Strategic human
resource management
Chapter 2
Copyright  2003 McGraw-Hill Australia Pty Ltd.
PPTs t/a Human Resource Management in Australia: Strategy-People-Performance
by De Cieri & Kramar
1
Strategic human resource
management (SHRM)
 Objectives
Describe the differences between strategy
formulation and strategy implementation.
List the components of the strategic
management process.
Discuss the role of the HR function in strategy
formulation.
Describe the linkages between HR and strategy
formulation.
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PPTs t/a Human Resource Management in Australia: Strategy-People-Performance
by De Cieri & Kramar
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Strategic human resource
management (SHRM)
 Objectives (continued)
Discuss the more popular typologies of generic
strategies and the various HR practices
associated with each.
Describe the different HR issues and practices
associated with various directional strategies.
List the competencies the HR executive needs to
become a strategic partner in the company.
Copyright  2003 McGraw-Hill Australia Pty Ltd.
PPTs t/a Human Resource Management in Australia: Strategy-People-Performance
by De Cieri & Kramar
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Strategic management
 A process or approach to addressing the
competitive challenges faced by an
organisation.
 It can be thought of as managing the
‘pattern or plan that integrates an
organisation’s major goals, policies and
action sequences into a cohesive whole’
(Quinn, 1980).
Copyright  2003 McGraw-Hill Australia Pty Ltd.
PPTs t/a Human Resource Management in Australia: Strategy-People-Performance
by De Cieri & Kramar
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Generic strategies (Porter)
 Cost
 Differentiation
 Focus
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PPTs t/a Human Resource Management in Australia: Strategy-People-Performance
by De Cieri & Kramar
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Strategic types (Miles & Snow)




Defender
Analyser
Prospector
Reactor
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PPTs t/a Human Resource Management in Australia: Strategy-People-Performance
by De Cieri & Kramar
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Strategic human resource
management (SHRM)
 A pattern of planned human resource
deployments and activities intended to
enable an organisation to achieve its goals.
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PPTs t/a Human Resource Management in Australia: Strategy-People-Performance
by De Cieri & Kramar
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Components of the strategic
management process
 Strategy formulation
The process of deciding on a strategic
direction by defining a company’s mission
and goals, its external opportunities and
threats, and its internal strengths and
weaknesses.
 Strategy implementation
The process of devising structures and
allocating resources to enact the strategy
chosen by a company.
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PPTs t/a Human Resource Management in Australia: Strategy-People-Performance
by De Cieri & Kramar
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Linking HR and the strategic
management process
 Strategic choice
The organisation’s strategy; the ways an
organisation will attempt to fulfill its mission
and achieve its long-term goals.
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PPTs t/a Human Resource Management in Australia: Strategy-People-Performance
by De Cieri & Kramar
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A model of the strategic management process
(see Figure 2.1 for more detail)
Strategy formulation
Strategy implementation
External
analysis
Goals
Strategic
choice
Internal
analysis
HR
needs
HR
capability
Firm
performance
HR
actions
Strategy
evaluation
Mission
HR
practices
Emergent strategies
Copyright  2003 McGraw-Hill Australia Pty Ltd.
PPTs t/a Human Resource Management in Australia: Strategy-People-Performance
by De Cieri & Kramar
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PPTs t/a Human Resource Management in Australia: Strategy-People-Performance
by De Cieri & Kramar
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Figure 2.2 Linkages of strategic planning
and HRM
Source: Adapted from K. Golden & V. Ramanujam, ‘Between a Dream and a Nightmare: On the Integration of the Human Resource
Function and the Strategic Business Planning Process’, Human Resource Management 24, 1985, pp. 429–51.
Copyright  2003 McGraw-Hill Australia Pty Ltd.
PPTs t/a Human Resource Management in Australia: Strategy-People-Performance
by De Cieri & Kramar
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Figure 2.3 Strategy formulation
External analysis
Opportunities
Threats
Mission
Strategic
choice
Goals
Internal analysis
Strengths
Weaknesses
HR Input
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PPTs t/a Human Resource Management in Australia: Strategy-People-Performance
by De Cieri & Kramar
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Strategy formulation:
four components
 Mission: a statement of the organisation’s reason for being.
 Goals: What an organisation hopes to achieve
in the medium- to long-term future.
 SWOT analysis (strengths, weaknesses, opportunities,
threats), comprising:
 External analysis: Examining the organisation’s operating
environment to identify strategic opportunities and
threats.
 Internal analysis: The process of examining an
organisation’s strengths and weaknesses.
 HR input: HR executives involved in strategy formulation.
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PPTs t/a Human Resource Management in Australia: Strategy-People-Performance
by De Cieri & Kramar
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Figure 2.4 Variables to be considered
in strategy implementation
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PPTs t/a Human Resource Management in Australia: Strategy-People-Performance
by De Cieri & Kramar
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Strategy implementation
(see Figure 2.5 for more detail)
HR
practices
Strategic
choice
HR
needs
HR
capability
Firm
performance
HR
actions
Emergent strategies
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PPTs t/a Human Resource Management in Australia: Strategy-People-Performance
by De Cieri & Kramar
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Figure 2.5 Strategy implementation
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PPTs t/a Human Resource Management in Australia: Strategy-People-Performance
by De Cieri & Kramar
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Menu of HR practice options






Job analysis and design
Recruitment and selection
Employee learning and development
Performance management
Pay structure, incentives and benefits
Industrial relations
 See Table 2.4 for more detail
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PPTs t/a Human Resource Management in Australia: Strategy-People-Performance
by De Cieri & Kramar
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Directional strategies




Concentration strategies
Internal growth strategies
External growth strategies
Divestment or downsizing strategies
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PPTs t/a Human Resource Management in Australia: Strategy-People-Performance
by De Cieri & Kramar
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The role of HR in providing
strategic competitive advantage
 Emergent strategies
 Enhancing firm competitiveness
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PPTs t/a Human Resource Management in Australia: Strategy-People-Performance
by De Cieri & Kramar
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Figure 2.6 HR competencies
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PPTs t/a Human Resource Management in Australia: Strategy-People-Performance
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Summary
 SHRM: to proactively provide a competitive
advantage through the company’s human
resources.
 The HR function needs to be integral to strategy
formulation.
 HRM has an impact on strategy implementation.
 The strategic role of the HR function requires
business, professional-technical, change
management and integration competencies.
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PPTs t/a Human Resource Management in Australia: Strategy-People-Performance
by De Cieri & Kramar
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