HRM Strategies

What is a strategy?

The word strategy comes from the Greek noun “Strategus”, that means “commander in the chief”. Strategy can be simply define as a vision or a plan to achieve long term business objective by utilizing organization resources. The Strategic Human resource management related to people strategies    that are integrated with business strategies in order to achieve them.

Baird and Meshoulam (1988) reviews that “Business objective or the strategies can be achieve when human resource practices, measures, processes and system are developed based on organizational needs.

Key characteristics of a strategy.

Every strategy has three main characteristics

1.      Strategy looking forwards

That mean as a company where you want to go and what are the ways that are used to go there or in other words “this is what we want to do and this is how we are going to do it.”

2.      Identify the organization capabilities.

This refers to strategy help to identify capabilities and availability of existing recourse pool in the organization such as Money, Men, Methods, Machines, Material and Measurements.  

3.      Way to achieve strategic fit.

That means the resources and capabilities of an organization that match with the external and internal environment within the context.

Strategic HRM

Armstrongs (2014) suggested that “strategic human management is an approach that defines how the organizations goals will be achieved through people or in the organization. Strategic HRM is not only including the strategic planning it is for more broader concept that how HR strategies integrated with business strategies in order to achieve them.

In strategic HRM there are three main objectives.

1.      Integration

This means the alignment of the HR strategies with the main business strategies.

 

2.      Provide directions to fast changing environment.

SHRM will help to meet the challengers developing and implementation of HR policies in order to overcome the rapidly changing environment.

3.      Contribute to develop business strategies.

SHRM helps to identify its human resource strength and capabilities to achieve corporate or business strategies.

Different Strategies

The Resource based view

Every organization has different resources and human resources play a major role in it. This will create uniqueness in order to provide competitive advantages. The Resource based view was emerged in 1980’s and 1990’s. The main idea of this theory is to identifying the co competencies of the firm which is valuable, rare, inimitable and non-substitutable, based on the identifying co competencies create strategies of HRM.

Eg – ABC Company is a market leading company of domestic gas industry. And they have made their strategies based on their culture. XYZ Company needs to grab the market but they cannot imitate easily since the culture is unique to the ABC Company.

Let’s discuss some unique characteristic in the business

1.      Excellent leadership

2.      Brand

3.      Partnerships

4.      Team work

5.      Strong in finance

6.      Global presence

7.      Well managed processes

8.      Innovative ideas

Let see how to identify the resources that creates the co competences or the competitive advantage of the organization.

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First we need to identify whether the resources are tangible or intangible. Physical resource can be acquire easily in the market so it creates less competitive advantage. But for intangible assets such as brand name, trade mark cannot be gained easily and so that it will create sustainable competitive advantage.

Second criteria is the resources must be heterogeneous. That mean the quantities of the resource pool. If organization has same amount of resources so both can imitate each other and lose the competitive edge. Accordance with the resourced based view competitive advantage can be gained with the boundaries of resources.

Next one is immobile that means resources are moving from one organization to another organization. With the immobility of resources other organization can’t gain competitive advantage by replicating the same strategy.

Eg – process, Knowledge, brand name,

As a next step we need to identify the VRIO resources.

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Valuable- need to check whether the resources are actually valuable?

Rare - That mean resource cannot be acquired easily.

Cost to imitate – This means resources cannot be imitated easily. So the organization need to spend huge money one R & D in order to acquire it.

Organization – Resource itself do not add any advantage to the organization. In order to gain advantage they need to have special system, processes polices.

If any resource fulfil these requirements that resource automatically creates competitive edge for the organization.

The best practice approached

According to industrial experts this approach is not recommended. Since there is a high risk to success the strategy.  This method assume that there were set of standard or best practices to follow in the industry for any situation.

This approached company copy good practices that follow by other companies assuming that it is the best practise available in the market. The main reason to fail this approach due to strategy work for one company will not work for other companies. Based on this approach company will go for mergers & acquisition. But most of the time these mergers were not successful due to organizational cultural changers. For success of any mergers & acquisition HR teams & strategies involvement is essential. Since acquisition need to change the origination culture and need to acquire people that need to success the merge.

Best fit approached

The best fit model is related to contingency theory. This model explains that HR strategies must be par with the circumstances and context of an organization. In this approached emphasized integration between the HR and cooperate strategies. In best fit approach first we need to analyse the internal and external environments and need to identify the strength & weaknesses of the organization and threats and opportunities occur with the external environment. Also need to analyse on 6 M‘s in the company. They are Money, Men, Methods, Machines, Material and Measurements. 

In the best fit approach, the first need is to analyse whether the company have the right materials, right men, right method and right machine etc. that enhance the strength and overcome the weaknesses. At the same time company needs to focus on opportunities and threats that create from PESTEL & the competition occur from the rivals. By considering all the facts the company need to come up with strategies with the available resources. Following are the best example for best fit approach.

Eg- Arranging a weeding with the money you have in hand.

With this article hope you have identify the main HRM strategies available in the industry.

References,

1.      Armstrong, Hand book of human resource management, Jan. 2014

2.      www.strategicmanagementinsight.com/

3.      Graham, Strategic Human Resource Management, 2008