Strategy for HRM
This set of resources are offered to promote thought, stimulate discussion, diagnose the organizational environment and develop a sound human resource management strategy for your organization. We begin by looking at the seven distinguishable function human resource management provide to secure the achievement of the objective defined above.
Steps in developing HRM strategy
Step 1: Get the 'big picture'
Understand your business strategy.
- Highlight the key driving forces of your business. What are they? e.g. technology, distribution, competition, the markets.
- What are the implications of the driving forces for the people side of your business?
- What is the fundamental people contribution to bottom line business performance?
That relates to the people side of the business.
Do not be put off by negative reactions to the words or references to idealistic statements - it is the actual process of thinking through the issues in a formal and explicit manner that is important.
- What do your people contribute?
Focus on the internal strengths and weaknesses of the people side of the business.
- Consider the current skill and capability issues.
- What impact will/ might they have on business performance?
- Consider skill shortages?
- The impact of new technology on staffing levels?
Step 4: Conduct a detailed human resources analysis
Concentrate on the organization's COPS (culture, organization, people, HR systems)
- Consider: Where you are now? Where do you want to be?
- What gaps exists between the reality of where you are now and where you want to be?
Go back to the business strategy and examine it against your SWOT and COPS Analysis
- Identify the critical people issues namely those people issues that you must address. Those which have a key impact on the delivery of your business strategy.
- Prioritize the critical people issues. What will happen if you fail to address them?
For each critical issue highlight the options for managerial action generate, elaborate and create - don't go for the obvious. This is an important step as frequently people jump for the known rather than challenge existing assumptions about the way things have been done in the past. Think about the consequences of taking various courses of action.
Consider the mix of HR systems needed to address the issues. Do you need to improve communications, training or pay?
What are the implications for the business and the personnel function?
Once you have worked through the process it should then be possible to translate the action plan into broad objectives. These will need to be broken down into the specialist HR Systems areas of:
- employee training and development
- management development
- organization development
- Performande appraisal
- employee reward
- employee selection and recruitment
- manpower planning
The ultimate purpose of developing a human resource strategy is to ensure that the objectives set are mutually supportive so that the reward and payment systems are integrated with employee training and career development plans.
There is very little value or benefit in training people only to then frustrate them through a failure to provide ample career and development opportunities.
The Human Resources Management (HRM) function includes a variety of activities, and key among them is deciding what staffing needs you have and whether to use independent contractors or hire employees to fill these needs, recruiting and training the best employees, ensuring they are high performers, dealing with performance issues, and ensuring your personnel and management practices conform to various regulations. Activities also include managing your approach to employee benefits and compensation, employee records and personnel policies. Usually small businesses (for-profit or nonprofit) have to carry out these activities themselves because they can't yet afford part- or full-time help. However, they should always ensure that employees have -- and are aware of -- personnel policies which conform to current regulations. These policies are often in the form of employee manuals, which all employees have.
Note that some people distinguish a difference between between HRM (a major management activity) and HRD (Human Resource Development, a profession). Those people might include HRM in HRD, explaining that HRD includes the broader range of activities to develop personnel inside of organizations, including, eg, career development, training, organization development, etc.
There is a long-standing argument about where HR-related functions should be organized into large organizations, eg, "should HR be in the Organization Development department or the other way around?"
The HRM function and HRD profession have undergone tremendous change over the past 20-30 years. Many years ago, large organizations looked to the "Personnel Department," mostly to manage the paperwork around hiring and paying people. More recently, organizations consider the "HR Department" as playing a major role in staffing, training and helping to manage people so that people and the organization are performing at maximum capability in a highly fulfilling manner.