Strategic Human Resource Management

Unit 1: Strategic HRM

1.1.

Strategic HRM

11

1.1.1.

Introduction to Strategic HRM

11

1.1.2.

Scope of SHRM

12

1.1.3.

Features of SHRM

12

1.1.4.

Components of SHRM

13

1.1.5.

Objectives of SHRM

14

1.1.6.

Evolution/ Development of SHRM

14

1.1.7.

Difference between Traditional HRM and SHRM

15

1.1.8.

Challenges/Barriers to Strategic HR

16

1.1.9.

Overcoming Barriers of SHRM

18

1.1.10.

Importance of SHRM

19

1.2.

An Investment Perspective of Human Resource Management

20

1.2.1.

Introduction

20

1.2.2.

Aspects of Investment in Human Resource

22

1.2.2.1.

Human Resource Investment Consideration

22

1.2.2.2.

Investment in Training and Development

24

1.2.2.3.

Investment Practices for Improved Retention

35

1.2.2.4.

Investment in Job Secure Workforces

40

1.2.2.5.

Non- Traditional Investment Approaches

45

1.3.

SHRM Approaches: The Indian Context

48

1.3.1.

Introduction

48

1.3.2.

Integrated System Model

48

1.3.3.

The HRD Framework

51

1.3.4.

HRD as an Approach

51

1.3.5.

The Indian Approach vs. the Western Approach

52

1.4.

Exercise

53

Unit 2: Human Resource Evaluation and Human Resource Planning

2.1.

Human Resource Evaluation

54

2.1.1.

Concept of HR Evaluation

54

2.1.2.

Purposes of HR Evaluation

54

2.1.3.

Linkages between HRM and Firm Performance

56

2.1.4.

Aspects of HR Evaluation

59

2.1.5.

Rational Approaches to Evaluation of HR

61

2.1.6.

Myths Related to HR Evaluation

64

2.1.7.

Benefits of HR Evaluation

68

2.1.8.

Obstacles in HR Evaluation

69

2.2.

Strategic Fit Frameworks

71

2.2.1.

Meaning and Definition of Strategic Fit

71

2.2.2.

Types of Strategic Fit

71

2.2.3.

Approaches for Development of HR Strategy

72

2.2.3.1.

Linking Business Strategy and HR Strategy (Best Fit Approach)

72

2.2.3.2.

HR Bundles Approach

77

2.2.3.3.

Best Practice Approach

79

2.3.

HRM Practices

81

2.3.1.

Concept of HRM Practices

81

2.3.2.

Factors Affecting HRM Practices

82

2.3.3.

Importance of HRM Practices

84

2.3.4.

Distinctive HR Practices

85

2.3.4.1.

Recruitment, Training and Development

85

2.3.4.2.

Induction

86

2.3.4.3.

Retention Strategy

86

2.3.4.4.

Leadership

87

2.3.4.5.

Outsourcing

87

2.3.4.6.

Offshoring

87

2.4.

Human Resource Planning (HRP): An Overview

88

2.4.1.

Meaning and Definition of Human Resource Planning

88

2.4.2.

Nature of Human Resource Planning

89

2.4.3.

Scope of Human Resource Planning

89

2.4.4.

Significance of Human Resource Planning

90

2.4.5.

Perspectives of HRP

91

2.4.6.

Objective of HRP

92

2.4.7.

Business Strategy and HRP

92

2.4.8.

Factors Influencing Human Resource Planning

95

2.4.9.

Process of HRP

97

2.4.9.1.

Environmental Scanning

98

2.4.9.2.

Organisational Objectives and Policies

98

2.4.9.3.

Demand Forecasting

99

2.4.9.4.

Supply Forecasting

101

2.4.9.5.

Estimating Manpower Gaps

103

2.4.9.6.

Matching Supply and Demand

103

2.4.9.7.

Action Planning

106

2.4.9.8.

Evaluation and Control

106

2.4.10.

Limiting Factors of Human Resource Planning

107

2.4.11.

Guidelines for Effective Human Resource Planning

108

2.5.

Exercise

110

Unit 3: HR Systems

3.1.

HR Systems

111

3.1.1.

Introduction

111

3.1.2.

Steps in Developing HR Systems

112

3.1.3.

Components of HR Systems

113

3.2.

Staffing Systems

114

3.2.1.

Meaning and Definition of Staffing

114

3.2.2.

Nature of Staffing

115

3.2.3.

Process of Staffing

115

3.2.4.

Recognising Staffing Systems that Fit the Firms Business Strategy

117

3.2.5.

Potential versus Achievement Orientation

118

3.2.5.1.

Recognising High-Quality Practices When Selecting for Achievement

118

3.2.5.2.

Recognising High-Quality Practices When Selecting for Potential

120

3.2.6.

Organisational Fit and Systems for Addressing Employee Motivation

121

3.2.7.

Importance of Staffing

123

3.3.

Reward and Compensation Systems

123

3.3.1.

Reward System

123

3.3.1.1.

Aim of Reward System

124

3.3.1.2.

Components of a Reward System

124

3.3.2.

Compensation

128

3.3.2.1.

Compensation System/Components of Compensation

129

3.3.2.2.

Factors Influencing Compensation

131

3.3.2.3.

Importance of Compensation

132

3.3.3.

Aligning Reward and Compensation Strategy with Firm’s Business Strategy

134

3.3.4.

Pay Level: Maintaining External Competitiveness in Compensation

135

3.3.5.

Use of Pay Surveys for Competitive Market Data

136

3.3.5.1.

Sources of Data for Pay Surveys

137

3.3.5.2.

Strategic Considerations of Pay Surveys

139

3.3.6.

Pay Structure: Maintaining Internal Consistency in Job Pricing

140

3.3.6.1.

Establishing an Internally Consistent Pay Structure using Job Evaluation

141

3.3.6.2.

Creating Pay Structure: Blending External Competitiveness and Internal Consistency

143

3.3.7.

Pay Systems

145

3.3.7.1.

Performance-Contingent Pay and Pay at Risk

146

3.3.7.2.

Pay for Other Employee Contributions

148

3.3.8.

Employee Benefits

149

3.3.8.1.

Types of Fringe Benefits

149

3.3.8.2.

Importance of Employee Benefits

156

3.4.

Employee and Career Development Systems

157

3.4.1.

Introduction

157

3.4.2.

Training and Development System

158

3.4.2.1.

Systematic Approach to Training

158

3.4.2.2.

Measures for Making Employee Development System Effective

163

3.4.2.3.

Role of Training in Career Development

164

3.4.3.

Career Development System

165

3.4.3.1.

Designing Effective Career Development Systems

165

3.4.3.2.

Benefits of a Career Development System

167

3.4.3.3.

Career Development as Motivational Tool for Employee

169

3.5.

Performance Management Systems (PMS)

171

3.5.1.

Meaning of PMS

171

3.5.2.

Purposes and Uses of PMS

172

3.5.3.

Components of PMS

174

3.5.4.

Prerequisites for an Effective PMS

175

3.5.5.

Aligning Performance Management Systems with Firm’s Strategy

177

3.5.6.

Performance Appraisal as a Tool of Performance Management

178

3.5.7.

Advantages of PMS

189

3.5.8.

Disadvantages of PMS

191

3.6.

Exercise

192

Unit 4: Strategic Option

4.1.

Strategic Options and HR Decisions

190

4.2.

Downsizing and Restructuring

191

4.2.1.

Meaning of Downsizing

191

4.2.2.

Characteristics of Downsizing

191

4.2.3.

Reasons for Downsizing

193

4.2.4.

Types of Downsizing Strategies

193

4.2.5.

Survivors of Downsizing

194

4.2.6.

Benefits of Downsizing

196

4.2.7.

Consequences of Downsizing

197

4.2.8.

Precautions to be Taken While Downsizing

198

4.3.

Labour Markets

199

4.3.1.

Meaning of Labour Market

199

4.3.2.

Characteristics of Labour Market

200

4.3.3.

Components of Labour Market

200

4.3.4.

Types of Labour Markets

202

4.3.5.

Unemployment Rate and Labour Markets

207

4.4.

Mergers and Acquisitions (M&As)

209

4.4.1.

Concept of Mergers and Acquisitions

209

4.4.2.

Reasons for Mergers and Acquisitions

210

4.4.3.

Types of Mergers and Acquisitions

212

4.4.4.

Stages and HR Issues Involved in Mergers and Acquisitions

214

4.4.5.

Role of HR Professionals in Mergers and Acquisitions

216

4.4.6.

Advantages of Mergers and Acquisitions

218

4.4.7.

Mistakes in Mergers and Acquisitions

219

4.5.