Strategic
Human Resource
Management
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HR as a Strategic Partner
HR executives must
understand complex
organizational design
• Sharp deviation from
what has traditionally
been an administrativetype role for HR
•
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Strategic Activities CEOs want from HR

Make workforce strategies integral to company
strategies and goals

Leverage HR’s role in major change initiatives

Earn the right to a seat at the corporate table

Understand finance and profits

Help line managers achieve their goals
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The Meaning of “Strategy”
A critical factor that affects Firm Performance
 A factor that contributes to Competitive
Advantage in markets
 Means having a long-term focus
 Incorporates plans that involve the top
executives and/or board of directors of the firm
 A general framework that provides a perspective
for selecting specific policies and procedures

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Definition of Strategic Human Resource
Management (SHRM)

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Integrating human resource management
strategies and systems to achieve overall
mission, strategies, and success of the firm
while meeting needs of employees and
other stakeholders.
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Strategic Plan
The three traditional poles of a strategic
Plan (Aktouf, 1996)

Senior Management
Environment
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Resources
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Steps in Strategic Management Process
Step 1
Mission and Goals
Management philosophy
values
Step 2
Environmental Analysis
External scan
Internal scan
Step 3
Step 4
Strategic Formulation
Strategic choice
Corporate
Business
Functional
Strategy Implementation
Leadership
Structure
Control Systems
Human Resources
Step 5
Strategy Evaluation
Operating performance
Financial Performance
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Step 1- Organization’s Direction
An organizational analysis, involving a close look
at the organization’s overall mission and goals, is
an integral aspect of identifying human resource
strategies. Often, even similar organizations
pursue different goals; however, some goals such
as profitability (or revenue surplus),
organizational growth, employee satisfaction,
efficiency, adaptation to environmental changes,
etc. are common across most organizations.
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Step 1- Organization’s Direction (Continued)


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How an organization defines its mission also
significantly influences human resource strategies.
A mission statement specifies what activities the
organization intends to pursue and what course is
charted for the future. It is a concise statement of
“who we are, what we do, and where we are
headed.” It gives an organization its own special
identity, character, and path of development.
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Step 2- Environmental Analysis

External Analysis- By careful and continuous
monitoring of economic, social, and labor market
trends and noting changes in governmental
policies, legislation, and public policy statements,
a human resource manager will be able to identify
environmental threats and opportunities that, in
turn, help formulate new action guidelines.
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Step 2- Environmental Analysis (Continued)

Internal Analysis- Human resource strategies
should be formed only after a careful look at the
strengths and weaknesses of the organization and
its culture. In the same way, organizational
strategies that cannot be built on existing human
resource capabilities should be avoided (unless it
is possible to remove these deficiencies
immediately either through training or selection
of employees).
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Step 3- Strategic Formulation
Strategic formulation involves senior
managers
evaluating the interaction between strategic factors
and making strategic choices that guide managers to
meet the organization’s goals. Some strategies are
formulated at the corporate, business, and specific
functional levels.
The term “strategic choice” raises the questions of
who is making decisions and why they are made.
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Step 4- Strategic Implementation
Strategy
implementation is an area of activity
that focuses on the techniques used by managers
to implement their strategies. In particular, it
refers to activities that deal with leadership style,
the structure of the organization, the information
and control systems, and the management of
human resources.
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Step 5- Strategic Evaluation


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Human resource strategies, however effective they
prove to be, must be examined periodically.
An organization’s contextual factors, such as
technology, environments, government policies,
and so on, change continuously. Additionally,
several of its internal factors, such as membership
characteristics, role definitions, and internal
procedures also continuously change. All of these
changes necessitate periodic strategy evaluation to
ensure their continued appropriateness.
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Step 5- Strategic Evaluation (Continued)


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Strategy evaluation is an activity that determines
to what extent the actual change and
performance match the desired change and
performance.
Results of program evaluation produce valuable
feedback, which is information that helps evaluate
success or failure. Such information, in turn, helps
the firm to fine tune its practices or even abandon
some actions that do not seem to have
performance potential.
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Conclusion


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The strategic management model depicts
the five major activities as forming a rational
and linear process.
It is, however, important to note that it is a
normative model, that is, it shows how
strategic management should be done
rather than describing what is actually done
by senior managers.
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