
5. Have your company taken to court because of discriminatory actions
6. Have your company cited under federal occupational safety laws for unsafe
practices
7. Have some employees think their salaries are unfair and inequitable relative to
others in the organization
8. Allow a lack of training to undermine your department's effectiveness
9. Commit any unfair labor practices