STRATEGIC APPROACH TO HUMAN RESOURCE MANAGEMENT.ppt

STRATEGIC APPROACH TO HUMAN RESOURCE MANAGEMENT

1. STRATEGIC APPROACH TO HUMAN
RESOURCE MANAGEMENT-WEEK 1
Strategic approach to HRM applies to the
concept of strategy to managing a firm’s
human resources.

2. The Approach has six (6) elements as
follows:
1.Recognition of the impact of outside
environment.
• External environment is usually dynamic
•Opportunities and threats
•Capitalize on opportunities
•Overcome, minimize or avoid threats
•Managers are expected to develop strategies
to deal with the external environment.

3. 2.Recognition of the Impact of Competition
and the Dynamics of the Labor market.
•Competition for customers, suppliers and
employees
•Impact of local, regional, national and
international labor markets
•Wage rates
•Unemployment rates
•Working conditions
•Minimum wage legislation
•Competitor reputation

4. 3.Long Range focus
•A strategic focus should consider the long-
range direction of a company’s human
resources e.g., 10-20 years
•It is not easy to change a strategy
•Ensure long-term strategy is consistent
•Firm needs to be guided into its far future

5. 4.Choice and Decision-Making focus
•Strategy implies choosing among alternatives
•Making decisions that commit the firm’s
resources towards a particular direction
•Example: A major decision by Ford in mid-
1980s to invest in employee involvement.
Strategy addresses what an organization
should do and why. The company hoped to
improve service quality like Japanese
competitors that had pursued the same
strategy successfully.

6. 5. Consideration of all personnel
•Shop floor employees - cleaners
•Junior staff- clerks
•Middle level staff- supervisors & managers
•Senior management staff - chief managers
•CEOs/MDs
•The approach is different from the traditional
one that focused on juniors, mainly
unionisable staff only.

7. •All staff are considered important in the
strategic approach to HRM
•Each employee should be valued as he/she
plays a crucial role in the realization of
corporate goals and objectives.
•The CEO/MD also requires advice, training
and development from HRM just like the
cleaners at the shop floor. Discuss
How is this done in your organization?

8. 6.Integration with Corporate Strategy
•Corporate strategy should drive HR Strategy
and not vice versa
•HR professionals should be involved in
strategic planning of the entire organization.
•HR should not just focus on daily operations
and transactions as has been the case
traditionally

9. •The HRM should establish goals and objectives
that are in Line with Corporate goals -
Compatibility
•If a corporate strategy is to produce desired
results the human resource strategies should
be supportive

10. Examples of Organizational Strategies and
Associated Human Resource Strategies
Corporate
Strategy
ExampleHuman Resource
Strategies
Retrenchment
(cost reduction)
GM Layoffs, Wage
Reduction, Productivity
Increases, Job
Redesign, Renegotiated
Labor Agreements

11. Growth Intel Aggressive Recruiting
and Hiring, Rapidly
Rising Wages, Job
Creation, Expanding
Training and
Development
Renewal ChryslerManaged Turnover,
Selective Layoff,
Organizational
Development,
Transfer/Replacement,
Productivity Increases,
Employee Involvement

12. Niche
Focus
Kentucky Fried
Chicken
Specialized Job
Creation, Elimination of
Other Jobs,
Specialized Training
and Development
AcquisitionGE Selective Layoffs,
Transfers/Placement/
Job Combinations,
Orientation and
Training, Managing
Cultural Transitions

13. Note: Strategic Management
•The objective of good strategic
management is to coordinate all of the
organization’s resources including
human resources in such a way that
everything the organization does
contributes positively to carrying out its
strategy.

14. •Excellent coordination and combination
of functions often yields synergy, the
extra benefit or value realized when
resources have been combined and
coordinated effectively. This concept
makes the combined whole of the
organization more valuable than the sum
of its parts.

15. Difference between Strategic Human
Resource Approach and Traditional
Personnel Approach
DimensionStrategic Human
Resource Approach
Traditional Personnel
Management
Approach
Planning
and
Strategy
Formulation
Participates in
formulating overall
organizational
strategic plan and
aligning human
resource functions with
company strategy
Is involved in
operational panning only

16. AuthorityHas high status and
authority for top
personnel officer
(e.g., vice-president
for Human
Resources)
Has medium status and
authority (e.g., personnel
director)
Scope Is concerned with
all managers and
employees
Is concerned primarily
with hourly, operational,
and clerical employees

17. Decision-
Making
Is involved in making
strategic decisions
Makes Operational
decisions only
IntegrationIs fully integrated with
other organizational
functions: Marketing,
Finance, Legal,
Production

Has moderate to
small integration
with other
organizational
functions
CoordinationCoordinates all human
resource activities (e.g.,
training, recruitment,
staffing, Equal
Employment
opportunity)
Does not coordinate
all human resource
functions

18. Case 1
RIGHT MANAGEMENT CONSULTANTS
•Company was formed by four (4)
entrepreneurs in Philadelphia
•Company did business with more than 80% of
the fortune 500
•Right effectively handled change
•Expanded in the US by entering into affiliate
agreements with several existing firms

19. Growth
According to the Managing Principal of the
Florida/Caribbean Division, Success of the
Company was attributed to the following
•Professional training
•Responsiveness
•Tailor-made services – customization/personalization
•Exercise - Discuss the relevance of training in your
organization.

20. International Recognition/Image
•Within 100 small businesses in the US-
Business Week
•Among the best small companies in the world-
Forbes Magazine.

21. Expanding Service Focus
In 1980s Right Consultant focused on:
•Business partners to manage change
•Restructuring and organizational changes
•Customized key executive services for CEOs
and Senior Managers
•Strategy development
•Support services such as contract and legal advice,
communications and research data assistance.

22. •Spouse Employment Assistance on a formal
basis and included all employees
•Common to find married couples in US committed
to two careers.
•Job bank facilitates the search
•How are the spouses of employees in Kenyan
organizations helped in job search?
•What is the approach in your own organization?
•What would you recommend?

23. Managing the Human Side of Change:
Services are provided in three basic areas.
1.Restructuring Planning and implementation
•Customized programs
•Counseling employees
2.Transition Management
•Transition Services
•Training

24. 3.Recommitment
•Recommitment programs for survivors/retained
staff
•Motivational programs to improve productivity
– quantity, quality, sales, revenue, job creation,
wider branch network etc.
Exercise
Discussion Questions on page 36 of course text

25. Development of Human Resource
Management (Management Thoughts)
1. Craft system
•Was practised in 1600s and 1700s
•Goods and services produced by small groups
of workers usually in small workshops or
homes
•Work was customized/jobbing and supervised
by a master craftsman.
•No confusion about career progression and
wages.

26. •After about 200 years, demand necessitated
change in production of goods and services.
–More craftsmen were required
–Work places/homes were expanded into small
factories.
–Machines were introduced to speed up
production and improve quality.
The above changes gave rise to industrial revolution.

27. 2. Scientific Management
•In early 1900s more machines and new
methods were introduced in the work place.
•Number of workers increased significantly
•Managers were compelled to develop rules,
regulations and procedures to control
workers.
• Introduction of job specialization which
resulted in repetitive and monotonous jobs

28. •Easier to replace difficult, demanding or uncooperative
workers.
•The guiding principle in scientific management is that there is
one best way of performing a job.
•The approach underscores the cheapest, fastest and most
efficient way of performing a task.
•The system enables an organization to make profit and does
not have to be safe or humane.
•Fredrick Taylor, the father of Scientific Management , focused
on productivity.
–Analyzed specific motions required to perform various tasks and
refined the motions needed to complete them.
–T he successful workers earned good pay.
–Unsuccessful workers were terminated.

29. Taylor’s ideas and those of his followers led to time and
motion experts with there stop watches and
clipboards observing workers and seeking to discover
the one best way in which every job could be
performed.
Many organization’s apply Taylor’s ideas to date.
Criticisms of Taylor’s ideas
Treating workers as tools and not persons.
He also claimed that his ideas are applicable to any
organization
Calls his personal ideas principles.

30. 3. Human Relations
•This management thought is based on Hawthorne
Studies
•Experiments on workers were carried out at the
Hawthorne plant of the Western Electric Company at
Illinois in USA between 1927 and 1932 by Elton
Mayo of Harvard to determine the effect of
illuminization and other conditions (noise, humidity,
pay, rest and break) on productivity. An increase or
decrease in illumination or other variables did not
have effect on productivity as it continued to
increase.

31. •Mayo and Roethlisberger found the results unusual
and decided to continue with the research.
According to Mayo and his researchers,
improvement in productivity was caused by other
factors as indicated below.
1. Recognition-human interaction and attention paid to
workers.
2.Satisfaction with the job-understand the needs of workers.
3.Satisfactory interrelationships among workers
Many organizations apply this model by investing in
employee involvement program/ staff involvement.
.

32. •It should be noted that Mayo used women
workers in his experiment. He formed two
groups namely control group (no changes) and
test groups where various variables such as
lighting were changed to see the effect on
productivity.

33. 4. Behavioral Science
•This school of thought focuses mostly on the total
organization and less on the individual.
•Examines how the organization affects the individual workers
and how the individual worker affect the organization.
•As a result, changes that were taking place in the USA in the
1920s and 1930s (urbanization, higher incomes, labour
expenditures, women rights, sophisticated households,
organized unions etc), classical techniques (administrative
theory and scientific management) could no longer work
effectively in organizations. In response to this, a number of
theorists began to direct their attention to the human
element.

34. a. Abraham Maslow (1908-1970)
•Human beings are motivated by needs that
exist in the hierarchy. These are physiological,
safety, love, esteem and self actualization. A
person moves up the ladder when the existing
level is satisfied.

35. b. Douglas Mc Gregor(1906-1964)
•According to him, most employees dislike work and are more
interested in monetary gains rather than performing their
work well. Because of this, managers tend to centralize
decision making, make many rules and regulations and
supervise workers closely. McGregor labeled this theory x
and developed an alternative theory y. Theory Y states that
workers enjoy their work in a conducive working
environment and can provide valuable input to decision
making process of the organization. Instead of designing
unnecessary control mechanisms managers should emphasize
coordination and assist when necessary.

36. •In order to achieve the set organization goals
and objectives, a balanced approach is
recommended between an organization and
the individual employee. The employee has
personal objectives that he/she would like to
achieve just like the organization. Staff
motivation is therefore critical in strategic
human resource management.