Strategic Nature of

Human Resources
Management
Designing management systems to ensure that human
talent is used effectively and efficiently to accomplish
organizational goals.
 HUMAN CAPITAL IN ORGANIZATIONS

• In all organizations there are many resources that

affect organizational performance.
Organizations must manage four types of assets
 Physical
 Financial
 Intangible
 Human
 HUMAN CAPITAL IN ORGANIZATIONS

• Human Capital and HR

What is Human Capital ?
• the collective value of the capabilities, knowledge ,
skills, life, experiences, and motivation of an
organizational workforce.
• Also known as Intellectual Capital

Measuring the Value of Human Capital

 HUMAN CAPITAL IN ORGANIZATIONS

• Human Resources as a Core Competency

What is Core Competency ?

• A unique capability that creates high value and
differentiates an organization from its competition.
 HR ACTIVITIES
• Strategic HR Management
• Equal Employment Opportunity
• Staffing
• Talent Management and Development
• Total Rewards
• Risk Management and Worker Protection
• Employee and Labor Relations
HR ACTIVITIES
 MANAGING HUMAN RESOURCES IN
ORGANIZATIONS
• Smaller Organizations and HR Management
• HR Cooperation with Operating Manager
 HR MANAGEMENT ROLES

• Administrative
 Technology Transforming HR
 Outsourcing of HR
• Operational and employee advocate
• Strategic
 STRATEGIC HR MANAGEMENT

What is Strategy ?

 The strategy an organization follow is its proposition for how to

compete successfully and thereby survive and grow.

What is Strategic HR Management ?

 Refers to the use of employees to gain or keep a competitive

advantage
 STRATEGIC HR MANAGEMENT

AREA FOCUS MOST OFTENS TYPICAL ACTIVITIES

REPORT TO
Human Resource Global, long-run CEO/President •Human Resource Planning
Management innovative •Evolving Legal issues
(Strategic) •Community economic
development
•Cost containment and benefit
options
•Employee advisory boards
•Compensation planning and
strategies
STRATEGIC HR MANAGEMENT
 STRATEGIC SUCCESS WITH HR PRACTICES
A BNA study summarized HR’S strategic performance
notes:
• Top management usually does not assess HR on
its strategic contributions.
• Only about one-quarter of firms monitor
effectiveness/productivity statis-tics—measures
clearly tied to business strategic performance.
• Around one-half of organizations do not have an
HR strategy.
• Forty percent of firms report weak or no links
between HR and overall strategic planning.
 STRATEGIC SUCCESS WITH HR PRACTICES

• HR Best Practices
Some recognized HR best practices include:
Employment security
Training/cross-training
Selective recruiting
Promotion from within
High wages/incentives
Measurement
Information sharing/participation
 OPERATIONALIZING HR STRATEGY

• HR Best Practices
Some recognized HR best practices include: But
how specifically can HR professionals provide the
perspective and exper-tise to be a successful part
of the strategic planning process?

Understand the business

Focus on the key business goals.
Know what to measure.
Prepare for the future.
OPERATIONALIZING HR STRATEGY
USING HUMAN RESOURCES AS A CORE
COMPETENCY
Ways in which Human Resources might become a Core
Competency

 Attracting and retaining employees with unique

professional and technical capabilities
 Investing in Training and Development of those
employees
 Compensating them in ways that retain and keep
them competitive with their counterparts in other
organizations.
USING HUMAN RESOURCES AS A CORE
COMPETENCY
 ORGANIZATIONAL CULTURE AND HR

 The ability of an organization to use its human capital as

a core competency depends at least in part on the
organizational culture that is operating.
 HR AS ORGANIZATIONAL
CONTRIBUTOR
• Organizational productivity
 Productivity
 Unit labor cost

– Improving Organizational Productivity

 Organizational restructuring
 Re-designing work
 Aligning HR activities
 Outsourcing
HR AS ORGANIZATIONAL CONTRIBUTOR

• Customer service and quality

 Quality
Delivering high-quality services and/or products can
significantly influence organizational effectiveness
• HR Effectiveness and Financial Performance
 Effectiveness for organizations is defined as the extent
to which goals have been met.
 Efficiency is the degree to which operations are done
in an economical manner.
ALL GLORY TO GOD !