Forming HR Strategies

Based on Human Resource Management (4th Edition) by Alan Price - published by Cengage

Identifying the relationship between HRM and strategy is simpler in theory than in practice. Frequently, Strategic HR is a matter of rhetoric. Organizations may take a variety of approaches towards HR and strategy, ranging from those which give no consideration whatsoever to human resurce issues to some where HR becomes the driving force. (...) Strategies can encompass many issues. Whether or not a business gives prominence to its human resource strategies, when the organization takes decisions on its intended market and product or service range, it also determines the types of job and skills required (Purcell, 1995: 63). Where organizations are genuinely concerned with their people, HRM normally focuses on certain strategic sub-goals, or second-order strategies in Purcell’s terminology (...) (Continued on page 273 of Human Resource Management (Price, 2011)

(...) Human resource strategies are derived from overall business objectives in the same way as investment or marketing strategies. We noted in the chapter on employee enagement that commitment is seen to be particularly crucial for competitive advantage. For true commitment to occur, conventional management wisdom sees the need for employees to accept and believe in an organization's goals.

Extra detail:  These goals (like any other objectives) need to be expressed in quantifiable terms so that outcomes can be measured. However, strategic HR objectives go beyond the simplistic calculation and control of staff numbers and minimisation of costs. Strategic thinking also incorporates ethical and legal considerations which have complex implications on the achievement of a wide range of business objectives:

• Equity - applicants and employees should be treated fairly and justly, so that there are no grounds for complaint or bad publicity.
• Consideration - individual circumstances and wishes should be allowed for when taking strategic decisions which affect the security, prospects and self-respect of employees.
• Commitment and motivation - staff tend not to be committed to organisations which are not committed to them.
• Working conditions - safe, healthy and pleasant conditions enhance well-being, minimise stress and improve efficiency.

Many managers make the mistake of assuming that the action they take in a particular situation has no consequences outside that set of circumstances. Businesses have customers on which they depend for their existence. Employers, their friends, relatives and neighbours may be customers. Any impression of an organisation, conveyed by satisfied or dissatisfied employees, can spread by word of mouth and impact on sales. In some circumstances word may reach the media, with massive consequences on a company's public standing.

 Convincing the CEO that a strategic partnership with HR is crucial to the future success of the business is one of the toughest challenges facing HR practitioners.

Strategy formation

(...) Coherent strategies and integrated practices sound fine in theory but how are they to be translated into action? This 'surface neatness' hides an organizational reality which is far from simple. Mintzberg argues that the strategies which are actually carried through into practice include an unintended element which he terms 'emergent strategies'. This might result from poor strategic thinking, poor implementation or a sound state of realism. It reflects the view that strategic management should not be confined to the top layers in an organization. Emergent strategy rarely comes from the centre, but rather from bright ideas and initiatives at a local level which were unprecicted but were found to work and then adopted widely (This can be deliberate and organized through a process of internal benchmarking).

Other aspects of strategy involve people making decisions about capital equipment, finance or marketing; HR strategy requires people to make decisions about themselves. (...) However, it is a deadly serious game, with people's careers and livelihoods at stake. The reality is that faced with a choice between profit and the wellbeing of employees most commercial organizations will select the former. 'Softer' human resource issues continue to be secondary and subordinate to financial matters.

HR Directors are now starting to follow common practice in other business functions - measurng input costs, establish ongoing performance metrics, and building business cases for new initiatives.

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