Chapter 3 Human Resource Management Strategy and Analysis

CHAPTER 3 HUMAN RESOURCE MANAGEMENT STRATEGY AND ANALYSIS
Strategic Human Resource Management refers to improving business performance and

developing an organizational culture that fosters innovation and flexibility by linking HRM with the
strategic goals and objectives of the firm. Every businesses aim for the success of the organization, and one
of the strategy is to offer the best to its customers. The choice of HRM practices is a strategic decision that
greatly contributes to the achieving of the specific solid results regarding the firm growth goals. In order to
succeed, HR should know on how to Analyze, Plan, Implement, and on how to control things in the
business. Also, HR should know the goal of the business, as well as the SWOT, or the Strength,Weaknesses,
Opportunities, and the Threats. Strengths -the internal capabilities that may help a company reach its
objectives. Weaknesses, these are internal limitations that may interfere with a company’s ability to
achieve its objectives. Opportunities, these are external factors that the company may be able to exploit to
its advantage. Threats, in businesses, it is a must that we know current and emerging external factors that
may challenge the company’s performance.
PESTLE analysis is an analytical tool which considers external factors and helps us to think about
their impacts. The factors in PESTLE analysis are: Political or the current and potential influences from
political pressures. Economic or The local, national and world economic impact. Sociological- the ways in
which changes in society affect the project. Technological- how new and emerging technology affects our
project / organization? Legal -how the local, national and global legislation affects the project.
Environmental- these are local, national and global environmental issues. A strategic plan is the company’s
plan for how it will match its internal strengths and weaknesses with external opportunities and threats. A
successful strategic plan helps ensure a competitive advantage. Strategic planning is the process of
developing and maintaining a strategic fit between the organization’s goals and capabilities and its
changing marketing opportunities. It is important to all managers. All managers personnel and other
decisions should be consistent with the goals that cascade down from the firms overall strategic plan.
Those goals form a hierarchy, starting with the presidents overall strategic goals and filtering down to
what each individual manager needs to do in order to support that overall company goal. Objectives
should always be SMART- Specific, Measurable, Attainable, Relevant and Time bound.
One of the major activity in strategic planning is Portfolio analysis whereby management evaluates
the products and businesses that make up the company. We distinguished among corporate-level,
competitive-level, and functional strategies. Corporate strategies include, among others, diversification
strategies, vertical integration, horizontal integration, geographic expansion, and consolidation. The
main competitive strategies include cost leadership, differentiation, and focuser. Functional strategies
reflect the specific departmental policies that are necessary for executing the business’ competitive
strategies. Department managers play an important role in strategic planning in terms of devising the
strategic plan, formulating supporting functional/ departmental strategies, and of course in executing
the company s plans.
Each function or department in the business needs its own functional strategy, and strategic
human resource management means formulating and executing human resource policies and practices
that produce the employee competencies and behaviors the company needs to achieve its strategic
aims. Human resource strategies are the specific human resource management policies and practices
managers use to support their strategic aims. The manager will want to gather and analyze data prior to
making decisions. A high-performance work system is a set of human resource management policies and
practices that promote organizational effectiveness. Human resource metrics are critical in creating high
performance human resource policies and practices. This is because they enable managers to
benchmark their own practices against those of successful organizations. A high-performance work
system is a set of human resource management policies and practices that together produce superior
employee performance.

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CHAPTER 3 HUMAN RESOURCE MANAGEMENT STRATEGY AND ANALYSIS

Strategic Human Resource Management refers to improving business performance and

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