Introduction

STRATEGIC HUMAN
RESOURCE MANAGEMENT
Much of life now looks like [a] doughnut. Organisations
as well as individuals have come to realise that they
have an essential core, a core of necessary jobs and
necessary people, a core which is surrounded by an
open flexible space, which they fill with flexible
workers and flexible supply contracts. The strategic
issue for organisations, nowadays, is to decide what
activities and which people to put in which space. It
is not always obvious (CHARLES HANDY, British
academic, business consultant and author).
 WHAT IS HUMAN RESOURCE
MANAGEMENT?

Managing people within the employer-

employee relationship.
It involves the productive use of people in
achieving the organisations strategic
business objectives and the satisfaction
of individual employee needs.
 HRM is either a part of the problem or part of the
solution in gaining the productive contribution of
people.
The HR manager, as with any other functional
manager in marketing, production or finance, is
responsible for performance.
His or her position exists foremost to help achieve the
strategic business objectives of the organisation.
The HR function is recognised for contributing to the
bottom line (which refers to a final result such as net
profit after taxes).
HRM AND MANAGEMENT

HRM is management, but management is more

than HRM.
HRM is that part of management dealing directly
with people, whereas management also includes
marketing research and development, and
accounting and finance.
Because the purpose of HRM is to improve the
productive contribution of people, it is intimately
related to all other aspects of management.
Organisations needing to trim overheads or reduce
corporate flab cut HRM.
Who is responsible for HR?

It should be quite clear that human resource

management functions are not necessarily
executed by a human resource specialist or
department.
Precisely how the human resource management
functions are divided between the human
resource departments specialists and the
organisations other managers varies from
situation to situation and is contingent upon a
vast number of circumstantial factors.
Circumstantial Factors

Internal factors:
organisational history,
size,
structure and location,
the values, philosophies and management styles of top
management,
the nature of the workforce,
the type of industry.

External factors:
economic conditions,
legislative requirements,
industrial relations.
 Myths that keep HR from being a profession

New Realities
Old Myths HR departments are not designed
to provide corporate therapy or to
People go into HR because act as social or health-and-
they like people. happiness retreats. HR
professionals must create the
practices that make employees
more competitive, not more
comfortable.

HR activities are based on theory

and research. HR professionals
must master both theory and
Anyone can do HR. practice.
 Old Myths New Realities
HR deals with the soft The impact of HR practices on
side of business and business results can and must be
therefore is not measured. HR professionals
accountable. must learn to translate their work
into financial performance.

HR practices must create value

HR focuses on costs, by increasing the intellectual
which must be capital within the firm. HR
controlled. professionals must add value, not
only reduce costs.

Old Myths
HRs job is to be the policy police
and the health-and-happiness
patrol.
HR is full of fads.
New Realities
The HR function does not own
compliance.
HR practices have evolved
over time. HR professionals
must see their current work as
part of an evolutionary chain
and explain their work with
less jargon and more authority.
 Old Myths New Realities
At times, HR practices should force
HR is staffed by nice vigorous debates. HR professionals
people. should be confrontative and
challenging as well as supportive.

HR work is as important to line

managers as are finance, strategy,
HR is HRs job. and other business domains. HR
professionals should join with
managers in championing HR
issues.
 APPROACHES TO HRM
Instrumental HRM (hard approach): stresses the
rational, quantitative and strategic aspects of
managing human resources.
Humanistic HRM (soft approach): while
emphasising the integration of HR practices with
strategic objectives, it stresses competitive
advantage is achieved by employees with superior
know-how, commitment, job satisfaction,
adaptability and motivation.
 The New Role of HR Managers
STRATEGIC PARTNER
HR professionals play a strategic role when they have the ability to translate
business strategy into action. This facilitating role allows the HR manager to
become part of the business team.
ADMINISTRATIVE EXPERT
To become administrative experts HR professionals must be able to re-engineer
HR activities through the use of technology, process engineering and total
quality management.
EMPLOYEE CHAMPION
The HR professional must be able to relate to and meet the needs of employees
CHANGE AGENT
The HR manager needs to serve as a catalyst for change within the
organisation. This can be achieved by leading change in the HR function and by
developing problem-solving communication and influence skills. In short, the
HR manager must know how to manage change.
 HRM ACTIVITIES
Job analysis defines a job in terms of specific tasks and responsibilities and
identifies the abilities, skills and qualifications needed to perform it successfully.
Human resource planning or employment planning is the process by which
an organisation attempts to ensure that it has the right number of qualified
people in the right jobs at the right time.
Employee recruitment is the process of seeking and attracting a pool of
applicants from which qualified candidates for job vacancies within an
organisation can be selected.
Employee selection involves choosing from the available candidates the
individual predicted to be most likely to perform successfully in the job.
 HRM ACTIVITIES (cont)

Performance appraisal is concerned with determining how well employees are

doing their jobs, communicating that information to the employees and
establishing a plan for performance improvement.
Training and development activities help employees learn how to perform their
jobs, improve their performance and prepare themselves for more senior
positions.
Career planning and development activities benefit both employees - by
identifying employee career goals, possible future job opportunities and personal
improvement requirements - and the organisation - by ensuring that qualified
employees are available when needed.
Employee motivation is vital to the success of any organisation. Highly
motivated employees tend to be more productive and have lower rates of
absenteeism, turnover and lateness.
 HRM ACTIVITIES (cont)

Compensation refers to the cash rewards, such as the base

salary, bonus, incentive payments and allowances which
employees receive for working in an organisation.
Benefits are sometimes referred to as indirect or non-cash
compensation.
Industrial relations is concerned with the relationship between
an organisation and its employees.
Effective health and safety programs help guarantee the
physical and mental wellbeing of employees.
Management of diversity and successfully integrating
Australias multi-cultural population into the work force
maximises the contribution of all employees.
WHAT IS STRATEGY

Defines the direction in which an

organisation intends to move and
establishes the framework for action
by which it intends to get there.
STRATEGIC INTENT
Companies that have achieved global
leadership, have created a sustained
obsession to achieve a challenging long-
term objective. This obsession is called
strategic intent.
Achieve this requires organisations to move
from their traditional conscript mindset
(externally motivated) to a volunteer
mindset internally motivated).
 Strategic Intent

Establishamissionandkeyobjectives

F
E Analysetheenvironment
E
D
B
A Analyseandselectbusinessstrategies
C
K

Implementthestrategies

Monitorandevaluateperformance
 BHP Tosurviveandprosper,wemustcreatea
Charter highperformanceorganisationinwhich
everyindividualacceptsresponsibility

andisrewardedforresults.

Business Wehaveadoptedaportfoliobusiness
strategy assetmodeltocompeteinaclearly
definedandtargetedapproach.

People Wearecommittedtoprovidingagreat
strategy companytoworkfor,withgreatjobsand
attractiverewards.

Remunera- Ourexecutiveswillbeabletoseethelink
tion betweentheresultstheyproduceandthe
strategy levelofrewardtheyachievethrougha
flexibleremunerationdeliverymodel.

LinkbetweenorganisationandHRMobjectivesandstrategies
Source:BHP,Comingoutofatightcorner;Report to Shareholders,2000,p.31.

TYPES OF STRATEGIES
Growth
Retrenchment
Stability
Combination
 HRM STRATEGY AIMS TO ENABLE
ORGANISATION TO ACHIEVE STRATEGIC
OBJECTIVES BY:
Ensuring all business processes recognise the value of
people
Seeing that all concerned appreciate the HR implications of
their proposals
Achieving a close match between corporate business
objectives and objectives of the HR function
Designing a culture, climate and organisational processes
conducive to optimal performance of staff
Identifying the firms distinctive competencies and the types
of people that match these competencies.
Assessing the performance requirements
Reviewing levels of commitment throughout the organisation
STRATEGIC HRM OBJECTIVES CAN BE
LINKED TO STRATEGIC OBJECTIVES
SUCH AS:

Cost containment
Customer service
Social responsibility
Organisational effectiveness
 ASSESSMENT OF
INFLUENCES

Where are we now?

Where do we want to be in the future?
What path is best for us?
How and when can we implement it?
EXTERNAL INFLUENCES
Political
Legal
Environmental
Technological
Cultural
Demographic
Social
Business
Economic
Industrial relations
INTERNAL INFLUENCES
Organisational mission and purpose
Objectives and strategies
Organisational culture
Organisational structure
OUTCOMES IN EVALUATING HRM
STRATEGIES AND POLICIES

Commitment
Competence
Cost-effectiveness
Congruence
Adaptability
Performance
Job satisfaction
Employee motivation
Trust
THE HRM CHALLENGE

Strategic HRM demands HR

professionals who have competencies
at a general management level and
who are willing to accept responsibility
for organisational performance outside
HRM Davidson
 Summary

In the current turbulent environment HR managers need

to adopt a strategic approach, be part of the top
management team, be involved in corporate planning
and develop a vision for HRM.
HRM activities must be part of a coordinated effort to
improve the productive contribution of people in meeting
the organisations strategic business objectives.
Inability to do so means that the organisation will
ultimately stagnate and fail.