Strategic planning

Strategic Role of
HRM
Chapter 3

strategic plan
 A strategic plan is the company’s plan
for how it will match its internal
strengths and weaknesses with external
opportunities and threats in order to
maintain a competitive advantage
 strategy
A course of action the company can pursue
to achieve its strategic aims.

Strategic HR Planning –
What is this?
 Strategic human
resource planning. Human resource
planning is a process that identifies
current and future human resources
needs for an organization to achieve its
goals. Human resource planning should
serve as a link between human
resource management and the
overall strategic plan of an organization.

Scanning the Environment
 The process begins with the scanning of the
environment, i.e. both the external and internal factors
of the organization. The external environment
encompasses the political, legal, technological,
economic, social and cultural forces that have a great
impact on the functioning of the business. The internal
factors include the organizational culture, hierarchy,
business processes, SWOT analysis, industrial relations,
etc. that play a crucial role in performing the business
operations.
 The role of the HR department is to collect all the
information about the immediate competitors – their
strategies, vision, mission, strengths, and weaknesses

Identify Sources of
Competitive Advantage
 The next step in the strategic human resource
management process is to identify the
parameters of competitive advantage that
could stem from diverse sources as product
quality, price, customer service, brand
positioning, delivery, etc.
 The HR department can help in gaining the
competitive advantage by conducting the
efficient training programs designed to enrich
the skills of the staff.

Identify HRM Strategies
 a) Learning as Socialization: This strategy includes the
techniques as training courses, coaching sessions, education
programs to ensure that the employees abide by the rules,
value and beliefs of an organization and are able to meet the
performance targets.
 b) Devolved Informal Learning: This strategy helps in
making the employees aware of the learning opportunities and
the career development.
 c) Engineering: This strategy focuses on creating and
developing communities of practice and social networks within
and outside the organization.

Implementing HR
Strategies:
 Once the strategy has been decided
the next step is to put it into the
action. The HR strategy can be
implemented by considering the HR
policies, plans, actions and practices

Monitor and Evaluation:
 The final step in the strategic human resource
management process is to compare the
performance of the HR strategy against the
pre-established standards.
 At this stage, certain activities are performed
to evaluate the outcomes of the strategic
decision: establishing the performance targets
and tolerance levels, analyzing the deviations,
executing the modifications.
 Thus, to have an effective HR strategy the firm
follow these steps systematically and ensures
that the purpose for which it is designed is
fulfilled.

Determining the Objectives of Human
Resource Planning
 The objective for which the manpower planning
is to be done should be defined precisely, so as
to ensure that a right number of people for the
right kind of job are selected.
 The objectives can vary across the several
departments in the organization such as the
personnel demand may differ in marketing,
finance, production, HR department, based on
their roles or functions.

Analyzing Current
Manpower Inventory
 The next step is to analyze the current manpower supply
in the organization through the stored information about
the employees in terms of their experience, proficiency,
skills, etc. required to perform a particular job.
 Also, the future vacancies can be estimated, so as to
plan for the manpower from both the internal (within the
current employees) and the external (hiring candidates
from outside) sources. Thus, it is to be ensured that
reservoir of talent is maintained to meet any vacancy
arising in the near future.

Forecasting Demand and
Supply of Human Resources
 Once the inventory of talented
manpower is maintained; the next
step is to match the demand for the
manpower arising in the future with
the supply or available resources with
the organization.
 Here, the required skills of personnel
for a particular job are matched with
the job description and specification.

Analyzing the Manpower
Gaps
 After forecasting the demand and supply, the
manpower gaps can be easily evaluated. In
case the demand is more than the supply of
human resources, that means there is a deficit,
and thus, new candidates are to be hired.
 Whereas, if the Demand is less than supply,
there arises a surplus in the human resources,
and hence, the employees have to be removed
either in the form of termination, retirement,
layoff, transfer, etc.

Employment Plan/Action
Plan
 Once the manpower gaps are
evaluated, the action plan is to be
formulated accordingly. In a case of a
deficit, the firm may go either for
recruitment, training,
interdepartmental transfer plans
whereas in the case of a surplus, the
voluntary retirement schemes,
redeployment, transfer, layoff, could
be followed.

Training and Development
 The training is not only for the new
joiners’ but also for the existing
employees who are required to
update their skills from time to time.
 After the employment plan, the
training programs are conducted to
equip the new employees as well as
the old ones with the requisite skills
to be performed on a particular job.

Appraisal of Manpower
Planning
 Finally, the effectiveness of the manpower planning
process is to be evaluated. Here the human resource
plan is compared with its actual implementation to
ensure the availability of a number of employees for
several jobs.
 At this stage, the firm has to decide the success of the
plan and control the deficiencies, if any.
 Thus, human resource planning is a continuous process
that begins with the objectives of Human Resource
planning and ends with the appraisal or feedback and
control of the planning process.

Strategic Role of Human
Resource Managers
 Evolving Roles
 Recruitment and Selection
 Employee Training
 Compensation and Benefits
 Workplace Safety
 Employee Relations

Evolving Roles
 During the 1980s, personnel departments were responsible for
handing out applications, providing employees with insurance
enrollment forms and processing payroll. The role of the
personnel department was mainly administrative. Over the
next several decades, the role of personnel administration
became more involved with overall business goals. Companies
began to recruit human resources leaders who were capable of
strategic management. Personnel administration evolved into
human resources management. Human resources managers
are responsible for developing strategic solutions to
employment-related matters that affect the organization's
ability to meet its productivity and performance goals.

Recruitment and Selection
 Employee recruitment and selection is as much a part of
employee relations as it is a separate discipline unto
itself. Therefore, a human resources manager’s strategic
role is to combine elements of employee relations into
the employer’s recruitment and selection strategy.
Integrating employee recognition programs into
promotion-from-within policies is an effective form of
employee motivation that combines the employee
relations and recruitment and selection areas of human
resources.

Employee Training
 Human resources managers’ strategic role with respect
to employee training and development prepares the
workforce for future positions within the company.
Succession planning, promotion-from-within policies and
performance evaluation factor into the human resources
manager’s role. Training and development motivate
employees, and in some cases, improve employee
retention

Compensation and Benefits
 An employer's compensation and benefits structure
partly determines the company's business reputation
and image. In addition, the decisions that human
resources managers make regarding pay scales and
employee benefits can impact employee satisfaction, as
well as the organization’s ability to recruit talented
workers. Job evaluation, labor market conditions,
workforce shortages and budget constraints are factors
that HR managers consider in a strategic plan for pay
and benefit

Workplace Safety
 Creating a work environment free from unnecessary
hazards is a strategic role of every human resources
manager. Strategic development for workplace safety
entails risk management and mitigating potential losses
from on-the-job injuries and fatalities. Workers'
compensation insurance is an area in which a strategic
plan helps lower company expense for insurance
coverage. Reducing accidents through training
employees on the proper use of complex machinery and
equipment is one of the functional tasks associated with
creating a safe work environment

Employee Relations
 Some human resources managers believe that
strengthening the employer-employee relationship rests
solely in the employee relations areas of the HR
department. This isn’t true. Nevertheless, employee
relations is such a large part of every discipline –
including salaries, benefits, safety, training and
employee development – that sustaining an employee
relations program is an important element of human
resources strategy

Basic Strategic Trends
 TREND 1 – Retiring Baby Boomers
 TREND 2 – Entrance of Generation Z
 TREND 3 – Workforce Flexibility
 TREND 4 – Gig Workforce
 TREND 5 – Tight Labor Market
 TREND 6 – Return of the Performance
Review
 TREND 7 – Bonuses versus Raises
 TREND 8 – Parental Leave
 TREND 9 – Compliance issues

Generations
 Baby Boomers(1946-1965)
 Generation X (1966-1976)
 Generation Y (1977-1994)
 Generation Z (1995-Till)

Strategic planning

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