STRATEGIC HR & LEADERSHIPDr. Shazia AkhtarPhD ( Human Resource Management)

Strategic Human Resource Management

The process of taking a long-term approach to human resource management through the development and implementation of HR programs that address and solve business problems and directly contribute to major long-term business objectives.

Involves aligning initiatives involving how people are managed with organizational mission and objectives

Strategic Management Process

Determining what needs to be done to achieve corporate objectives, often over 3 - 5 yearsExamining organization and competitive environmentEstablishing optimal fit between organization and its environment Reviewing and revising strategic plan

The theory of the strategic HR planning is that the closer the alignment between HR and the business strategy, the better is the ability to adapt to client needs and thus maintain competitive advantage. HR role includes developing a plan of HR initiatives to achieve and promote the behaviors, culture and competencies to help the organization achieve its goals. To develop systems that reflect the organizations mission, vision and values and, in conjunction, supports employee performance at the organizational, team and individual level.

Process of Strategic Management

Models of StrategyIndustrial Organization (I/O) ModelExternal environment is primary determinant of organizational strategy rather than internal decisions of managersEnvironment presents threats and opportunitiesAll competing organizations control or have equal access to resourcesResources are highly mobile between firms

Resource-Based View (RBV)

An organizations resources and capabilities, not external environmental conditions, should be basis for strategic decisionsCompetitive advantage is gained through acquisition and value of organizational resourcesOrganizations can identify, locate and acquire key valuable resourcesResources are not highly mobile across organizations, and once acquired are retainedValuable resources are costly to imitate and non-substitutable

Contrasting the Two ApproachesResearch provides support for both positionsWhat drives strategy?I/O: External considerationsRBV: Internal considerationsI/O: Strategy drives resource acquisitionRBV: Strategy determined by resources

Corporate Strategies: GrowthBenefitsGaining economies of scale in operations and functionsEnhancing competitive position Providing opportunities for employee professional development and advancementHR IssuesPlanning for new hiringAlerting current employeesEnsuring quality & performance standards are maintainedInternal MethodsDeveloping new marketsPenetration of existing marketsDeveloping new products or services for existing or new marketsExternal MethodsAcquiring other organizationsVertical integrationHR IssuesMerging organizationsDismissing redundant employees

Traditional HR Versus Strategic HR

Traditional HRStrategic HRResponsibility for HRStaff SpecialistsLine ManagersFocusEmployee relationsPartnership with internal &external customersRole of HRTransactional, change -followerTransformational, change leaderInitiativesSlow,reactive,fragmentedFast, proactive, IntegratedTime HorizonShort-termShort, medium, long (as necessary)ControlBureaucraticOrganic, flexibleJob designTight division of laborFlexible, teamsKey InvestmentsCapital, productsPeople, knowledgeAccountabilityCost centreInvestment centre

Exhibit 4-7Outcomes of Strategic HR

Benefits of a Strategic Approach to HRFacilitates development of high-quality workforce through focus on types of people and skills neededFacilitates cost-effective utilization of labor, particularly in service industries where labor is generally greatest costFacilitates planning and assessment of environmental uncertainty, and adaptation of organization to external forces

Barriers to Strategic HRShort-term mentality/focus on current performanceInability of HR to think strategicallyLack of appreciation for what HR can contributeFailure to understand line managers role as an HR managerDifficulty in quantifying many HR outcomesPerception of human assets as higher-risk investments

HR and Leadership

HR professionals are uniquely well placed to help current leadership produce the next generation of leaders by establishing leadership brand, assessing the gaps in the present leadership against this brand and investing in future leaders.

(Source: Ulrich, D., & Brockbank, W. (2005). The HR value proposition. Boston: Harvard Business School Press. )

The Strategic HR FunctionEstablishing a strategic HR function requires proactive, capable leadership. HR professionals at all levels must understand the business requirements to best align their roles, objectives and priorities. Research shows that HR professionals play three roles: strategic partner/change agent, administrative expert and employee champion. Developing human resource leaders through focusing on leadership competencies is critical to achieve a strategic HR function.

Strategic partner

HRs leadership in organization development is also essential for the organizations success.

Effective HR leaders align their departments with the organizations they serve and match their resources with business requirements.

At the top, HR needs to help make the whole corporation greater than the sum of its parts and to implement practices that support corporate strategies, build shareholder value and shape the corporate image. At the business unit level, HR needs to focus on strategic objectives, identifying and serving target customers, creating wealth in the marketplace and delivering an employee value proposition

Human Resource Leadership Capabilities

Shaping Business Strategy Developing HR Strategy Leading Change Aligning HR Processes AchievingResults Understand the business context and develop plans to achieve competitive advantage. Identify people- related issues and formulate plans to address them. Enable the organization to implement change effectively Change roles, activities and systems to achieve desired outcomes. Implement actions and processes to achieve results. Source: Adapted from Human resource leaders: Capability, strengths and gaps. (2003). In Building a strategic HR function. New York: The Human Resource Planning Society.

ConclusionThe role of HR has transitioned from an administrative function to the opportunity to be a true strategic business partner. With the movement toward demonstrating HR strategic leadership capabilities, the demand on HR professionals to expand their leadership skills and competenciesincluding business acumenis increasing. Ultimately, the future of HR may well depend upon the degree to which it adds value to the organization.