Unit 2 SHRM PDF

UNIT 2 THE STRATEGIC ROLE OF HUMAN RESOURCE MANAGEMENT Strategic HR management involves making the function of managing people the most important priority in the organization and integrating all HR programs and policies within the framework of a company’s strategy. Strategic HR management...

UNIT 2 THE STRATEGIC ROLE OF HUMAN RESOURCE MANAGEMENT Strategic HR management involves making the function of managing people the most important priority in the organization and integrating all HR programs and policies within the framework of a company’s strategy. Strategic HR management realizes that people make or break an organization because all decisions made regarding finance, marketing, operations, or technology are made by an organization’s people.  STRATEGIC HR VERSUS TRADITIONAL HR Strategic HR can be contrasted to the more traditional administrative focus of HR through an examination of four different roles that HR can play in an organization. Proposes an entirely new role and agenda for HR that focuses less on traditional functional activities, such as compensation and staffing, and more on outcomes.  HR should deliver results that enrich the organization’s value to its customers, its investors, and its employees. This can be accomplished through four roles: by HR becoming (1) a partner with senior and line managers in strategy execution; (2) an expert in the way that work is organized and executed; (3) a champion for employees, working to increase employee contribution and commitment to the organization; and (4) an agent of continuous transformation who shapes processes and culture to improve an organization’s capacity for change. TRADITIONAL HR VERSUS STRATEGIC HR  BARRIERS TO STRATEGIC HR Short-term Lack of Difficulty in mentality/focus on Inability of HR to appreciation of quantifying many current think strategically what HR can HR outcomes performance contribute Failure to Perception of Incentives for understand general human assets as change that might manager’s role as higher-risk arise an HR manager investments HUMAN RESOURCE PLANNING  OVERVIEW Human resource planning is ‘the process of analysing and identifying the need for and availability of human resources so that the organization can meet its objectives’. The HRP process examines the implications of business strategies and goals on human requirements - the number and type of people required; the training they will require; and whether the organization will have to employ additional employees. Hence, HRP is a proactive process.  HRP: REACTIVE OR PROACTIVE PROCESS HRP IS A PROACTIVE PROCESS It anticipates changes in industry, marketplace, economy, society, and technology to ensure that the organization is well prepared to meet these changes when they occur. HRP IS A REACTIVE PROCESS Business needs defined HR needs. Strategic business decisions were taken in isolation without appreciating the HR implications of those decisions.  BUSINESS STRATEGY AND HRP An organization achieves its goals and objectives through its employees or human resources. A firm having a lot of capital and the most advanced machinery may not demonstrate sustained levels of high performance or achieve its objectives if it does not have capable, motivated, and high-performing employees. The quality of HR and their contribution to the organization is of strategic importance for bringing about competitive advantage for the firm. STRATEGY: Determination of the long-term goals and objectives of an organization, and the allocation of resources necessary for carrying out these goals.  RELATIONSHIP BETWEEN BUSINESS STRATEGY OF A FIRM AND HRP Business Strategy focus HR Strategy HRP Activities (Classification by Porter) Job and employee Cost leadership Internal promotions specializations Cost control Emphasis on training Employee efficiency Stable business environment Hiring and training for Long HR planning horizon Efficiency and quality specific capabilities Differentiation Shorter HR planning horizon Long-term focus Hire the HR capabilities External staffing Growth required Hire and train for broad Creative job behaviour Flexible jobs and employees competencies Decentralization  OBJECTIVES OF HRP Mello (2003) outlined five major objectives of HRP Ensuring that the Preventing organization Building line overstaffing is responsive and staff and to the partnership understaffing environment changes Providing Ensuring direction to employee all HR availability activities  TYPES OF PLANNING Anticipates the needs for groups of employees in specific, usually lower-level, jobs and the general skills employees Aggregate Planning need to ensure sustained high Performance. Focuses on key individual management positions that the organization needs to make sure remain filled and the types Succession Planning of individuals who might provide the best fit in these critical positions. Aggregate Planning The first step in aggregate planning is forecasting the demand for employees. In doing so, the organization needs to consider its strategic plan and any kinds and rates of growth or retrenchment that may be planned. Most organizations rely more on the judgments of experienced and knowledgeable managers in determining employee requirements. Unit forecasting (bottom-up planning) Each individual unit, department, or branch of the organization estimates its future needs for employees. For example, each branch of a bank might prepare its own forecast based on the goals and objectives each branch manager has for the particular office. These estimates are then presented to subsequent layers of management, who combine and sum the totals and present them to senior management for approval. Promotes responsiveness to customers and the marketplace. Top-down forecasting Involves senior managers allocating a budgeted amount for employee payroll expenditures and then dividing the pool at subsequent levels down the hierarchy. Each manager receives a budget from her/his supervisor and then decides how to allocate these funds down to the next group of managers. Promotes organizational efficiency in resource allocation.  WHICH TECHNIQUE TO CHOOSE? An organization can choose a planning technique that is consistent with its overall strategy. An organization whose key strategic objectives involve cost minimization can opt for top-down forecasting. An organization more concerned with change and adaptability can opt for unit or bottom-up forecasting. In addition to the demand for actual headcount of employees, the organization also needs to consider the demand for specific skills that it will require of its employees as part of the HR planning process.  Once demand for employees has been forecasted, the organization then has to plan for an adequate supply of employees to meet this demand. This process involves estimating the actual number of employees and determining the skills that these employees must have and whether their backgrounds, training, and career plans will provide a sufficient fit for the organization’s future plans. Skills inventory: To assess the abilities, skills, and experiences of existing employees. Computerized databases that are part of the organization’s overall HR information system. Each employee provides information on his or her experience, education, abilities, job preferences, career aspirations, and other relevant personal information. This allows an organization to gain a collective sense of who their employees are and what capabilities they have.  Markov analysis: Describes the probability of employees staying with the job in any job category, moving to another job, or leaving the organization over a given time period, usually one year. This can also be utilized to allow managers identify problem departments within an organization or positions that appear to be less desirable as reflected in high rates of turnover or low rates of retention. STRATEGIES FOR MANAGING EMPLOYEE SHORTAGES AND SURPLUSES SUCCESSION PLANNING Succession planning involves identifying key management positions that the organization cannot afford to have vacant. Succession planning serves two purposes. 1. It facilitates transition when an employee leaves. It is not unusual to have a departing employee work alongside his or her successor for a given period prior to departure to facilitate the transition. 2. succession planning identifies the development needs of high- potential employees and assists with their career planning. Replacement chart Identify key positions, possible successors for each of these positions, whether each potential successor currently has the background to assume the job responsibilities, or the expected amount of time it will take for the potential successor to be ready.  JOB ANALYSIS AND SHRM HRM Activity Input provided by Job Analysis HR Planning Number and types of employees that the firm will need in order to accomplish goals Changes in the nature of job due to technology or job redesign has implications for the type of skills required by the firm. Recruitment and The KSAs that the potential employee should be tested for and the standards of performance Selection to be used Compensation To estimate value of each job and determine its compensation Compensation for a job depends on skills, education, knowledge, etc. required to perform the job. Performance Appraisal To compare each employee's performance against standards established in job analysis Training and To determine the nature of training to be imparted based on the tasks and activities to be Development performed and skills required Safety and Health To identify possible job hazards and working conditions associated with a job To determine what training should be given to workers performing hazardous tasks Industrial Relations Specific job descriptions reduce grievances by clearly specifying the tasks covered under a job  COMPETENCY -BASEDJOB ANALYSIS Competency-based job analysis means 'describing the job in terms of the observable, measurable, and behavioural competencies that an employee doing that job must exhibit to do the job well'. Thus, competency-based job analysis differs from traditional job analysis in certain ways. Traditional Job Analysis Competency based Job analysis Job-focused: Describes jobs in terms of job Worker-focused: Describes jobs in terms of duties and responsibilities the measurable, observable, and behavioural competencies that must be exhibited by an employee doing that job Focusses on 'what' is accomplished Focusses on 'how' the employee accomplishes the work  HUMAN RESOURCE ACQUISITION: AN OVERVIEW With human resources becoming central to business success, it is important for firms to ensure that they have the right talent in place for today as well as for the future. Hiring has become tougher with a large number of firms trying to tap into an increasingly limited talent pool. As firms compete to meet their talent needs successfully, they wage what is commonly referred to as a 'war for talent'. With firms willing to 'pay the price for talent', employees have more opportunities and change jobs more frequently. The cost of replacing an employee can be very high. Skill shortages coupled with high levels of employee turnover have resulted in firms hiring more frequently and in larger numbers than ever before. Acquisition of human resources is a strategic response by firms to gain an advantage in a competitive business environment.  COMPARISON OF RECRUITMENT AND SELECTION PROCESSES RECRUITMENT SELECTION Process of generating a qualified pool of applicants for Process of gathering information on job Definition actual or anticipated job vacancies Positive process applicants and making the hiring decision based (increases the pool of available candidates) on the information Negative process (eliminates candidates from the applicant pool) Making large numbers of qualified applicants aware of Gathering information about job applicants by employment opportunities available in the Organization using a combination of selection methods Attracting the attention of qualified candidates Predicting which job applicants will perform the Generating enough interest among qualified candidates job successfully, if hired Objectives so that they apply for the job and accept the job if it is To be able to discriminate (fairly) between job offered to them applicants likely to be successful on the job and Creating a positive image of the organization among those unlikely those who come in contact with the firm to increase the success rate of organizational staffing activities Company databases Application blanks job posting and bidding Interviews Methods Advertisements, referrals, and recommendations Work samples, employment/ psychometric Executive search agencies tests, and assessment centres Campus recruitment ENVIRONMENTAL FACTORS AFFECTING THE STAFFING EFFORT OF AN ORGANIZATION Labour market External to the condition firm Government regulations and legal Environmental considerations Factors Organizational policies and practices Internal to the Organizational image firm Job attractiveness  METHODS OF RECRUITMENT Direct Applicants Organizational Databases Employee Referrals and External Methods of Internal Methods of Recommendations Job Posting and Recruitment Recruitment Professional Associations Bidding Employment Agencies Inside Moonlighting Executive Search Firms Informal Methods Advertisements Campus Recruitment RECRUITMENT SOURCES: INTERNAL VERSUS EXTERNAL NEW APPROACHES TO RECRUITMENT Employer Special Events Contest Branding Recruiting Recruitment Outsourcing the E-recruitment Recruitment Function METHODS OF EMPLOYEE SELECTION  CLASSIFICATION OF TYPES OF EMPLOYMENT INTERVIEWS Degree of Structured/ directive Unstructured/ Structure Classification nondirective Criteria of Situational Content or Focus Behavioural of Question Job-related Stress One-to-one Conduction of Sequential Interview Panel NEW APPROACHES TO EXECUTIVE SELECTION Computer-aided Competency-based Decision Support Approach to Systems Selection Person-Culture Fit  STAFFING PROCESS: RECRUITING AND SELECTING EMPLOYEES Developing Clarifying Recruitment an effective hiring planning recruitment philosophy strategy Gathering Making a final information Screening Searching for selection about applicants job applicants decision candidates  STRATEGIC RECRUITMENT AND SELECTION Millmore suggests that for recruitment and selection to be classified as strategic, hey must demonstrate three primary features: Strategic integration Long-term focus A mechanism for translating strategic HR demands into appropriate recruitment and selection specifications. CONCEPTUAL FRAMEWORK OF STRATEGIC RECRUITMENT AND SELECTION HIRING FOR A DIVERSE WORKFORCE  ALTERNATIVES TO HIRING PERMANENT EMPLOYEES Alternatives to hiring Contingent work force Types Independent Employee Temporary Re-hiring Hiring from contractors leasing help services former non-tradition employees labour pool e.g. house- wives, retired employees Thank you!!!