Topic 1: Strategic Human Resource Management

Tutorial Solutions
Shivani Swastika Lal – 2007004229

1. The term HRM expands to Human Resource Management; it implies the implementation of
management principles for managing the workforce of an organization. It is concerned with
the process of hiring, developing and retaining the manpower, with a view to making them
more efficient. Human Resource Management or HRM is simply the process of managing
human resources, in a systematic way. It is a practice devised to maximize the performance
of employees, i.e. to make them more efficient and productive. It is concerned with the
application of principles of management to manage organization personnel while paying
attention to the policies and systems of the entity. It entails the best possible use of limited
skilled workforce of the organization. HRM consist of human-oriented activities like
recruiting, training and development, performance appraisal, safety and health, industrial
relations and so on. It facilitates adjusting human resource policies and practices with the
strategies of the organization, whether corporate or functional.

SHRM is the process of aligning the business strategy with the company’s human resource
practices, so as to attain strategic goals of an organization. In SHRM, the workforce of the
company is managed proactively. Strategic Human Resource Management, shortly known as
SHRM is a function of management which entails development of policies, programmers and
practices related to human resources, which are then aligned with business strategy, so as to
achieve strategic objectives of the organization. Its primary purpose is to improve the
performance of the business and maintain a culture that encourages innovation and works
continuously to gain competitive advantage.

The differences between HRM and SHRM:

 The governance of manpower of the organization in a thorough and structured manner is
called Human Resource Management or HRM. A managerial function which implies
framing of HR strategies in such a way to direct employee’s efforts towards the goals of
an organization is known as SHRM.
  The process of HRM is reactive in nature. On the other hand, SHRM is a proactive
management function.
 In human resource management, the responsibility of manpower lies with the staff
specialists, whereas in strategic human resource management, the task of managing the
workforce, is vested in the line managers.
 HRM follows fragmented approach, which stresses on applying management principles
while managing people in an organization. As against this, SHRM follows an integrated
approach, which involves lining up of business strategy with the company’s HR
practices.
 Human resource management emphasizes on employee relations, ensuring employees
motivation, and also the firm conforms to the necessary employment laws. Conversely,
SHRM focuses on a partnership with internal and external constituent groups.
 HRM supports short-term business goals and outcomes, but SHRM supports long-term
goals and results of business.
 In human resource management, the human resource manager plays the role of change
follower, i.e. he/she responses to change, hence pursues transactional leadership style. As
opposed to SHRM, the human resource manager is a change leader, i.e. an imitator, thus
seeks transformational leadership.
 The primary element in HRM is the capital and products, but people and their knowledge
are the building blocks of SHRM.
 If we talk about accountability, a conventional HRM is a cost center. Unlike a strategic
HRM which is an investment center.
 In human resource management, stringent control over employees is exercised. As
against this, in strategic human resource management, no such control is imposed, rather
the rules for managing manpower is lenient.

2. Approaches to Human Resource Management are:

Instrumental (Hard) - Stresses the rational, quantitative and strategic aspects. Performance
improvement and competitive advantage are highlighted.
  The hard approach to HR is centered on organizational objectives and aligning employees
to strategic objectives.
 This is a business oriented approach, low employee commitment. Employees are
regarded as a resource to add value and achieve competitive advantage.
 Employees are managed in a rational, quantitative and strategic manner. They are viewed
as another economic resource.
 The main focus is for increasing productivity, employing people as cheaply as possible
and utilizing them at full capacity.
 There is little communication between management and employees. The approach is
directed towards an autocratic leadership style.
 There is no emphasis on employee involvement, empowerment and delegation of
authority.

Humanistic (Soft) - Emphasizes the integration of HR policies and practices with strategic
business objectives but also acknowledges employee development, collaboration, participation
and trust.

 This is a ‘softer’ element and is concerned with employee development and work
behavior.
 High commitment
 There is a greater emphasis placed on relationship building, motivation, performance
monitoring, leadership and communication.
 Employees are placed at the center of the organization; they are a valued asset.
 Competitive advantage is achieved through employee commitment, participation,
performance, adoptability and loyalty.
 This is based on the ‘unitary’ concept, employees and management share a common goal
and work together to achieve organizational objectives.

3. Human resources managers plan, direct, and coordinate the administrative functions of an
organization. They look after the recruiting, interviewing, and hiring of new staff, consult
with the top executives on strategic planning, and serve as a link between an organization’s
management and its employees. Human resources manager’s role:
 Plan and coordinate an organization’s workforce to best use employees’ talents
 Link an organization’s management with its employees
 Plan and oversee employee benefit programs
 Serve as a consultant with other managers advising them on human resources issues,
such as equal employment opportunity and sexual harassment
 Coordinate and supervise the work of specialists and support staff
 Looks after an organization’s recruitment, interview, selection, and hiring processes
 Handle staffing issues, such as mediating disputes and directing disciplinary
procedures.
 Recruiting and hiring – It is a process of discovering sources of manpower and
employing effective measures for attracting that manpower in adequate numbers to
facilitate the selection of an efficient working force in an organization.
 Training and development – These processes help in enhancing and enabling the
capacities of people to build their strengths and confidence in order for them to
deliver more effectively.
 Competency development – Competency is a cluster of related knowledge, skills,
and attitude that affect a major part of one’s job. It can be improved by means of
training and development.
 Organization development – It is an organization-wide effort to increase its
effectiveness and viability, and move towards growth.
 Communication – It is an activity that involves conveying meaningful information.
At all times, the HR must convey all relevant information to the employees.
 Performance management – It focuses on improving the performance of the
organization, employees, and various other services.
 Employee relations – This is a concept that works towards bettering the relations
among the employees, as well as between the employee and the management.
 Coaching, mentoring, and counselling – It is a practice of supporting an individual
and helping him overcome all his issues in order to perform better.
 Policy recommendation – Policy recommendations help to streamline management
practices and reduce employee grievances. For example, a manager who is more than
 35 years and, who possesses a minimum experience of 7 years, is entitled to receive
the benefits stated in the company’s administrative manual.
 Wages, salary, and compensation benefits – These benefits are provided to the
employees to keep them motivated towards their work and the organization.
 Talent management and employee engagement – It is a management concept that
works towards retaining the talent by engaging the person in a way which would
further the organization’s interest.
 Leadership development – This activity refers to enhancing the quality and
efficiency of a leader in an organization.
 Team building – It focuses on bringing out the best in a team to ensure development
of an organization, and the ability to work together closely to achieve goals.
 Networking and partnering – It is also important to build relations with the external
stakeholders, including the customers and suppliers for better business.
Every organization wants to attract, motivate, and keep qualified employees and match them
to jobs for which they are well-suited. Human resources managers accomplish this aim by
directing the administrative functions of human resources departments. Their work involves
overseeing employee relations, securing regulatory compliance, and administering employee-
related services such as payroll, training, and benefits. They supervise the department’s
specialists and support staff and make sure that tasks are completed accurately and on time.

Human resources managers also consult with top executives regarding the organization’s
strategic planning and talent management issues. They identify ways to maximize the value
of the organization’s employees and ensure that they are used as efficiently as possible. For
example, they might assess worker productivity and recommend changes to the
organization’s structure to help the organization meet budgetary goals.
The following are examples of types of human resources managers: Labor relations directors,
also called employee relations managers, oversee employment policies in union and
nonunion settings. They draw up, negotiate, and administer labor contracts that cover issues
such as grievances, wages, benefits, and union and management practices. They also handle
labor complaints between employees and management, and they coordinate grievance
procedures. Payroll managers supervise the operations of an organization’s payroll
 department. They ensure that all aspects of payroll are processed correctly and on time. They
administer payroll procedures, prepare reports for the accounting department, and resolve
any payroll problems or discrepancies.
4. Major HR activities for any successful organization are:
 Compensation and Benefits - Successful organizations understand the importance of
providing competitive compensation and benefits to its employees. Staying current on
salary trends is critical to attracting and retaining top employees. In today’s job market,
good employees will look for a position down the street if they think they will be better
compensated. A total compensation package should be part of a comprehensive
compensation strategy and should include base pay and any other employee benefits –
health, life, dental, disability insurance, paid time off, etc. Employee compensation and
benefits should be budgeted and managed through an annual budgeting process.
 Recruitment and Staffing - It can be challenging to find the right employees for your
organization. Recruiting and screening applications can be a tiring chore but with
electronic screening programs, it can be very manageable.
 Training and Development - Training employees are key to maintaining high levels of
employee performance and is considered an important benefit for employees. Employees
need to learn the culture of the organization, their specific job duties, and continuing
education to maintain changing job skills.
a. Organizational Orientation - Orienting employees helps them get acclimated to the
new work environment. The structured process answers important logistical questions
that the employee might have. For example, the orientation will share information
like building keys, access codes, review of the employee manual, how to operate the
phone system, computer system, copy machine, fax machine, standard procedures for
requesting time off, who to call when sick, how to confront and address internal
issues. Taking the time to orient new employees helps to eliminate problems that arise
as a result of them simply not knowing or understanding something about the work
environment.
b. Department Orientation - This next level of orientation allows the new employee to
get acclimated to the specific department they will be working in. There are cultures
 within cultures making it important for employees to get to know co-workers, the
culture of the department, and basically “how things are done around here” ….
c. Job Training - Whether an employee is learning how to answer the telephone for their
department or how to operate a piece of machinery, it is critical to have a
documented, very descriptive job description outlining: who the employee reports to,
work hours, specific job tasks and responsibilities, individual SMART Goals with due
date.
d. Continuing Education - Job skills are changing rapidly making it important for
organizations to invest in the continuing education of their workforce. Employees
should be required to maintain skills and develop new ones. This can be done by in-
house training, local seminars, or industry conferences. A highly trained workforce
helps to ensure high-quality products and services for your customers.
 Employee Relations - A workforce of engaged employees can have a high correlation to
increased productivity and improve the bottom line. This suggests that having a plan to
develop and sustain good employee relations is an important aspect of the HR
management function. It is important to have a process in place to deal with employee
issues that will inevitably happen. Effective conflict management in the workplace is
important to successful work teams. We all have issues in our personal lives so it is also
important to have a process in place to help employees deal with these types of issues to
ease the burden and stress that personal problems bring to the workplace. For example,
allowing an employee to work a flexible work schedule while caring for an ill family
member can take some of the stress off the employee.
 Employee Satisfaction - Monitoring employee satisfaction is important for
understanding the employee’s perception of how well the organization is managed.
Employees on the front line do the work and have a unique perspective of not only how
things are done, but also how the customer views the organization’s products and
services. By simply asking the question, managers can learn a lot. And, if what is learned
is put into an improvement plan with SMART goals, an organization can make great
strides in improving how they operate – resulting in higher levels of customer
satisfaction.
 Labor Laws and Legal Compliance - There are countless laws that govern how
organizations manage operations and labor. Staying compliant is an important part of
business management. SHRM is also a great organization that helps business owners
keep updated on changing employment laws. Healthy and successful organizations spend
time and resources to develop a strong HR program that supports employees. Employees
who understand what is expected of them, are given the tools to perform the job and get
rewarded for doing a good job to make customers happy. And, happy customers tell
others of their great experience and come back. But most importantly, the customer pays
the bills so employers need to take care of the people (employees) who ultimately take
care of the customers! That is what human resource management is all about!