SHRM DEFINITION

“Strategic human resource management means formulating and executing human resource
policies and practices that produce the employee competencies and behaviors that the
company needs to achieve its strategic aims.”- Gary Dessler
“Strategic human resource management is an approach to making decisions on the intentions
and plans of the organization concerning the employment relationship and the organization’s
recruitment, training, development, performance management, and the organization’s
strategies, policies, and practices.” – Armstrong
Strategic human resource management (SHRM) is defined as “the pattern of planned human
resource deployments and activities intended to enable an organization to achieve its goals”.
– Wright & McMahan

NATURE OF SHRM
 Long-term Focus: As business strategies have a long-term orientation, therefore, focus of
SHRM is also long-term probably more than one year
 Associated with Goal-Setting: SHRM is highly related with setting of objectives,
formulation of policy and allocation of resources and it is carried out at all levels of top
management.
 Interrelated with Business Strategies: There is an interrelation between business strategies
and SHRM. E.g. it gives significant inputs when business strategy is formulated, and human
resource strategies (like recruitment, staffing, training and performance appraisal)

Nature of Strategy:
1. Long-term Orientation: Strategy is typically a long-term plan. It’s not about short-
term gains, but about sustained success and competitive advantage over time.
2. Proactive Approach: It involves being proactive rather than reactive. Instead of
simply responding to external forces, a strategic approach involves shaping and
influencing those forces.
3. Involves Choices: Strategy requires making choices. You can’t pursue every
opportunity, so you need to decide which ones are most important and how to allocate
resources.
4. Involves Uncertainty: Strategies are developed in an environment of uncertainty.
You can’t predict the future, but you can plan for different scenarios.
 5. Adaptability: Good strategies are adaptable. They need to be flexible enough to
adjust to changing circumstances.

Importance of Strategy:
1. Provides Direction: It gives a clear sense of direction for an organization, helping to
prioritize efforts and resources towards common goals.
2. Enhances Efficiency: A well-defined strategy ensures that resources are utilized
efficiently, avoiding wastage and duplication of efforts.
3. Fosters Innovation: It encourages creative thinking and innovation as organizations
seek new and better ways to achieve their objectives.
4. Facilitates Adaptation: Strategy enables organizations to respond effectively to
changes in the external environment, whether they be opportunities or threats.
5. Increases Competitive Advantage: A good strategy allows an organization to
differentiate itself from competitors, gaining a competitive edge in the market.
6. Improves Organizational Performance: When implemented effectively, a well-
crafted strategy can lead to improved financial performance and overall success.

FORMULATION OF STRATEGY

Strategy formulation refers to the process of choosing the most appropriate course of action
for
the realization of organizational goals and objectives and thereby achieving the organizational
vision.
The process of strategy formulation basically involves six main steps. Though these steps do
not follow a rigid chronological order, however they are very rational and can be easily
followed in this order.
1. Setting Organizations’ objectives - The key component of any strategy statement is to
set the long-term objectives of the organization. It is known that strategy is generally a
medium for realization of organizational objectives. Objectives stress the state of being
there whereas Strategy stresses upon the process of reaching there. Strategy includes both
the fixation of objectives as well the medium to be used to realize those objectives. Thus,
strategy is a wider term which believes in the manner of deployment of resources so as to
achieve the objectives. While fixing the organizational objectives, it is essential that the
factors which influence the selection of objectives must be analyzed before the selection
of objectives. Once the objectives and the factors influencing strategic decisions have
been determined, it is easy to take strategic decisions.
2. Evaluating the Organizational Environment - The next step is to evaluate the general
economic and industrial environment in which the organization operates. This includes a
review of the organizations competitive position. It is essential to conduct a qualitative
and quantitative review of an organizations existing product line. The purpose of such a
review is to make sure that the factors important for competitive success in the market can be
discovered so that the management can identify their own strengths and weaknesses as well
as their competitors’ strengths and weaknesses. After identifying its strengths and
weaknesses, an organization must keep a track of competitors’ moves and actions so as to
discover probable opportunities of threats to its market or supply sources.

3. Setting Quantitative Targets - In this step, an organization must practically fix the
quantitative target values for some of the organizational objectives. The idea behind this is to
compare with long term customers, so as to evaluate the contribution that might be made by
various product zones or operating departments.

4. Aiming in context with the divisional plans - In this step, the contributions made by each
department or division or product category within the organization is identified and
accordingly strategic planning is done for each sub-unit. This requires a careful analysis of
macroeconomic trends.

5. Performance Analysis - Performance analysis includes discovering and analyzing the gap
between the planned or desired performance. A critical evaluation of the organizations past
performance, present condition and the desired future conditions must be done by the
organization. This critical evaluation identifies the degree of gap that persists between the
actual reality and the long-term aspirations of the organization. An attempt is made by the
organization to estimate its probable future condition if the current trends persist.

6. Choice of Strategy - This is the ultimate step in Strategy Formulation. The best course of
action is actually chosen after considering organizational goals, organizational strengths,
potential and limitations as well as the external opportunities

STRATEGY IMPLEMENTATION

Strategy implementation is the translation of chosen strategy into organizational action so as

to achieve strategic goals and objectives. Strategy implementation is also defined as the
manner in which an organization should develop, utilize, and amalgamate organizational
structure, control systems, and culture to follow strategies that lead to competitive advantage
and a better performance.

Steps in implementing a strategy: Developing an organization having potential of carrying

out strategy successfully. Disbursement of abundant resources to strategy-essential activities.
Creating strategy-encouraging policies. Employing best policies and programs for constant
improvement. Linking reward structure to accomplishment of results. Making use of strategic
leadership.

Excellently formulated strategies will fail if they are not properly implemented. Also, it is
essential to note that strategy implementation is not possible unless there is stability between
strategy and each organizational dimension such as organizational structure, reward structure,
resource-allocation process, etc.

STRATEGIC MANAGEMENT PROCESS

Strategic Human Resource Management (SHRM), the strategic management process focuses
on aligning HR strategies with the overall strategic goals of the organization. Here’s an
overview of how SHRM integrates into the strategic management process:

1. Strategic Analysis: This involves assessing the internal and external environment of
the organization. In SHRM, this means understanding the organization's capabilities,
culture, and workforce demographics, as well as analyzing industry trends, labor
market conditions, and regulatory factors that could impact HR strategies.

2. Strategy Formulation: In SHRM, strategy formulation includes identifying HR

priorities and objectives that align with the organization’s strategic goals. This may
involve deciding on the appropriate HR practices such as recruitment, training,
compensation, and performance management that will support the overall strategy.

3. Strategy Implementation: This phase involves executing the HR strategies

developed in the formulation stage. SHRM emphasizes ensuring that HR policies and
practices are implemented effectively to achieve organizational goals. It includes
activities such as recruitment and selection of talent, training and development
programs, and creating a supportive organizational culture.
4. Evaluation and Control: SHRM also emphasizes the importance of evaluating the
effectiveness of HR strategies and making adjustments as necessary. This involves
measuring HR performance metrics, assessing employee engagement and satisfaction,
and monitoring how well HR practices contribute to achieving strategic objectives.

5. Integration with Overall Strategy: Throughout the strategic management process,

SHRM ensures that HR strategies are integrated with the overall strategic direction of
the organization. This alignment helps in leveraging human capital as a source of
competitive advantage and ensuring that HR practices contribute to the organization’s
long-term success.

ENVIRONMENTAL SCANNING
Environment is surrounding around the business with which business is able to move /
function smoothly and regularly and continuously. Here scanning means looking into
all aspects of environments parts. Here environmental analysis enables a business firm
to identify its strengths weaknesses, opportunities, and threats. The proper evaluation
or analysis of the environment helps a firm to formulate effective strategies in various
areas of its functions. The significance of environment scanning will be explained as
under.

IMPORTANCE OF ENVIRONMENTAL SCANNING

i) Identification of strengths: The analysis of the internal environment helps
to identify the strength of the firm and every organization puts all efforts to
maintain and improve its strengths. For example, every business will see
that how we maintain competent & dedicated employees. What will be
ways with which we can pursue good HRP & HRD and what will be the
methods with which we may have good & improved & latest technology
etc?
ii) Identification of weaknesses: The business analysis gives an idea about
business weaknesses. The weaknesses are barriers in the process of
development. Therefore every organization try to point out its drawback
and will try to improve it. Then the weakness may be in terms of its
technology, HR, lack of finance, or in any other areas.
iii) Identification of opportunities: Opportunities generally reside outside the
business. Therefore, external environment analysis helps to point out and
use for business benefits. The business also undertakes all those efforts to
grab those opportunities. For example, if govt. gives concession or
subsidies. Then businesses may cut the prices of their products and may
gain a large sell advantage of products.
iv) Identification of threat: The business may have threats from its
competitions or rivals and others. Therefore, environmental analysis helps
to identify those threats and helps to defuse them before their effects on
business or its functioning.
v) Effective planning: Environmental scanning help to business in the
preparation of the effective plan. The planning is the guide of the business
or so it is to be prepared defect-free. The environmental analysis does that
and helps businesses.
vi) Survival and growth of the business: Survival and growth are two basic
objectives of any business. Without the attainment of these two, there is no
meaning to the existence of the business. So, analysis of the environment
ensures the existence of these two objectives and according to the business
unit.
vii) Facilitates organizing of Resources: Business units need different
resources, it includes natural, physical, Human resources, etc. These
resources are limited in number. Therefore, it should be used in a very
conscious way. The analysis of the environment enables the business to
organize all these resources in a required and logical manner.
viii) Flexibility in operations: A study of the environment enables a firm to
adjust its activities depending upon the changing situation.
ix) Corporate image: Corporate image means to create a mental picture of the
firm in the minds of the customer. Due to the analysis of the environment,
there is an overall improvement in the performance of the business, and its
effect is there is a good image of the business among all i.e., customer
dealer, suppliers, etc.
x) Motivation to employees: Because of environmental analysis, there are
good decisions, improved performances, and introduction of new HR
 policies, employees in the organization are motivated. Environmental
Analysis

COMPONENTS OF ENVIRONMENTAL SCANNING

1. Internal Environmental Components- The components that lie within the
organization are internal components and changes in these affect the general
performance of the organization. Human resources, capital resources and
technological resources are some of the internal environmental components.
2. External Environmental Components: The components that fall outside the
business organization are called external environmental components. Although the
components lie outside the organization, they still affect the organizational activities.
The external components can be divided into microenvironmental components and
macro environmental components. Microenvironmental components include
competitors, consumers, markets, suppliers, organizations, etc. Macro environmental
components include political, legal, economic, cultural, demographic and
technological factors.

TECHNIQUES OF ENVIRONMENTAL SCANNING:

There are various techniques of environmental scanning. Some of the important
techniques are explain as follows:
1. SWOT Analysis- SWOT analysis is an acronym for Strengths, Weaknesses,
opportunities and threats analysis of the environment. Strengths and weaknesses are
considered as internal factors whereas opportunities and threats are external factors.
These factors determine the course of action to ensure the growth of the business.
2. PEST Analysis- PEST stands for Political, economic, social and technological
analysis of the environment. It deals with the external macro-environment.
3. ETOP- ETOP stands for the Environmental Threat Opportunity profile. It helps an
organization to analyse the impact of the environment based on threats and
opportunities.
4. QUEST- QUEST stands for the Quick Environmental Scanning technique. This
technique is designed to analyse the environment quickly and inexpensively so that
businesses can focus on critical issues that have to be addressed in a short span.
SCENARIO PLANNING
Scenario planning is an approach that has been widely adopted as part of the strategic
planning process. Scenario planning became well-known in the 1960s when companies like
Shell started applying this process to better navigate the changing environment concerning oil
production and manufacturing.
Even though various definitions exist, scenario planning is essentially about:

 understanding the external dynamics that could influence the operating

environment of your business,
 using data to create plausible and possible scenarios for the future
 defining strategic choices that should be explored as a result of each scenario; and
 developing an internal organizational response for each scenario

Scenario planning is rooted in storytelling and the ability to craft a narrative that opens the
organization to an alternative future and creates the capacity for change to occur. It is
important not to confuse scenario planning with forecasting. Scenario planning does not aim
to predict the future but rather to open the organization to the possibility of what the future
could entail.
Benefits of scenario planning
The scenario planning process provides several benefits for the organization, such as:
Expanding current thinking and avoiding conformity of ideas
Create the capacity for change by preparing for various occurrences.
Risk reduction by creating awareness of possible threats
The scenario planning process
The process of scenario planning differs from method to method and from one organization
to another. For the purpose of this article, we will explain a generic approach that highlights
the central premise of the scenario planning process.
Step 1: Explore external trends
In this step, companies utilize external data to identify macro trends that could potentially
influence the business. It involves exploring current market trends and using available data to
determine the relevance of certain trends. Importantly, this step is not about creating new
trends but rather identifying the relevance of well-researched trends and determining their
possible impact on the organization.
For instance, the aging population and decreasing population growth were explored by a
retailer of baby diapers in Japan and Germany. This led to a decision to diversify product
development into adult homecare products to mitigate the risk of diminishing returns in the
newborn market.
Step 2: Frame your horizon and parameters
Most scenario processes utilize various time horizons to make scenarios more robust and
focus on a medium to a longer-term timeframe. Depending on the business and industry, this
could range from 5 to 20+ years.
The longer the time frame, the more theoretical scenarios tend to become, as organizations
need to make several assumptions to define solid scenarios. If your organization is new to the
process, it is better to first work within a shorter time frame.
During this step, the organization also frames the parameters of the scenario process by
setting boundaries. Specifically, this entails defining:

 What is the question that we hope to explore when creating these scenarios?
 What will we not explore, and what is out of scope for our scenario?
 What assumptions are we making when creating scenarios?

For example, an organization in the health industry explored potential scenarios of privatizing
the healthcare system. For them, the questions to explore ranged from various degrees of
privatization and its impact on their operations. They set a boundary to not explore political
scenarios in the country, even though these would influence their scenarios. Instead, they
focused on more specific questions related to their context.
This is an important point. Setting the scenarios too broad will create scenarios that will be
too high level and not inform any concrete responses. Similarly, setting the parameters too
narrow will result in scenarios that do not encourage new thinking and remain too close to the
current reality.
Step 3: Build your scenarios
Working within a multi-disciplinary group, formulate 3 to 5 scenarios in terms of different
levels of probability. It’s important to build scenarios upon data that enables participants to
make informed choices about possible futures.
Depending on the approach, organizations should be building at least one worst-case
scenario, a best-case scenario, and a probable alternative scenario. Scenarios are not mutually
exclusive, so be clear about the differences within each scenario.
To use an example from practice, let’s evaluate a grocery retailer with a large national
footprint. They used scenario planning to understand the impact of digital platforms and
online shopping on their business. The scenarios below were created in response to the
external trend of retailers entering the online shopping market and enabling consumers to buy
groceries online and have them delivered to their door:

 Worst case scenario – eCommerce enters the grocery retailer domain, and the
need for a physical grocery story footprint diminishes. Consumers want online
services and are prepared to pay more for the convenience of getting their
groceries delivered. Fast-moving players with better technological capability flood
the market and build a stronger distribution network to meet online delivery
demand.
 Best case scenario – eCommerce has gained some traction in the grocery and
retail market. However, there is still a need for a strong physical presence in stores
across the country. We can partner with third parties to meet the demand of the
online consumer and use our local grocery stores as depot hubs that utilize our
current logistics network to meet the demands.
 Mid-range scenario – eCommerce becomes an integral part of the business to
complement the physical grocery store footprint. By enabling online options, we
can expand our market to smaller towns where it did not make sense previously to
have a physical store by allowing deliveries and orders during the week to these
counderstanding the external dynamics that could influence the operating
environment of your business,
 using data to create plausible and possible scenarios for the future
 defining strategic choices that should be explored as a result of each scenario; and
 developing an internal organizational response for each scenario

Scenario planning is rooted in storytelling and the ability to craft a narrative that opens the
organization to an alternative future and creates the capacity for change to occur. It is
important not to confuse scenario planning with forecasting. Scenario planning does not aim
to predict the future but rather to open the organization to the possibility of what the future
could entail.
Benefits of scenario planning
The scenario planning process provides several benefits for the organization, such as:
Expanding current thinking and avoiding conformity of ideas
Create the capacity for change by preparing for various occurrences.
Risk reduction by creating awareness of possible threats
The scenario planning process
The process of scenario planning differs from method to method and from one organization
to another. For the purpose of this article, we will explain a generic approach that highlights
the central premise of the scenario planning process.
Step 1: Explore external trends
In this step, companies utilize external data to identify macro trends that could potentially
influence the business. It involves exploring current market trends and using available data to
determine the relevance of certain trends. Importantly, this step is not about creating new
trends but rather identifying the relevance of well-researched trends and determining their
possible impact on the organization.
For instance, the aging population and decreasing population growth were explored by a
retailer of baby diapers in Japan and Germany. This led to a decision to diversify product
development into adult homecare products to mitigate the risk of diminishing returns in the
newborn market.
Step 2: Frame your horizon and parameters
Most scenario processes utilize various time horizons to make scenarios more robust and
focus on a medium to a longer-term timeframe. Depending on the business and industry, this
could range from 5 to 20+ years.
The longer the time frame, the more theoretical scenarios tend to become, as organizations
need to make several assumptions to define solid scenarios. If your organization is new to the
process, it is better to first work within a shorter time frame.
During this step, the organization also frames the parameters of the scenario process by
setting boundaries. Specifically, this entails defining:

 What is the question that we hope to explore when creating these scenarios?
 What will we not explore, and what is out of scope for our scenario?
 What assumptions are we making when creating scenarios?
For example, an organization in the health industry explored potential scenarios of privatizing
the healthcare system. For them, the questions to explore ranged from various degrees of
privatization and its impact on their operations. They set a boundary to not explore political
scenarios in the country, even though these would influence their scenarios. Instead, they
focused on more specific questions related to their context.
This is an important point. Setting the scenarios too broad will create scenarios that will be
too high level and not inform any concrete responses. Similarly, setting the parameters too
narrow will result in scenarios that do not encourage new thinking and remain too close to the
current reality.
Step 3: Build your scenarios
Working within a multi-disciplinary group, formulate 3 to 5 scenarios in terms of different
levels of probability. It’s important to build scenarios upon data that enables participants to
make informed choices about possible futures.
Depending on the approach, organizations should be building at least one worst-case
scenario, a best-case scenario, and a probable alternative scenario. Scenarios are not mutually
exclusive, so be clear about the differences within each scenario.
To use an example from practice, let’s evaluate a grocery retailer with a large national
footprint. They used scenario planning to understand the impact of digital platforms and
online shopping on their business. The scenarios below were created in response to the
external trend of retailers entering the online shopping market and enabling consumers to buy
groceries online and have them delivered to their door:

 Worst case scenario – eCommerce enters the grocery retailer domain, and the
need for a physical grocery story footprint diminishes. Consumers want online
services and are prepared to pay more for the convenience of getting their
groceries delivered. Fast-moving players with better technological capability flood
the market and build a stronger distribution network to meet online delivery
demand.
 Best case scenario – eCommerce has gained some traction in the grocery and
retail market. However, there is still a need for a strong physical presence in stores
across the country. We can partner with third parties to meet the demand of the
online consumer and use our local grocery stores as depot hubs that utilize our
current logistics network to meet the demands.
  Mid-range scenario – eCommerce becomes an integral part of the business to
complement the physical grocery store footprint. By enabling online options, we
can expand our market to smaller towns where it did not make sense previously to
have a physical store by allowing deliveries and orders during the week to these
coND

nsumers.

Step 4: Define strategic choices

Once you’ve created and validated your scenarios, the team needs to decide on the strategic
choices they have to inform scenario responses. A strategic choice indicates alternative
responses based upon the assumptions of each identified scenario.
To take our grocery retailer as an example:
By reviewing the crafted scenarios, the company faces some strategic choices that they need
to explore. They need to clarify the desired response and action that the organization will take
should these scenarios become a reality:

 Strategic choice 1: Do we want to compete in the eCommerce market?

  Strategic choice 2: Do we believe product diversification will retain current and
bring new consumers to our stores?
 Strategic choice 3: Do we invest in building an online eCommerce capability?
 Strategic choice 4: Do we partner with others to extend our delivery distribution
service?
 Strategic choice 5: Given our size, can we compete with the new players entering
the market by pushing down our prices?

The purpose of this step is to generate a variety of actions that the organization can consider
in response to the scenarios above. Once you’ve developed a list, categorize it into themes
that deal with choices of a similar nature.
So, for instance, you could group strategic choices related to “Pricing” together. Other
categories could include “Capability and skill,” “Logistics,” and “Partnerships.” The
organization should define a desired strategic response that coincides with the scenario for
each of these categories.
Step 5: Build external flags and internal triggers
The last step in the scenario planning process is identifying external flags and internal
triggers that help us monitor when our designed scenarios are becoming more or less
probable.
External flags are developed as specific events to “watch out” for. They will tell us that the
probability of a scenario occurring is increasing/decreasing. Internal triggers dictate a
response to a flag that will help the organization systematically shift to prepare and move
closer to the designed response.
STRATEGY IMPLEMENTATION
Strategy implementation is the process used to ensure a strategic plan is executed.
It involves translating the high-level goals and objectives outlined in a company's
strategic plan into specific actions and initiatives that can be carried out by
employees at all levels of the organization.
As a whopping 9 out of 10 organizations fail to implement their strategies, you
can’t just create a strategic plan and leave it on the shelf—make sure you have a
solid strategy implementation process in place to bring it to life.
In our six-step strategy implementation process, you will transform your static,
inactive plan into a living, dynamic, and successful strategy implementation. Read
our article on factors affecting strategy implementation to develop an even deeper
understanding of strategic implementation.

6-Step Strategy Implementation Process

 The implementation process should follow a strategic analysis and strategy
formulation phase. After you’ve identified your business problem and strategy to
tackle it, you should follow these key steps to put your strategy into action:

1. Choose your strategy framework

2. Build your plan
3. Define projects and KPIs
4. Establish your strategy rhythm
5. Implement strategy reporting
6. Link performance to strategy

Step #1: Choose your strategy framework

Strategy is something that should be embedded in everything an organization

does.
It must be part of the DNA of both the organization and its people. But if you
don't make an effort to call it out explicitly, you won't get the focus or traction you
need.
Start with a simple framework that establishes a strategy lexicon everyone
understands and can get behind. Whenever someone asks, "how are our strategic
objectives going?", everyone must be on the same page regarding what it actually
means.
For example, at Cascade, we use the following "strategy house" to define the
different elements of our strategy:
Step #2: Build your plan and set clear goals

The next step of our strategy implementation process is where you start creating
your roadmap to success.
Now that you've got your framework in place, you're ready to move on to the
actual creation of your strategic plan. We've developed a comprehensive guide on
how to write a strategic plan, so we won't go into details here.
But assuming you're using a framework similar to the one above, here's how we'd
suggest approaching the creation of your implementation plan with your key
stakeholders:
1. Bring together your management team: Gather the leaders of your
organization (founders, CEO, directors, etc.) to agree on your vision. You might
do this in one workshop but have them engaged with it regularly. Have them read
this article to keep everyone on the same page.‍
2. Define values: At the same workshop, write down the values that the
organization holds. They’re crucial for your company’s culture, so go through this
article to make the process smoother.
 3. Align on strategic priorities: Finally (same workshop still), write down 3 or 4
Strategic Focus Areas the team thinks need to be addressed to reach the vision.
4. Co-create objectives with your teams: Take your basic framework back to
your team(s) and have them independently input ideas for strategic goals and
objectives under each Focus Area. You must involve them in the planning process
and give them a voice. This will ensure buy-in and motivation to implement your
business strategies.
5. Make a final check: Once you've fleshed out the strategic objectives, get back
together as a group and ask yourself a series of hard questions:

 ‍If we deliver each of these strategic objectives under a given Focus Area, will we
have nailed that Focus Area?
 If we deliver all of our Focus Areas, will we reach our vision?
 Will our values help or hinder us along the way?

Step #3: Define KPIs and projects

Now it’s time to cover the bottom layer of our strategy house: projects and key
performance indicators (KPIs).
That's part of the strategy implementation process where top management should
empower people throughout the organization to come up with their projects and
KPIs to measure success.
Step 3 of our process guide to strategy implementation is to define your KPIs and
create effective projects. You need actionable steps (projects) and a way to
measure progress toward your strategic objectives (KPIs).

KPIs
KPIs are one of the oldest management tools around. And for a good reason—they
work. They keep you and your team members honest about progress and focused
on outcomes.
They need to become your beacons for implementing strategy. Here are a few tips
when it comes to coming up with your own:

 Keep them simple: Don't try to come up with complex ratios that only a small group
of people understand. Make them simple and relatable to everyone in the
organization.
  Choose at least 1 KPI for each of your strategic objectives: In general, it’s best to
have 1-3 KPIs per objective. Too many KPIs can lead to confusion and dilute focus.
However, the exact number will depend on the complexity of the objective and
available resources. If an objective is particularly complex, it may require more KPIs
to adequately measure progress.
 Make it easy to measure them quickly: Large organizations have hundreds of
metrics, with each unit and function tracking them in their own set of preferred tools
and applications. Bring them under one roof so you can get real-time insights.
 Don't make them all about the $$$: Sure, profit and revenue might be your end-
game, but KPIs should be the drivers of those things—measuring the outcomes alone
adds little value.

Step #4: Deal with business-as-usual

Step 4 in our guide to strategy implementation is where you overcome business-

as-usual.
The ironic thing about strategy implementation is that everyone acknowledges its
importance, but it's often the first thing to be forgotten about when the going gets
tough.
People get so caught up in the day-to-day that they don't have time to focus on the
big-picture items that will keep the organization moving forward. This rapidly
becomes a self-fulfilling cycle and is one of the most common reasons strategies
fail.
Here are some tips to help you break the cycle:

 Meet often to discuss progress: We'd suggest a minimum of quarterly reviews for
higher-level objectives, but monthly would be a great place to start until things get
bedded in.
 Determine the attendees: You'll need the leadership team at a minimum—but you
also need to involve the rest of the organization. The more they engage with the
overall strategy, the stronger the ownership they feel.
 Be conscious of time: Specify the end time and always respect it. Allocate the last 10
minutes (or as many as you need) to “next steps”. Reviewing progress without the
next steps is meaningless.‍
  Define the meeting structure beforehand: What metrics will you discuss? For how
long? Which reports will be used? More on this in step #5 below.

Step #5: Implement consistent & simple strategy reports

Step 5 of our process guide to strategy implementation focuses on strategy

reporting.
Once you've put your strategy into action, it's important to review and adapt it
regularly to ensure it's still on track to meet your business goals. This is where
strategy reports come in handy.
Now that your meetings are in place, you'll want to choose a consistent way of
reporting the progress of your strategy implementation. The main objectives of
this report should be:

Consistency
Set up a regular schedule for reviewing your strategy reports. This could be
weekly, monthly, or quarterly—whatever works best for your business. Everyone
should know what to expect and what they need to update before the meeting(s).

Simplicity
The progress report should give an at-a-glance view of how the strategy is
progressing. Identify the key metrics that are most important to your business, and
focus on those when reviewing your reports and dashboards.

Accountability
Ensure that the report includes the names of the owner of each goal
(accountability), as well as the names of the people getting things done
(recognition).

Conclusions
Your next steps. Your action plan. What will be done to get to desired outcomes?
The strategy report needs to include not only an overview of how the strategy
looks now but how it's progressing over time. Try to include a comparison period
or graphs/charts that show progress over time to ensure momentum is maintained.
 Strategy reports will help you look for trends and patterns in your data. Are there
areas where you're consistently exceeding expectations? Are there areas where
you're consistently falling short? Use this information to make informed decisions
about how to adapt your strategy.
And don't forget - adapting your strategy doesn't mean giving up on it entirely. It
simply means making adjustments and tweaks to ensure you're staying on track
and achieving your goals. Sometimes, a small tweak can make a big difference in
your results, so don't be afraid to make changes as you go.

Step #6: Link performance management with strategic management

Linking performance reviews to strategy, the first five steps of our process guide
to strategy implementation are the absolute basics to ensure that you have success
implementing and executing your strategy.
But organizations that truly succeed are those who manage to weave strategy
implementation into the fabric of their existence. An easy way to get started with
this is to create a formal link between strategic management and performance
reviews.
Nothing shows people how important strategy is more than when it impacts their
reviews and potentially even their reward and remuneration. Here are a few ways
to do it:

 Build a strategic management system that has these performance review links built
into its HR processes.

But even if you're doing performance reviews the old-fashioned way, you can still
make a point of awarding specific credit to employees who embrace strategy
execution in their role and can demonstrate how they've contributed.

 Encourage your managers to talk to people about strategy regularly. Consider creating
a 1:1 template that managers can use which highlights how a person's goals contribute
to the strategy.
 Expose your strategy to your people. Lack of communication is a common pitfall that
prevents successful strategy execution. If you only present your strategy in
PowerPoint, people won’t remember it. Help your people align with the plan by
having them access it at will.
KINDS AND TYPES OF STRATEGIES

Kinds of Strategies in SHRM:

1. Corporate Level Strategies:

o Business Strategy Integration: Aligning HR strategies with overall business

goals. This involves ensuring that HR practices support and enhance the
broader corporate strategy.
2. Business Unit Level Strategies:

o Competitive Strategy Support: Developing HR strategies that directly

support the competitive strategy of a specific business unit within the
organization.
3. Functional Level Strategies:

o Functional HR Strategy: Focusing on specific HR functions such as

recruitment, training, compensation, and performance management, ensuring
they are aligned with overall business objectives.

Types of Strategies in SHRM:

1. HR Planning Strategies:

o Workforce Planning: Forecasting the organization’s future workforce needs

and planning how to meet those needs through recruitment, training, etc.
o Succession Planning: Identifying and developing internal employees with
potential to fill key roles in the future.
2. Talent Management Strategies:

o Recruitment and Selection: Strategies for attracting and hiring the best talent
for the organization.
 o Retention: Policies and practices aimed at retaining valuable employees.
3. Training and Development Strategies:

o Employee Development: Programs designed to enhance the skills and

capabilities of employees to meet current and future job requirements.
o Leadership Development: Focusing on developing leadership skills among
employees to fill key roles within the organization.
4. Compensation and Benefits Strategies:

o Pay Structure: Developing fair and competitive pay structures to attract and
retain talent.
o Benefits Packages: Designing benefits packages that meet the needs of
employees and are aligned with organizational goals.
5. Performance Management Strategies:

o Performance Appraisal: Establishing systems for evaluating employee

performance and providing feedback.
o Goal Setting: Aligning individual and team goals with organizational
objectives.
6. Employee Relations Strategies:

o Employee Engagement: Strategies for fostering a positive work environment

and improving employee morale and commitment.
o Conflict Resolution: Policies and practices for managing and resolving
conflicts in the workplace.

IMPORTANCE OF STRATEGIC MANAGEMENT

Strategic management is crucial for organizations because it provides a structured approach

to achieving long-term goals and sustaining competitive advantage in a dynamic business
environment. Here are key reasons why strategic management is important:

1. Clear Direction and Focus: Strategic management helps organizations clarify their
mission, vision, and objectives. It ensures that everyone in the organization
understands the goals they are working towards, creating alignment and focus across
all levels.
2. Enhanced Decision Making: By defining strategic priorities and objectives, strategic
management provides a framework for making informed decisions. It helps in
prioritizing initiatives, allocating resources effectively, and evaluating potential
opportunities and risks.

3. Adaptation to Change: In today's rapidly changing business environment,

organizations must be agile and responsive. Strategic management involves
continuous monitoring of external and internal factors, allowing organizations to
anticipate changes and proactively adjust their strategies.

4. Competitive Advantage: Strategic management helps organizations identify their

unique strengths and capabilities (core competencies) and leverage them to
differentiate themselves from competitors. It enables the development of sustainable
competitive advantages that are difficult for rivals to replicate.

5. Resource Allocation: Effective strategic management involves allocating resources

(financial, human, technological) in a way that maximizes their impact on achieving
strategic objectives. It ensures resources are used efficiently and effectively to support
organizational goals.

6. Organizational Alignment: Strategic management aligns the efforts of various

departments and functions within an organization. It encourages collaboration and
coordination across different teams, ensuring that everyone is working towards
common objectives.

7. Long-term Sustainability: Strategic management focuses on long-term goals and

sustainability. It helps organizations anticipate future challenges and opportunities,
guiding them in making decisions that support long-term growth and viability.

8. Performance Measurement: Strategic management involves establishing key

performance indicators (KPIs) and metrics to monitor progress towards strategic
goals. It enables organizations to assess their performance, identify areas for
improvement, and make necessary adjustments.

9. Stakeholder Engagement: Strategic management considers the interests of various

stakeholders, including employees, customers, shareholders, and the community. It
 helps in building trust and maintaining positive relationships with stakeholders by
demonstrating a clear strategic direction and responsible management practices.

10. Innovation and Adaptation: Strategic management fosters a culture of innovation

and continuous improvement. It encourages organizations to explore new ideas,
technologies, and business models that can drive growth and adapt to evolving market
conditions.

Role of HRM in Strategic management

The role of Human Resource Management (HRM) in strategic management is pivotal as

HRM plays a crucial part in aligning human capital—the workforce—with the strategic goals
and objectives of the organization. Here’s a detailed explanation of how HRM contributes to
strategic management:

1. Strategic Alignment:
o Talent Acquisition: HRM ensures that the organization attracts and hires
individuals who possess the skills, competencies, and values that align with
the strategic needs and culture of the organization. This includes workforce
planning to anticipate future skill needs based on strategic objectives.
o Job Design and Organizational Structure: HRM designs jobs and structures
the organization in a way that supports the achievement of strategic goals.
This includes determining reporting relationships, creating teams, and
ensuring clarity in roles and responsibilities.
2. Employee Development and Training:
o HRM identifies skill gaps and develops training programs that enhance the
capabilities of employees to meet current and future strategic challenges. This
could involve leadership development, technical training, or cross-functional
training to prepare employees for evolving roles and responsibilities.
3. Performance Management:
o HRM establishes performance management systems that align individual and
team performance with organizational objectives. This includes setting
 performance standards, conducting performance appraisals, providing
feedback, and linking performance to rewards and recognition.
o It ensures that performance metrics are aligned with strategic goals, fostering a
performance-driven culture that supports organizational success.
4. Employee Engagement and Motivation:
o HRM promotes employee engagement by creating a positive work
environment that encourages commitment and discretionary effort among
employees. This involves fostering open communication, providing
opportunities for career development, and recognizing and rewarding high
performance aligned with strategic priorities.
5. Change Management:
o HRM plays a critical role in managing organizational change processes that
arise from strategic initiatives. This includes communication strategies,
training programs, and support mechanisms to help employees adapt to new
strategies, technologies, or organizational structures.
6. Culture and Values:
o HRM reinforces organizational culture and values that support the
achievement of strategic objectives. It ensures that the organization’s culture
aligns with its strategic direction, promoting behaviors and attitudes that drive
success and sustainability.
7. Workforce Analytics:
o HRM utilizes data and analytics to provide insights into workforce trends,
capabilities, and effectiveness. This includes analyzing turnover rates,
employee performance metrics, and demographic data to inform strategic
decision-making and resource allocation.
8. Legal and Ethical Considerations:
o HRM ensures compliance with employment laws and regulations while
adhering to ethical standards in all HR practices. It mitigates legal risks and
reputational risks associated with HR decisions and practices, supporting long-
term organizational stability.

MEETING COMPETITIVE CHALLENGES VIA HRM PRACTICES

Meeting competitive challenges through Human Resource Management (HRM) practices
involves leveraging HR strategies and initiatives to enhance organizational capabilities,
attract and retain talent, and ultimately achieve a sustainable competitive advantage. Here’s
how HRM practices contribute to meeting competitive challenges:

1. Talent Acquisition and Retention:

o Attracting Top Talent: HRM practices such as effective recruitment
strategies, employer branding, and competitive compensation packages help
attract skilled and talented individuals to the organization.
o Retention Strategies: HRM focuses on retaining valuable employees through
initiatives like career development opportunities, mentoring programs, work-
life balance initiatives, and a positive organizational culture. Retaining talent
reduces turnover costs and ensures continuity of knowledge and expertise
within the organization.
2. Training and Development:
o Skill Enhancement: HRM invests in training and development programs to
enhance employees' skills and capabilities. This includes technical training,
leadership development, and soft skills training that align with current and
future job requirements.
o Adaptability and Innovation: Continuous learning and development foster a
culture of innovation and agility within the organization. Employees are better
equipped to adapt to changing market conditions and technological
advancements, enabling the organization to respond swiftly to competitive
threats and opportunities.
3. Performance Management:
o Aligning Goals: HRM aligns individual and team performance goals with
organizational objectives through effective performance management systems.
Clear performance expectations, regular feedback, and performance appraisals
ensure that employees understand how their contributions impact the
organization’s competitiveness.
o Reward and Recognition: HRM designs reward and recognition programs
that acknowledge high performance and contributions towards achieving
strategic goals. This motivates employees to excel and reinforces behaviors
that drive competitive advantage.
 4. Organizational Culture and Leadership:
o Culture of Excellence: HRM fosters a positive organizational culture
characterized by values that support innovation, collaboration, and customer
focus. A strong culture aligns employees' actions with strategic priorities and
enhances organizational effectiveness.
o Effective Leadership: HRM plays a role in developing and nurturing
effective leadership throughout the organization. Strong leadership is crucial
for setting strategic direction, motivating teams, and driving performance in
response to competitive challenges.
5. Employee Engagement and Satisfaction:
o Engagement Initiatives: HRM implements initiatives to enhance employee
engagement, such as regular communication, employee feedback mechanisms,
and opportunities for involvement in decision-making processes.
o Job Satisfaction: HRM ensures that employees find their work meaningful
and satisfying by providing a supportive work environment, opportunities for
career advancement, and recognition for achievements. Satisfied and engaged
employees are more committed to the organization’s success and contribute
positively to its competitive position.
6. Strategic Workforce Planning:
o Anticipating Future Needs: HRM engages in strategic workforce planning to
anticipate future skill requirements based on business objectives and industry
trends. This ensures that the organization has the right talent in place to
respond to competitive challenges and capitalize on emerging opportunities.
o Flexibility and Agility: HRM designs workforce strategies that allow the
organization to adapt quickly to changes in market demand or competitive
threats. This may include flexible staffing arrangements, talent pools, and
succession planning to maintain continuity and resilience in the face of
uncertainty.

SHR PHILOSOPHY

Strategic Human Resource Management (SHRM) philosophy represents a strategic approach

to managing human resources within an organization. It emphasizes the integration of HR
practices with the overall strategic goals and objectives of the organization, rather than
treating HR as a separate administrative function. Here are the key elements that define the
SHRM philosophy:

1. Alignment with Business Strategy:

o SHRM philosophy starts with aligning HR practices closely with the strategic
objectives of the organization. This involves understanding the business
environment, identifying competitive challenges and opportunities, and
determining how HR can contribute to achieving organizational goals.
2. Proactive and Future-Oriented:
o Unlike traditional HR approaches that are reactive, SHRM takes a proactive
stance. It involves anticipating future challenges and opportunities, and
designing HR practices and policies that prepare the organization to respond
effectively.
3. Focus on Organizational Effectiveness:
o SHRM philosophy aims to enhance organizational effectiveness through
effective management of human capital. This includes ensuring that the right
people are in the right roles, developing their skills and capabilities, and
creating a supportive work environment conducive to high performance.
4. Integration with Other Functions:
o SHRM emphasizes the integration of HR practices with other organizational
functions such as finance, marketing, and operations. This integration ensures
that HR strategies support and complement overall business strategies, leading
to coordinated efforts across the organization.
5. Emphasis on Strategic HR Practices:
o SHRM focuses on strategic HR practices that contribute directly to
competitive advantage. These may include talent acquisition and retention
strategies, performance management systems aligned with organizational
goals, leadership development programs, and fostering a culture of innovation
and continuous improvement.
6. Measurement and Evaluation:
o SHRM philosophy advocates for the measurement and evaluation of HR
initiatives and their impact on organizational performance. This involves using
metrics and analytics to assess the effectiveness of HR practices, identify areas
for improvement, and make data-driven decisions.
 7. Adaptability and Flexibility:
o Given the dynamic nature of business environments, SHRM philosophy
emphasizes adaptability and flexibility in HR practices. Organizations need to
be able to adjust their HR strategies in response to changes in technology,
market conditions, and regulatory environments.
8. Ethical and Social Responsibility:
o SHRM philosophy includes considerations of ethical and social responsibility
in HR practices. This involves promoting fairness, diversity, inclusion, and
ethical behavior in all aspects of HR management, ensuring that organizational
success is achieved in a sustainable and responsible manner.

In summary, Strategic Human Resource Management (SHRM) philosophy moves beyond

traditional HR functions to become a critical component of organizational strategy. By
aligning HR practices with business objectives, focusing on organizational effectiveness,
integrating with other functions, and emphasizing strategic HR practices, SHRM helps
organizations leverage their human capital to achieve sustainable competitive advantage and
long-term success.