KB 31A Strategic HRM

a human resource newsletter KNOWLEDGEBEANS

issue no 31 | February 2011

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The need of the hour is that the HR professionals push past the strategy - development phase and put their plans into action. The implementation of strategy is a key element of business success.

The basics of effective implementation are: - Understanding and realization of business strategy/plan in totality - Gauge HR in terms of business results - Build relationships with the top line executives

- Be determined in building alliances - Get savvy about business change - Branch out for support

HR also needs to evolve into focusing on three key areas: 1. Competencies and guidance around the acquisition, development and deployment of human capability through performance management systems reflecting KPIs, based on the overall business plan; clear understanding of roles and responsibilities of employees, and control mechanisms in place with effective reward systems 2. Facilitating the ‘transfer’ of certain core competencies and skill sets to everyone in a management/leadership role 3. Project management; making sure that when we implement new ‘people systems’ they are implemented correctly and aligned with other business systems Thus, what is needed is the right horizontal and vertical fit of SHRM in the organization for enhancing business performance. Horizontal fit being, coordination among a variety of human resource practices, while vertical fit is concerned more with the compatibility between the HR practices and the strategy an organization pursues. HRM SYSTEMS – A SOURCE OF IMPLEMENTATION OF STRATEGY With the role of HRM under the scanner for justification worldwide, the need for HRM experts and practitioners to establish their HR systems as a strategic asset is becoming crucial. With the conventional sources of competitive advantage becoming relatively less important over time, competencies and capabilities of the employees as well as intellectual capital are gaining leverage. And this is where the HRM systems can play a strategic role in the organization’s growth. Research suggests that a well designed and aligned HRM system represents a significant economic asset for the organization. Various ways of aligning HRM systems to business strategy have been proposed by researchers such as ‘conceptual approach’, alignment to cost reduction/innovation/quality enhancement strategies etc. HRM systems can align to the business strategies as well as help in strategy formulation. A strategically proactive HR can play a vital role in creating strategic alternatives for the organization in the long run. This includes myriad activities from OD ENTHUSIAST’S ORATE

Dhara Shah

Dhara Shah is a student at K J Somaiya Institute of Management Studies and Research; currently pursuing her Masters in Management Studies. She is majoring in HR and has a keen interest in the study of behavioural sciences.

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