Strategic Human Resource Management

In today’s intensely competitive and global marketplace, maintaining a competitive advantage by becoming a low cost leader or a differentiator puts a heavy premium on having a highly committed or competent workforce. Competitive advantage lies not just in differentiating a product or service or in becoming the low cost leader but in also being able to tap the company’s special skills or core competencies and rapidly respond to customer’s needs and competitor’s moves. In other words competitive advantage lies in management’s ability to consolidate corporate-wide technologies and production skills into competencies that empower individual businesses to adapt quickly to changing opportunities.

In a growing number of organizations human resources are now viewed as a source of competitive advantage. There is greater recognition that distinctive competencies are obtained through highly developed employee skills, distinctive organizational cultures, management processes and systems. This is in contrast to the traditional emphasis on transferable resources such as equipment. Increasingly it is being recognized that competitive advantage can be obtained with a high quality workforce that enables organizations to compete on the basis of market responsiveness, product and service quality, differentiated products and technological innovation.

Strategic human resource management has been defined as ‘ the linking of human resources with strategic goals and objectives in order to improve business performance and develop organizational culture that foster innovation and flexibility ‘. Strategic HR means accepting the HR function as a strategic partner in the formulation of the company’s strategies as well as in the implementation of those strategies through HR activities such as recruiting, selecting, training and rewarding personnel. Whereas strategic HR recognizes HR’s partnership role in the strategizing process, the term HR Strategies refers to specific HR courses of action the company plans to pursue to achieve it’s aims.

HR management can play a role in environmental scanning i.e. identifying and analyzing external opportunities and threats that may be crucial to the company’s success. Similarly HR management is in a unique position to supply competitive intelligence that may be useful in the strategic planning process. HR also participates in the strategy formulation process by supplying information regarding the company’s internal strengths and weaknesses. The strengths and weaknesses of a company’s human resources can have a determining effect on the viability of the firm’s strategic options.

By design the perspective demands that HR managers become strategic partners in business operations playing prospective roles rather than being passive administrators reacting to the requirements of other business functions. Strategic HR managers need a change in their mindset from seeing themselves as relationship managers to resource managers knowing how to utilize the full potential of their human resources.

The new breed of HR managers need to understand and know how to measure the monetary impact of their actions, so as to be able to demonstrate the value added contributions of their functions. HR professionals become strategic partners when they participate in the process of defining business strategy, when they ask questions that move strategy to action and when they design HR practices that align with the business strategy. By fulfilling this role, HR professionals increase the capacity of a business to execute its strategies.

The primary actions of the strategic human resource manager translate business strategies into HR priorities. In any business setting, whether corporate, functional, business unit or product line a strategy exists either explicitly in the formal process or document or implicitly through a shared agenda on priorities. As strategic partners, HR professionals should be to identify the HR practices that make the strategy happen. The process of identifying these HR priorities is called organizational diagnosis, a process through which an organization is audited to determine its strengths and weaknesses.

Translating business strategies into HR practices helps a business in three ways. First, the business can adapt to change because the time from the conception to the execution of a strategy is shortened. Second, the business can better meet customer demands because its customer service strategies have been translated into specific policies and practices. Third, the business can achieve financial performance through its more effective execution of strategy.

In brief, a strategic perspective of HRM that requires simultaneous consideration of both external (business strategy) and internal (consistency) requirement leads to superior performance of the firm. This performance advantage is achieved by:

. Marshalling resources that support the business strategy and implementing the chosen strategy, efficiently and effectively.

. Utilizing the full potential of the human resources to the firm’s advantage.

. Leveraging other resources such as physical assets and capital to complement and augment the human resources based advantage.

Is Talent Acquisition function alike Sales function?

There was a discussion on a very interesting topic last week on LinkedIn.

Human Resource (Talent Acquistion fuction) is alike sales fuction,Do you agree?If yes, then how will you contrive fixed or variable % in compensation structure?

Below is the answer to the above question and my feeling on how this interesting matter be addressed.

This is a very interesting topic to discuss. I believe that the major KRA of the Talent Acquisition Function is to hire the best talent at affordable rates from the competitive markets. It’s all about having the best talent at the right place at the right time. So, the Fixed and the variable structure should be planned out keeping in mind two major factors – Retention of the existing talent and New Talent Acquisition.

Accordingly, Fixed part should be paid for the retention of the existing talent and the variable to paid for hiring the best talent as per the job requirement, SLA adherence, and the hiring cost saved. Now dividing the compensation structure into percentage is an organisation call.

Your suggestions are always welcome.

Right people at the right time at the right place

The business success is about taking right people to the right place on right time. So what is the problem? Actually, if you need to manage not one, but five employees or better five groups of employees, then you face the problem of measuring and control. It's hard to tell whether one group is performing better or not, it becoming hard to compare one employees success against other one, it's hard to see the unique features of people. So what the solution is? The key metrics and key indicators, which will tell you how to manage your stuff right.

There are two approaches I suggest to take into account when thinking about human resources (HR) at your company. First, you can think in terms of process, second you can think it terms of how do employees affect the whole business.

The processes of working with employees include: hire, education, management, retire. All the stages must be processes carefully, as they could fully change your business. For instance, if you will have the best system to hire stuff, but it will be working slowly, then you will fail. If your education system will allow to train everyone, but will not allow to check the actual performance generated by training processed, then you will fail. If your best people will retire, then you will lose.

So, that's why it's really important to measure and control all processes involved into employees relationship. People who you work with, should understand what your goals are and how they will help to achieve these goals. This is the key idea of manage and control in employees management processes.

Another approach is focusing on how someone's job affect the company. It's obvious that even if someone works in a Sales then he or she will affect not only the financial part of the business by generating sales, but also all other parts.

For instance, sales person will be involved in entire company processes, such as education and knowledge sharing. This person will also work directly with customers, so he or she might not just sale, but get a valuable feedback from end users of your product. These people will also help your company to grow not just in terms of sales, but in terms of better business processes and business efficiency.

So how to measure and control HR department at your company. The answer is very simple - you should develop some key indicators that will represent company business and then pay attention to what is working good and what should be changed. There are many names for this system, for instance KPI (Key Performance Indicators) or Balanced Scorecard. The result is having the clear view of what is going to happen in company and how it will steam-line your business.

What should be the first step? Actually, I think you have already had some important information for scorecard. For instance, you have document called "mission", this is a general definition of your principles, you can some business goals, you have business processes described and formalized. What you need now is to gather all this important information into a easy to manage system, which will take in account the importance of each metrics. This system (Balanced Scorecard or KPI) will help to manage and control the performance of your HR department.

Building A Competitive Talent Organization

To build a competitive talent organization, the talent leader needs to be closely aligned with other senior managers in organization. Here are five ways that senior managers can contribute to your organization's talent goals:

Plan vigorously.

Senior managers should partner with the talent leader and hiring managers in their division to create a written plan for how they will meet your current and long-term talent needs. Planning for the talent agenda should be as thorough and as vigorous as any other planning in the company (for instance, strategic, annual operating, material, and financial planning).

Be accessible.

Senior managers should schedule regular meetings with their talent organization counterpart and be available and responsive when the talent leader contacts them. All senior managers should be accessible to meet prospective talent anywhere and anytime.

Sell.

With a plan in place, senior managers are responsible for "selling" the plan within their division. How will the talent plan help the division succeed? How should people participate? How will they be measured and rewarded for their participation? Senior managers need to emphasize the importance of Key Talent and back up their words with concrete plans and metrics. They also need to always wear their "selling shoes" when talking and meeting with prospective talent. If a hiring manager or other employee cannot sell his own company to a candidate, then leave that person off of the interview or meeting schedule.


Benchmarking.

Know how effective your talent efforts are today and continue to measure these efforts using the metrics outlined next to gauge your efforts over time. Are they working? Also, continuously benchmark internal and external talent. The grass is hardly as green on the other side as you want to believe. Still, knowing who is out there, what they are doing, and how your internal talent stacks up is an essential element of strategic talent planning.

Make movement happen.

Don't let open positions stagnate while hiring managers churn through reams of resumes from unqualified candidates. The framework provided in this book shows you how to be proactive in assessing and meeting your talent needs. Put the time and resources behind this framework to make it happen in your organization. And be willing to open up positions and make churn happen within the organization to accommodate new candidates and grow existing talent. Keeping the place moving will add the extra adrenaline needed for all talent to see a future in front of them in the current organization.