CASE STUDY:
HR AS A STRATEGIC PARTNER:
THE MEASUREMENT CHALLENGE
HRM
MBA
Imran Ghaznavi

Introduction
 Issues
 Much has been talked about HR’s role today and
it is a brutal reality that HR as function is under
extreme pressure to justify its position and sphere
of influence.
 Most organizations view the HR department as an
administrative function.
 The senior management is generally skeptical of
HR’s role in the firm.

What the case study is all
about
 Human Resource should be at the table not
on the table
 HR contribution towards the value creation
should be measured
 HR has to play a strategic role in the
organization
 HR must has the ability to align the
employee efforts with the organization's
overall vision.

How is it possible
 We need to understand and develop the HR
“Architecture” of the organization.
 The HR Architecture has three basic
components
 HR Function
 The broader HR system
 The resulting employee behaviors

Outcomes of HR Architecture
Traditional HR attributes Crucial HR attributes
 Total Compensation
 Employee turnover
 Cost per hire
 %of staff with appraisal
 Employee attitudes –job
satisfaction

 Capable & committed
Work Force
 Development of essential
employee competences or
training systems
 Above are also known as
strategic HR drivers

HR creates value
 Aliening every employees effort with the
organization's overall vision
 HR to shift from traditional administrative
role strategic role
 Strategic assets keep organizations competitive
edge sharp for long haul, as they are difficult to
copy.
However the impact of organizations strategy is
difficult to see in short run.

Importance of intangible
assets
 New economic paradigm characterized by
speed, innovation, quality, customer
satisfaction has increased the importance of
intangible assets like
 Brand recognition,
 Knowledge
 Innovation and
 Human capital

HR measurement system
 Development of HR - measurement system
 That convincingly showcase HR’s impact on
business performance.
 This is possible with properly developed HR
architecture
Managers throughout the organization should
understand how people create value and how to
measure the value creation.

HR’s strategic Architecture
The HR
Function
• HR professionals with strategic
competences
The HR
System
• High performance, strategically
aligned polices and practices
Employee
Behavior
• Strategically focused competencies,
motivations, and associated behaviors

HR Architecture
 The continuum from the HR professionals
with in the HR function to the system of HR-
related polices and practices, through the
competencies, motivations and associated
behaviors of the firm’s employees

The HR Function
 The foundation of a value-creating HR
strategy – is a management infrastructure
that understands and can implement a firms
strategy.
 Technical HRM – HR basics R, C &B
 Strategic HRM- Delivery of services which
directly support the implementation of
organizational strategy.

HR System
 The system is the lynchpin of the HR strategic
influence.
 High PerformanceWork System (HPWS)
 Each element of the HR system is designed is to
maximize the overall quality of human capital
throughout the organization.
 Develop strategies that provide timely and
effective support for the skills demanded

Comparison of High and low
Management Qualities
 The firms with most effective HR
management system has:
 Dramatically high performance
 Employees turnover was close to half
 Sales per employee was four time higher
 The ratio of market value was more then three
times in large high performing companies

Strategic employee behavior
 The productive behavior of the employees
plays vital role in the success and growth of
the organization.
 HR need to continuously monitor the internal
environment and create an environment
which jazz up every individual and display a
positive behavior in building good will for the
organization

Conclusion
 The CEO’s and the senior management has to
bring HR at strategic table.
 HR managers need to take lead in aligning
the HR strategies towards accomplishment of
organizations goals.
 Develop effective measurement system for
the HR contribution towards the
organizations profit maximization.
 All this has to be done through systematic
thinking.