INTRODUCTION
Greek word
‘strategos’ – generalship – the actual direction of military force as distinct
from the policy governing it’s deployment. Literally therefore, the word
strategy means the art of the general, but in business parlance, no definite
meaning attached to strategy. Strategic
human resource management (strategic HRM) defines how the organization’s goals
will be achieved through people by means of HR strategies and integrated HR
policies and practices.
A strategy
could be:
A plan or
course of action or a set of decision rule making pattern or creating a common
thread. The pattern or common threat related to the organization activities
which are derived from the policies, objectives and goals.
FUNCTIONAL STRATEGY AREAS
In business organizations, the identified
functional strategy areas are:
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Human Resource Management
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Operations
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Production
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Finance
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Research and Development
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Marketing
STRATEGIC HUMAN RESOURCE MANAGEMENT
Human Resource
Management known as personnel management deals with formal systems for managing
people at work. For that reason, it is
one of the fundamental aspects of organizational and managerial life.
Your first formal interaction with an organization you wish to join will likely involve
some aspect of its human resource function; and throughout your career
as a manager you will be part of, as well as be affected by your organization’s
human resource management. Firms can create a competitive advantage when they
possess or develop resources that are:
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Valuable
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Rare
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Inimitable
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Organized
THE STRATEGIC IMPART OF HUMAN RESOURCES:
Create Value
People can create value through their efforts to decrease
costs or provide something unique to customers or some combination of the two
Empowerment programmes total quality initiatives and
continuous improvement efforts such as Corning and Xerox are intentionally
designed to increase the value that employees bring to the bottom line.
Is
Rare
People are a source of
competitive advantage which their
skills, knowledge and abilities
are not equally available to all competition.
Top companies invest a lot to hire and train the best and the brightest employees to gain advantage over their
competitors.
Dow Chemical went to court to stop General Electric from
hiring away its engineers. This case shows that some companies recognize both
the value and rareness of certain employees.
It Is Difficult To Imitate
People are a
source of competitive advantage when their capabilities and contribution cannot
be copied by others.
It
Is Organized
People are a source of competitive advantage
when their talents can be combined and deployed rapidly to work on new
assignment on a moments’ notice. Team
work and cooperation are two pervasive methods for ensuring an organized
workforce.
The above four
criteria highlight the importance of people and show the closeness of Human
Resources Manager to strategic management.
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Competition in intensifying
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Rising
educational standards and access to technology are increasingly available world-wide
Innovation – useful new ideas that emerge from the focused
creativity of organization members has become ever more critical to gaining and
maintaining competitive advantage. Because employee skills, knowledge and
ability are among the most distinctive and renewable resources on which a
company can draw, their strategic management is more important than ever.
Increasingly, organizations are recognizing that success
depends on what people know, that is their knowledge and skills. The human capital or more broadly
intellectual capital often is used today to describe the strategic value of
employee knowledge and abilities. As
executives have come to appreciate that employees can be their organization’s
most important resources, human resources managers have pledged a greater role in contributing to the organization’s
strategic planning, that means that
human resources (HR) specialists are challenged to know their organization’s
business and line managers are challenged to excel at selecting and motivating
the best people.
As contributor’s strategy, Human Resource managers also face
greater ethical challenges. When they were merely a specialized staff function, they could focus on, say, legal requirements for hiring
decisions, but strategy decisions require them to be able to quick decision
about staffing, training and other human resource matters to the organization’s
business success.
For example, as members of the top management team, human
resource manager will be faced with the need for drastic downsizing of the workforce while still retaining top
executives through salaries or bonuses or they may fail to aggressively in investigate and challenge corrupt
practices of colleague. In the long-run, however, organizations are
best served when human resource leaders
are a strong advocate for at least four set of values: strategic,
ethical, legal and financial
Managing human capital to sustain a competitive advantage to
perhaps the most important part of an organization’s human resource function. But on a day-to-day basis human resource
managers also have many other concerns regarding their workers and entire
personnel puzzle.
These concerns
include:
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attracting talent
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Maintaining a well-trained, highly motivated and
loyal workforce
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Managing diversity
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Devising effective compensation systems
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Managing layoffs and;
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Containing healthcare and pension costs.
The Nuts and Bolts of HRM
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Strategic Human resource management
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The HR Planning Process
Staffing and Organisation
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Recruitment
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Selection
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Workforce reduction
Developing the workforce
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Training and Development
Performance Appraisal
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What do you appraise
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Who should do the appraisal
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How do you give employees feedback
Designing Reward system
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Pay decision
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Incentive systems and variable pay
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Executive pay and stock options
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Employee benefits
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Legal issues in compensation and benefits
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Health and safety
Labour Relation
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Labour laws
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Unionization
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Collective bargaining
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What does the future hold
The Human Resource Planning
Process occurs in three stages
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Planning
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Programming and
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Evaluation
Human Resource
Managers need to know the organization’s business plans to ensure that the
right member and types of people are available where the company is headed in what business it plan to be, what future
growth is expected and so forth:
Few actions are more developing to
more than having to lay off recently hired college graduates because of
inadequate planning for the future needs.
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