Strategic Human Resource Management: An Overview By Dr. Kitunzi Mutunzi

Session Objectives/Scope To refresh & enhance participants’ capacities to appreciate and gainfully utilize: An overview of some core concepts & scope of HRM The meaning & Essence of SHRM The concepts of strategy & strategic management Relationship between HR & Strategic management Basics/ essentials for establishing SHRM 4/23/2017 SHRM-Overview

What is Human Resource Management? Planning, organizing, coordinating, & controlling the Utilization of individuals to achieve organizational objectives NB: All managers at every level must concern themselves with human resource management What are the primary (Five) functions of HRM? 4/23/2017 SHRM-Overview

Human Resource Management- Basic Functions 1 Staffing Human Resource Management Human Resource Development Employee and Labor Relations Compensation Safety and Health 4/23/2017 SHRM-Overview

What constitutes Staffing in HRM? Human Resource Planning Job Analysis Recruitment Selection Orientation/socialization 4/23/2017 SHRM-Overview

What is involved in Human Resource Development? Training Development Career Planning Career Development Organizational Development Performance Management Performance Appraisal 4/23/2017 SHRM-Overview

What does Compensation entail in HRM? Direct Financial Compensation - Pay that person receives in form of wages, salaries, bonuses, and commissions. Indirect Financial Compensation (Benefits) - All financial rewards not included in direct compensation such as paid vacations, sick leave, holidays, and medical insurance. Nonfinancial Compensation - Satisfaction that person receives from job itself or from psychological and/or physical environment in which a person works. 4/23/2017 SHRM-Overview

What Comprises Safety and Health in HRM? Safety - Involves protecting employees from injuries caused by work-related accidents Health - Refers to employees' freedom from illness and their general physical and mental well being 4/23/2017 SHRM-Overview

What is Employee and Labor Relations about in HRM? Labor Union and Collective Bargaining Organizations are required by law to recognize trade unions and bargain with them in good faith if their employees want the unions to represent them Human resource activity is often referred to as industrial relations NB: Most firms today would rather have a union-free environment Private-sector union membership has fallen from 39 percent in 1958 to 7.8 percent in 2005. 4/23/2017 SHRM-Overview

What is HR Branding? HR Branding Shapes a Firm’s corporate image or culture It embodies values and standards that guide peoples’ behavior It helps People know what firm a stands for, people it hires, fit between jobs and people, and results it recognizes and rewards HR Branding is Important in getting high quality applicants to join firms 4/23/2017 SHRM-Overview

Interrelationships of HRM Functions All HRM functions are interrelated Each function affects other areas 4/23/2017 SHRM-Overview

Environment of Strategic Human Resource Management EXTERNAL ENVIRONMENT INTERNAL ENVIRONMENT Unions Society Technology 1 Marketing Operations Legal Considerations Staffing Human Resource Management Human Resource Development Unanticipated Events Employee and Labor Relations Finance Compensation Other Functional Areas Economy Safety and Health Shareholders 4/23/2017 Customers SHRM-Overview Competition Labor Market

HR’s Changing Role: Questions That Are Being Asked Can some HR tasks be performed more efficiently by line managers or outside vendors? Can some HR tasks be centralized or eliminated altogether? Can technology perform tasks that were previously done by HR /personnel? Many HR departments continue to get smaller 4/23/2017 SHRM-Overview

HR’s Changing Role: Who Performs Human Resource Management Tasks? Human Resource Managers HR Outsourcing HR Shared Service Centers Professional Employer Organization (Employee Leasing) Line Managers 4/23/2017 SHRM-Overview

HR as a Strategic Partner HR executives must understand complex organizational design Sharp deviation from what has traditionally been an administrative type role for HR 4/23/2017 SHRM-Overview

Measures of HR performance Human Capital Metrics Measures of HR performance 4/23/2017 SHRM-Overview

Examples of HR Metrics Time to fill open positions HR headcount ratios Administrative cost per employee Turnover cost Training return on investment Cost per employee for HR administration ranges from $1,200 - $1,600 4/23/2017 SHRM-Overview

HR Scorecard Report card of effectiveness of specific persons Metrics that will best suit each company depends on variety of factors 4/23/2017 SHRM-Overview

Human Resource Designations: Executives, Generalists, and Specialists Vice President, Human Resources Vice President, Industrial Relations Manager, Training and Development Manager, Compensation Manager, Staffing Executive: Generalist: Specialist: Benefits Analyst 4/23/2017 SHRM-Overview

Traditional Human Resource Functions in a Large Firm President and CEO Vice President, Marketing Vice President, Operations Vice President, Finance Vice President, Human Resources Manager, Training and Development Manager, Compensation Manager, Staffing Manager, Safety and Health Manager, Labor Relations 4/23/2017 SHRM-Overview

The Evolving HR Organization HR Outsourcing HR Shared Service Centers Professional Employer Organization Line Manager Evolve to make HR more strategic 4/23/2017 SHRM-Overview

A Possible Evolving HR Organization Example President and CEO Vice President, Operations Vice President, Strategic Human Resources Vice President, Finance Vice President, Marketing Director of Safety and Health Training & Development (Outsourced) Compensation (Shared Service Centers) Staffing (Line Managers, Use of Applicant Tracking Systems) 4/23/2017 SHRM-Overview

What is Strategic Human Resource Management (SHRM)? Various Definitions: SHRM is an approach to making decisions on the intentions of the organization concerning people-essential components of the organization`s business strategy. It is about the relationship between HRM and Strategic management in the organization. SHRM refers to the overall direction the organization wishes to pursue in achieving its objectives through people. 4/23/2017 SHRM-Overview

Definition of SHRM cont’d SHRM can be regarded as an approach to dealing with longer-term people issues as part of the strategic management thrust of the business. It covers macro-organisational concerns relating to structure and culture, organizational effectiveness & performance, matching resources to future business requirements, & the management of change. 4/23/2017 SHRM-Overview

Meaning of SHRM cont… SHRM deals with `those HR activities used to support the firms competitive strategy (Wright & Snell, 1989). SHRM encompasses those decisions & actions which concern the management of employees at all levels in the business & which are directed towards creating & sustaining competitive advantage (Miller, 1989). SHRM is the means of aligning the management of human resources with the strategic content of the business (Walker, 1992). 4/23/2017 SHRM-Overview

Matching HRM activities and policies, Meaning of SHRM cont… According to Hendry & Pettigrew (1986), SHRM has the following four meanings: The use of planning A coherent approach to the design & management of personnel systems based on an employment policy & manpower strategy & often underpinned by a philosophy. Matching HRM activities and policies, Seeing the people of the organization as a strategic resource for the achievement of competitive advantage. 4/23/2017 SHRM-Overview

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What is a Strategy? A strategy is a process (or approach/ methodology /plan/ measures/ means) through which the basic mission and objectives of an entity are set, and a process through which the entity/ organization uses its resources to achieve its objectives. Strategy = channel/ plan 4/23/2017 SHRM-Overview

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Salient Fact to Note: Human Resources are increasingly a strategic issue because of the following empirical observations: There is an overall corporate purpose and that the human resource dimensions of that purpose are evident. A process of developing strategy within the organization exists and is understood, and that there is explicit consideration of human resource dimensions. The organization at all levels establishes responsibility and accountability for human resource management. It includes the responsibility to identify and interact in the social, political, technological and economic environments in which the organization is and will be doing business. 4/23/2017 SHRM-Overview

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What are the Basic Requirements for establishing Effective SHRM? Entities that effectively observe SHRM often have the following characteristics: Strong, visionary and often charismatic leadership from the top. Well articulated vision, mission, objectives and values. A clearly expressed business strategy which had been implemented successfully A positive focus on well understood critical success factors 4/23/2017 SHRM-Overview

Prerequisites for Good SHRM cont’d A closely related range of products or services offered by the organization to its customers/clients. A cohesive top management team. A personnel/HR director who plays an active part in discussing corporate/business issues as well as making an effective & corporate/ business-oriented contribution on HR matters. 4/23/2017 SHRM-Overview

What are Basic Functions of Strategic Human Resource Managers? General Management of the HR Department Knowledge of Laws Interaction with Executive Leadership Employee Relations Collaboration Commitment Building Building Capacity 4/23/2017 SHRM-Overview

End of Session Thank you for your attention/participation Questions, issues, concerns, etc are yet welcome 4/23/2017 SHRM-Overview

Group Work/Exercises Read the handout given and undertake the following tasks (as prep for subsequent lectures): Tasks: Describe the major activities/tasks undertaken in coming up with a good strategic Human resources plan? (pp-15-16) Identify the Human Resources Strategic Planning Pitfalls that ought to be avoided? (pp16) Expound the Key Challenges with Human Resource Planning (pp-20) 4/23/2017 SHRM-Overview

Group Work/Exercises- cont… More Tasks: A typical strategic human resource planning model comprises six specific steps in developing a Human Resource Strategy. Which are these six steps? (pp22) Read pages 26- to 40 of the notes given for further discussion. 4/23/2017 SHRM-Overview

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