HUMAN RESOURCE STRATEGY

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HUMAN RESOURCE STRATEGY
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Goals

• Understand how HR contributes to bottom line of
  organization
• Understand that organizations could have same
  policies with very different results based upon
  its culture

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HR MODELS

• CLERICAL
• LEGAL
• FINANCIAL
• HUMANISTIC
• BEHAVIORAL SCIENCE
• STRATEGIC

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Strategic Model (SHRM)

• Historically, HR focused on employee
• SHRM focuses on organizational effectiveness
• How can HR can help company become more
  profitable?
• System approach
• HR is part of the production process that can
  increase value of good or service

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Strategy

• plan of what business to we want to compete in
• developing goals
• what are we best at
• what cant we do

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ALTERNATIVE STRATEGIC APPROACHES

• BEST PRACTICES-there are practices that are just
  good for everyone
• RESOURCE BASED VIEW
• focuses on how employees can add value to the
  firm for sustained competitive advantage
• resources that are difficult to copy
• resources that add value
• CONTIGENCY THEORY
• Contends that best HR practices will depend upon
  firm strategy
• Argues for multiple ways to achieve goals
• Do HR practices fit with firms strategy

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Resource Based View

• Sustained Competitive Advantage
• Perceived customer value
• technology
• specialization
• economies of scale
• financing
• Employees
• How are we different from competitors
• Provides economic benefits
• Cannot be duplicated
• management is particularly difficult to duplicate

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Contingency Perspective

• Firms that match business strategy and HR
  practices will have the highest performance

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Strategic Objectives

• Cost
• Quality
• Innovation
• Growth
• Focus

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HR Needs in Strategy Formulation
HR Role
Innovation
Cost Leadership
Focus of firm Employee
role Training Staffing Compensation Performanc
e management
- efficiency - specific repetitive -
specific/short-term skills - promote
internally - internal pay equity -
behavior-oriented

• - creative, risk-taking
• - broader tasks
• creative risk-takers
• - broad career paths
• - recruit more from
• outside
• - external pay equity
• long-run
• results-oriented
• Allows for mistakes

IRWIN

• a Times Mirror Higher Education Group, Inc.,
  company, 1997

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HR Strategy Formulation
Administrative Linkage
Strategic Planning
HR Function
SOURCE Adapted from K. Golden and V. Ramanujam,
Between a Dream and a Nightmare On the
Integration of the Human Resource Function and
the Strategic Business Planning Process, Human
Resource Management 24 (1985) 429-451.
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HR Strategy Formulation
Administrative Linkage
One-Way Linkage
Strategic Planning
Strategic Planning
HR Function
HR Function
SOURCE Adapted from K. Golden and V. Ramanujam,
Between a Dream and a Nightmare On the
Integration of the Human Resource Function and
the Strategic Business Planning Process, Human
Resource Management 24 (1985) 429-451.
13
HR Strategy Formulation
Administrative Linkage
One-Way Linkage
Two-Way Linkage
Strategic Planning
Strategic Planning
Strategic Planning
HR Function
HR Function
HR Function
SOURCE Adapted from K. Golden and V. Ramanujam,
Between a Dream and a Nightmare On the
Integration of the Human Resource Function and
the Strategic Business Planning Process, Human
Resource Management 24 (1985) 429-451.
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How is HR Strategy Formulated?
Administrative Linkage
One-Way Linkage
Two-Way Linkage
Integrative Linkage
Strategic Planning
Strategic Planning
Strategic Planning
Strategic Planning
HR Function
HR Function
HR Function
HR Function
SOURCE Adapted from K. Golden and V. Ramanujam,
Between a Dream and a Nightmare On the
Integration of the Human Resource Function and
the Strategic Business Planning Process, Human
Resource Management 24 (1985) 429-451.
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Role of Culture

• Having HR policies not enough, need to know
  whether these policies are interpreted,
  understood, and believed by employees
• Strong climates the organization means it

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Factors that contribute to a strong culture

• Visibility do people know what the policies and
  expectations are?
• Understandability JetBlue
• Legitimacy of authority does management mean
  it?
• Relevance what difference does it make? Do I
  care?
• Consistency- helps reinforce the above
• Consensus do we have buy in across employees?
  Are the policies fair?
• Strong cultures lend meaning to the policies

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Strategy Summary

• HR strategy is about managing employees
  effectively to improve organizational performance
• Best practice view
• good practices that will benefit all
• difficult to copy add value
• Strategic HRM
• contingency view - good practices depend on
  business strategy
• Resource based view
• HR policies and practices can lend strategic
  advantage