Chapter 2: The Evolving/ Strategic Role of Human

Resource Management

Md. H Asibur Rahman

Lecturer
Department of Business Administration
Faculty of Business & Social Science (FBSS), BMA
Bangladesh University of Professionals (BUP)
 Topics To be Covered

Personnel Management Vs. HRM

 Role of Strategic HRM
Strategic HR Versus Traditional HR
Barriers to Strategic HR
Out comes of Strategic HRM
A Comprehensive Model of Strategic HRM
 Personnel Management Vs. Human Resource Management 
Basis for Comparison Personnel Management  Human Resource Management 
Personnel Management is that aspect of A strategic approach to acquiring, developing,
management having as its goal the effective managing, motivating and gaining the commitment
Meaning
utilization of the labor resources of an of the organization's key resource – the people who
organization”. work in and for it-
Approach  Traditional Modern 
Treatment of
Machines or Tools Asset 
manpower 
Type of function  Routine function Strategic function 
Basis of Pay  Job Evaluation Performance Evaluation 
Management Role  Transactional Transformational 
Communication  Indirect Direct 
Labor Management  Collective Bargaining Contracts Individual Contracts 
Initiatives  Piecemeal Integrated 
Management Actions  Procedure Business needs
Decision Making  Slow Fast 
Job Design  Division of Labor Groups/Teams
Primarily on mundane activities like employee Treat manpower of the organization as valued
Focus 
hiring, remunerating, training, and harmony. assets, to be valued, used and preserved.
 Strategic Human Resource Management
Involves the development of a consistent, aligned collection of
practices, programs, and policies to facilitate the achievement
of the organization’s strategic objectives.

Requires abandoning the mindset and practices of “personnel

management” and focusing on strategic issues than
operational issues.

Integration of all HR programs within a larger framework,

facilitating the organization’s mission and its objectives.
 Strategic Human Resource Management
Probably, the single-most important caveat of strategic HR
management is that there is no one best way to manage people in
any given organization.
Even within a given industry, HR practices can vary extensively
from one organization to another, as seen in Reading 4.1
 “Distinctive Human Resources Are Firms’ Core
Competencies,”
In any organization, a critical prerequisite for success is people
management systems that clearly support the organization’s
mission and strategy.
 Strategic Human Resource Management
Establishing a strong HR strategy that is clearly linked to the
organization’s strategy is not enough. HR strategy needs to
be communicated, practiced, and—perhaps most
important—spelled out and written down.
Organizations with a written HR strategy tend to be more
profitable than those without one.
Organizations with a specific written HR strategy had revenues
per employee that are 35 percent higher than organizations
without a written strategy.
Organizations with a written strategy had 12 percent less
employee absenteeism and lower turnover.
 Strategic HR Versus Traditional HR
Strategic HR can be contrasted to the more traditional
administrative focus of HR through an examination of four
different roles that HR can play in an organization
Ulrich developed a framework, which proposes an
entirely new role and agenda for HR that focuses less on
traditional functional activities, such as compensation and
staffing, and more on outcomes.
HR would be defined not by what it does but rather
by what it delivers.
Strategic Human Resource Management
 Role of Strategic HR
HR can deliver results to enrich the organizations through four
roles: by being
 Strategic Partner: A partner with senior and line managers in
strategy execution;
 Administrative Expert: An expert in the way that work is organized
and executed;
 Employee Champion: A champion for employees, working to
increase employee contribution and commitment to the organization;
and
 Change Agent: An agent of continuous transformation who shapes
processes and culture to improve an organization’s capacity for change.
 Roles of Strategic HRM
1. Strategic Partner: A partner with senior and line managers
in strategy execution
 Responsible for the organizational architecture or structure
 Conduct an organizational audit to help managers identify
those components that need to be changed to facilitate strategy
execution
 Identify methods for renovating the parts of the
organizational architecture
 Take stock of its own work and set clear priorities to ensure
delivery of results
 Roles of Strategic HRM
2. Administrative Expert: An expert in the way that work is
organized and executed;

 Rules making police

 Ensuring that the required routine work still gets done effectively and
efficiently
 “Rethinking” several traditional HR functions (automated
recruitment and benefits)
 Roles of Strategic HRM
3. Employee Champion: A champion for employees,
working to increase employee contribution and
commitment to the organization

 Partnering with line management to enhance employee morale

 Training line managers to recognize—and avoid—the causes of
low morale
 Acting as an advocate for employees, representing them and
being their voice with senior management
 Roles of Strategic HRM
4. Change Agent: An agent of continuous transformation who
shapes processes and culture to improve an organization’s
capacity for change.

 Build the organization’s capacity to embrace and capitalize on

new situations
 Define, developed, and deliver change initiatives in a timely
manner
 Plan for and overcome any resistance to change
 Roles of HR in Knowledge Based Economy
Human capital The best employees are recruited, appropriately motivated,
steward and retained.

Knowledge facilitator The procurement of the necessary employee knowledge and

skill sets that allow information to be acquired, developed,
and disseminated, providing a competitive advantage.

Relationship builder  The development of structure, work practices, and

organizational culture that allow individuals to work
together, across departments and functions
 Networks need to be developed that focus on the
strategic objectives
 Ensuring synergies and teamwork
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 Strategic HR at Google
Google has developed its HR function, known as “People Operations” around a
“three-thirds” model whereby three different complimentary teams work to staff
the rapidly growing organization, which competes for talent in a very competitive
environment.
Categories Background Activities
Specialized HR Degrees in HRM Identifies trends and issues regarding HR,
allowing Google to respond in a proactive
manner.
Strategy Strategic Consulting Contributes knowledge and problem-solving
Developer Firms skills regarding HR-related programs and
solutions.
Workforce Degrees in statistics, Determine appropriate metrics to remain
Analytics Team finance, and competitive in its search for talent, including
psychology appropriate compensation, interview processes,
and factors that relate to employee retention4–15
 Employment Strategies
 Different organizations engage in different types of employment in
pursuing their strategies
 Lepak and Snell identified four different employment models and
examines the types of HR systems required by each
 Lepak and Snell first analyzed the characteristics of human capital by
using two dimensions.
 Strategic value, or the extent of its potential to improve
efficiency and effectiveness, exploit market opportunities, and/or
neutralize potential threats
 Uniqueness, or the degree to which it is specialized and not
widely available
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Copyright © 2002 South-Western. All rights reserved. 4–17
Lepak and Snell’s Employment Models
 Lepak and Snell’s Employment Models
 Quadrant 2: Job-based Employment
 Requires productivity-based HR
management.
 Less investment will be made in
employees, and the organization will seek to
acquire individuals with the requisite
skills rather than provide training in skills
that are generic.
 Shorter time frames will be established for
performance and rewards, and jobs will be
more standardized.

If you like to study more:

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 Lepak and Snell’s Employment Models
 Quadrant 3: Contractual Employment Agreements
 Requires compliance-based HR management.
 Structure and direction would be provided for employees and systems established
to ensure that employees comply with rules, regulations, and
procedures.
 Workers would receive little
discretion, and any training,
performance management, and
compensation would be based
on ensuring compliance with the
set work structures.
 Lepak and Snell’s Employment Models
 Quadrant 3: Alliance/Partnership Employment
 Requires collaborative-based HR management
 Much of the work would be outsourced to an outside vendor based on the sharing
of information and establishment of trust.
 The organization would select
alliance partners who are
committed to the relationship as well
as the organization’s success.
 Performance standards and incentives
would be established that mutually
benefit both partners.
Traditional HR versus Strategic HR
Barriers to Strategic HR
Outcome of Strategic HR

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A Model of Strategic HRM
Thank You

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Reading 4.1: HR and Organizational Excellence

• HR can help deliver organizational excellence by:

• Becoming a partner with senior and line managers in strategy execution.
• Becoming expert in the way work is organized, delivering administrative
efficiency to ensure that costs are reduced while quality is maintained.
• Becoming a champion for employees, representing their concerns to senior
management and working to increase employee contributions.
• Becoming an agent of continuous transformation by shaping processes and
organizational culture.

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Reading 4.1: Five Critical Business Challenges

Globalization

Profitability through Growth

Technology

Intellectual Capital

Change, Change, and More Change

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Reading 4.1: HR as Strategy Execution Partner

• HR is responsible for defining an organizational structure as the

model for the company’s way of doing business.
• HR must be accountable for conducting an organizational audit.
• HR is to identify methods to renovate part of the organizational
architecture.
• HR must take stock of its own work and set clear priorities.

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Reading 4.1: HR and Organizational Culture

• HR can help bring about a cultural change by:

• Defining and clarifying the concept of cultural change.
• Articulating why cultural change is central to business success.
• Defining a process for assessing the current culture and the desired new
culture, as well as measuring the gap between the two.
• Identifying alternative approaches to creating culture change.

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Reading 4.1: Four Changes for the Line

• How senior operating management can create an environment in

which HR becomes focused on outcomes instead of activities:
• Communicate to the organization that the “soft stuff” matters.
• Explicitly define the deliverables from HR, and hold HR accountable for
results.
• Invest in innovative HR practices.
• Upgrade HR professionals.

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Reading 4.2: Human Capital Management

• To become effective human capital managers, HR mangers must

develop competencies in:
• Knowledge of the business.
• Human resource functional expertise.
• The management of change.

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Reading 4.2: New Functional Role for HR

• HR must focus on business level outcomes rather than HR level

inputs.
• HR must become a strategic core competency rather than a market
follower.
• Strategic competencies are more important than functional
competencies.
• The most important missing element in the HR function expertise is a
systems perspective.

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Reading 4.3: Organization Culture Questionnaire

• Topics to be included in the questionnaire:

• How is performance defined, measured and rewarded in the organization?
• How are information and resources allocated and managed in the
organization?
• What is the operational philosophy of the organization with regard to risk-
taking, leadership, and concern for overall results?
• Does the organization regard its human resources as costs or assets?

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Reading 4.3: Analyzing Dysfunctional Cultures

• Which components of the culture are misaligned?

• What priorities should be assigned each of the gaps between what
the culture is and what people feel that it should be?
• What resources are needed and how should they be used to change
the culture?
• How should the change effort be managed and who does what?
• What role should HR strategy play in signaling, making and reinforcing
the necessary changes?

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