HR STRATEGIES

Concept of strategy
The direction and scope of an organization over the long term. It should match the resources of the organization to its changing environment (markets, customers and other stakeholders). Strategy determines the direction where the organization is going

The concept of strategy

It is a long term plan It is the pattern of the organizationss behavior over time (descriptive meaning of strategy) It is a perspective : a fundamental way of doing things (mission) A ploy: a specific manoeuvre to outwit a competitor

What gives the firm competitive advantage?

Unique (differentiation, focus) Hard to copy Sustainable

The concept of strategic management

Vision and mission Strategic goals Strategic plans Implementing the strategy
(business strategy via functional strategies)

Managing strategy itself (goals, plans, implementation)

Strategic fit
Capabilities and resources to the environment (opportunities and threats) The business (or corporate) strategy to functional strategies and strategies of business units Every part of the strategy area should be mutually supportive

HR strategies (part of HRM)

What are HR strategies?

HR strategies set out what the organization intends to do about its human resource management policies and practices and how they should be integrated with the business strategy and each other. Key elements:
Strategic objectives Plan of action

There is no great strategy only great execution (Gratton 2000)

A good HR strategy:
satisfy business needs is founded on detailed analysis can be turned into actionable programmes is coherent and integrated takes account of the needs of line magagers, employees and other stakeholders

An HR strategy can be
Overarching / overall (general) Specific: focuses on specific areas
Talent management Development Reward management

Overall HR strategies
describe the general intentions of the organization about how people should be managed and developed and what steps should be taken to ensure that the organization can attract and retain the people it needs; and ensure that employees are committed, motivated, engaged.

Categories of overall strategies

Evolutionary approach to HRM. Broad-bush statements of aims and purpose that set the scene for more specific strategies. Specific and articulated plans to create sets of HR practices and develop a coherent HR system. Conscious introduction of overall approaches to HRM such as:
High-performance management High-involvement management High-commitment management

High-performance management
Aims to effect organizational performance through people. HRM areas involved (HPWS high performance work systems):
Recruitment & selection Training and development Reward management Performance management

High-involvement management
Commitment ad involvement opposed to bureaucratic control. Treating employees as partners. Providing opportunity for the employee to control and understand their work. Communication for mutual understanding.

High-commitment management
A form of management aimed at eliciting a commitment so that behavior is primarily self-regulated rather than controlled. Organizational relations based on trust. Approaches to achieve commitment:
Career ladders and emphasis on trainability Functional flexibility Reduction of hierarchy, ending of status differentails Reliance on teams: dissemination, structuring work, problem solving Intrinsic satisfaction via job design Permanent employment with temporary workers Merit pay and profit sharing Involvement in quality management

Specific HR strategies
HC management High-performance management Corporate social responsibility Organization development Engagement Knowledge management Resourcing Talent management Learning and development Rewarding Employee relations

How should HR strategies be formulated?

The strategy formation process is complex, and excessively rationalistic models that advocate formalistic linkages between strategic planning and HR planning are not particularly helpful to our understanding of it. Business strategy may be an important influence on HR strategy but it is only one of several factors. Implicit (if not explicit) in the mix of factors that influence the shape of HR strategies is a set of historical compromises and trade-offs from stakeholders. Coherent and integrated HR strategies are only likely to be developed if the top team understands and acts upon the strategic imperatives associated with the employment, development and engagement of people. More effectively if there is an HR director as a member of the top management.

Schools of strategy development

The design school is deliberate and is based on the assumption of economic rationality. It uses quantitative rather than qualitative tools of analysis and focuses on market opportunities and threats. The process school adopts a variety of approaches and is concerned with how strategies are made and what influences strategy formulation. Emphasizes intuition and vision. The configuration school draws attention to the beliefs that:
strategies vary according to the life cycle of the organization, they will be contingent on the sector of the organization and, they will be about change and transformation.

The focus is on implementation strategies, which is where Purcell thinks HR can play a major role.

2 approaches to HRstrategy linkage

Inside- out: from a status quo HR function Outside in: from business

The most advanced linkage was the integrative linkage in which the senior HR executive was part of the top management team

Strategic options and choices

The process of developing HR strategies involves generating strategic HRM options and then making appropriate strategic choices. Five forces on HR policy choice:
1. the external environment (social, political, legal and economic); 2. the workforce; 3. the organizations culture; 4. the organizations strategy; 5. the technology of production and organization of work.

Fundamental questions on the development of HR strategy

What are the firms strategic objectives and how are these translated into unit objectives? What are the performance drivers of those objectives and how do the skills, motivation and structure of the firms workforce influence these performance drivers? How does the HR system influence the skills, motivation and structure of the workforce?

6 step approach to strategy development

1. Build the guiding coalition involve people from all parts of the business. 2. Image the future create a shared vision of areas of strategic importance. 3. Understand current capabilities and identify the gap establish where the organization is now and the gap between aspirations for the future and the reality of the present. 4. Create a map of the system ensure that the parts can be built into a meaningful whole. 5. Model the dynamics of the system ensure that the dynamic nature of the future is taken into account. 6. Bridge into action agree the broad themes for action and the specific issues related to those themes, develop guiding principles, involve line managers and create cross-functional teams to identify goals and performance indicators.

A methodology for formulating HR strategies

Assess feasibility. Determine desirability: Examine the implications of
strategy in terms of sacrosanct HR policies.

Determine goals. Eg for lower production costs:

performance standards (contribution) and reduced headcounts (composition).

higher

Decide means of achieving goals. The closer the

external and internal fit, the better the strategy, consistent with the need to adapt flexibly to change.

How the vertical integration of business and HR strategies is achieved

Understand what the business is aiming to do and what drives it, and how HR practices make an impact on these drivers.

How horizontal fit (bundling) is achieved

Identify appropriate HR practices Assess how these items can be bundled together so that they become mutually reinforcing Draw up programmes for the development of these practices, paying particular attention to the links between them.

How HR strategies can be set out

The format will vary but may typically be set out under the following headings: Basic considerations. Content: details of the proposed HR strategy. Rationale. Implementation plan: actions, scheduling, responsibility, resources Costs and benefits analysis.

Barriers to the implementation

failure to understand the strategic needs of the business, inadequate assessment of the environmental and cultural factors, the development of ill-conceived and irrelevant initiatives.

How HR strategies can be implemented?

1. Analyse business needs and how the HR strategy will help to meet them. 2. Communicate full information on the strategy and what it is expected to achieve. 3. Involve those concerned in identifying implementation problems and how they should be dealt with. 4. Prepare action plans. 5. Plan and execute a programme of project management that ensures that the action plans are achieved. 6. Follow up and evaluate progress so that remedial action can be taken as necessary. Translating abstractions of the strategy into programmes with clearly stated objectives and deliverables

Thank you for the attention!