The Practice Of Strategic Human Resource Management

Formulating and implementing HR Strategies

• There is typically no single HR strategy in a firm, although research conducted showed that a number of the firms we contacted did have an overall strategic approach within which there were specific HR strategies

• Business strategy maybe an important influence on HR strategy but it is only one of the several factors and the relationship is not unilinear.

• Implicit in the mix of factors that influence the shape of HR strategies is a set of historical compromises and trade-offs from shareholders.

• HR strategy can influence as well as can be influenced by business strategy. In reality however HR strategies are more likely to flow from business strategies that will be dominated by product/market and financial considerations. But there is still room for HR to make a useful, essential contribution at the stage when business strategies are conceived, for example, by focusing on resource issues.

The Development Process

The process of developing HR strategies involves generating strategic HRM options and then making appropriate strategic choices. These choices should

• Relate to but also anticipate the needs of the business

• Be congruent with the present or desired culture of the organization

• Have the capacity to change the character and direction of the business

• Equip the organization to deal effectively with the external pressures and demands affecting it

• Focus on areas of critical need

• Focus on fundamental questions as “What is constraining us?” or “What is stopping us from delivering business results?”

• Be founded on detailed analysis and study and not just wishful thinking

• Incorporate the experienced and collective judgement of top management

• Anticipate the problems of implementation if managers are not committed to the strategy and or lack the skills to play their part.

• Anticipate any problems that might arise because of the hostility or interference of employees or trade unions

• Ensure that the organization has the resources required to implement the strategy

• Provide for the acquisition and development of people with the skills needed to manage and sustain the organization in the future to meet organizational objectives

• Consist of componenets that fit with and support each other

• Be capable of being turned into actionable programmes

Strategic Frameworks

The formulation of coherent HR strategies is more likely if the overall approaches the organization intends to adopt to managing its human resources are understood. The most common approaches are

• The development of resource capability

• High-commitment management

• High performance management

• Best practice

Resource Capability

This approach regards the firm as a bundle of tangible and intangible resources and capabilities required for product/market competition. Human Resources are seen as a major source of competitive advantage.

Within this framework, firms attempt to gain competitive advantage using human resources through developing distinctive capabilities (competencies) that arise from the nature of the firm’ relationship with its suppliers, customers and its employees.

It is concerned with the development and retention of human or intellectual capital.

The high commitment management approach

It is based on the assumption that higher levels of performance from people and a belief that the organization is worth working for, are more likely when employees are not tightkly controlled. Instead they should be given broader responsibilities, encouraged to contribute and helped to achieve satisfaction in their work. This approach involves treating employees as partners in the enterprise, whose interests are respected, who have a voice on matters that concern them and whose opinions are sought and listened to. It is concerned with communication and involvement.

The high-performance management approach

It aims to raise the performance of the organization through its people. High performance management practices involve the development of resourcing, employee development, performance management and reward processes that focus on the delivery of added value

The best practice approach

It is based on the assumption that there is a set of best practices and that adopting them will inevitably lead to superior organizational performance.