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MBAO 6030 Human Resource Strategy

ROLE OF STRATEGICMANAGEMENT IN HUMAN RESOURCE MANAGEMENT

The Meaning of “Strategy” Plans that involve the top executives and/or

board of directors of the firm A general framework that provides a perspective

for selecting specific policies and procedures. A factor that contributes to Competitive

Advantage in markets Having a long-term focus A critical factor that affects Firm Performance

WHAT IS STRATEGY?

Human resource strategy involves the

planned and effective use of human resources in order to get an edge over the competitors.

1. The use of planning in human resource management.

2. An integral approach to the design and implementation of HR systems.

3. Matching HRM policies and activities with the business strategy of the organization.

4. Viewing people as a strategic resource for the achievement of competitive advantage.

MBAO 6030 Human Resource Strategy

HR Strategy: Strategic Fit

Training Rewards

Corporate Strategy

Business Strategy

HR Strategy

HR System

(Performance Mgmt.)

HR Strategy: HR System Internal Fit

Performance Management System

HR StrategyGoal Setting

Performance Measurement

Coaching

Rewards

Appeal

Performance Evaluation

STRATEGY IN HUMAN RESOURCE MANAGEMENT describes the

vision, mission goals of the HRM Function in the organization.

The HRM Strategy describes the final and desired state of the HRM Function. The HRM Employees use the HRM Strategy as the basis for the goal setting process within the HRM Function to navigate their own performance the right direction.

External environmentCompetitionGov policyTechnologyMarket trends

External environmentCompetitionGov policyTechnologyMarket trends

BUSINESS STRATEGYBUSINESS STRATEGY

CORPORATE STRATEGYCORPORATE STRATEGY

Internal environmentCultureStructurePoliciesPast strategy

Internal environmentCultureStructurePoliciesPast strategy

HR strategiesHR planningDesign of jobsWhat workers doWhat workers need

HR strategiesHR planningDesign of jobsWhat workers doWhat workers need

ProcurementDevelopmentPerformance managementCompensationLabor relations

ProcurementDevelopmentPerformance managementCompensationLabor relations

OUTCOMESIncreasedperformanceCustomer SatisfactionEmployee satisfaction

OUTCOMESIncreasedperformanceCustomer SatisfactionEmployee satisfaction

HRISHRIS

Pans regulatingemployeePans regulatingemployee

Strategic management plays an important role in different aspects of Human Resource management.

1.HR PLANNING

2.STAFFING-RECRUITMENT & SELECTION

3.TRAINING & DEVELOPMENT

4.PERFORMANCE APPRAISAL

5.COMPENSATION & REWARDS

1. HR PLANNING-Prevents overstaffing and understaffing.

Ensures the organization has the right number of employees with the right skills in the right places and at the right time.

Ensures the organization is responsive to changes in its environment.

Provides direction and coherence to all HR activities and systems.

Facilitates leadership continuity through succession planning.

HR planning follows from the strategic plan, the information collected in the HR planning process contributes to the assessment of internal organization’s environment done in strategic planning.

2.STAFFING- The process of recruiting applicants and selecting prospective employees, remains a key strategic area for human resource strategy.

An organisation’s performance is a direct result of the individuals it employs, the specific strategies used and decisions made in the staffing process will directly impact the success of the strategic plan.

i. Recruitment & Selection

ii. Placement

An effective staffing strategy requires in depth planning for the recruiting process to ensure efficiency and generation of a qualified applicant pool. The strategic decisions organizations need to make relative to staffing are summarized below:

3. Training and Development- Training and development of employees is a key strategic issue for organizations. Training involves employees acquiring knowledge and skills that they will be able to use on the job.

There are two key factors to develop successful training programmes in organizations. The first is planning and strategizing the training. This involves four distinct steps: • Needs assessment

• The establishment of objectives and measures

• Delivery of the training

• EvaluationThe second key factor is to ensure that desired results are

achieved or accomplished. Training needs are to be integrated with performance management systems and compensation.

FOR EX. INFOSYS WHICH IS A KNOWLEDGE BASED IT BUSINESS ALWAYS REQUIRES ITS HUMAN RESOURCE TO BE

TO BE HIGHLY SKILLED TO BE COMPETENTEASILY ADAPTING TO CAHANGING WORK

SITUATIONS TO BE WELL INFORMED

INFOSYS HAS GAINED ITS MOTIVE OF SMART WORKFORCE THROUGH ITS WELL ORGANISED TRAINING ACTIVITY.

THE MOTTO OF INFOSYS TRAINING PROGRAM IS

“LEARN ONCE, USE ANYWHERE”

OBJECTIVE IS TO NURTURE A LARGE NUMBER OF HIGH QUALITY LEADERS WITH A GLOBAL PERSPECTIVE.

THE TRAINING SPECTRUM INCLUDESOFTWARE DEVELOPMENTMANAGERIAL SKILLSSOTWARE SKILLSLEADERSHIP & DOMAIN SPECIFIC TRAINING

TRAINING IS PROVIDED AT THREE LEVELSENTRY LEVELLATERAL LEVELLEADERSHIP TRAINING(Infosys Leadership Institute)

ENTRY LEVEL→ An employee who joins at the entry level undergoes a 14-week comprehensive training programme covering both technical and managerial aspects.LATERAL LEVEL→ A separate training programs for lateral entrants. Using a blend of presentations and interactive sessions, they are introduced with the Infosys brand/culture. Task based training takes place afterward.LEADERSHIP TRAINING →Training in leadership qualities is the third level programme.Infosys Leadership Institute(ILI) in Mysore trains about 400 infoscions anually.

ILI RUNS SPECIAL PROGRAMMES ALSO

First time traveler training 3 day event with 6 modules i.e.→ Personal trait understanding

→ Culture & project elements appreciation → Customer interfacing → Communication skills → Corporate etiquette → Social Interfacing skillsLanguage trainingBon Voyage→ Training given to all its travelers at the time of collecting tickets/passport, covers immigration processes & tips on making ones way in a new country.

ILI CURENTLY HAS

78 Full time FacultyMore than 200 consultantsTop level management including Chairman &. directors also conducts workshop. Infosys spends around 4% of total wage bill on training & delivers about 10% of the total training through E-Learning Programs.

FIRM LEVEL COMPETITIVE STRATEGY

COST LEADERSHIP CUSTOMER SATISFACTION

INNOVATION

HR COMPETITIVEOBJECTIVES

PEOPLE WORKING HARDER

PEOPLE WORKING SMARTER

PEOPLE WORKINH WITH VISION

HR DECISIONS AND ACTIONS

STREAMLINESTANDARDIZEDECREASE PRODUCTIONTIMEREDUCE COSTS

EDUCATE LINE MANAGERS & OTHER CLIENTSDELEGATE DECISIONSINCREASE FLEXIBILITY

DEFINE VISIONATTRACT CREATIVE TALENTREWARD RISKPROVIDE OPPORTUNITIES& TOOLS FOR EXPLORATION

4.PERFORMANCE APPRAISAL- An organization’s long-term success in meeting its strategic objectives relies on managing employee performance and ensuring that performance measures are consistent with the strategic needs.

One purpose of performance appraisal systems is to facilitate employee development.

A second purpose is to determine appropriate rewards and compensation, which must be clearly linked to achievement of strategic goals.

FOR Ex.:- PHILIPS TAKE A FIVE-POINT SCALE TO MEASURE THE POTENTIAL OF AN EMPLOYEE AND PUT THEM IN ONE OF THE QUADRANTS.

PROBLEM STARS CHILDREN

PLANNED SOLID SEPERATION CITIZENS

PROBLEM STARS CHILDREN

PLANNED SOLID SEPERATION CITIZENS

CC DD

AA BB

HIGH

LOW

POTENTIAL

PERFORMANCE

HIGH

Low potential-Low performance- Employees under this criteria are asked to improve their performance initially. If that effort fails, Philips works towards a planned separation.

Low potential-High performance-Defined as solid citizens-high skills but limited capability to grow beyond their current job profile.

Low performance-High potential-Problem children do well in their jobs if a location, boss or job profile is changed. If they continue to perform less, the separation process is initiated.

High performance-High potential-Are like star performers. And are given challenging tasks constantly.

The appraisal criteria considers the following features:- Conceptual Effectiveness-

Vision Business orientation Sense of Reality Interpersonal Effectiveness-

Negotiating power Personal influence Verbal Behavior

Operational Effectiveness

Result orientation

Individual effectiveness Risk taking control Achievement Motivation-

Professional ambition

Innovativeness Stability

Philips lays down a fast track, career growth plan for the star performers. Separates the star performers from the employees ranks & exploit their potential fully using rewards & incentive schemes.

5.COMPENSATION & REWARDS

Organizations face a number of key strategic issues in setting their compensation and reward policies and programmes. These include:

Compensation relative to the market

Balance between fixed and variable compensation

Appropriate mix of financial and non financial compensation

Developing an overall cost-effective compensation programme that results in high performance.

HR Strategy: Context of HR System

1. The “Five Factors” Influencing the HR System External Environment Social: social values, roles, trends, etc. Political: political forces, changes. Ex. Bush

presidency and its agenda for Social Security. Legal: laws, court decisions, regulatory rules. Economic: product, labor, capital, factor markets.

2. The Workforce

3. Organization Culture Weak vs. Strong culture “Type” of culture

4. Organization Strategy What are a firm’s distinctive competencies? What is the basis that competitive strategy be

sustained? What are a firm’s strategic objectives? Compare corporate and Business strategies.

5. Technology of Production & Organization of Work Required employee skills Ease of monitoring employees’ input

MBAO 6030 Human Resource Strategy