This PPT gives an introduction to strategic human resource management

1. Introduction to Strategic Human
Resource Management
Presented by
Richard Wickramaratne
Senior Lecturer in Human Resource
Management
April 22, 2018
Duration: 03 Hours

2. Intended Learning Outcomes
On successful completion, the student should be able
to:
• Define SHRM
• Explain the links among SHRM, Strategic
Management, and general planning process
• Describe the SHRM process in sequential steps while
understanding the tasks undertaken in each of these
steps

3. Strategic Decisions
Peter Drucker who long ago (1955)
pointed out in the practice of
management the importance of strategic
decisions, which he defined as ‘all
decisions on business objectives and on
the means to reach them’.

4. What Does Strategy Mean?
Strategy is the determination of the basic
long-term goals and objectives of an
enterprise, and the adoption of courses of
action and the allocation of resources
necessary for carrying out these goals
(Chandler, 1962).

5. Strategic Management
Strategic management is the set of
decisions and actions resulting in the
formulation and implementation of
strategies designed to achieve the
objectives of an organization. (Pearce and
Robinson,1988).

6. Wheelen & Hunger’s (2012) Strategic
Management Model

7. Levels of Strategies
•Corporate Level (growth, stability and renewal
strategies)
Some of the growth strategies are: Concentration,
Vertical integration , Horizontal integration &
Diversification.
•Business Level (Cost leadership, differentiation, and
market focus)
Functional/Operational Level (Manufacturing,
Marketing, Operations, IT, and Research and
development ◦ Human resources )

8. Strategic HRM Defined
Strategic HRM is an approach that
defines how the organization’s goals
will be achieved through people by
means of HR strategies and
integrated HR policies and practices
(Armstrong, 2016).

9. Other definitions of SHRM
• Strategic HRM is concerned with ‘seeing the people of the
organization as a strategic resource for the achievement of
competitive advantage’ (Hendry and Pettigrew, 1986).
• ‘A set of processes and activities jointly shared by human resources
and line managers to solve people-related business problems’
(Schuler and Walker, 1990).
• ‘The macro-organizational approach to viewing the role and function
of HRM in the larger organization’ (Butler et al , 1991)

10. Other definitions continued…………..
• The pattern of planned human resource deployments and activities
• intended to enable an organization to achieve its goals’ (Wright and
McMahan, 1992).
• ‘Strategic HRM focuses on actions that differentiate the firm from its
competitors’ (Purcell, 1999).
• ‘The central premise of strategic human resource management theory is that
successful organizational performance depends on a close fit or alignment
between business and human resource strategy’ (Batt, 2007).

11. Aims of Strategic HRM
The fundamental aim of strategic HRM is
to generate strategic capability by
ensuring that the organization has the
skilled, engaged and well-motivated
employees it needs to achieve sustained
competitive advantage.

12. A framework for understanding SHRM

13. What is integration in SHRM?
Strategic human resource management is largely about integration and
adaptation. Its concern is to ensure that:
• human resources (HR) management is fully integrated with the
strategy and strategic needs of the firm (Vertical Integration) and
• HR policies cohere both across policy areas and across hierarchies
(Horizontal Integration).

14. What is strategic fit?
As explained by Wright and McMahan (1992)
strategic fit refers to the two dimensions that
distinguish strategic HRM:
•First, vertically, it entails the linking of human
resource management practices with the strategic
management processes of the organization.
•Second, horizontally, it emphasizes the
coordination or congruence among the various
human resource management practices.

15. Link Between Business Strategy & HR
Strategy
Firm’s
Competitive
Environment
Firm’s Strategic Situation Firm’s Strategic Plan
Firm’s HR (& Other
Functional) Strategies
What are the HR policies
that support firm’s
strategy?
Organizational
Performance
Firm’s Internal
Environment

16. Overall:
• performance
• engagement
• ‘the big idea’
• human capital
advantage
• HRM process
advantage
• etc
Specific:
• organization
development
• corporate social
responsibility
• resourcing
• talent management
• learning and
development
• employee reward
• employee
relations
• employee
well-being
HR STRATEGY AREAS
This resource is part of a range offered free to academics and/or students using Armstrong’s Handbook of Human Resource Management Practice, 11th edition,
as part of their course. For more academic resources and other FREE material, please visit www.koganpage.com/resources and then click on Academic
Resources.

18. Scanning the Environment
The external environment-political, legal, technological,
economic, social and cultural forces that have a great impact
on the functioning of the business.
The internal factors-organizational culture, hierarchy,
business processes, industrial relations, etc. that play a
crucial role in performing the business operations.
The role of the HR department is to collect all the information
about the immediate competitors, their strategies, vision,
mission, strengths, and weaknesses.HR professionals can
identify the workforce, work culture, skills of the staff,
compensation levels, reasons for employee exit and other
relevant information about the competing firm.

19. Identify Sources of Competitive Advantage
The next step in the strategic human resource
management process is to identify the parameters of
competitive advantage that could stem from diverse
sources as product quality, price, customer service,
brand positioning, delivery, etc.
The HR department can help in gaining the competitive
advantage by conducting the efficient training
programmes designed to enrich the skills of the staff.

20. Identify HRM Strategies
• There are major four strategies undertaken by an organization to enrich the
employees capabilities:
• a) Learning as Socialization: This strategy includes the techniques as training
courses, coaching sessions, education programmes to ensure that the employees
abide by the rules, value and beliefs of an organization and are able to meet
the performance targets.
• b) Devolved Informal Learning: This strategy helps in making the employees
aware of the learning opportunities and the career development.
• c) Engineering: This strategy focuses on creating and developing communities
of practice and social networks within and outside the organization.
• d) Empowered Informal Learning: Through this strategy, the HR department
focuses on developing the learning environment such as knowledge about the
new processes, designing of new work areas and the provision of shared spaces.

21. Implementing HR
Strategies
Once the strategy has been
decided the next step is to put it
into the action. The HR strategy
can be implemented by
considering the HR policies,
plans, actions and practices.

22. Monitor and Evaluation
The final step in the strategic human resource
management process is to compare the
performance of the HR strategy against the pre-
established standards. At this stage, certain
activities are performed to evaluate the outcomes
of the strategic decision: establishing the
performance targets and tolerance levels,
analyzing the deviations, executing the
modifications.

24. Quiz

25. In strategic human resource management, HR strategies are generally
aligned with
• business strategy
• marketing strategies
• finance strategy
• economic strategy

26. Which of the following is closely associated with strategic human
resource management?
• efficient utilization of human resources
• attracting the best human resources
• providing the best possible training
• All of the above

27. Strategic human resource management aims to achieve competitive
advantage in the market through
• price
• product
• people
• process

28. Strategic management process usually consists of _______ steps.
• Four
• Five
• Six
• Seven

29. Mini Case Studies at Facebook

30. An Excellent Performance Management
System
Performance management has grown even important to the
management of your employees’ careers. Continues feedback is
necessary to guide the employees and teams and in this regard
Facebook is doing a great job. It provides its employees continuous
feedback. Performance appraisal happens twice an year. It is based
upon the results obtained from employees and managers using online
tools. Typically seven people are involved in the process of feedback.
Real time success metrics quantifying the results help with ongoing
feedback. Rewards at Facebook are based on performance. However,
all the endeavour is data driven. Performance results and coworker
feedback is used to provide rewards. Facebook uses rewards to guide
performance. If there is a wide gap in the rewards obtained by two
performers on the same level, it can be because of the gap in
performance. Sometimes the gap can be as high as 300 percent. Two
things happen in this way – one performance is rewarded, another
performers are retained. While it gives the message that performance
is important, it also sends the message that performance will be
appreciated for sure.

31. Employee Convenience Matters
In the technology world work pressure can be very high and
researchers and authors have also emphasised upon too. In such a
scenario, most companies have adopted various strategies to provide
their employees more convenience. One of them is work from home.
However, Facebook manages it in another way. It has established a
come to work culture. To make things easier for its employees, it offers
free wifi shuttle buses. These buses do not just offer higher
convenience, they allow the employees to collaborate on the go. Apart
from it, the company offers free train passes, van pools as well as free
auto parking. There are very few firms that treat bicyclists with as
much pride as Facebook. There is a full service bike shop on the
campus. There are no meetings on Wednesdays and that allows a no
interruption day for work. Meetings can affect the flow of work so
keeping one day free allows programmers to remain in flow. Many
employees use this day to work from home if they want. The level of
convenience and engagement at Facebook keeps pressure at check.
If work life becomes as convenient who would not love to work at
Facebook? The most loved social media platform is also the best
place to work because of how much it loves its workers.

32. A Culture of Being Bold, Moving Fast, and
Taking Risks
At Facebook, it is all about being bold, taking risks and breaking the norms.
If you have never broken a norm you did not move fast enough. In the world
of IT and social media things have to move faster than usual. Failure can
happen but that does not mean you should stop taking risks. You must not
be afraid of making mistakes because they stop you from being what you
can be. It is critical to grab opportunities than to lose them and remain afraid
of having made mistakes. Throughout its office facilities, there are slogans
painted all over the wall. It signifies a high energy corporate culture. Rather
than trying to achieve perfection, you have to try and get things done. At
Facebook, they encourager bold decision making and risk taking. If you do
not take risks, it implies a situation of stagnancy. Its a fast changing world
and taking no risks only a guarantee of failure. In this world, the normal
course is the riskiest and finding new courses can help you stumble upon
better opportunities. This attitude helped the company shift its direction and
be successful on the smartphone platform. The company had realised it
years ago taht smartphone was going to become the next important platform
to drive revenue. The shift Facebook made years ago has helped it grab a
larger share from online advertising.

33. What has Facebook done to engage its employees?
Free food with great variety – Facebook takes care of its employees’ taste and has made available a large
menu with higher variety. Being a young company, the menu at Facebook is designed as per the taste of
its employees. A large variety of ice creams, cookies, and other milk products and other kind of food
including barbecue is available for the workers to tingle their taste buds. If you go over the entire list, you
are going to feel spoiled by the variety and quality of the menu. (Dr. J. Sullivan, ERE, 2013). The way to
your employees heart goes through their belly. The quality of food served at Facebook can be as good as
in some of the world’s best restaurants. Eating arrangements in the open under the sun make it as
enjoyable as a picnic or party. Gourmet meals at Google are famous but as John Sullivan highlights
Facebook is at a clear advantage in terms of knowing the taste and interests of the millenial generation.
One thing that very few employers care about is the energy level of their employees and that they need
to sustain it. Your HR policies and work environment must be structured in a manner that employees’
energy level is not affected. If employees are full of energy the worker morale challenge is to an extent
solved. Facebook very well understands the challenge. It is why for most employees working at Facebook
is a pleasant experience. Food does not just give energy; good food gives pleasure, keeps people happy
and their energy flowing. A pleasant work environment sustains both worker morale and energy. The
millennial generation has grown familiar with these challenges and so selects their employers with
caution. It is a foodie generation and treating it with delicacies is a simple method of keeping it happier.
Now, that’s the value of good food and the quality, as some insiders know is matchless that only some of
the best restaurants in the world can challenge. A job at Facebook can be a treat and that’s why the
approval ratings of the CEO have remained so high (98% plus is a tough to match arrival rating). Most of
the reviews on Facebook show very high job satisfaction. Facebook also makes alcohol available to its
employees on Fridays. CEO Zuckerberg knows some great ways to engage his employees. The new parents
have some amazing rewards for them – parental leave, baby cash and other forms of rewards like
reserved parking spaces for the pregnant mothers. It also helps at the retention of the female engineers.

34. Reference
Armstrong, M. (2016).Armstrong's Handbook of Strategic Human
Resource Management , 6th Edition.
https://www.cheshnotes.com/2018/01/hr-management-facebook-
amazing-benefits-amazing-talents/

35. Thank You