LECTURE 04

HR Strategies

Contents
Importance of HR to Strategy What are HR Strategies Types of HR Strategies Criteria for an Effective HR Strategy

IMPORTANCE OF HR TO STRATEGY

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, which enables organizations to compete on the basis of market responsiveness, product and services quality, differentiated products and technological innovation Rush to competencies Controlling Labor Costs

Eliminating inefficient use of workforce underutilized workers, lack of trust, resistance to change, antagonistic labormanagement relations, motivation problems, and restrictive work practices leading to low productivity

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

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 advanced environment of the future Means of buffering environmental uncertainty Gauging effects of environmental turbulence, globalization, technology, dramatically changing demographics and differences in workforce values Through congruence/consistency between HR and strategy

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

WHAT ARE HR STRATEGIES?

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 to achieve), and there must be a plan of action (i.e. the means by which it is proposed that the objectives will be met)

TYPES OF HR STRATEGIES

Types of HR Strategies

Types: Overall HR Strategies

These 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 so far as possible that employees are committed, motivated and engaged. Categories: An emergent, evolutionary and possibly unarticulated understanding of the required approach to HRM. This will be influenced by the Business Strategy, 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 organizational effectiveness

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

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

CRITERIA FOR AN EFFECTIVE HR STRATEGY

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