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Strategic Human Resource Management Example – In the past, Human Resource Management (HRM) was called the personnel department. In the past, the HR department hired people and handled the recruitment paperwork and processes. The first HR department is believed to have been created in 1901 by the National Cash Register Company (NCR). The company faced a major strike, but eventually defeated the union after a lockout. (We cover unions in Chapter 12, “Working with Unions.”) After this difficult struggle, the company president decided to improve employee relations by establishing a human resources department to handle grievances, layoffs, safety concerns, and other personnel issues. The department also monitored new legislation regarding laws affecting the organization. Many other companies came to the same realization that separation was necessary to create employee satisfaction, which led to higher productivity. In 1913, Henry Ford saw employee turnover at 380 percent and tried to reduce turnover by increasing wages from $2.50 to $5.00, even though $2.50 was fair in that time period (Losey, 2011) . Of course, this approach didn’t work for long, and these large companies began to understand that if they wanted to meet customer demand, they had to do more than hire and fire.
Recently, however, HR has split into human resource management and human resource development, as these functions have evolved over the century. Human resource management is not only critical to the success of an organization, but should be part of a company’s overall strategic plan because so many companies today depend on people to generate profits. Strategic planning plays an important role in how productive an organization is.
Strategic Human Resource Management Example
Most people agree that the following responsibilities usually fall under HRM. Each of these aspects has its own part within the overall strategic plan of the organization:
Human Resource Management Strategy And Analysis
In smaller organizations, HRM functions are probably performed by the manager or owner (de Kok & Uhlaner, 2001). They hire people, train them and determine how much they should be paid. Larger companies end up performing the same tasks, but because they have more employees, they can afford to hire specialists or HR managers to handle these areas of the business. As a result, it is very likely that you, as a manager or entrepreneur, will perform HRM tasks, which is why it is important to understand the strategic components of HRM.
The Human Resources Strategy is an elaborate and systematic action plan developed by the Human Resources Department. This definition tells us that HR strategy includes detailed paths for implementing HR strategic plans and HR plans. Think of the HRM strategic plan as the main goals the organization wants to achieve, and the HR plan as the specific activities undertaken to achieve the strategic plan. In other words, a strategic plan may include long-term goals, while an HR plan may include short-term goals that are tied to the overall strategic plan. As was mentioned at the beginning of this chapter, in the past the personnel department was called the personnel department. This term means that the department provided “support” to the rest of the organization. Companies now understand that the human side of the business is the most important asset in any business (especially in this global economy), which is why HR is much more than it was twenty years ago. While HR management has mostly included activities related to the recruitment process and legal compliance, HR management encompasses much more, including strategic planning, which is the subject of this chapter. Ulrich’s HRM model, a common way of looking at HRM strategic planning, provides a general view of the role of HRM in an organization. His model is said to have started a movement that changed the way HR was viewed; HR is no longer just a functional area, but a partnership within the organization. While his model has changed over the years, the current model focuses on aligning HR activities with the overall global business strategy to create a strategic partnership (Ulrich & Brockbank, 2005). The new revised model focuses on five main areas of HR:
According to Ulrich (Ulrich, 2011), the implementation of this model must take place with an understanding of the company’s general goals, problems, challenges and opportunities. For example, an HR professional must manage the dynamic nature of the human resources environment, such as changes in labor markets, company culture and values, customers, shareholders, and the economy. Once this is done, HR can determine how best to meet the needs of the organization within these five main areas.
HR managers know the business and therefore know the needs of the business and can create a plan to meet those needs. They also keep abreast of current events so they know what is happening globally that may affect their strategic plan. For example, if it detects that an economic downturn is coming, it will adjust its strategic plan. In other words, the strategic plan should be a living document that changes as the business and the world change.
Solution: Strategic Human Resource Managment An Overview Introductry Chapter
As discussed in Section 2.1.2, “Steps for Creating a Strategic Plan,” HRM strategic plans must have several elements to be successful. A distinction must be made here: a strategic HRM plan is different from an HR plan. Think of the HRM strategic plan as the main goals the organization wants to achieve, while the HR plan consists of detailed plans to ensure that the strategic plan is achieved. A strategic plan is often seen as just another report that needs to be written. Instead of jumping in and writing without much thought, it is best to consider the plan carefully.
The purpose of Section 2, “Conducting a Strategic Analysis,” is to give you some basic elements to consider and examine before writing an HRM plan.
In this step, HRM professionals will analyze the challenges addressed in the first step. For example, a department may see that it is not strategically aligned with the company’s mission and values and decide to make changes to their department’s mission and values as a result of this information.
Many organizations and departments will use a strategic planning tool that identifies strengths, weaknesses, opportunities and threats (SWOT analysis) to determine some of the challenges they face. Once this analysis is done for the business, HR can match the needs of the business by understanding the business strategy. See Table 2.3 “Sample HR SWOT Analysis for Techno, Inc.” for an example of how a company’s SWOT analysis can be used to develop a SWOT analysis for the HR department.
Human Resources (hr) Meaning And Responsibilities
Once the corporate SWOT alignment is complete, HR can develop its own SWOT analysis to identify the gaps between HR’s strategic plan and the company’s strategic plan. For example, if an HR manager finds that the strength of a department is many training programs, the organization should continue this. If an organization’s weakness is a lack of consistent compensation across job titles, then there is an opportunity to review and revise compensation policies. In other words, the SWOT analysis of a company provides a basis for solving some problems in an organization, but it can also be limited to solving problems within a department.
Based on the data collected in the last step, the HRM manager must prioritize goals and then develop action plans to address these challenges. For example, if an organization finds that it lacks a comprehensive training program, plans must be developed to address this need. (Training needs are discussed in Chapter 8, “Training and Development.”) An important aspect of this step is the involvement of management and senior personnel in the organization. Once you have a list of issues to address, discuss them with management and senior staff, as they may see other issues or priorities differently than you do. Remember that for HRM to be effective, it must work with the organization and help the organization achieve its goals. This should be considered in every aspect of HRM planning.
Once the HRM manager meets with executives and management and priorities are agreed upon, plans are ready to be developed. The detailed development of these plans will be discussed in section 2.2 “Write a Human Resource Management Plan”. Sometimes companies have great strategic plans, but when it comes to developing the details, it can be difficult to match the strategic plan with the more detailed plans. The HRM manager must always refer to the overall strategic plan before developing the HRM strategic plan and HRM plans.
Even if a company does not have an HR department, management still needs to develop HRM strategic plans and HRM plans. By developing and monitoring these plans, the organization can ensure that the right processes are implemented to meet the ever-changing needs of the organization. The strategic plan looks at the organization as a whole, the strategic HRM plan looks at the department as a whole, and the HR plan deals with specific issues in the HR department.
Pdf) Human Resource Planning As A Strategic Function: Biases In Forecasting Judgement
De Kok, J. and Lorraine M. Uhlaner, “The Organizational Context and Human Resource Management in a Small Firm” (Tinbergen Institute Discussion Papers 01-038/3,
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