04 HR Strategies

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    LECTURE 04

    HR Strategies

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    Contents

    Importance of HR to Strategy

    What are HR Strategies

    Types of HR Strategies

    Criteria for an Effective HR Strategy

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    IMPORTANCE OF HR TO STRATEGY

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    Importance of HR to Strategy

    Providing Competitive Advantage (CA) Michael E Porter HRM is the key to obtaining CA

    CA can be obtained through a high quality workforce, whichenables organizations to compete on the basis of marketresponsiveness, product and services quality, differentiated

    products and technological innovation Rush to competencies

    Controlling Labor Costs

    Eliminating inefficient use of workforce underutilizedworkers, lack of trust, resistance to change, antagonistic labor-

    management relations, motivation problems, and restrictivework practices leading to low productivity

    Better HR utilization would prove to be more cost efficientthan investing in plant and equipment.

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    Importance of HR to Strategy (Contd.)

    Rush to competencies (Contd.)

    Potential cost efficiencies and improved HRM would play a key

    role in organizations competitive strategy and development of

    distinctive competencies

    Awareness of the demands of the technologically advancedenvironment of the future

    Means of buffering environmental uncertainty

    Gauging effects of environmental turbulence, globalization,

    technology, dramatically changing demographics and differencesin workforce values

    Through congruence/consistency between HR and strategy

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    Importance of HR to Strategy (Contd.)

    HR Contributions to Strategy: -

    1. Environmental Scanning and Competitive Intelligence

    2. Implementation of Resource Reallocation Decisions

    3. Lead time for dealing with Labor Shortages

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    WHAT ARE HR STRATEGIES?

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    What are HR Strategies?

    HR strategies set out what the organization intends to do about its

    HRM policies and practices and how they should be integrated

    with the business strategy and with each other

    As per Dyer and Reeves: -

    Internally consistent bundles of human resource practices

    Richardson and Thompson: -

    A strategy whether it is an HR strategy or any other kind of

    management strategy, must have two key elements: there must be

    strategic objectives (i.e. things the strategy is supposed toachieve), and there must be a plan of action (i.e. the means by

    which it is proposed that the objectives will be met)

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    TYPES OF HR STRATEGIES

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    Types of HR Strategies

    Types: -

    Overall HR Strategies

    These describe the general intentions of the organization about howpeople should be managed and developed and what steps should betaken to ensure that the organization can attract and retain the

    people it needs and ensure so far as possible that employees arecommitted, motivated and engaged.

    Categories: -

    An emergent, evolutionary and possibly unarticulated understanding ofthe required approach to HRM. This will be influenced by the BusinessStrategy, organizations life-cycle and the views, experiences and

    management style of the chief executive, manager, HR Head, etc. Broad brush statements of aims and purpose that set the scene for more

    specific targets. These are concerned with overall organizationaleffectiveness

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    Types of HR Strategies

    Types: -

    Overall HR Strategies

    Categories (Contd.): -

    Specific plans to create bundles of HR practices and develop a coherent

    HR system Overall approaches to HRM: -

    High Performance Management

    High-Involvement Management

    High-Commitment Management

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    Types of HR Strategies

    Types: -

    Specific HR Strategies

    Human capital management

    High performance management

    CSR OD

    Knowledge management

    Talent management

    Resourcing

    Learning and development Reward

    Engagement

    Employee Relations

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    CRITERIA FOR AN EFFECTIVE HR STRATEGY

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    Criteria for an effective HR Strategy

    Would satisfy business needs

    Would be founded on detailed analysis

    Can be turnable into actionable programmes

    Is coherent and integrated

    Takes into account the needs of line managers and employees

    generally as well as those of the organization and its other

    stakeholders