STRATEGIC HUMAN RESOURCE MANAGEMENT By : Prof. V.P.KAKKAR

TRADITIONAL HR Vs STRATEGIC HR TRADIONAL HR STRATEGIC HR RESPONSIBILITY HR STAFF LINE MANAGERS FOCUS EMPLOYMENT RELATIONSHIP PARTNERSHIP WITH INTERNAL & COMPLIANCE WITH LAW & EXTERNAL CUSTOMERS ROLE OF HR REACTIVE & TRANSACTIONAL PROACTIVE & TRANSFORMATIONAL INITIATIVES SLOW & FRAGMENTED FAST,FLEXIBLE & INTEGRATED TIME HORIZON SHORT TERM SHORT, MEDIUM & LONG TERM CONTROL BUREAUCRATIC ORGANIC ( RULES,POLICIES, PROCEDURES) ( FLEXIBILITY,FEW RESTRICTIONS) JOB DESIGN FOCUS ON SCIENTIFIC MGMT BROAD JOB DESIGN,GROUPS DIVISION OF LABOUR & TEAMS, CROSS FUNCTIONAL TRG KEY INVESTMENTS PRODUCTS, TECHNOLOGY PEOPLE (KNOWLEDGE, SKILLS, ABILITIES ACCOUNTABILITY COST CENTRE INVESTMENT CENTRE

EVOLUTION OF SHRM HRM SHRM . CONVERGENCE BETWEEN PERSONNEL MGMT . PART OF ORGANIC ORG . CROSS HIERARICAL & CROSS FUNCTIONAL TEAMS . DECENTRALISATION . LOW FORMALISATION . FLEXIBLE. . CONVERGENCE BETWEEN HRM & BUSINESS STRATEGY . PROACTIVE HRM . CONCERNED WITH ORGANISATIONAL EFFECTIVENESS & PERFORMANCE . MECHANISTIC . BUREAUCRATIC . HIGH CENTRALISATION . HIGH FORMALISATION . LOW FLEXIBILITY

INVESTMENT PERSPECTIVE OF HR (How best to invest in its people ) RESOURCE BASED VIEW ( VRIO FRAMEWORK ) value , rareness , limitability & organization ENHANCING HUMAN CAPITAL collective skills, knowledge & capabilities TRADITIONAL COST VIEW : HR related budget ( salaries, training etc.. ) STATEGIC VIEW : Employees as valuable investments In knowledge economy : Knowledge is important (not goods, services or technology ) for all economic activities. INVESTMENT IN HUMAN RESOURCES IMPORTANT for getting competitive advantage to keep pace with changing technologies & processes COST OF TRG & OTHER INVESTMENTS TO BE CONSTANTLY REVIEWED AGAINST BENEFITS. RISKS INVOLVED : Enhanced employability of employees that makes them more desirables to competitors.

BARRIERS TO STRATEGIC HR SHORT TEM MENTALITY/ FOCUS ON CURRENT PERFORMANCE Reason: No Long term view of investments. More focus on performance evaluation and compensation based on sort term. INABILITY OF HR TO THINK STRATEGICALLY Reason: insufficient management training and segmented understanding of entire business LACK OF APPRECIATION OF WHAT HR CAN CONTRIBUTE FROM STRATEGIC PERSPECTIVE Reason : Seeing HR function as providing unnecessary bureaucracy FUNCTIONAL MANAGERS SEEING THEMSELVES AS HR MANAGERS Reason : Concerned more with technical aspects of their areas than huma aspects. DIFFICULTY IN QUANTIFYING MANY HR OUTCOMES REASON: Tendency towards programs that are quantifiable rather than developmental programs. PERCEPTION OF HR ASSETS AS HIGH RISK INVESTMENTS THAN CAPITAL ASSETS. REASON: HR assets not owned by organizations. More investment in technology & information DISINCENTIVES FOR CHANGE REASON: Strategic approach may call for drastic changes in system. Natural resistance is there to change initiatives. So Risk is involved as these changes might fail MOST OF ABOVE BARRIERS ARE ROOTED IN CULTURE OF AN ORGANISATION ( Organizations history, values and management practices act as act as barriers to change initiatives. Overcoming these barriers is the real challenge of STRATEGIC HRM )

RELATIONSHIP BETWEEN BUSINESS AND HR STRATEGIES THREE TYPES OF BUSINESS STRATEGIES ARE ADOPTED BY ORGANISATIONS: COST LEADERSHIP & DIFFERENTIATION HR STRATEGIES ARE OUTCOME OF GENERAL SHRM APPROACH FOR WINNING A SUSTAINABLE GLOBAL COMPETITIVE ADVANTAGE, A PERFECT STRATEGIC FIT IS REQUIRED TO BE CREATED BETWEEN BUSINESS STRATEGIES AND HR STRATEGIES Following 5 types of strategic fits are generally adopted: BEST FIT APPROACH: Also called external fit or vertical integration with business strategies. HR strategies should match stages of development of firm ie need for different types of people as well as diverse approaches towards investment in HUMAN CAPITAL. FIT AS CONTIGENCY : HR approaches to ensure that internal practices of organization respond to external factors : market, skill availability etc. FIT AS AN IDEAL SET OF PRACTICES( BEST PRACTICE APPROACH) Identifying any organization as benchmark which has reputation for excellence and copying its practices. FIT AS GESTALT : Emphasizes the importance of finding an appropriate combination of HR practices wrt business strategies. FIT AS BUNDLES (Configuration Approach) : Development and implementation of several HR practices together so that they are interrelated and internally consistent. Each HR practice reinforces and complements the other. Also termed as internal fit oe Horizontal integration.

COMPETING APPROACHES AND MODELS SHRM FIT PERSPECTIVE TYPOLOGICAL PERSPECTIVE FUNCTIONAL PERSPECTIVE ECONOMIC PERSPECTIVE Each functional area optimize performance wrt Business Strategy To use Human Resources as distinguishable Source of competitive advantage Human resources to be Integrated with Strategic plg Use of 3 distinct HR Strategies . Inducement . Investment . Involvement

MACKENZIE’S 7S MODEL STRUCTURE STRATEGY SYSTEMS SHARED VISION STYLE SKILLS STAFF