HR Strategy

1
Human Resource Strategy
2
The Idea of Strategic HRM

• No definitive, robust theory.
• No agreement on meaning, factors, outcomes.
• how is SHRM linked with organisational
  performance? difficult to establish firm
  relationships given intervening factors
  structure, culture wider environment
• various typologies of business and associated HR
  strategies
• Empirical studies tend to use
• large-scale questionnaire surveys (Storey)
• case-studies on SHRM.
• Theoretical empirical gaps between rhetoric and
  real experience - downsizing and redundancies
  etc.

3
Stages in a Corporate Strategy Process
Organisation Mission and Goals (Define the
business)
Strategic Analysis (current situation, programmes
and performance)
Rational, logical versus interpreted political
Strategic Choice (bounded rationality, shaping
the environment)
Strategy Implementation (programmes, resources
responsibilities)
4
Planning Levels
CEO
Corporate Level
Corporate HQ
Business Level
Aviation
Heating
Trucks
Plastics
Consultancy
Functional Level
Accounting
Manufacturing
Marketing
R D
5
Strategy Formulation

• Managers analyse the situation develop
  strategies to achieve the mission.
• SWOT analysis planning to identify
• Organizational
• Strengths manufacturing ability, marketing
  skills
• Weaknesses high labor turnover, weak financials.
  
• Environmental
• Opportunities new markets
• Threats economic recession, competitors

• Long-term - 5 yrs
• Intermediate-term 1- 5 yrs.
• Corporate business plans
• Short-term - less than 1 yr.
• Functional plans?
• Rolling cycle - amend plans constantly?

6
Standard Corporate Planning Picture
SWOT STEEPLE Internal external analysis
Corporate strategy develop a plan of policies,
allocations, programmes to maximise long-run
value

• Concentrate
• Diversify
• Globalize
• Vertically Integrate
• Down-size
• Flexible firm

• Grow
• Stabilize
• Retrench
• React/Panic

7
Manifestation of Strategy and Policy

• Maintenance
• Standing plans (programmed decisions)
• policies, rules, and standard operating
  procedures (SOP).
• general and specific guides to action.
• Programme arrangements and allocations.
• Innovations
• New initiatives, programmes and projects

What are these for HRM?
8
Schools of Strategy

• Prescriptive
• Design School
• Strategy (formation as a process of conception)
• Planning (formal process)
• Positioning (analytical process and techniques)
• Descriptive Schools (metaphors)
• Enterpreneurial (visionary)
• Cognitive (mental)
• Learning (emergent, adaptation, incremental)
• Power (a process of negotiation between
  interests)
• Cultural (collective values, beliefs and
  behaviours)
• Environmental (reactive, contingent)
• Configuration (process of transformation from
  one state to another - management of change)

Source Mintzberg, Ahlstrand, Lampel, 1998,
Strategy Safari, Prentice Hall
9
Michael Porter -- Value-Added Chain Analysis
Technology development
Support Activities
Procurement
Primary Activities
Inbound logistics
Operations
Outbound logistics
Marketing and sales
After sales service
Employee management
Support Activities
Firms infrastructure
10
Mintzberg on Strategy

• Plan (intended)
• direction, guide, a course of action.
• Pattern (realised)
• consistency in behaviour over time e.g. high end,
  low risk, patterns evolved out of the past. What
  plan have we actually pursued over the last 5
  years?
• Position
• Locating our HRM in a position, unique and
  valuable, involving a set of activities, X marks
  the spot.
• Perspective
• look inwards and upwards to a grand vision of the
  enterprise. The theory (mind-set) of the
  business. Less easy to change than position e.g.
  from bureaucracy to innovation.
• Ploy (specific manoeuvres)

11
Deliberate and emergent strategies
Intended Strategy
Deliberate Strategy
Unrealised Strategy
Realised Strategy
Emergent
Source Mintzberg, Ahlstrand, Lampel, 1998,
Strategy Safari, Prentice Hall
12
Form and Formation
Set direction but unknown waters, move quickly
or slowly? Focuses effort unity vs group-think
peripheral vision Defines the organisation a
shorthand but slogans may override complexity
distort reality Provides consistency Provide
order, a cognitive structure to simplify, explain
facilitate action but creativity thrives on
loose order

• Strategies have a form and they are formulated
• So what is the form of HRM strategy of
  organisation X?
• Steerage and Umbrellas
• Deliberate broad outlines with details emerging
  en-route

13
CEO and HR Director as strategists

• Interpersonal
• figurehead
• leader
• Information Processing
• liaison
• monitor
• disseminator
• Spokesperson
• Decision-making
• initiator/changer
• resource allocator
• disturbance handler
• negotiator
• (after H Mintzberg)

• Conceive the big idea?
• Let everyone else get on with the details?
• But the job is not like this
• Mintzberg on managerial roles

14
Corporate-Level Strategies

• Stick to the knitting - focus on core business
• Diversification
• Related similar areas - build upon existing
  divisions
• synergy core competencies
• Unrelated - portfolio business in new areas
• No declared strategy?
• Corporate failure? Implicit strategy?
• Avoid resource-consuming activity
• Disdain for formal planning but reliance on
  consistency of behaviour at all levels.
• No frills, non-bureaucratic organisation
• No recipe to decrease flexibility, block
  learning adaptation
• Tension between control and discretionary
  freedom.

15
International HRM Strategy

• Global HRM diversity for different conditions
• single, standard scheme across all countries?
• adaptation acceptance of national differences?
• values, ethics in decision-making
• Domestic
• Common national schemes?
• public sector institutions?
• Common professions/occupations
• personnel system discretion for semi-autonomous
  divisions to take advantage of local
  circumstances?

16
HRM Services and the Product Life Cycle
Maturity
Growth
Profit
/volume
Develop or decline
Start-up

• Implications for
• Recruitment?
• Rewards?
• Training Development?
• Employee Relations?
• Organisational development?

Loss
Time
17
Analysis of HR Services

• Deliverables capacity and capability
• Can we deliver? What do we deliver and how
  well?
• Efficiency
• How well is the process offered, managed and
  controlled?
• What are the transformation indicators and
  service quality ratios?
• cost/unit, cost/recruit, performance/employee,
  cost/HR intervention?
• Adaptability
• short long term responses to pressure and
  change
• Benchmarking
• efficiencies, processes outputs
• investment - , technical and human
• quality, systems, research and intelligence

18
Common-sense propositions on quality

• No focus on quality - lose market share and
  reputation.
• Good reputation is easier to lose than regain.
• People trust and become accustomed to favourites
• They remember the bad. "I'll never go there
  again".
• New loyalties with substitute suppliers.
• Complacency breeds neglect.
• It takes a major operational and psychological
  effort to
• maintain quality vigilance (entropy).
• regain a lost reputation.
• Common-sense either forgotten or only realised
  post hoc

19
What is Quality?

• ....... a perception of class, excellence, a
  type of "referential" standard or (in definition)
  reflecting needs and expectations of customer.
• Guru definitions
• product or service, nature or features
  reflecting capacity to satisfy express or implied
  statements of need (Deming)
• conformance to requirements (Crosby)
• fitness for purpose or use (Juran)
• product/service characteristics as offered by
  design, marketing, manufacture, maintenance and
  service that meet customer expectations
  (Feigenbaum)
• Oakland (1995) - perceivable, measurable move
  from mere satisfaction to "delight
  and reputation for excellence".
• Reliability. Next door swears by her 8-year old
  Zanussi!

20
Elements of a Quality Policy

• organisation structure for quality roles,
  responsibilities
• how client/customer needs and perceptions will be
  identified
• technical/economic resource allocation
• QMS scheme operation
• how suppliers supplies will be required to meet
  standards
• prevention zero defects/CQI approach vs.
  "inspect-out"
• communication, knowledge, information staff
  development
• audit of QMS in operation
• Partnership with staff, customers and suppliers.
• Physical manifestation not just conceptual

21
TQM - a Strategy and Discourse

• an approach to improving the competitiveness,
  effectiveness and flexibility of a whole
  organisation..... a way of planning, organising
  and understanding each activity and it depends on
  each individual at each level. TQM is a way of
  ...... bringing everyone into the processes of
  improvement
• Oakland 1995
• a TQM programme requires re-evaluation of how
  organisational members address the quality of
  their work and the service processes.

22
TQM underpinned by policy commitment

• A culture and practice change strategy
• Organisational renewal
• Injection of energy
• Staff encouraged in positive, initiative taking
  behaviours
• Adopt a prevention and CQI ethic
• Quality improvement teams/circles
• Use of a variety of methods and techniques
  (tools)

23
Kaizen Continuous Quality Improvement (CQI)

• critical view of organisational performance
  standards
• continuously challenge incrementally upgrade
  performance levels
• contribution and role of HR team
• attitude (ownership), involvement and team effort
  as the key to improvement
• HR team - line manager relationships

24
Classical functional, problem analysis cycle

• Situation analysis
• Problem definition
• Objectives and resourcing
• Solution development - options and best fit from
  DO NOTHING to DO EVERYTHING. Min/Max,
  optimistic/pessimistic, high/low budget etc.).
  Test models against objectives and constraints
• Implementation analysis
• detailed planning for operational
  implementation.
• analysis for potential problems
• scheduling, work allocation, capacity management,
  communicating, monitoring systems overall
  coordination.

25
Questions for Quality Strategy

• Who are our direct and indirect clients
• Define characteristics, needs, requirements?
• Design features of services?
• How do clients perceive these?
• Bench-mark comparisons
• Which features do not compete?
• How can we delight beyond the basic
  specification?
• Design improvement projects?
• Who, by when at what cost?
• Operational ability to bridge the gaps?
• Information monitoring systems?
• Supply chain analysis - performance
  communication?

26
Specifying HR Quality

• Essential contract for supply
• ensuring delivered quality in a contract of
  service.
• Implications of failure to draw up a clear
  specification?
• Design quality dimensions include
• Features, performance, delivery, cost,
  reliability, durability, serviceability,
  response, aesthetics, reputation.
• Conformance measurement Degree to which service
  design specification is met

27
ISO 9000 Certification for HR Services?

• The parties organisational level?
• Detailed specification
• what best practice will be (product process
  definition)
• contract volume, milestones, stage deliverables?
  
• CSFs/CQFs for inputs, processes, outputs?
• work done to plan, in the defined ways?
• QA/QC methods? inspection, testing and
  monitoring
• staged prices and conditions? variation orders
  vs. extras
• penalties?
• audit trail
• client liaison

28
Clauses of ISO 9000
Costs of initiating and maintaining the system?
29
USA Baldrige National Quality Award (1999)

• Leadership (weighting 125 points)
• Strategic Planning (85)
• Customer Market Focus (85)
• Information and Analysis (85)
• Human Resource Focus (85)
• Process Management (85)
• Business Results (450)

Criteria for Performance Excellence
30
References

• Gratton L, Hope-Hailey V, Stiles P. and Truss C,
  (1999) Strategic HRM Corporate Rhetoric and
  Human Reality, OUP.
• Huselid M, (1995) The Impact of Human Resource
  Management Practices on Turnover, Productivity
  and Corporate Financial Performance . Academy of
  Management Journal, Vol. 38, No. 3, pp. 635-672.
• Kamoche K. (1994) A Critique and a Proposed
  Reformulation of Strategic HRM . HRM Journal,
  Vol. 4, No. 4, pp.29-43.
• Miles R and Snow C. (1984) Designing Strategic
  Human Resources Systems, Organizational Dynamics,
  Summer 36-52.
• Swiercz P. (1995) Strategic HRM, Human Resource
  Planning, 18,3, p.53-.
• Truss C. (2001 forthcoming) Complexities and
  Controversies in Linking HRM with Organisational
  Outcomes . Journal of Management Studies.
• Truss C. and Gratton L. (1994) Strategic HRM A
  Conceptual Approach . International Journal of
  HRM, 5,3, pp.663-686.
• Truss C, Gratton L, Hope-Hailey V, McGovern P,
  Stiles P. (1997) Soft Hard Models of HRM A
  Reappraisal . Journal of Management Studies,
  34,1, pp.53-73.
• Wright, P. and McMahan, G. (1992) Theoretical
  Perspectives for Strategic HRM , Journal of
  Management, Vol. 18, No. 2, pp. 295-320.