1.4.

HRM STRATEGY

s 1.4.1. Meaning and Definition of HR Strategy

The entire plan that directs the execution of particular HRM functional
areas is called human resource management strategy. The human
resource decisions that are best for the organisation are directed by
strategies of HRM. The organisational business strategy must be
compatible with all the functional areas of HRM strategy.
HR strategies are developed in order to cultivate talents, attitudes and
behaviour in the staff members which will in turn help the organisation
lo meet its goals. It is devised of ideology for effectively handling the
 MBA Fourth Semester (Strategic Human
Resource
38
employees using HR practices and policies. The different
different ManageMent
areas ) Kiy
like compensation, recruitment, performance management,
relations, rewards and recognition and training are covered underemploye H
this. P
HR strategies must be put in line with the organisational mission, a

and goals. Analysing the features of the industry,

competitive advantage and identifying important people and establishino
crucial for developing HR strategy. It is vital that different processes ik
developed for different group of employees in the strateges
organisation af
in viewtheir talents roles and knowledge. The strategy should keeping
focus B
the organisation'sstructure, system,culture, and people. di
H
In itself, HR strategy is never "good" or "bad". The scénario in whicha
particular strategy is used determines its success. Likewise, the imne de
of an HR strategy on the performance of an organisation depends o h
correlation with other aspects. As a,result,, a simple and strone
prediction of HR practices can be witnessed, which h¡s also be 1
extensively supported. It says "fit leads to better performance, and lack H
of fit creates inconsistencies that reduce performanc Dics" br
th
According to Dessler, "HR strategy is defined as the coursesof action 1)
HR uses to help the company achieve its strategic aims".
According to Tyson, "Human resource strategy can be defined as a set
of ideas, policies and practices which management adopt in order to
achieye a people management objective".
According to Tony Grundy, "HR strategy is defined as the plans.
programmes and intentions to develop the human capability of an
organisation to meet the future needs of its external and internal 2)
environment":

1.4.2. Nature of HR Strategy

Purcell observed that Strategy in HR, like in other areas, is about
continuity and change, about appropriateness in the circumstances, bul
anticipating when the circumstances change. It is about taking strategic 3)
decisions.' HR strategy should be based on the values that an
organisation believes govern its approach to people management. It will
set out intentions butit is not just a long-term plan. It can and should be
immediately relevant. It is necessary to bear in mind the dictum of
Fombrun et al that businesses and managers must perform well in the
present to succeed in the future. People strategy has to balance explici!
business alignment with the need in uncertain circumstances to keep 4)
flexible.
Intnxluction to SHRM:Iits Approaches and Models (Chapter 1) 39

strategy
should be distinguished from HR policy. HR strategy is
HR
purposcful and dynamic. It provides a sense of direction and constantly
meet changed circumstances.
HR policy is more about the
adjusts to
now. It defines 'the way things are done around here'. It may
here and
evolve but this
is not necessarily the result of a strategic choice. It is
when a
deliberate decision is madeto change a policy that a strategy for
achieving this change may
have to be formulated.
people strategies are
Because all organisations are different, all strategy. Research into
standard
Aferent. There is no such thing as a
strategy conducted by Armstrong, Long and Baron revealed many
HR very general
variations. Some articulated strategies are simply
declarations of intent or statements of the values
that the organisation
has adopted for managing people.

14.3. Objectives of HR
Strategy
be hidden but carefully
HR strategy has numerous goals that should not
Following are
broadcasted and intrnally as well as externally endorsed.
the different goals of HR strategy: motivating factors
1) To Develop HR Services: HR strategies are
towards the betterment of HR services. It not only improves the
prevailing HR practices but also introdüces fresh HR
services that
affect employee's satisfaction and also enhance the efficiency of
workforce in the organisation. One such HR strategy is the accurate
analysis of HR processes, since a few processes have to be
disregarded, few re-designed, while a few new value-added
processes need to be introduced in the organisation.
2) To Amalgamate Human Resources: One goal of the HR strategy
is the amalgamation of human resources in the organisation since it
has to bring in line HR and business strategy. Business strategy
gives direction to the entire organisation whereas HR strategy
focuses on the development of human capital. It emphasises on the
organisation which is flexible,fast, and competitive in the industry.
5) To Introduce Perfect Manager: The best time to introduce the
perfect manager is while discussing the HR strategy. A pertect
manager is one who has a balanced approach towards hard and soft
largets, He considers all their subordinates equal,. which make him
admirable. He is supportive towards the employees as well as the
Organisational growth, thus helping in the development of he
Organisation. The best time to declare such an objective is HR Strategy.
Determine Required Behaviour: Desirable employee
Denaviour is determined bythe HR [Link] kind of benaviour
 Human Resource
40
MBA Fourth
Semester (Strategic
Management)
Kuy
that will be rewarded and recognised in the future is also determinA
which helps employees adapt to the revised norms. This goal ii
important since it enables employees to understand what is expecle
from them. HR mnager coaches the managers so that they \earm
towarde
and drive them
make out desirable behaviour
emplovees who follow the corporate
culture whole rewarding
heartedly.
5) To Enhance Employee Satisfaction: Another objective of HR
employee's satisfaction. Emnl
R
strategy is to increase the
witness the difference between employers. Adifferent employer is
more than they required
always perceived to give its employees
1.4.4. Types of HR Strategies
Following are the important kinds of HR strategies:
1) Overarching HR Strategies: These kinds of strategies give a
general outline of the plan's goal-specific strategy and also elucidate
the department's efforts to accomplish the plan's goals. These
strategies affect everything undertaken or to be achieved by the
department. These strategies portray the universal and fundamental
plan of the organisation regarding the management and evelopment
of human resources, steps taken to make sure that organisation can
draw and preserve its desired employees and make sure that
workforce is motivated, dedicated and involved.
The overall organisational effectiveness ending up into getting human
resource benefits by, utilising 'better people in organisations with
better process', creating improved performance work processes and
developing agreat workplace in comparison with another competitors
isthe matter of concern. A few samples of this strategy are:
i) "Since we are in search of both young as well as old people, we
will emphasise on the regional newspaper as well as on the
Department website and media accessed by youth. The
Communication Officer will be in-charge of this event and a
group of senior managers will support him. Monthly checks will
be done toensure the opportunistic hadling of
the sources.
ii) Since we are targeting the latest
workers, Spanish language media willmigrant and immigrant
Heads of regional Mexican-American beandinvolved and the
communities through continuous meetings, creating Puerto Rican
statements on a regular basis, e-mails, and bi-lingual joint
of our facility. We will also create excursions
a
will operate from 8am to 8pm every telephone
day, the
hotline whicn
Communications team will comprise of Nancy andentire monti.
Miguel who.
for the next six months, will circulate the
monthly updates."
Inirotuction SHRM its Approaches and Models (Chapter 1)
to
41
ii) "Since we are targeting to reach the
maximum number of :arents
regarding the walk-t0-school campaign, we will put into use the
itorial board conferences, a kick-off news
conference which is
sirategised to increase broadcast and print media
public service announcements, high profile studentcoverage, radio
activities and
tagline and a visual image. All this will be incorporated a
on
September 15. The communication consultant will work in close
association with the deputy director and the steering committee
will take all the important decisions."
) Specific HR Strategies: The grounds for what the
organisation
plans to do in certain areas are set by specific HR strategies. These
areas are as follows:
i) Talent Management: The manner in which the organisation plans
to develop its employees and exploit their maximum potential.
i) Continuous Improvement: Making available targeted and
unending innovation coupled with individual development.
ii) Knowledge Management: Acquiring. creating, sharing,
capturing and putting in use knowledge to improve the
employee's learning curve.
iv) Resourcing: Acquiring and sustaining highly talented employees.
v) Learning and Development: Providing the employees with an
environment where they feel motivated to gain knowledge and
develop.
vi) Reward: Describing the long-term plans of the organisation
regarding the growth and implementation or rewards policies,
processes and practices, which enable the employees to
accomplish the organisational goals and fulfil stakeholder's
need alóngwith attaining employee satisfaction.
Vi) Employee Relations: Elaborating on the plans of the
organisation regarding the need of employee involvement and
the changes that should be incorporated for the effective
management of relationships between the organisation and its
employees and trade unions.
1.4.5. Importance of HR Strategy
important to the
Following are the ways in which the HR strategy is
organisation and employees: tool,
I)
Decision-Making
decision-making

Tool: Being a managerial specific HR project

HR strategy directs
the management to tackle a the HR strategy
proposal. The project against
contract is evaluated
4? MBA Fourth Semexter (Strategle Human RoNoure
by the managenment team and the team will enulble
resources to implement the strategy. During the the MHuprmwHE
Cx0stenee
strategy, the team will be able to create more projcct of
management team needs to prioritise the propOsnls since i
be possible for the HR department to implenment all of he
2) Useful in Setting Viston: Another important
strategy is that it enables employees to take routinelunction
they can easily comprehend iftheir decisions bascd ondecisions
I|R slratepy
are of any use to the organisation or not. HR
strategy
vision but it is put in use for the routine decisions,
The
directs the decision process. slratey
3) Enhances Communication: HR strategy is vital
for the disCUSKi
with managers regarding improvement of HR scrvices convenie
HR team can display how department works and how lR
handle individual feedback, request or services provided. wi
4) Promotes Team Spirit: HR strategy
promotes team spirit
resources since it provides human resourçes in hun
communication and discussion regarding the future ofslagehumanlor
resources. The HR strategy must narrate an
. develops a general understanding for theappealing sory since i
key words used in
formulating thestrategy and HR employees interpret them differenty.
1.4.6. Need of Aligning HRwith Corporate
A well-researched Strategy
and presented corporate strategy is
blueprint for how a business is going to run. An a valuabk
clear vision and ambition for the effective strategy scts a
company
necessary resources required delivering on it, whËle identifying the
resource of the organisation. An organisation including the human
with corporate strategy because of the following aligns their HR strategy
1) Strategic Alignment of HR: HR need:
deal with only administrative departments sometimes are left t0
functions, such as recruitment.
performance management, training
functions are important, but on their own,and compensation. These 6
an organisation plans for the they form no part of how
right level of human resources l0
deliver on its plans and ambitions.
add value to the business Empowering HR department 0
strategy
functional activities in a manner that ensures it undertakes
supports growth and success.
2) Delivering the Strategy: An
to the business strategy enableseffective HR strategy with clear linS
the
activities better with its human rsources. organisation to align
An HR department na
understands the demands of the business strategy
can help ensU
 Models (Chapter 1) 43
Intnduction
to SHRM its Approaches and
organisation have the right people in place to deliver on
that the
their ambitions
and support growth. HR departmcnts integrated into
strategic management team can work across
the
scnior
the
organisation ensuring thhat human resource requirements are
organisational investments.
considered equally with other
Organisation are affected by
Krective Training and Development: together can
buge range of external and internal factors that demands on
change the nature of individual job roles
or place new
individual's skill sets. An HR strategy
linked to the organisational
any such changes andtherefore
strategy is better placed to anticipate development plan io help the
can put in place a targeted training and
organisation morequickly adapt to
new circumstances.
Retention: Employees who feel better
A) Improved Recruitment and
Supported in their
jobs tend to be happier and more productive.
reputation in the jobs
Furthermore, organisation with a positive
workforce faces fewer barriers to
rmarket for taking care of its
effective rectuitment. Taken together,
these factors are important
must be aligned with to
elements in illustrating why HR strategy
With recruitment and retention being two key
cotporate strategy.
assigned, a more stable and
areas where monetary value can be
better-trained workforce means improved
operating profits.
HR strategy places it at
5) HR Drives Strategy: A mature approach to overall capacity and
the center of understanding an organisation's
employees and their
capability. Having a clear concept of the organisation
different skills can help an organisation see where the
structuring the
has potential for development and growth and help in opportunities.
organisation to take advantage of emerging
Organisations that have reached this point in their development
see
success,
HR as a key driver of strategy and integral to their future
rather than as a simple administrative function that ensures everyone
gets paid on time.
6) Workplace Mandates: When HR strategy is aligned with corporate
strategy, companies have the benefit of HR's expertise on
Workplace regulations and employment laws. HR is responsible for
Keeping organisations in compliance with safety regulations,
antidiscrimination laws and other state and federal workplace
Tequirements. When the corporate strategy conflicts with
workplace
instance, plans
nandates, the business could be sued or fined. For
for a
ew manufacturing process
that significantly raises
Occupational Heatn
eiperatures on the plant floor could violate
and Safety Administration standards.
 2

MBA Fourth Semester (Strategic Human Resource Management) K

44
Introduct

1.5. DEVELOPMENT OF HR STRATEGY 4) Ex

ext

1.5.1. Introduction ex
Using the organisation's overarching corporate and business strategk fo
organisation's
as context. managers can formally develop the
ex

strategy. Ideally, the formulation of HR strategy is conceived as

th
process that is closely aligned tothe formulation of business strategie 5) Je
Using the organisation's overarching, corporate and business strate i. th
as context. managers can formally develop the organisation's
H: hi
strategy. Ideally. the formulation of HR strategy is conceived as ei
process that is closely aligned to the formulation of business strategies
a
The process of human resource strategy formulation in essence involva
C
top-management level analyses, choices, decisions and actions regardin:
appropriate strategies for the management of human resources within te 6)
context of the organisation are changing intemal and extermal environments f
It is all about making certain strategic choices within the context c:
environmental constraints, opportunities and threats, andabout creating th: t

necessary fit" between the general strategic decisions and direction of t:

organisation and its human resources architecture (the human resourceas
the HRM function(s) and the HRM system of the organisation) 7)
1.5.2. Sources for Developing HR Strategies
HR strategy has to be developed using several sources as the documer
is connected with the existing reality. The connections to the reality ar
important as the employees believe; they will be able to implement suc
HR strategy. Various sources for formulation of HR strategies are à
follows:
1) Internal HR Practices: The most useful source of information fo HR
1.5
the HR strategy development is the analysis of the internal HR fig
practice in the organisation. The HR employees have to analyss 1)
their jobs, they have to find all the gaps and they have to identify a
the potential processes to be improved.
2) Workshops: The other useful source of the information
is th
workshops among the HR employees, when they have a chance tC
influence each other and they can enrich the ideas of the others. lt 1
extremely useful as the emplovees tend not to tell the idea to th 2)
others, when it is not in the area of their responsibility.
3) Employees: The employees are extremely useful for the
development of the new HR strategy, but it is not enough. The
ideas are not innovat1ve enough and the HR ahout 2
44 MBA Fourh Semester (Strategic Human Resource M
1.5. DEVELOPMENT OF HR Management) Kiy
1.5.1. Introduction
STRATEGY In

Using the organisation's overarching corporate and business

as context, managers can formally develop he
strategy. ldeally, the formulation of HR strategy is conceived
straleyve
organisation.
process that is closely aligned to the formulation of business
Using the organisation's overarching, corporate and business
as context, managers can formally develop the
strateges,.
stratege 5

strategy. ldeally, the formulation of HR strategy isorganisation' conceived

s
process that is closely aligncd tothe formulation of business
strategie:
The process of human resource strategy
formulation in essence involve
top-management level analyses, choices, decisions and actions
appropriate strategies for the management of human resources regar in
context of theorganisation are changing internal and within the
It is all about making certain strategic externalenvironments
choices within the context d
environmental constraints, opportunitics and threats, and about
necessary "fit"between the general strategic decisions and çreating the
organisation and its human resources architecture (the direction of the
the HRM function(s) and the HRM human resources,
system of the organisation)
7
1.5.2. Sources for
HR strategy has to be developedDeveloping HR Strategies
is connected with the existing using several sources as the document
reality. The connections to the reality arc
important as the employees believe; they will be able to implement such
HR strategy. Various sources for
follows: formulation of HR strategies are as
1) Internal HR Practices: The
most useful
the HR strategy development is the source of information for
practice in the organisation. The HR analysis of the internal HR
their jobs, they have to find all the employees have to analysc
gaps
thepotential processes to be improved. and they have to identify al
2) Workshops: The other
useful source of the information is the
workshops among the HR
influence each other and theyemployees, when they have a chance to
can enrich the ideas of the others.
extremely useful as the employecs tend not to It is
others, when it is not in the area of their tell the idea to the 2
responsibility.
3) Employees: The employces are
development of the new HR strategy, extremely but it is
useful for the
not enough. Theif
jdeas are not innovative enough and the HR strategy is aboul
constant innovation in the daily agendas of human
resources.
Introduction to SHRM its Approaches and Modelss (Chapter 1) 45

External HR Practices: The HR managers have to look for the

4) external best practice, which can influence the HR strategy. The
external HR practice is extremely important as the HR teams
follows the best practice and it can choOse the area of the HR
excellence, which will be used as the HR competitive advantage for
the hiring and retention processes.
Applicants: The other excellent source of the information
for
5) Job who were
the development of the HR strategy is the job applicants, previous
hired recently. They can speak about the HR practice at of human
approach
employers and they can influence positively the
resources
resources towards employees. They can warn human
approach
about the bad habits in other organisation and the positive
can be implemented in the new HR strategy.
the source of the information
6) Managers: The managers have to be
policies and HR
for the new HR strategy as they are users of the HR
areas for
services. They understand the HR policies and they feel the
when they are
the improvement. They can be extremely useful, to
asked to provide the honest feedback and to add the priorities
their wishes.

7) External HR Consulting Company: The external HR consulting

the HR
as
company can be used as the source of the information
consultants see many HR practices and they can evaluate different
HR approaches in different companies. They can easily generalise
the experience and they can help the HR management team to bring
the best HR practice.

1.5.3. Steps in Developing HR Strategies

HR strategy formulation process contains the various steps as shown in
figure 1.4:
1) HR Information Gathering: The team has to complete the
information about different HRprocesses, their performance and
their impact on the profitability of the organisation. The
profitability can be difficult, but the team can always make a
good estimate about the impact of the process to the results of the
organisation.
3Organisational Development Information:The information about
the deevelopment of the organisation in the past and its current
Status. Each organisation has several stages in its organisational
lifecycle and Some trends in the organisation are healthy and some
trends
e extremely dangerous and can impact the future
profitability.
 +h

46 MBA Fourth Semester (Strategic Human

Resource
3) HR Workshops: When the input
information is gathered, the HR team
Management) K,
HR Information Gathering Intro

has to organise the workshops inside app

Con
human resources, where the piece of Organisational Developmenx, dev
the new HR strategy can evolve. The Information 1)
teams should discuss the findingsone 2)
by one and all the ideas should be HR Workshops 3)
gathered as they can impact the
overall HR strategy. 1.5
4) HR Managerial Workshops: HR Managerial Workshops Bes
The
information from the previous HR stra
workshop with employees should Preparation of the HR Strategy poi
go to the, next level and the HR deg
managers should talk about the org
trends and the topics, which should HR Strategy Feedbacks ver

be included in the HR the

strategy and
what is the impact on the whole bus
HR Strátegy Approvat Bu
organisation and the HR team. The Figure 1.4: Steps in stra
results of the HR Formulation of HR Strategies
managerial
workshops have to be recorded and the Th
of the story have to be priorities of different parts org
assigned.
5) Preparation of the per
HR Strategy: A dedicated
prepare the report of the HR HR sub-team has to ens
from the HR managerial strategy from the approved CoI
workshops. outcomes
appealing for the audience and HR The report has to be' strong and cu
6) HR Strategy Feedbacks: The HR employees. Th
the pre-final version of the management team has to present ap
HR strategy
the organisation and their to the fellow
and honestly discussed withfeedback has to be
the managers.
managers in ma
appreciated and fuly Skski
mana The sane session
bebe organised for the HR giv
the HR strategy report. employees as they can
has to
say their feedback to CO
7) HR Strategy Approval: The HR pr
top management as they are the final
strategy has to be are
approved by the
and they should fully agree with the customers of human resources
in the organisation within several years. way, the HR wants to Ba
operate Th