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Strategic Human Resource Management (SHRM) aligns human resource practices with organizational goals to enhance performance and competitive advantage. It emphasizes proactive management of people, recognizing external factors and competition, while integrating HR strategies with corporate strategies. The document outlines the components, characteristics, objectives, and differences between traditional HRM and SHRM, highlighting the importance of strategic flexibility and alignment in achieving organizational success.
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0% found this document useful (0 votes)
109 views26 pagesIhrm Unit 3 Notes
Strategic Human Resource Management (SHRM) aligns human resource practices with organizational goals to enhance performance and competitive advantage. It emphasizes proactive management of people, recognizing external factors and competition, while integrating HR strategies with corporate strategies. The document outlines the components, characteristics, objectives, and differences between traditional HRM and SHRM, highlighting the importance of strategic flexibility and alignment in achieving organizational success.
Uploaded by
Ankit RanjanCopyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
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Unit-3 CtHemy
CONCEPT OF STRATEGIC HUMAN RESOURCE MANAGEMENT
Strategic human resource management is the process of linking the human resource function
with the strategie abjectives of the organization to improve performance.
Attracting and keeping talented and skilled employees is one of the most important challenges
organizations face in today’s dynamic business world
No siateuy, no matter how well designed, will work unless the organization has the right people,
[ with the right skills and behaviors, in the right roles, motivated in the right way and supported by
the right leaders.
Stratexic human resource management is the proactive management of people to the desired
value to them, It is designed to help companies better mect the needs of their employees while
promoting company goals.
Defi
tion of Strategic Human Resource Management
sports define SHRM from a different perspective. Some of the important definitions are listed
Suuteyie human resource management means formulating andexecuting human resource
policies and practices that produce the employee competencies and behaviors that the company
cods to achieve ils strategi¢ aims.”- Gary Dessler
Sirategic human resource management is an approach t making decisions on the intentions and
. plans of the organization’ concerning the employment relationship and the organization's
recruitment, training, development, performance management, and the organization's strategies,
sivies, and practices.” — Armstrong
© human resource management (SHRM) is defined as “the pattern of planned human
organization to achieve its goals”. ~
source deployments and activities intended to enable
Vrivht & McMahan
uoleie human resource management is an approach that relates to decisions about the nature of
cnpioyment relationship, recruitment. waining, development, performance management, reward,
ind employee relations.
Wright and McMahan (1992) defined SHRM as ‘the pattern of planned human resource
ployment and activities intended! to enable the firm to achieve its goals” Components of Strategic Human Resource Management
This definition implies the following four components of SHRM:
1. It focuses on an organization’s human resources (people) as the primary source of competitive
advantage of the organization.
2. The activities highlight the HR programs, policies, and practices as the means through which
the people of the organization can be deployed to gain competitive advantage.
3. The pattem and plan imply that there is a fit between HR strategy and the organization's
business strategy (vertical fit) and between all of the HR activities (horizontal fit).
4. The people, practices, and planned patterns are all purposeful, that is, directed towards the
achievement of the goals of the organization.
SHRM
Characteristics of Strategic Human Resource Management(SHRM)
Recognition of the outside Environment: Outside environment presents some opportunities
and threats to the organization in the form of
© Laws
+ Fconomic conditions
«Social and demographic change
+ Domestic and international political forces + Technology and so on.
Strategic human resource strategy explicitly recognizes the threats and opportunities in each area
and attempts to capitalize on the opportunities while minimizing or deflecting the effect of
threats,
The impact of Competition: The forces of competition in attracting, rewarding, and using
employees have a major effect on corporate human resource strategy. Forces play out in local,
regional and national labor markets, Labor market dynamics of wage rates, unemployment rates,
working conditions, benefits levels minimum wages legislation and competition reputation all
have an impact on and are affected by strategic human resource decisions.
Long-Range Focus: A strategic human resource management should be long-range focus cause
this is not easy to change the strategic human resource policy.
4. Choice and Decision-making focus: In other words, the strategy has a problem solving or
problem preventing focus. Strategy concentrates on the question, “what should the organization
do and why?” this action orientation requires that decisions be made and carried out.
5. Consideration of all Personnel: A strategic approach to human resources is concerned with all
of the firm’s employees, not just its hourly or operational personnel. Traditionally, human
resource management focuses on hourly employees, with most clerical exempt employees also
included
6. Integration with the Corporate Strategy: Human resource strategy adopted by a firm should
be integrated with the firm's corporate strategy.
Objectives of SHRM
1. To focus the HR policies, programmes and practices as the means through which the people
can be deployed to gain better and competitive advantages:
2. To manage and maintain human capital resources, skill, knowledge, efficiency and
intelligence of the employees;
3. To find out the ways and means {or effective and efficient utilisation of human resources;
; 4, To emphasise that human resources treated as the primary source of competitive advantages of
the organisation;
5, To integrate the HR strategies with the Business strategies for the betterment of organisation;
6. To make an appropriate direction for people, practices and performance towards the
achievements of the goals of the organisation;
7. To develop stable employce relations by way of effective resource utilisation, optimizing
remuneration, better productivity and better work culture; ete
the needs and customised services of different market segments and try to fulfil
8. To recognis
them properly; 9 ' ia 4 i
9. To make an appropriate ‘cost optimisation’ with increase the efficiency of resources; and
10, To make an appropriate and feasible plan for change environment,
Strategic Perspective in HRM
Traditional V/s. Strategic HRM
Traditional HRM versus SHRM
Strategic human resource management and the traditional HR function differ from each other in
several ways. The major points of differences between the two are;
BASIS
Responsibility
for HR
programs
| Focus of
| activities
|
|
[Rote of HR
Initiative for
change
Time horizon
Control
Traditional HRM
Staff personnel in the HR
department
Employee relations—
ensuring employee motivation
and productivity, compliance
with laws
Reactive and transactional
Slow, piecemeal, and
fragmented, not integrated
with larger issues
Short-term
Bureaucratic control through
rules, procedures, and policies
SHRM
Line managers; all managers
responsible for people are HR
managers
Partnerships with internal
(employees) and external
(customers, stakeholders, public
interest groups) groups
Proactive and transformational,
change leader
Fast, flexible, and systemic, change
initiatives implemented in concert
with other HR systems
Consider various time frames as
necessary (short, medium, or long-
term)
Organic control through flexibility,
as few restrictions on employee
behavior as possible Broad job design, flexibility, teams
| Job design Focus on scientific
and groups, and cross-training
| management principles—the
division of labor
independence, andl
| specialization
Important Capital, products, technology, People and their knowledge, skills,
investments and finance and abilities
E
“
| Accountability Cost center. Investment center. |
c |
15 Hyp te eh
Linking HR practices to business strategy and one another
gly important and
ng HR practices 0 business strategy is becoming increas
ve managers,
This issue of fittin
cant HR issues for HR staff and |
Lin fit involves making sure HR activities make sense anc help the organization achieve its goals
and objectives,
The three aspects of HR fit are:
: 1. Vertical fit
Phy aspect of vertical fit concerns the coincidence between HR practices and overall business
strat
Horizontal fit
stent. Consisteney ensures that
[his relates to the extent 10 which FR activities are mutually cons
IK, practices reinforee one
nother
3. External
match the demands of the external
tice choices. The challenge is to
Jhoiges that help to implement the
The third aspect concerns how well HR activities
cnvironment, Ensuring these aspects of fit requires HR pra
develop internally consistent configurations of HR practice cf
‘ums sirategy and enhance its competitiveness
Vhere is a need for strategic flexibiity along with a strategic fit for the long-term competitive
vantage of the fi 6
6
| Training Much of leadership training covers how to assign work and provide feedback about
performance and basic employment law, such as Title VII of the Civil Rights Act and preventing. workplace ay
ning with labor-management-related components, such as who?
harassment. Supplement your supervisory trait
contract interpretation, conflict resolution and,
workplace. Supervisors and managers have the
principles suggest that HR equip them with the skills necessary
management issues.
it your workforce isn't unionized, how to maintain a union-free
« raost direct contact with workers, and workforce management
yy to be first responders concerning labor-"~
®
su suaining HR best practices in collective bargaining include developing management strategy and
proposals for contract negotiation atleast six months before the contract expiration date, Assess the negotiating,
een load and reassign long-term projects that could interfere with their availabilty for argaitiit
sessions. The NLRA requires that both management and the union make themselves available for contract
nevotiations as that demonstrates good faith. If you anticipate changes in your employes benefits package, get.
Tlastication from your compensation and benefits specialist on how the group health plan, pension and other
benetits will affect negotiations -)
staff, supervisors and managers. Continuing education *
ships with labor union representatives generally ares
d colleges. Use social media and Intemet research to
industries that labor unions are targeting.
°
If your employees aren't union workers, improve your employee relations practices,
Strinathen the employer-employee relationship by addressing workplace issues as soon as possible to avoid th
Tnucing effects of conflict that often lead employees to seek unionization. Conduct routine vulnerability
aceosements to determine the likelihood of your employees supporting a union. Vigilance pays off — showing”
interest in and appreciation for your employees keeps job satisfaction high so they won't seek uniofs
representation. °
Take advantage of resources available to HR
courses. workshops and seminars on building relation:
sponsored by law firms, management consulting groups an
jearn about union-organizing drives, including the occupations and
: \onating HR management should address union grievances as soon as they arise. When a uniofs
employee feels that he has been unjustly reprimanded or terminated, he can file a grievance. The HR manager op
union-employee grievance, which usually is a three*
4 labor relations specialist is responsible for processing a
step process. The process includes a union steward who represents the employee's interests. If the matter isnt
resolved within the allotted three steps, the case goes to arbitration. The arbitration process can be as lengthy an
cosy as litigation, both being processes that HR management would like to avoid whenever possible.
S
Interuational labour Standards
®
International labour law is the body of rules spanning public and private international law which concern thys
rights and duties of employees, employers, trade unions and governments in regulating the workplace. The
International Labour Organization and the World Trade Organization have been the main international bodice
involved in reforming labour markets. The International Monetary Fund and the World Bank have indirect\v
driven changes in labour policy by demanding structural adjustment conditions for receiving loans or grants
Issues regarding Conflict of laws arise, determined by national courts, when people work in more than or
country, and supra-national bodies, particularly in the law of the European Union, has a growing body of rules
regarding labour rights, “ yy
. ioc of A
international labour standards refer to conventions agreed upon by international actors, resulting from a series of O
security, and improve their terms py
value judgments, set forth to protect basic worker rights, enhance workers’ job se n thei evel
of employment on a global scale, The intent of such ‘standards, then, is to establish a worldwide minimum leve!
of protection from inhumane labour practices through the adoption and implementation of: said measures. From a@®
theoretical standpoint, it has been maintained, on ethical grounds, that there are certain basic human rights that ia
ae universal to humankind, Thus, its the aim of intemational labour standards to ensure the provision of such =
rights in the workplace, such as against workplace aggression, bullying, discrimination and gender inequality on
the other hands for working diversity, workplace democracy and empowerment A
ar standards does not necessarily imply implementation or enforcement
mechanisms, most real world cases have utilised formal treaties and agreements stemming from international
institutions, The primary international agency charged with developing working standards is the International
Labour Organization (ILO). Established in 1919, the ILO advocates international standards as essential for the
ratlcation of labour conditions involving “injustice, hardship and privation”. According to the ILO.”
srtemational labour standards contribute to the possibility of lasting peace, help to mitigate potentially adverser>
ifecte of intemational market competition and help the progress of international development. A
While the existence of international labor
is not limited to the ILO nor is it constrained to the legislative model that the ILQS
‘ons, multilateral enforcement, and voluntary standards. In_
aaeerne Controversies that arise over each ofthese models, greater issues have also been raised concerning thes
debate over the need for intemational labour standards themselves. However, while crities have arisen, thes
tera onal community has largely come t0 & consensus in favour of basie protection of the world’s labour
force from inhumane practices.
Implementation, however,
represents. Other alternatives include direct trade sanctic
o
‘Associated with the development of successful international labour standards is proper monitoring and”
Most monitoring occurs through the ILO, but domestic agencies and othe’s
enforcement of labour standards.
NGOs also play a role in the successful monitoring of international labour standards. -
o
Objective of ILO o
Ps
Formulation of international policies and programmes to promote basic human rights, improve working anf”
living conditions, and enhance employment opportunities; °
+ Creation of intemational labour standards in the form of Conventions and Recommendations, backed by a,
o
unique system to supervise their application;
+ Anextensive programme of international technical cooperation. %
+ Training, education, research, and publishing activities to help advance all of these efforts. ,
+ To promote and realize standards and fundamental principles and rights at work; o
+ To create greater opportunities for women and men to secure decent employment; c
°
+ To enhance the coverage and effectiveness of social protection for all. 5
4
TRUCTURE OF ILO-Some of the most important organisational structure of ILO are as follows:
Intemational Labour Conference (ILC)
Governing Body
International Labour Office (ILO),
(1) INTERNATIONAL LABOUR CONFERENCE (ILC)
e
e
a
a
°
e
°
2
This is the Apex body of ILO which makes labour policies for international labour. The ILC holds its sessions at
a frequency not less than once in a year. The delegates from three group’s viz. the government, the employers’
and the workers attend ILC sessions in the ratio of 2:1:1 respectively. Each representative has a vote. The
representatives from the Government are mostly ministers, diplomats or officials.
oe
The conference is empowered to appoint committees to deal with different matters relating to labour during each
session. Examples of such committees are the selection committee, The Credential Committee, The Resolution *
Committee, The Drafting Committee, The Finance Committee, etc. All committees except Finance Committee
are tripartite in nature
S
‘The functions performed by the ILC are to: eo
oe
Formulate international labour standards,
Fix the amount of contribution to be paid by the member states. eo
Decide budget and submit the same to the Governing Body. a
Study the labour problems submitted by the Director General and assist in their solutions. °
Appoint.committees to deal with different problems during its sessions.
Fleet the president.
Select members of the Governing Body.
Develop policies and procedures.
Seek advisory opinion from International Committee of Justice. id
*
Confirm the powers, functions and procedure of Regional Conference. a
7
(2) GOVERNING BODY eo
It is also a tripartite body. It implements decisions of the ILC with the help of the International Labour?
Organization, It consists of $6 members in the same ratio of 2:1:1, ie. 28 representatives of the Government, 14
of the employers and 14 of the workers. Of the 28 representatives of the Government, 10 are appointed by the
members of the States of Chief Industrial Importance and remaining 18 are delegates of the other governments.
Industrial population is the criteria for chief Industrial Importance. India is one of the ten states of chief’
Industrial Importance. The tenure of the office of this body is 3 years. It meets frequently in a year to takéw
dccisions on the programmes of the ILO.
o
coe ‘ne functions of the Governing Body are to:
Co-ordinate work between the ILC and ILO.
Prepare agenda for each session of the ILC.
Appoint the Director General of the office.
Scrutinize the budget,
Follow up with member states in regard to implemer
the ILC.
Fix the date, duration, schedule and agenda for the Regional Conferences ; 1c
+ Seek as and winen required, alvisory opinion from the Intemational Court of Justice with the consent of the ILC.
station of the conventions and recommendations adopted by!
4,
5.
PHONO OO oOoOHN OHS:
v
(3) International Labour Office:
This is the secretariat of the ILO in Geneva and is the third major organ of the ILO. The Director General (DG)
of the ILO is the Chief Executive Officer of the Secretariat appointed by the Governing Body. He also serves
the Secretary General ofthe ILC. His tenure is for 10 years and extendable by the Governing Body.
08
two Deputy Director Generals, six Assistant Director Generals, one Directors
dies, and one Director of the International Centre for Advanced
Chief of Divisions from 100 nations.
‘The Director General is assisted by
of the Intemational Institute of Labour Stu
Technical and Vocational Training, Advisors,
Following are the main functions of this offi
Prepare briefs and documents for agenda of ILC.
eee we Governments ofthe States to form labour legislation based on recommendations of the ILC.
Bring out publications relating to industrial labour problems of international nature and interest.
Carry out functions related to the observance of the conventions.
Collect and distribute information on international labour and social problems.
6. To promote and realize standards and fundamental priniples and tights at work;
THE ROLE OF THE ILO
’
zation (ILO) is to promote social justice and internationally,
founding principle that social justice is essential to universal
The mission of the International Labour Organi:
recognized human and labour rights, based on the
and lasting peace. ,
Decent Work Agenda z
on
As part of its mission, the ILO aims to achieve decent work for all by promoting social dialogue, socir',
protection and employment ereation, as well as respect for international labour standards. The ILO provides
technical support to more than 100 countries to help achieve these aims, with the support of developmet 4
partners.
, international labour standards
The I1.O sets international labour standards with Conventions, which are ratified by member states, or®
Recommendations, which are non-binding. e
Conventions are drawn up with input from governments, workers’ and employers’ groups at the ILO.@
Conventions are adopted by the Intemational Labour Conference, which meets every year in Geneva, e
The 1LO’s supervisory role e
n i Taare Tvoese ner
‘The 1.0 monitors the implementation of ILO Conventions ratified by member states. This is done ‘hro ps
+ The Committee of Experts on the Application of Conventions and Recommendations e
The Intemational Labour Conference's Tripartite Committee on the Application of Conventions an
Recommendations . .
| Mesnber tats ae also required to send reports on the progress of the implementation of the Conventions they y
have raified
°
ILO Declaration on Fundamental Principles and Rights at Work 7
Adopted in 1998, the Declaration commits member states t respect and promote eight fundamental principle
and rights in four categories, whether or not they have ratified the relevant Conventions.
They are
«Freedom of association and the right to collective bargaining (Conventions 87 and 98)
+The elimination of forced or compulsory labour (No. 29 and No. 105)
+ The abolition of child labour (Conventions No. 138 and No. 182)
+ ‘The climination of discrimination in respect of employment and occupation [ THRM]
UNIT-3
IHRM MBA 4Sem
Industrial Relations And Internation:
Concept of Industrial Relations
‘The term industrial relations explain the relationship between employees and management which
stem directly or indirectly from union-employer relationship. Industrial relations are the
relationships between employees and employers within the organizational settings. The field of
industrial relations looks atthe relationship between management and workers, particularly
groups of workers represented by a union. Industral relations are basically the interactions
between employers, employees and the government, and the institutions and associations through
which such interactions are mediated.
|The term industrial relations have a broad as well as a narrow outlook. Originally, industrial
relations were broadly defined to include the relationships and interactions between employers
and employees. From this perspective, industrial relations cover all aspects of the employment
relationship, including human resource management, employee relations, and union-management
(or labor) relations. Now its meaning has become more specific and restricted. Accordingly,
industrial relations pertains to the study and practice of collective bargaining, trade unionism,
and labor-management relations, while human resource management is a separate, largely
distinct field that deals with nonunion employment relationships and the personnel practices and
policies of employers.
‘The term industrial relations have a broad as well as a narrow outlook. Originally, industrial
relations were broadly defined to include the relationships and interactions between employers
and employees, From this perspective, industrial relations cover all aspects of the employment
felationship, including human resource management, employee relations, and union-management
{ot labor relations. Now its meaning has become more specific and restricted, Accordingly,
{ndustrial relations pertains to the study and practice of collective bargaining, trade unionism,
and labor-management relations, while human resource management is a separate, largely
- distinct field that deals with nonunion employment relationships and the personnel practices and
policies of employers.
Industrial relations is used to denote the collective relationships between management and the
‘worker, It also includes aspects of industrial life as trade unionism, collective bargaining,
workers’ participation in management, discipline and grievance handling, industrial disputes and
interpretation of labor laws and rules and code of conduct
In the words of Lester, Industrial relations involve attempts at arriving at solutions between the
conflicting objectives and values; between the profit motive and social gain; between discipline
‘and freedom, between authority and industrial democracy; between bargaining and co-operation;
and between conflicting interests ofthe individual, the group and the community”, {he National Commission on Labor (NCL)also emphasize on the same concept. According to
NCL, industrial relations affect not merely the interests of the two participants- labor and
‘ianagement, but also the economic and social goals to which the State addresses itself. To
regulate these relations in socially desirable channels isa function, which the State is in the best
position to perform.
International Practices in IR
A number of human resources best practices can help you develop a productive and collegial
Felationship between management and organized labor. Up-to-date information about labor laws,
leadership training on basic industrial relations practices and well-constructed negotiation
Strategy are elements that will improve your organization's labor-management relations, Turn
what traditionally has been an adversarial relationship into one that benefits your company and
employees.
Labor Laws
Fundamental to the labor-management relationship is clarity about applicable laws, such as the
National Labor Relations Act. The act establishes employees’ rights and sets out the obligations
ind responsibilities of employers and labor unions. In addition to understanding basic labor law,
HR best practices include staying abreast of changes in the laws and decisions of the National
Labor Relations Board that affect your industry and your workplace.
Leadership Training
Much of leadership training covers how to assign work and provide feedback about performance
And basic employment law, such as Title VII of the Civil Rights Act and preventing workplace
harassment, Supplement your supervisory training with labor-management-related components,
such as union contract interpretation, conflict resolution and, if your workforce isn't unionized,
how to maintain a union-free workplace, Supervisors and managers have the most direct contact
with workers, and workforce management principles suggest that HR equip them with the skills
necessary to be first responders concerning labor-management issues.
Collective Bargaining
HR ‘best practices in collective bargaining include developing management strategy and
Proposals for contract negotiation at least six months before the contract expiration date, Assess
the negotiating team’s workload and reassign long-term projects that could interfere with their
availability for bargaining sessions. The NLRA requires that both management and the union
make themselves available for contract negotiations, as that demonstrates good faith, If you
anticipate changes in your employee benefits package, get clarification from your compensation
and benefits specialist on how the group health plan, pension and other benefits will affect
negotiations. Resources
Take advantage of resources available to HR staff, supervisors and manages, Continuing
Sducation courses, workshops and, seminars on building relationships with lator mee
Tareaenuatives generally are sponsored by law firms, management consulting. groups and
sorlees. Use social media and Internet research to earn. about union-organising drives
including the occupations and industries that labor unions are targeting.
Union-Free Workplace
If your employees aren't union workers, improve your employee relations practices. Strengthen
the employer-employee relationship by addressing workplace issues as soon as possible to avoid
the lingering effects of conflict that often lead employees to seek unionization, Conduct routine
Vulnerability assessments to determine the likelihood of your employees supporting a union,
Vigilance pays off — showing interest in and appreciation for your employees keeps job
satisfaction high so they won’t seek union representation,
Grievance Handling
HR management should address union grievances as soon as they arise. When a union employee
feels that he has been unjustly reprimanded or terminated, he can file a grievance. The HR
‘manager or a labor relations specialist is responsible for processing a union-employee grievance,
Which usually is a three-step process. The process includes a union steward who represents the
employee's interests. Ifthe matter isn’t resolved within the alloted three steps, the case goes to
arbitration. The arbitration process can be as lengthy and costly as litigation, both being
processes that HR management would like to avoid whenever possible,
Shift in 1H IR
IR in India is witnessing a drastic change because of a number of factors, few of them are
Emerging business scenario has brought in new market imperatives.
‘The institution of Trade Union is getting weak.In IT sector there is absence of TU’s.
The institution of Collective Bargaining is being decentralized and is replaced by Individual
Bargaining,
‘Compensation Management pattern is changing and is replaced by performace based wages:
Use of policies for diluting labour struggle.
A number of legal steps have also been taken to make IR- Employee and Work Friendly. In the wake of changing philosophy of IR itis but natural that HR. whether National or
International has to be collaborative in nature and work towards multi dimensional
betterment and need satisfaction of all parties concerned with an organization.( Employee
sEmployer, Work and Extemal agencies.)
INTERNATIONAL LABOUR STANDARDS.
Intemational labour law is the body of rules spanning public and private international law which
concem the rights and duties of employees, employers, trade unions and governments in
regulating the workplace. The International Labour Organization and the World Trade
Organization have been the main intemational bodies involved in reforming labour markets, The
Intemational Monetary Fund and the World Bank have indirectly driven changes in labour policy
by demanding structural adjustment conditions for receiving loans or grants. Issues regarding
Conflict of laws arise, determined by national courts, when people work in more than one
Country, and supra-national bodies, particularly in the law of the European Union, has a growing
body of rules regarding labour rights,
Intemational labour standards refer to conventions agreed upon by international actors, resulting
from a series of value judgments, set forth to protect basic worker rights, enhance workers’ job
security, and improve their terms of employment on a global scale, The intent of such standards,
then, is to establish a worldwide minimum level of protection from inhumane labour practices
{through the adoption and implementation of said measures. From a theoretical standpoint, it has
been maintained, on ethical grounds, that there are certain basic human rights that are universal
to humankind. Thus, itis the aim of intemational labour standards to ensure the provision of such
rights in the workplace, such as against workplace aggression, bullying, discrimination and
gender inequality on the other hands for working diversity, workplace democracy and
empowerment,
- While the existence of international labour standards does not necessarily imply implementation
or enforcement mechanisms, most real world cases have utilised formal treaties and agreements
stemming from international institutions. The primary intemational agency charged with
developing working standards is the International Labour Organization (ILO). Established in
1919, the ILO advocates international standards as essential for the eradication of labour
conditions involving “injustice, hardship and privation”. According to the ILO, intemational
labour standards contribute to the possibility of lasting peace, help to mitigate potentially adverse
effects of intemational market competition and help the progress of international development.
Implementation, however, is not limited to the ILO nor is it constrained to the legislative model
that the ILO represents. Other alternatives include direct trade sanctions, multilateral
enforcement, and voluntary standards, In addition to controversies that arise over each of these
models, greater issues have also been raised concerning the debate over the need for international
labour standards themselves. However, while critics have arisen, the international community
has largely come to a consensus in favour of basic protection of the world’s labour force from
inhumane practices, Associated with the development of successful international labour standards is proper
monitoring and enforcement of labour standards. Most monitoring occurs through the ILO, but
domestic agencies and other NGOs also play a role in the successful monitoring of international
labour standards,
Objective of ILO
+ Formulation of international policies and programmes to promote basic human rights,
improve working and living conditions, and enhance employment opportunities;
+ Creation of intemational labour standards in the form of Conventions and
Recommendations, backed by a unique system to supervise their application;
+ _Anextensive programme of international technical cooperation.
+ Training, education, research, and publishing activities to help advance all of these
efforts.
+ To promote and realize standards and fundamental principles and rights at work;
‘+ To create greater opportunities for women and men to secure decent employment;
+ To enhance the coverage and effectiveness of social protection forall.
STRUCTURE OF ILO
‘Some of the most important organisational structure of ILO are as follows:
1. International Labour Conference (ILC)
2. Governing Body
3. Intemational Labour Office (ILO).
(1) INTERNATIONAL LABOUR CONFERENCE (ILC)
This is the Apex body of ILO which makes labour policies for international labour. The ILC
holds its sessions at a frequency not less than once in a year. The delegates from three group's
viz. the government, the employers’ and the workers attend ILC sessions in the ratio of 2:1:1
respectively. Each representative has a vote, The representatives from the Government are
‘mostly ministers, diplomats or officials.
The conference is empowered to appoint committees to deal with different matters relating to
labour during each session. Examples of such committees are the selection committee, The
Credential Committee, The Resolution Committee, The Drafting Committee, The Finance
Committee, etc. All committees except Finance Committee are tripartite in nature,
The functions performed by the ILC are to:
Formulate international labour standards.
Fix the amount of contribution to be paid by the member states.
Decide budget and submit the same to the Governing Body.
Study the labour problems submitted by the Director General and assist in their solutions.
Appoint committees to deal with different problems during its sessions. Elet the resident,
members of the Governing Bod:
Develop Policies and procedures,
advisory opinion from International Committee of Justice.
6.
1,
&
9,
* Confirm the powers, functions and procedure of Regional Conference.
@) GOVERNING BODY
Itis also a tripartite body. It implements decisions of the ILC with the help of the International
Labour Organization, It consists of 56 members in the same ratio of 2:1:1, Le. 28 representatives
of the Government, 14 of the employers and 14 of the workers. Of the 28 representatives of the
Government, 10 are appointed by the members of the States of Chief Industrial Importance and
remaining 18 are delegates ofthe other governments.
Industrial population is the criteria for chief Industrial Importance. India is one of the ten states
of chief Industrial Importance. The tenure of the office of this body is 3 years. It mects
frequently in a year to take decisions on the programmes of the ILO.
The funetions of the Governing Body are to:
Co-ordinate work between the ILC and ILO.
Prepare agenda for each session of the ILC.
“Appoint the Director General of the office.
Scrutinize the budget.
Follow up with member states in regard
recommendations adopted by the ILC.
Fix the date, duration, schedule and agenda for the Regional Conferences
Seek as and when required, advisory opinion from the International Court of Justice with
the consent of the ILC.
to implementation of the conventions and
(@) International Labour Office:
‘This isthe secretariat of the ILO in Geneva and isthe third major organ of the ILO. The Director
* General (DG) of the ILO is the Chief Executive Officer of the Secretariat appointed by the
Governing Body. He also serves as the Secretary General of the ILC. His tenure is for 10 years
and extendable by the Governing Body.
‘The Director General is assisted by two Deputy Director Generals, six Assistant Director
Generals, one Director of the International Institute of Labour Studies, and one Director of the
International Centre for Advanced Technical and Vocational Training, Advisors, Chief of
Divisions from 100 nations.
Following are the main functions of this office:
1, Prepare briefs and documents for agenda of ILC. 2 Assist the
Governments of the States to form labour legislation based on
Tecommendations of the ILC.
pak Publications relating to industrial labour problems of international nature and
$ CAzy out fictions related tothe observance ofthe conventions.
Collect and distribute information on international labour and social problems.
6. To promote and realize standards and fundamental principles and rights at work;
THE ROLE OF THE ILO
The mission of the Intemational Labour Organization (ILO) is to promote social justice and
intemationally recognized human and labour rights, based on the founding principle that social
justice is essential to universal and lasting peace.
Decent Work Agenda
As part ofits mission, the ILO aims to achieve decent work for all by promoting social dialogue,
social protection and employment creation, as well as respect for international labour standards.
The ILO provides technical support to more than 100 countries to help achieve these aims, with
the support of development partners.
International labour standards
The ILO sets international labour standards with Conventions, which are ratified by member
states, or Recommendations, which are non-binding.
Conventions are drawn up with input from governments, workers’ and employers’ groups at the
ILO. Conventions are adopted by the International Labour Conference, which meets every year
in Geneva.
The ILO’s supervisory role
The ILO monitors the implementation of ILO Conventions ratified by member states. This is
done through:
+ The Committee of Experts on the Application of Conventions and Recommendations
+ The International Labour Conference’s Tripartite Committee on the Application of
Conventions and Recommendations
+ Member states are also required to send reports on the progress of the implementation of
the Conventions they have ratified.
1L0 Declaration on Fundamental Principles and Rights at Work
Adopted in 1998, the Declaration commits member states to respect and promote eight
fundamental principles and rights in four categories, whether or not they have ratified the
relevant Conventions. They are:
Freedom of association and the right to collective bargaining (Conventions 87 and 98)
‘The elimination of forced or compulsory labour (No. 29 and No. 105)
{The abolition of child labour (Conventions No. 138 and No 182)
The elimination of discrimination in respect of employment and occupation ©
and police
Unit 3
Por is international strategic human resé
ian resource
management?
rategic integrational human resoure
and practices that fs
Mr0se enterprises
A
What are the benef
Sul ron ae Management (SIR) is defined as human resource management anes, uncon 2
Activities of multinational enterprises and that mpact the international cancers and Boa ©
's of strategic international human resource management?
nportant because it help
Riese SHRI con hep els Businesses achieve thee gals By aining HR prorams an otis with he con anys business
ess improve employee performance, develop the workforce and creat a postive work environment
& ‘Strategic International HRM
“«
Introduction: Human
Human resources are the most important resource of an organization. As the competition Is intensifying global, the
revariapen cof human resources is increasingly being realized. Human resources are the most important means through which
rganizational goals can be realized so managing human resources is utmost important, Strategic Human Resource Management (SHRM)
takes a step ahead of HRM. When HRM practices are linked with overall business strategy, itis called strategic Human Resourc®
Management. it asists busines in gaining competitive advantage over the others. International SHRM (SIHRM) is step ahead of SHRM.
SIHRM is the Strategl Human Resource Management in the multidomestic frm where HRM practices are diferentiated across countrioS as
per their environment and culture integrating the entire organization
stegy he word strategy has been derived from Grek word strategos’ fora general who organizes, lads and recs his forces tothe
{9 avortagous poston. inmanagement worl strategy refers tothe pan of acton trough which ep management ads Ye
crganzation to achieve its goals and purpose and attain a competitive edge. The man emphasis of strategy ito achieve competiWve
Gavvontoge oy aking use of ts uniguecapabtes to achieve its objectives. Strategy are broad statements of action, deisions, and oles
qr idea rou towards the goats strates ae a deny, seco messi and obtainable
and planning how that strategy is put into effect. According to Samuel
functional process aimed at keeping an organization 2s
the same for a global company and a domestic company.
Strategic Management -is concerned with deciding on strategy
Certo and J Paul Peter, “Strategic Management is a continuous, interactive cross
whole appropriately matched to its environment.” Strategic management are not t
ge states would be intel fers frm each other due to its difference and peculiarities.
¢¢ Ststerc Human resource management (SHRM: Human resource management deals with all aspects of business that affects employees
such a recruitment, selection, compensation, retrenchment, training, and administration etc. When management of Human Resources
integrated into the business strategy, it is called Strategic Human Resource Management. Thus, by integrating HRM practices into strategic
plans HAM perspective i incorporated into the decision mating, Strategic HRM i al about achieving the organization's intentions and
‘goals through people.
-e management isthe proactive management of people. Strategic human resource management s designed to
so that company goals are achieved effectively. This can affect the way things are
yee training programs to assessment techniques and discipline. Itis based on
thee propositions. st human capitals a major source of competitive advantage; second, strategic plans are implemented through
people; and, tied, a systematic approach should be adopted to define where the organization wants to go and how it should get there by
it When the HRM practices are integrated into the business strategy, It leads to efficient
managed effectively, it results into the improvement in
« Strategic human resouret
help companies best meet the needs oftheir employees
done improving everything from hiring practices and empl
taking human perspective along with i
‘management of human resources and when the human resources are
‘rganiztion’s overall performance. aso helps organisation achieve competitive advantage by creating unique HRM systems that cannot
be imitated by others. Fr ths, HR departments should adopt afuture-riented approach and HR strategies should be continuously form an}
integral part of the overall business The value which human resource carry forthe business has increasingly been realised it the quality
human resources who can enable the organisation to achieve competitive advantage . Therefore, SHRM practices which link HR practices
to the overall Business strategy cary special significance now. In domestic organisation, environmental and the cultural factors fs almost
similar in all the locations ofthe same nation but, these factors change drasticaly as the firm moves across diferent nations. Each nation
has its own unique culture, which may be somewhat similar or totaly ifferent from the other nation’s culture. So the domestic HR policies
actices cannot be as such transferred to the international setting. As organisation moves to different nations, the complexity of
‘a multi domestic firm, its called SIHRM. Under
and pre
‘working in different environments and culture increases. When SHRM is practiced in
eon eanmnnrArAnnnsrae et
arization with a uniform ¥
nd
jons and policies a
als of those
HRM practices are differenti
Prevented pley Selon gente! 2088 nations spe their environment stil nterating the enti 28
races that reo Te oeMns & De Cie defines SHRM as Human resource management issues, fort
fe strategie activities oT multinational enterprises ad that impact the international concerns and 6
Ge Fses. SHRI Functor :
ions are the time, energy and financial resources that are devoted tothe HR function within an organiato
Pittecences Between Tr :
ae eee aera HRM and Strategic HRM The main points of difference between the traditional and strategic va 7
ited aan! 3:3 HRM ates ison the degre of een aman sorts nh ae cnet
amr a eR epaien ee HRM acti ont sonra pie, The ees ono
fat sate haan resource manages hare alo a hss but hse ates ae Inked wih he rans
existence. SHRM athe focus on lng term aspects. 2. HRM involves recruitment, selection, training and development
tompensation etc of personnel nthe organization whereas Stateglc HRM sa branch of HRM. 3. HRM atvtes pursue only short-2r™
(foals while Staten peruses ng erm gs, nied ffoesing on tral huan resource sete foes on adaressing and
olvng problems that affect people management programs in the long run and often globally. Therefore the primary goal of stateale
human resources st increase employee productvty by focusing on business obstacles that occur outside of human resources, 4, HRM
focuses mainly on employee relations. Strategic HRM focuses on partnerships with internal and external customers. 5. Under HRM, there
Fare no specific ules for cruitment, election traning etc but under Strateglc HRM, there are speci rules specid for specifi functions
strategic HRM there are specialists to handle ferent HR
Under na, there are no separate people fran acts whereas in
difference between the traditional HRM and strategic HRM
functions of recruitment, taining, and performance appraisal et. Sothe main
Gs SHAN inks with organizational objectives and traditional HRM does not nk with organizational objectives drecty. For example 2
‘company wants te increas its market share and HR actives are designed in sucha way that It alms at increasing the market share, it =
Gcxcategic Hat. HAM activites are meant to fulfil the organizational human resource needs only then
o
(@ SHAM Advantages & Limitations
1g benefits are derived when HRM is integrated into the strategy of the business organisation:
their HR policy is traditional
@ SHRM Advantages -The fol
€ ‘ithetpsin achieving competitive advantage through managing human resources.
© « tt provides a large number of ways for solving complex organisational problems. it take into account the interests of every stakeholder,
© organizational and human capabilities.
© « ractitates knowledge management and management of change.
© «x icidenies and analyze external opportunities and threats that maybe ruil forthe company's success. Itheps in sceessful
implementation of corporate strategy by providing a vision forthe future.
«+ Human resources are given due consideration in achieving goals and implementation. Overall it deals with all people issues that affect or
are affected by the strategic plans ofthe organization. It ensures that people development issues are addressed systematically Provides
long-term focus to HRM,
‘+ Meets the customers’ expectations effectively.« Recruit, retain and motivate, develop and retain highly competent people.
Barriers to SHRM/ Limitations Various barriers and challenges influence HR Practices and Processes within an International Context mostly
related to socio-economic, political and technological aspects. Some major barriers are summarized as follows: Figure : Barriers to SHRM
Workforce Diversity: The workforce diversity in terms of culture, gender, ethics makes the management of workforce complex. Each
Country has diferent culture, ethics, values and perceptions. The workforce diversity increase with each foreign market. And with increase
in diversity, the complexity of workforce management increases. Employment Legislation: Each country has its own employment laws,
policies and practices
‘A company has to abide by the laws of each country in which it operates which adds to the complexity. Lack of Flexibility: International
environment is dynamic. An organization must keep its ]HRMe systems flexible to adapt to the changes in environment. Limitation of
RRR AAR RTA TAS es: Sophisticated IHRM system:
erianttion of such systems shoul nee 2 Workin diverse markets» HR managers responsible for the development and
bssresic decisions De eauipped withahe exh ba hgtad
etc decision-making process imtan necessary staff and resources and shouldbe integrated in the organization=!
@°¥!ronment: Faulty or unrealistic pone seus an imorope iteration lads toils. Improper assessment of exten
he ue to poor assessment of extemal environment leads to flue of strategic process Resistance
{rom the ower level
c vel employees.e Lack
‘ame in case of fallures because of Stet commitment of the top level management team and fear to take strategie steps.e Fear of blame
oe ich employees hesitate assum
‘rrunions making it difficult.» The | levees heprat .
include representation of speci
nission statement, guidelines,
management strategy into pro
ees © responsibilty. Conflicts over autharity.« Resistance from labour
dive, integration of HRM int the corporate strategy canbe evaluated bya numberof rte. These
People managers on the board, existence of written strategy on people management in the form of
Consultation with specialists in the development of corporate strategy; translation ofthe human
Brammes; participative management processes and committee meetings, HR aucits
international HR strat
a of i The various Human resource strategies which should be Kept in mind
a ring different stages of internationalization have been discussed below: ‘ canon
ae Domeststaeisa stag where a ompany ges inten by ering gots soda sek new mares ti sage
‘Such HR strategy is adopted. The exporting activities can be managed by a separate export department.
7y*__TheMuttidomestistage: Tis the stage where new foreign markets redeveloped by sling to foreign nationals and marketing
mix forthe home market is extended tothe foreign market. The HR approach adopted at this stage Is Adaptive IHRM approach.
a Under adaptive approach, such HRM systems are developed fo each foreign subsidiary that are consistent with the local
economic, political, and legal environment ofthe host country.
©. The ntutinationat stage: At ths stage, the standardized products and services are produced around the world to gain efficiency.
e Exportive IHRM approach is followed under which MRM systems are transferred from home country to foreign subsidiaries
‘without modifying them according tothe local environment
e- ‘The Global Stage. Iti the stage where production is done in the country where the cost of production is least. A company at the
qe st2¢¢ may fllow an integrative or adaptive IHRM approse.nteprate IHRM approach Under Integrative IHRM approach, home
country HR practices are combined with host country practices and geocentric staffing policy is followed where the best talent from all
{over the world i employed irespective oftheir nationality. Adaptive IHRM Approach: Under adaptive IHRM approach, such systems thot
are consistent with the local, economic, political, and legal environment of the host country are adopted
Strate, 1 Resource Management Process: The various steps in Human resource management can be discussed as follows:
1. Scanning the Environment: The process of SHRM begin with scanning the environment in which the organization operates. I
includes scanning both internal and external environment. And talking about international frm, it includes scanning the
environment ofall the countries in which its subsidiaries operate. The external environment includes the political, legal,
technological, economic, social and cultural environment. The internal factors include the organizational culture, hierarchy,
business systems and processes, management, resources, industrial relations, ete
2. Formulation of Corporate Level Strategies: After scanning the environment, the next step i to formulate the strategy for the
corporate. Before formulating the business strategy, the vision, mission ,policies ofthe organisation are defined. Vision isthe
ultimate goal ofthe organization. It describes why the organization exists. It describes what it would lke to become in the future,
For example,an organisations vision could be to become the world’s best supplier in cosmetics. Mission describes how to
‘accomplish the vision ofthe organization. Mision statement distinguishes one organization from other similar organizations, It
‘should include a summary of core competencies and competitive differentiation. For example, We supply the best cosmetics with
ro chemicals in order to deliver superior value to our customers. Mission statement should be very clear and straight forward,
RRAR RAR AANRARAAAAAAAN strategies are established. Strate :
Freee eat organization. These are the genera statements which guide ations. After SE the
ed 5 corpora al corporations are diferent rm that of domestic companies. strateses <2? be
level strategies and business unit level strategies. Corporate Level Strategies “There 27
four types of Corporate Level Strategies, These a ty Strategies: strategies aim at business growth w!
o gles, These are: Stability Strat jes which aim at mit ch 2
Pe aL Status quoe and sustainable growth strategies. Growth Strategies: Strategies
oraic owt sates. Retrenchen steps Sth ste wn ae divestments and
- From corporate level sategien ae Strategies which include all possible combinations.« Business Unit Level Strategies:
Fee ae mn meat edn a nem nk ee, Taco leadership
ace , Differentiation strategies, Offensive Strategies, Defensive Strategies.
c eaten, pn erate SA east bso goa baie ere people. After defining the corporate
Sater the next ptf te HR pokey trough wh egos of open oli wd There major
ich an organization can pursue to enrich the employees capabilities: Learning as Socialization: Under tis strateey,
i employees are given training and coachinge sessions are held so that they are made to learn the rules, value and beliefs of 2”
organization and achieve the targets, Devolved informal Learning: Under ths, employees are made aware of career
c developments opportunities and efforts are made to enhance their learning. Engineering: This strategy focuses on creating and
developing communities of practice ande social networks within and outside the organization. Empowered informal Learning
Under tis, a learning environment i created within ane organization through development of such work systems and processes
New work areas are designed and provision of shared spaces is made so that learning environment is created through
c liquidations ete.e Cor
ar HR
9
Interactions,
a
© «implementing HR Strategies: After the human resource strategy is developed, they ae implemented Successful implementation
@
@
is as important as the development ofthe strategies. As without successful implementation, entire exercise will get meaningless
For successful implementation, commitment of top level management is a prerequisite.
5, Monitor and Evaluation: The final step in the strategic human resource management process
the HR strategy against the pre-established standards. Strategies may sometimes not be implemented as planes
in external factors. Therefore evaluation and controls important which includes the following steps: Establish the standardse
irmance at each stage.» Compare the standards with performances achieved .* Taking note of the deviations
is to compare the performance of
1d due to changes
Measure the perfor
and taking corrective steps.
n Resource Str
uidelines for Formulating effective Glot
For effective global human resources program the following things should be taken care of:
Guidelines for formulating effective Global Human Resource Strategy
®
©
©
©
«
©
(r__& eeu tonards aes matonasFor tev global. propane foots towards he aren cour nationals
ald be followed, The frm must choose from the poo of global employees who possess the sil and the qualification to hold
© the partiealr position, Favourtism policy can put companies at a clear disadvantage, and there are strong reasons to dlscard
them.
2. Identify the strategic pos
strategy around the world should be identified and the positions that hold responsibilty for
sitions: Strategic positions which are essential for achieving the business objectives and pursuing the
performing them should be specified
C
‘The technical, functional requirements and skills needed to perform these positions should be defined. Such role descriptions
C should be revisited at least annually to ensure they express the business strategy as the strategies keep on changing with the
: change in external factors.
4. Build a global database to know who and where your talent is A multinational company should maintain a global database of
human resources which serves as a big help not only at the time when strategic posts have to filled but aso, for the development
oftheir employees. Such data base should not only be used for filing up the top positions but also be used for middle level
‘employees and in the country markets and potential stars coming through the ranks.
‘4. Construct a mobility pyramid A mobility pyramid should also be constructed by the company where the preferences of the
managers to move to new locations as well as their ability and experience are maintained as database, Mobily should not only
be evaluated in terms of "movable" or "not movable.” Rather preferences should be noted not only for the place but also for the
kind of work for they would lke to move. When the need arises as the projects get open, such data base can be used by the
company to quickly determine willingness and ability of employess to take the job . Also, such pyramid should be constantly kept,
s' lives and company opportunities also change with time. This activity will
updated as circumstances keep changing in manager - Neti
Fe ceclerats ml For beterjb performance, ac exeitive sould be sed tue he apn iso he sls 2°¢
other means. These skill sh
fruitful inputs for managem
descriptions,
6. Recruit regularly For a
= ne ularly For @ good HR program, a company should recruit forthe potential employees regularly. New recruits should be
eee atin every important local market and headquarters regula. Such a reputation should be developed among the Best
Braduates as “the best company to join.” Also, by letting the people know how far they can climb up the ladder, best recruits can
be attracted,
; 1
Advertise Posts Internally The vacancies or the positions should be advertised internally by the company over the intranet. It not
‘only Solidifies company culture but also shows ambitious people they can make their future in the company. Such a policy is gives
employees responsibility to manage their own careers,
8. Institute succession planning Every manager in strategic job position should be required to nominate up to three candidates who
could take over that post in the near future. This policy can fruitfully help solving succession problems to a large extent.
Challenge and retain your talent For the companies in such a dynamic challenging environment, its essential to retain the best talent as it
is the most important resource and is really scarce. Monetary incentives are not sufficient to retain the good talent. Talented people lke to
(@ 8
