Developing a HRM Strategy
Dr. Saurabh Gupta
Being a part of the dynamic environment with rapid changes organizations are required to develop more focused and coherent approach to managing people. Now it is the real time to understand its human power and to convert it into human capital.
For the development of the strategy the two issues are important to study and analyze, these are:
(1) What kinds of people do you need to manage and run your business to meet your strategic business objectives?
(2) What kind of the people programs and initiatives must be designed and implemented to attract, develop and retain staff to compete effectively?
Now to overcome and to answer these two questions we are having the following dimensions;
• Culture: the beliefs, values, norms and management style of the organization
• Organization: the structure, job roles and reporting lines of the organization
• People: the skill levels, staff potential and management capability
• Human resources systems: the people focused mechanisms which deliver the strategy - employee selection, communications, training, rewards, career development, etc.
Normally in managing the people element of their business managers will only focus on one or two dimensions and neglect to deal with the others, and than fail to develop the human power. This will result in overall inefficiency. What is required is a strategic perspective aimed at identifying the relationship between all four dimensions. If you require an organization which really values quality and service you not only have to retrain staff, you must also review the organization, reward, and appraisal and communications systems. Here the rewarding becomes the real problem which leads to dissatisfaction and hence the lower productivity.
There are seven steps to developing a human resource strategy and the active involvement of senior line managers should be sought throughout the approach.
Step 1: Study the whole business picture
• Highlight the key driving forces of business. What are they?
• What are the implications of the driving forces for the people side of business?
• What is the fundamental people contribution to bottom line business performance?
Step 2: Develop a Mission Statement
Do not be put off by negative reactions to the words or references to idealistic statements - it is the actual process of thinking through the issues in a formal and explicit manner that is important.
• What is the contribution of people?
Step 3: Conduct a SWOT analysis of the organization
Focus on the internal strengths and weaknesses of the people side of the business.
• Consider the current skill and capability issues.
Vigorously research the external business and market environment. High light the opportunities and threats relating to the people side of the business.
• What impact will/ might they have on business performance?
• Consider skill shortages?
• The impact of new technology on staffing levels?
From this analysis we then need to review the capability of personnel department. Complete a SWOT analysis of the department - consider in detail the department's current areas of operation, the service levels and competences of personnel staff.
Step 4: Conduct a detailed human resources analysis
Concentrate on the organization's COPS (culture, organization, people, HR systems)
• Consider: Where we are? Where do we want to be?
• Study the gaps between reality of where we are now and where we want to be?
Step 5: Determine critical people issues
• Identify the critical people issues namely those that must be addressed. Those which have a key impact on the delivery of business strategy.
• Prioritize the critical people issues. What will happen if we fail to address them?
Step 6: Develop consequences and solutions
For each critical issue highlight the options for managerial action generate, elaborate and create - don't go for the obvious. This is an important step as frequently people jump for the known rather than challenge existing assumptions about the way things have been done in the past. Think about the consequences of taking various courses of action.
Once the process is over it should then be possible to translate the action plan into broad objectives. These will need to be broken down into the specialist HR Systems areas of:
• employee training and development
• management development
• organization development
• performance appraisal
• employee reward
• employee selection and recruitment
• manpower planning
Develop action plan around the critical issues. Set targets and dates for the accomplishment of the key objectives.
Step 7: Implementation and evaluation of the action plans
The ultimate purpose of developing a human resource strategy is to ensure that the objectives set are mutually supportive so that the reward and payment systems are integrated with employee training and career development plans.
There is very little value or benefit in training people only to then frustrate them through a failure to provide ample career and development opportunities.