Human Resource Planning
HRM-411,
1
Chapter 2
HUMAN RESOURCE POLICIES AND STRATEGIES
2 strategy
A set of related actions that managers take to
increase their company’s performance
HR strategy designed to give concrete guidance and
help to identify specific practices that are adaptable
for org
3 Strategy
Strategy is primarily concerned with-
The scope of an organisation’s activities
Matching the activities of an organisation to that
environment in which it operates
Resource implication
Operational decisions
The values and expectations of stakeholders
Long-term direction
4 IBM’s HR Strategy
1) innovation, 2) business value, 3) global integration, and 4) on-
demand infrastructure. Behind this overall strategy are all of
the employees who make it work.
IBM motivates its employees through:
• Performance-based opportunities.
• Leadership.
• Hiring diverse and talented people.
• Flexibility.
• A values-based climate.
5 Role of HR Strategy in
Strategic Management
Behavioral role theory
Resourced based theory
Human capital theory there is a economic value of
your knowledge skills & values
Agency theory
Transaction cost theory
Dependency theory
Institutional theory
6 Role of HR Strategy in
Strategic Management
1. Behavioral role theory
Employee behavior is the key factor for implementing strategy
Aligning HR policies and practices
Sustainable competitive advantage
Economic value
Cost minimization
Agency theory
7 Role of HR Strategy in
Strategic Management
Institutional theory
Strategic linkage and acceptance from stakeholders (1. investors,
2. customers and 3. employess)
Dependency theory
HR can influence the performance of the organization.
Levels/types of strategy
8
1.Corporate level strategy (Merger, Acuisition
and diversification)
(necessary for large organization or group of
company)
- Overall scope of the organization
- How to run in structural and financial terms
- How resources will be allocated to different operations.
2.Competitive or Business level strategy
(SBU)
-Differentiation (Uniqueness) and cost leadership (Low cost)
- How to compete in a market
- Which products or services should be developed and offered
to which markets
- To what extent it meets customers needs
- Does it achieve the objective of the organization, viz., long
term profitability, market growth and efficiency.
9
3.Operational strategies/ Functional
Level strategy:
HR strategy, marketing strategy, Finance strategy, management
strategy, research & development strategy, Production
strtaegy
Adopted at the functional level and the success at the
functional or operational level ultimately enable an
organization to achieve the corporate level and
competitive strategies.
11 HR Policies and Procedures
(step by step methods)
A comprehensive coverage of policies embrace any
action or decision, taken by either employees or
management in relation to the working
environment, the rights and responsibilities of
employees and management, and the action of both
parties.
Procedures prescribe the details for carrying out
policies. They spell out the specific rules and
regulations, the steps, time, place and personnel
responsible for implementing policies.
HR Program
12
HR Program is a stable plan of action that continues over
an extensive period of time.
•Some universal elements in HR Program are-
1.Employment- Selection and job change
2.Training and development
3.Communication
4.Grievances and discipline
5.Wages and salary
6.Health and safety
7.Benefits and Services
8.Labor relations
9.Research
Considerations in Developing
(making) HR policies
13
1.Policy statement constitutes criteria for
making decisions.
2. Policies provide a clear idea of what
management and employees can
expect.
3. Policies may originate from anywhere
inside an organization or from external
sources-community, state, legislation,
economy change, international forces.
4. Approval of new or changed HR policies
ultimately comes from top
management.
14 Considerations in Developing
HR policies
5. Formulating policies the first
consideration is the
objective and purpose.
6. It is required to anticipate
circumstances that may arise
in administration, as well as
knowledge of operating
problems.
7. Unions have had a
tremendous impact on policy
formulation.
15 Linking HR Processes to
Strategy
• Aligning HR Stategy with business
strategy can be done in one of these
ways-
1. Start with organizational strategy and then create HR stategy
2. Start with HR competencies and then craft corporate strategies
based on these competencies
3. Do a combination of both in a form of reciprocal relationship
16 1.Corporate strategy leads
to HR strategy
• Corporate strategy drives HR strategy. In
other words, personnel needs are based
on corporate plans. If a firm decides to
compete on the basis of offering low cost
products, HR policies and practices must
align and be based on low labor costs.
17 2.HR Competencies lead to
business strategy
• This “skills determine strategy” outlook
relies too heavily on employee capabilities
and not enough on environmental
analysis. Nor is consideration given to
changing HR practices in training or
compensation to facilitate this change in
startegy.
18 3. HR strategy and
Corporate strategy
• HR strategy generates the business
strategy and business strategy determines
the HR strategy. This concept of reciprocal
interdependence is widely accepted in the
HR strategy literature.
19 4. HR becomes a business
partner
• The key concept is the “concurrent strategy
formulation”. Strategy development, based
on environmental analysis, is conducted at
the same time that HRM issues are
considered. HR issues do not solely
determine strategy, nor does strategy
unilaterally determine HR practices. Hr
managers must understand the numbers
language of business or the outcome
expectations of nonprofit organizations.
20 5. Strategic partnering
• Organizations realize the impact that HRM strategy can
have on organizational effectiveness and as HR managers
develop the internal relationships to ensure that the
strategy is effective.
