1. INTRODUCTION TO SHRM

2. • Human resources refer to the people who work in an organization.
• Human resource management is concerned with a holistic approach
towards the management of people working in an organization, who
contribute to the achievement of organizational objectives.
• Strategy is the determination of the long term goals and objectives of
an organization, and the allocation of resources necessary for carrying
out these goals.

3. • Like strategy, HR strategy is concerned with two key elements:
1. Determining the strategic objectives (what goals is the strategy
supposed to achieve? For example, the goals may be high
productivity, reduced accidents, etc.)
2. Developing a plan of action (how will the human resources be
organized and allocated to accomplish the objectives of the
organization?)

4. • Human resource strategy, therefore, involves the planned and effective use
of human resources by an organization to help it gain or maintain an edge
over its competitors.
• An organization is said to achieve competitive advantage when it is able to
gain and maintain edge over its competitors by differentiating its products
or services from those of its competitors, thereby increasing its market
share.

5. STRATEGIC HRM: DEFINITION AND COMPONENTS
• Strategic HRM is concerned with the relationship between HRM and
strategic management in an organization.
• Strategic human resource management is an approach which relates to
decisions about the nature of employment relationship, recruitment,
training, development, performance management, reward and employee
relations.
• Wright and McMahan defined SHRM as ‘the pattern of planned human
resource deployment and activities intended to enable the firm to
achieve its goals’.

6. COMPONENTS
• It focuses on an organizations’ human resources (people) as the primary source of
competitive advantage of the organization.
• The activities highlight the HR programs, policies, and practices as the means
through which the people of the organization can be deployed to gain competitive
advantage.
• The pattern and plan imply that there is a fit between HR strategy and the
organization’s business strategy (vertical fit) and between all of the HR activities
(horizontal fit).
• The people, practices, and planned pattern are all purposeful, that is, directed
towards the achievement of the goals of the organization.

7. • An organization uses a combination of several resources- tangible and
intangible- in the pursuit of its objectives. These resources can be grouped into
three basic types:
1. Physical capital resources- the plant, equipment, and finances.
2. Organizational capital resources- the organization’s structure planning, hr
systems history, and organizational culture.
3. Human capital resources-the skills, judgement, and intelligence of the
organization’s employees.

8. • An organization may have huge capital and most advanced machinery, but if it
does not have capable, motivated, and high performing employees, the
organization is not likely to demonstrate sustained levels of high performance.
Since all physical and capital resources depend on people for their efficient use,
maintenance, and management, the quality of the people of an organization is
important in attaining competitive advantage.

9. • Strategic HRM is based on HRM principles
incorporating the concept of strategy. So if HRM is a coherent approach to the
management of people, strategic HRM now implies that what is done on a
planned way that integrates organizational goals with policies and action
sequences.

10. OBJECTIVES OF SHRM
The major objectives of SHRM are as follows:
• To ensure the availability of a skilled, committed, and highly motivated workforce
in the organization to achieve sustained competitive advantage.
• To provide direction to the organization so that both the business needs of the
organization and the individual and collective needs of its workforce are met.
This is achieved by developing and implementing HR practices that are
strategically aligned.

11. THE REQUIREMENTS FOR STRATEGIC HRM
Strategic HRM is most likely to be practiced in organizations with the following characteristics:
•Strong, visionary and often charismatic leadership from the top.
•Well articulated missions and values.
•A clear expressed business strategy which had been implemented successfully.
•A positive focus on well understood critical success factors
•The organization offers a closely related range of products or services to customers.
•A cohesive top management team.
•A personnel/HR director who plays an active part in discussing corporate/business issues
as well as making an effective and corporate/business-oriented contribution on HR matters.

12. EVOLUTION OF SHRM
• The HR function has evolved over time.
• In India, the Tata Iron and Steel Company (TISCO) was one of the first
organizations to set up a personnel department in the year 1947.
• The history of the function pre-dates Taylor’s theory of scientific
management and Fayol’s administrative theory. However, it was only during
the 1930s and 1940s that the function grew in significance, largely due to
war-time imperatives.

13. EVOLUTION OF THE HR FUNCTION
1. PERSONNEL MANAGEMENT
2. HRM (early 1970s)
3. SHRM (early 1908s)

14. 1. PERSONNEL MANAGEMENT
• Part of mechanistic organization
• Bureaucratic
• High centralization
• High formalization
• Low flexibility

15. 2. HRM (EARLY 1970S)
• Part of organic organization
• Cross-hierarchical and cross-functional teams
• Decentralized
• Low formalization
• Flexible

16. 3. SHRM (EARLY 1980S)
• Convergence between HRM and business strategy
• Proactive HRM
• Concerned with organizational effectiveness and performance.

17. EVOLUTION OF SHRM THOUGHT
• The success of Japanese firms in the 1980s was attributed mostly to their
Human Resource practices and organizational and national cultures.
• This realization attracted attention to the crucial role of the HR function in
providing sustainable competitiveness.
• There is growing fusion of personnel management, industrial relations,
human resource development and knowledge management which
combinedly constitutes the field of Strategic Human Resource Management.

18. • Its key characteristics are best summarized by Sission (1989):
1. A stress on the integration of personnel policies both with one
another and with corporate planning more generally;
2. The locus of responsibility for personnel managers no longer resides
with specialist managers but is now assumed by senior line
managers;
3. The focus shifts from management-trade union relations to
management- employee relations, from collectivism to individualism;
and
4. There is stress on commitment and the exercise of initiative, with
managers donning the role of ‘enablers’, coaches and facilitators.

19. DIFFERENCE BETWEEN TRADITIONAL HRM & SHRM
Basis Traditional HRM SHRM
Responsibility for
HR programmes
Staff personnel in
the HR department.
Line mangers; all
managers responsible
for people are HR
managers.
Focus of activities Employee relations-
ensuring employee
motivation and
productivity,
compliance with
laws.
Partnerships with
internal (employees)
and external
(customers,
stakeholders, public
interest groups) groups.

20. Role of HR Reactive and
transactional.
Proactive and
transformational, change
leader.
Initiative for
change
Slow, piecemeal, and
fragmented, not
integrated with larger
issues
Fast, flexible, and
systematic, change
initiatives implemented in
concert with other HR
systems.
Time horizon Short-term Consider various time
frames as necessary
(short, medium, or long-
term).

21. Control Bureaucratic control
through rules,
procedures, and
policies
Organic control
through flexibility,
as few restrictions
on employee
behavior as
possible.
Job design Focus on scientific
management
principles-division
of labor,
independence, and
specialization.
Broad job design,
flexibility, teams and
groups, and cross-
training

22. Important
Investments
Capital, products,
technology, and
finance
People and their
knowledge, skills
and abilities.
Accountability Cost centre Investment centre

23. BENEFITS OF STRATEGIC MANAGEMENT
• Allows identification, prioritization and exploitation of
opportunities.
• Provides an objective view of management problems.
• Represents a framework for improved co-ordination and control of
activities.
• Minimizes the effects of adverse conditions and changes.
• Allows major decisions to better support established objectives.

24. • Allows more effective allocation of time and resources to identified
opportunities.
• Allows fewer resources and lesser time to be devoted to correcting
erroneous or adhoc decisions.
• Creates a framework for internal communication among personnel.
• Helps to integrate the behaviors of individuals into a total effort.
• Provides a basis for the clarification of individual responsibilities.

25. • Give encouragement to forward thinking.
• Provides a co-operative, integrated and enthusiastic approach to tackling
problems and opportunities.
• Encourages a favorable attitude towards change.
• Gives a degree of discipline and formality to the management of a business.

26. THE CHANGING ROLE OF HR/ HRS NEW ROLE ORIENTATION
• HR is shifting from focusing on the organization of the business to focusing
on the business of the organization.
• HR is more important than ever, people are the only sustainable source of
competitive advantage.
“Watson Wyatt Study”

27. • “You can take my factories, burn up my buildings, but give me my people,
and I’ll bring my business right back again.”
- Henry Ford
• Employers want HR to address strategic issues involving the
competitiveness and performance of the firm more than the role of protector
and administrator.

28. • Environmental changes have put pressure on the HRM
function to justify its existence.
• Human resource management is placed at the centre of
business strategy today.
• High uncertainty in the environment has been a major
reason for the increasing influence of the HR function on
business strategy over the years.

29. • Though the HRM function and personnel continue to be in a
transitional phase, dramatic changes have taken place in the
past two decades.
• Two major changes that have occurred in HR function are
the roles associated with HRM and the partnership of HR
managers and line managers.

30. HRM Function
Dual Roles
Associated with
HRM
ADMINISTRATIVE
ROLE
Day to day
management of
people within
organizations
STRATEGIC ROLE
Planning and
attainment of
organizational
objectives.
Partnership of HR
and Line Managers
DEVOLUTION
Transfer of
some responsibilities
and activities
from the
HRM Function
to the line managers
DECENTRALIZATION
Structuring of
HRM department
CHANGES IN HRM FUNCTION

31. ROLES ASSOCIATED WITH MANAGEMENT OF HR
• The HR function today is seen as composed of two roles: an
administrative role and a high-level strategic role.
• In its administrative role, the HR function performs the traditional
administrative tasks associated with the day-today management of
people within organizations.

32. • The strategic role of the HR function has increased in importance since
the 1990s. The strategic focus of HRM is concerned with the planning
and attainment of organizational objectives.

33. PARTNERSHIP OF HR AND LINE MANAGERS
• Human resource activities are no longer seen to be the sole responsibility of
HR Managers. In the knowledge economy, line managers play an important
role in the formation as well as implementation of HR practices.
• As HRM work expands, responsibility for HR is increasingly shared among HR
managers and line managers.
• For example, without the participation of line managers, an employee
involvement programme cannot succeed in a firm.

34. • Similarly, though firms spend huge amounts on employee training and
development, the best developments take place on-the job through
coaching by a senior and more experienced manager.
• There is both Devolution and Decentralization of the HR functions.
• Devolution involves transferring some of the responsibilities and activities
from the HR personnel function to the line managers.

35. • Decentralization refers to how the HR department is structured. When the
firm is organized around strategic business units, each business unit has its
own HR staff. These HR personnel report to the head of the business unit
rather than to the head of the central HR department at corporate
headquarters. Line managers must play a strategic role in formulating HR
strategies.
• Line managers and HR managers must jointly own all aspects of the business.
Therefore, there are many HR skills that line managers must have.

36. MULTIPLE ROLES OF THE HR MANAGERS
• Administrative expert
• Operational role
• Employee champion
• Partner in Business Strategy
• Change Agent
• Customer Orientation

37. EMERGING TRENDS AND ISSUES
In the post-industrial society dominated by multinationals and
information technology, globalization, and services, the field of people
management has changed from reactive personnel management to
proactive human resource management and to value creating function,
which is strategic in nature. The trends in SHRM and the issues to which
it is trying to provide answers as follows:

38. • Each organization has its own situational realities, characteristics and
challenges. Business strategy and the role, strategy and process of HR
therefore has to be customized. It is generally felt that the competitive
pressures will increasingly demand speed, flexibility, process integration,
team building and concern for quality and customer care. There would be
more focus on results and social responsibility of business. All the
stakeholders have to be taken care of. HR interventions in the area of
selection, performance management, compensation and employee relations
have to be strategically managed to meet specific organizational situations.

39. • HR roles are changing with decentralization, de-layering and downsizing.
Corporate and HR roles are changing to advisory and line managers are
assuming direct responsibility of people under their charge. HR is a service
to be provided to them. They are internal customers of HR.
• HR capability has to come out from narrow functional knowledge to
encompass business capability. HR has to understand the concerns and
language of other functions and become their trusted partner.

40. • More and more reliance on IT is making HR self-administrating in its routine
aspects. HR has, therefore, to be more direct, visibly contributing to
achievement of organizational goals.
• Upgrading employees, preparing them to change, modernization of mind,
leading to collaboration and innovation is another important role emerging
for SHRM.
• Management of redundancy due to up gradation of technology is another
area. In this context transparency, communication, redeployment, retaining
and rightsizing are being emphasized.
• Internationalization and training of people in cross-cultural operations is
gaining added importance and HR has to prepare organizations for
expatriate management.

41. • Employee burnout, work-life balance and management of stress have become
prime responsibilities of HR because people are the most vital resource.
• Building unions as strategic partners of business and to make business a joint
partnership between unions and management is a challenge. How organizations
listen to the ‘voice’ of employees and act on it is the responsibility of SHRM as
unions are losing their hold in MNCs.
• Finally, the role of HR in business restructuring, acquisitions, mergers and joint
ventures has become the most important strategic responsibility of HR function.

42. HUMAN RESOURCE PLANNING: AN OVERVIEW
• Manpower Planning which is also called as Human Resource
Planning consists of putting right number of people, right kind of
people at the right place, right time, doing the right things for which
they are suited for the achievement of goals of the organization.
Human Resource Planning has got an important place in the arena of
industrialization. Human Resource Planning has to be a systems
approach and is carried out in a set procedure. The procedure is as
follows:
• Analyzing the current manpower inventory
• Making future manpower forecasts
• Developing employment programmes
• Design training programmes

43. HRP helps in determining the HR requirements of firms and develop
strategies for meeting those requirements so that the organization achieves its
objectives. It seeks answers to questions such as:
• What are the implications of proposed strategic plans with respect to human
resources?
• What are the implications of proposed strategic plans for staffing, training and
development, and management succession?
• How will a projected shortfall in the supply of skilled employees impact
various HR practices of the firm?
• What are the implications for attracting, retaining, motivating and rewarding
workers with skills that are in short supply?

44. • The HRP process cannot be carried out in isolation. The HRP process
examines the implications of business strategies and goals on human
requirements.
• HRP is a proactive process. It anticipates the changes in industry,
marketplace, economy, society and technology to ensure that the
organization is well prepared to meet these changes when they occur.

45. BUSINESS STRATEGY AND HRP
• Business strategy directly affects HR strategies and activities.
(refer Tanuja Agarwala Pg 183-185)

46. BEHAVIOURAL ISSUES IN STRATEGY IMPLEMENTATION
It is vital to bear in mind that organizational change is not an intellectual process
concerned with the design of ever-more-complex and elegant organization
structures. It is to do with the human side of enterprise and is essentially about
changing people’s attitudes, feelings and – above all else – their behaviour. The
behavioural of the employees affect the success of the organization. Strategic
implementation requires support, discipline, motivation and hard work from all
manager and employees
• Influence Tactics: The organizational leaders have to successfully implement the
strategies and achieve the objectives. Therefore the leader has to change the
behaviour of superiors, peers or subordinates. For this they must develop and
communicate the vision of the future and motivate organizational members to move
into that direction

47. • Power: it is the potential ability to influence the behavior of others. Leaders
often use their power their power to influence others and implement strategy.
Formal authority that comes through leaders position in the organization (He
cannot use the power to influence customers and government officials) the
leaders have to exercise something more than that of the formal authority
(Expertise, charisma, reward power, information power, legitimate power,
coercive power)
• Empowerment as a way of Influencing Behavior: The top executives have to
empower lower level employees. Training, self managed work groups
eliminating whole levels of management in organization and aggressive use of
automation are some of the ways to empower people at various places.

48. • Political Implications of Power: organization politics is defined as those
set of activities engaged in by people in order to acquire, enhance and
employ power and other resources to achieve preferred outcomes in
organizational setting characterized by uncertainties. Organization must
try to manage political behavior while implementing strategies. They
should
• Define job duties clearly
• Design job properly
• Demonstrate proper behaviors.
• Promote understanding
• Allocate resources judiciously

49. • Leadership Style and Culture Change: Culture is the set of values, beliefs,
behaviors that help its members understand what the organization stands for, how it
does things and what it considers important. Firms culture must be appropriate and
support their firm. The culture should have some value in it . To change the corporate
culture involves persuading people to abandon many of their existing beliefs and
values, and the behaviors that stem from them, and to adopt new ones. The first
difficulty that arises in practice is to identify the principal characteristics of the
existing culture. The process of understanding and gaining insight into the existing
culture can be aided by using one of the standard and properly validated inventories
or questionnaires that a number of consultants have developed to measure
characteristics of corporate culture. These offer the advantage of being able to
benchmark the culture against those of other, comparable firms that have used the
same instruments.

50. The weakness of this approach is that the information thus obtained tends to be
more superficial and less rich than material from other sources such as interviews
and group discussions and from study of the company’s history. In carrying out
this diagnostic exercise, such instruments can be supplemented by surveys of
employee opinions and attitudes and complementary information from surveys of
customers and suppliers or the public at large.

51. • Values and Culture: Value is something that has worth and importance to an
individual. People should have shared values. This value keeps the every one from
the top management down to factory persons on the factory floor pulling in the same
direction.
• Ethics and Strategy: Ethics are contemporary standards and a principle or conducts
that govern the action and behavior of individuals within the organization. In order
that the business system function successfully the organization has to avoid certain
unethical practices and the organization has to bound by legal laws and government
rules and regulations.

52. • Managing Resistance to Change: To change is almost
always unavoidable, but its strength can be minimized by
careful advance Top management tends to see change in its
strategic context. Rank-and-file employees are most likely to
be aware of its impact on important aspects of their
working lives. Some resistance planning, which involves
thinking about such issues as: Who will be affected by the
proposed changes, both directly and indirectly? From their
point of view, what aspects of their working lives will be
affected? Who should communicate information about
change, when and by what means? What management style
is to be used?

53. • Managing Conflict: Conflict is a process in which an effort is purposefully made by
one person or unit to block another that results in frustrating the attainment of the
others goals or the furthering of his interests. The organization has to resolve the
conflicts.
• Linking Performance and Pay to Strategies: In order to implement the strategies
effectively the organization has to align salary increases, promotions, merit pay,
bonuses etc., more closely to support the long term objectives of the organization

54. SHRM FOR COMPETITIVE ADVANTAGE
TRENDS IN BUSINESS ENVIRONMENT
• Globalization of Business
• Mergers and Acquisitions
• Downsizing
CHANGING NATURE OF WORK
• Industry and Occupational Shifts
• Technological Advancements
• Outsourcing
• Flexible work arrangements

55. DEMOGRAPHIC, SOCIETAL, AND WORKFORCE TRENDS
• Workforce Diversity
• Workforce availability
• Shortage of Skilled Talent
• Ageing population and Ageing workforce
• An educated knowledge workforce
• Women in workforce
• Changing family structures
• Global Workforce
• Contingent Workforce and Workforce flexibility
CHANGING NATURE OF EMPLOYMENT RELATIONSHIP

56. STRATEGIC FIT: A CONCEPTUAL FRAMEWORK
Organizations are often confronted with a dilemma-should they adopt business
strategies that fit the available competencies and capabilities in the firm, or should
they first decide their business strategy, and then stretch and modify their
competencies and capabilities to fit the business strategy?

57. • The strategic fit proposes that if an organization seeks to maximize its
competitive advantage, it must match its internal resources and skills
(organizational competencies) with the opportunities available in the external
environment.
• When an organization attempts to implement new strategies with outmoded or
inappropriate HR strategies, it can face problems. SHRM is largely about
integration.

58. Guest emphasized that it is important to ensure that HRM is fully integrated into strategic
planning. In 1997, Guest identified the following five types of fit:
1. Fit as strategic interaction (best fit approach)-HR practices linkage with the external context.
2. Fit as contingency-HR approaches to ensure that internal practices of the organization respond
to external factors such as the nature of the market, skill availability, etc.
3. Fit is an ideal set of practices (best practice approach)-there are ‘best practices’ which
all firms can adopt.
4. Fit is gestalt-emphasizes the importance of finding an appropriate combination of practices.
5. Fit as ‘bundles’ (the configuration approach)-suggests a search for distinct configuration or
bundles of HR practices that complement each other, in order to determine which ‘bundle’ is
likely to be most effective.

59. MATCHING CULTURE WITH STRATEGY
• Organization culture is a set of characteristics that describe an organization and
1. That distinguish one organization from another,
2. That are relatively enduring over a period of time, and
3. That influence the behavior of people in an organization.

60. • Organizational structure is likely to reflect the power structure and, again, delineate
important relationships and emphasize what is important in the organization.
• In most companies, there are strong informal networks of individuals and groups,
which coalesce around specific issues to promote or resist a particular view.
• Strategy and the external environment are big influences on corporate culture.

61. • Corporate culture should embody what the organization needs to be effective within
its environment.
• For example, if the organization requires flexibility and responsiveness, the culture
should encourage adaptability. The correct relationship between cultural values and
beliefs, organizational strategy and the business environment can enhance business
performance.

62. • Prof. Dan Denison conducted a study of culture and effectiveness and proposed
that the fit among the strategy, environment and culture is associated with four
types These categories are based on two factors:
1. The extent to which the competitive environment requires change or stability, and
2. The extent to which the strategic focus and strength is internal or external.

63. • The four categories associated with these differences are-
1. Adaptability
2. Mission
3. Involvement, and
4. Consistency