Strategic Human Resources

The need of an hour is that human resources is all about maintaining a positive and productive work environment, best practices helps to make sure that employees feel good about the company they work for. There is a growing recognition today that the strategic importance of HR is crucial to corporate success. In yesteryears was merely an administrative and supporting function of the organisation. Today it is the lynchpin of competitive advantage. Top organisations today are talking about “people before strategy”, underscoring Peter Ducker’s long-held contention that “people are a resource, not a cost”. HR today has moved beyond merely an administrative to a strategic role. HR managers are increasingly making their case for a seat on the board as they

strive for the HR function to be recognized for the value it adds to the bottom line. The internal customers ought to be given the priority and how to romance them like the way you romance your external customers.

The paper entails new HR trends and practices adopted by the various organizations focusing on the factor of employee exhilaration. The study is an attempt in invigorating the need of “Employee Focus” and its impact on performance of the employee as well as the organization. The functions like Manpower Planning, Performance Management, Training and the role of Performance appraisals in the field of strategic HR are being laid emphasized on. Hence it is an endeavour in revealing the mounting significance of such facets of HR.


The expression Human Resource Management (HRM) is a relative recent title for all aspects of managing people in an organisation. It represents a broad based understanding of the problems of people and their management in view of the development of behavioural science knowledge. A formal beginning of HRM functions in India was made in 1929, when Royal Commission of Labour was set up by the Government of India. Two years later the Commission submitted its report recommending the appointment of Labour officers to look after the employment and dismissal of workers as well as their working conditions. The scope of the function of Labour officers was widened during the Second World War, when such facilities as housing medical and recreational activities were added to existing responsibilities. In the process the labour officer got designated as Welfare Officer (WO),. The enactment of Industrial dispute act 1946 and factories at, 1947 further added the management of leaves, wages, bonus and retirement in the scope of the function of W.O.

Growth in the business, competition and increasing size during sixties and seventies led to the need of attracting and retaining talented people. Hence formulating policies on Human Resource Planning, recruitment and selection, training and development, performance and potential appraisal, internal ability and compensation management etc. also become a part of W.O. who now became the personnel manager. With the increasing recognition of the importance of human resources and their contribution to the survival of the organisations, personnel function has now been called as Human Resource Management Function. Some of this transitions have been the increasing the cost of labour, periodic stoppage of work, government legislation, changes in production and distribution methodologies, information technology and strategic use of employees contribution (Saiyadin 1992). Today the HRM function can be seen as the amalgam, of organisational behaviour, personnel management, industrial relations and labour legislation.

Increasing organisational size and its complexity, transitional from traditional to professional management, changing social and cultural norms globalization of industry and availability of information technology are constantly changing the profile of HRM functions HE has to play a more dynamic .Today HRM manager cannot survive in the security of past. He has to play a more dynamic role in not only performing the maintenance function, but should think of more creative ways to satisfy human aspirations to provide the competitive edge, to organisations on a sustainable basis. Human Resources Management by Mirza S Saiyadain

The people in the organisation, the human resources, are perhaps the most important aspect of any enterprise. The age of informational technology has popularized the word human capital. Earlier we were talking human resources and equating people along with the raw materials, financial resources and physical resources as an input for the enterprise. Now-a-days each and every process has its own management methods and personnel for managing that process. The basic principle remains the same as planning, organizing, staffing, directing, and controlling to achieve the goal by using the human, financial and material resources. Increasingly the firms are considering the adoption of new work practices such as problem solving teams, enhanced communication with workers, employment security, flexibility in job assignments, training workers for multiple jobs, and greater reliance on motivational tools.

Organisations are increasingly looking at human resources as a unique asset that can provide sustained competitive advantage. The changes in the business environment with increasing globalization, changing demographics of the workforce, increased focus on profitability through growth, technological changes, intellectual capital and never ending changes that organisations are undergone have led to increased importance of managing human resources.(Devanna, Fombrum and Tichy,1981;Wright, 1998).Youndt and Snell (1996) find that firms employing HR practices according to the stated strategy are regarded to have better perceptual performance.

The human resource management that aims to improve the productive contribution of individuals while simultaneously attempting to attain other societal and individual employee objectives has undergone drastic change with the passing of years.
We all know that HRM is concerned with the “people” & keeping the fact in mind that HRM helps in acquiring, developing, stimulating & retaining the outstanding employees as it gives both effectiveness & efficiency to the working of the organization, it has been started being used strategically & is now termed as Strategic human resource management.
Human Resource plays a significant, strategic role in supporting organizations. As such effective strategic human resource management approaches serve as the keystone of any severe change management planning. They must also be the heart of endeavours to transform the culture of organisations, so that they develop into less hierarchal, practice oriented, intact formal groups, and inwardly focused and more flat, outcome oriented, integrated and externally focused. The aim of SHRM is to make sure that the culture, approach and structure of the organisation and the excellence, dedication and motivation of its employees add entirely to the attainment of business objectives. It is unification of SHRM strategies with organisation strategies. The corporate strategies and HR strategies are developed simultaneously. They are coherent and comprehensive. There is emphasis on developing HR skills and capitalising on the competencies. Today’s Strategic HRM aims to gain competitive advantage through managing human resources that are valuable, and costly to imitate.

Today’s new Strategic HRM emphasise on the concept “empowerment” pervasive in organisations. The concept of empowerment is open to many different practices and the significance of this concept is utilized in many different functions of organisations policies like management and employee development programs, appraisal and reward policy changes, and employee recognitions, training forming teams and teamwork, attempts to create a new climate of employee relationships.

In todays flattened, downsized & high-performing organizations, highly trained & committed employees not machines are often the firm’s competitive key. Perhaps the most drastic change in HRs role today is its growing involvement in developing & implementing the company’s strategy.

Strategies increasingly depend on strengthening organizational competitiveness & on building committed work teams, & these put HR in a central role. In the fast changing, globally competitive & quality oriented industrial environment, it’s often the firm’s employees – its human resources – who provide the competitive key. And so now it is a demand of the time to involve HR in the earlier stages of development & implementing the firm’s strategic plan, rather than to let HR react to it. That means now the role of HR is not just to implement the things out but also to plan out in such a manner that the employees can be strategically used to get edge over the competitors, keeping in mind the fact that this is the only resource (HUMANS), which cannot be duplicated by the competitors.

The Strategic Human Resource Management Process includes:

? Manpower planning and determining internal mobility.

? Sustaining and retaining employees and ensuring productivity by investing in various HR practices in competitive environment.

? Evaluate employee performance, correct deviations with precautionary measures with future development.

? Reviewing and revising strategic plan for sustaining organisation competence and performance.

Strategic Manpower Planning Involves

? Constancy, to employ or replace key workforce executives with minimal loss.

? Flexibility, ability to handle troubles encountered within the enterprise.

? Straightforwardness, harmonizing the perfect line of relationship among the employees.
? Clarity, feature of having specific objectives for all the levels or units in the organisation.

Managerial functions includes planning, it involves formulating policies for future development of the enterprise, program to choose adequate number of persons who can work efficiently and accomplish the business objectives, provide training to the workers in the enterprise, integration and maintenance of work force.

Organizing, it has to provide a clear layout about the inter-relationship between persons, jobs and physical factor and every worker should have proper understanding of their job. Direction involves motivation, which can be either positive or negative for the enterprise. It is necessary to motivate the workers about the nature of their job. Instructions should be clear, neatly explained and easy to understand.

An efficient Manpower planning is established by significantly emphasizing on Internal Mobility to promote the existing employee and exploit their experience in bring high outputs for the organisation. A reduced employee turnover has a remarkable positive impact on the organisation. It brings satisfaction to the employees, maintain competitiveness and protect financial investments. As reported in the study, Internal Mobility by Taleo Research, 92 percent of companies turn to the existing employee base to fill an open job position. The majority of survey respondents (more than 70 large and global corporations) report internally filling 40 percent or more of open positions annually. According to the Taleo Research Internal Mobility Report a closed stress is needed on the factors like

? Improving Employee satisfaction
? Retention of employees
? Lower Costs and Faster Fills
? Transformed outlook from Goals to Process Design

One of the most visible shifts in the workplace in recent years has been the rapid vanishing of the prototypical devoted employee who would work 30 to 40 years for the same company and then retire with a gold watch and pension. Many personnel these days hold positions at several companies during their career and may feel no particular loyalty to remain at a single firm for a great tenure.
Best Practice Approach to HRM in supporting competitive advantage by sustaining and retaining employees are:

By Pfeffer and Veiga (1999)
Employment Security

Selective Hiring

Self Managed Teams and Decentralization

Comparatively high compensation contingent on organisational performance

Extensive Training

Reduction of Status Difference

Reduced turnover and retention of employees have prominent potential benefits like cost reduction, increase in skilled and experienced staff, employee commitment and satisfaction, and above all productivity, which in turn extensively demands the process of:

? Analyzing who are your most occupied and productive employees.

? Segmenting a strategy for enrichment versus skills improvement.

? Utilizing the accurate actions that envisage outcomes of engagement.

? Maturing strengths based focus on development and performance management.


The Performance Management and Information section presents guidance and support on a range of management issues and coordinates performance management activities including the over all improvement and development of employees. Performance management is a process on performance measurement approaches, such as the balanced scorecard. While the balanced scorecard offers a framework for the collection of strategic information, performance management ensures that results are used to influence the selection of planned actions and to foster the renewal of dynamic, competitive strategy.

Unlike most tools and techniques, performance management is an unremitting, enterprise-wide process, rather than a one-time, isolated event. Six Performance Management imperatives are Compliance Management, Profitability Management, Cost Management, Performance Improvement, and Business Innovation

Performance management is a set of functions that evaluate and report the behavior of employees and the effectiveness of the job and a set of various sub functions, such as gathering information, maintaining and examining logs, determining task performance under normal and pressurized conditions, how, each employees working towards their own goals and purpose aligning with organisational perspective.
The level of performance increases if certain kind of benefits are offered to the employees, which generates a feeling among the employees that “I am Cared”. Some of them are:

Defined Benefit Plans and Pensions, Retirement Planning, Health Care Systems, Insurance Plans, Profit Sharing Plans, Social Security, College Loans, Vision Plans, Employee Medical Health Insurance, Major Medical Health Insurance, Dental Plans, Flexible Spending Accounts, Employee Assistance Program, Accidental, Disability Insurance, and Cafeteria Plans.


The human resource function that probably has the greatest effect on development is Performance appraisal. A well implemented and executed performance appraisal system drives development. When employees collect apparent feedback on their performance, when rewards and recognitions are attached to performance, when expectations are stated clear in behavioral terms, or goal related terms, the employees constant inclination is on “ performing-better”. The performance appraisal system can be planned to sustain the approach by providing objective measures of skill accomplishment. It can also be used to classify and increase the skills of employees with potential.

Every employee must be assessed at least once a year. There are six types of performance appraisals that are used with employees depending on various circumstances: annual, conditional, extended, interim, probationary, and special. The performance appraisal forms include:

Rating form: includes the listing of dimensions for the position, the ratings, supervisor recommendations, employee comments, and a place for appropriate signatures.

Narrative form: is to be completed and submitted along with the rating form. Each rating must be supported by appropriate comments. Goals may be listed on the form for each dimension if appropriate.

Dimensions and Standards/Criteria form: is used for listing the selected dimensions, the specific criteria, and standards for performance.

A properly designed should relate company and/ or group goals to the individual’s tasks and goals for the review period. The performance is broadly categorized into quality, quantity, timeliness and cost effectiveness, focused on outputs and organisational development.


Self Appraisal: A method in which employee evaluates his own performance and discusses with his manager. It provides the employee with the opportunity to reflect on his own performance and reasons behind it.

3600 Feedback: 360 degree feedback is a method and a tool that provides each employee the opportunity to receive performance feedback from his or her supervisor and four to eight peers, reporting staff members, coworkers and customers. Most 360 degree feedback tools are also responded to by each individual in a self assessment.

Results-Focused Approaches – Creamer and Janosik (in press) note that there are both advantages and disadvantages to results-based performance appraisal approaches. On the positive side, they produce short and long-term results in the context of original performance and organizational objectives, are generally perceived as fair, tend to generate high levels of commitment to the organization, and they encourage a high level of participation and are thus defensible. On the negative side, they can be overly results oriented – especially in educational organizations, and they may be inflexible.

Management by Objectives, and Accountabilities and Measures (Grote, 1996).

MBO emphasizes participation by all organization members. Grote identifies the following core elements in MBO:
? Formation of trusting and open communication throughout the organization
? Mutual problem solving and negotiations in the establishment of objectives
? Creation of win-win relationships
? Organizational rewards and punishments based on job-related performance and achievement
? Minimal uses of political games, forces, and fear
? Development of a positive, proactive, and challenging organizational climate

Supervisors need to ensure that appraisal processes are congruent with objectives and goals. An MBO rating form needs to provide space to list staff member objectives in order of importance, as well as space for the evaluator to describe staff member performance using a mutually agreed upon scale. Categories of performance can include: distinguished performance, competent performance, provisional performance, and inadequate performance.

Accountabilities and Measures approaches involve the supervisor and staff member agreeing on accountability and performance factors and including them in the job description. Performance is then forecast for each factor to enable quantifiable measures for each factor. An Accountabilities and Measures form can be created, with performance factor categories.


Behavioural Observation Scale: Involves a process of identifying the key tasks for a job. It evaluates according to how frequently the employees exhibit the required behaviour for excellent performance.

Behaviorally Anchored Rating Scale: In this approach, broad categories of practice are identified, ideally through collaborations between supervisors and staff. Specific job behaviors are then linked to the categories. Measures of staff member behavior are rated on a scale in relation to specific behavior items, such as “understands department functions.

Performance appraisal process is incomplete without the feedback given to the employee about his appraisal and his performance. Effective feedback describes the behavior rather than evaluates. The employee performance appraisal form is reviewed with the self-appraisal that the individual created assessing her own performance. The manager and employee talk honestly about how well she performed over the past twelve months: Strengths, weaknesses, successes and areas needing improvement. The performance management process, ends and begins anew with the performance review meeting. At the beginning of the meeting, the individual’s past year’s performance is reviewed and the success of the development plan is evaluated. At the end of the meeting, the appraiser and the individual set a date to create the plan for next year’s goals, objectives, and development.

TRAINING: A Strategic HRM Function

After a successful Performance appraisal A Training Need assessment is required, this is the systematic method of determining if a training need exists and if it does, what training is required to fill the gap between the standard and the actual performance of the employee. Training needs analysis is Systematic method of determining performance discrepancies, and causes of performance discrepancies

Reasons to conduct training needs analysis

? Identify the deficiencies
? Determine whether employees lack KSAs (Key Skill Areas)
? Benchmark for evaluation of training
? Makes sure training is provided to the right people
? Increases the motivation of training
Organisations are increasingly spending more money annually on training with the belief that it will give them competitive edge in the local and global market. Training as an organisational intervention may be defined as a well thought of set of activities aimed to facilitate learning of knowledge, attitude and skills, among its people in the organisation to improve their current job performance and contribute to the achievement of organisational goals.
Some Training Methodologies are

Training Methodologies
Anonymous card
Panel Discussion
Skill Practice
Dyadic Discussion or Exchange
Problem-Solving Activity
Group Enquiry
Role Play
Physical Continuum
Creative Activity
Synergy Activity
Closing Circle
Case Study
Trio Discussion or Exchange
Full Group Discussion
Writing Activity
Experimental Activity
Self Assessment and Self Evaluation
Feedback Activity
Small Group Discussion
Inter-group Discussion/ Exchange
Peer Consultation
Peer Teaching
Index Card Match
Information Search
Read and Discuss Group
Guided Teaching
Read and Teach Group
Ice Breaker
Mental Imagery
Source, Silberman, M and Whiteling,V. (1992). Twenty Acting,
Training Programs.San Diego California, U.S.A: Pfieffer & Company

Apart from training methodologies, the functions like Training Need Analysis, Training Design, Training Implementation, and Training Evaluation are the key determinants in measuring the effectiveness of training, aiming to maximize productivity, and betterment of relationships in workplace, which not only increases organisational commitment but also improves individual job performances.

Advantages of a Strategic Approach to HR:

? Smooth the progress of development of expert workforce through focus on type of people and skills required.

? Facilitates cost-effective management of employment, particularly in service industries where labor is generally greatest cost.

? Facilitates planning and assessment of environmental uncertainty, and adaptation of organization to external forces.

? Successful SHRM efforts begin with recognition of strategic requirements.

? Employee participation is serious to linking strategy and HR practices.

? Strategic HR facilitates methodical and logical and analytical approach.

? Corporate HR departments can have impact on organization’s efforts to launch strategic initiatives.


Ideally HR & top management work together to devise the company’s on the whole business strategy and policies; that strategy then provides the framework within which HR activities such as Training & Appraising must be expertised. Once practiced honestly, it results out in the employee competencies & performance that in turn help the company implement its strategies & recognize its goals. While HR strategies must be developed to support the achievement of the organisation’s objectives, it is a two-way process. HR strategies can themselves be critical inputs in determining the strategic initiatives for the organisation. In order to be successful the employees should be developed in such a manner that they can be the competitive advantage, & for this the human resource management must be an equal partner in both the formulation & the implementation of the corporate & competitive strategies.


? Human Resources Management by Mirza S Saiyadain

? International Human Resource Management: Policies and Practices, by Dennis R.

? Briscoe, Randall S. Schuler – 2004 – Business & Economics


? – 32k

? Strategic Human Resource Management by Randall. S Schuler and Susan E. Jackson


? Training: A strategic. HRM function. By Divina M. Edralin

? Strategic Human Resource Management by Charles J. Fombrun, Noel M. Tichy, Mary Anne Devanna – 1984

? mobility-program.

? E-mail News – Nurturing, Sustaining and Retaining Engaged Employees

? Strategic Human Resource Management – by Olive Lundy, Alan Cowling – 1996