A Project on Strategic Human Resource Management, Study Guides, Projects, Research of Human Resource Management

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PROJECT

On

STRATEGIC HUMAN RESOURCE

MANAGEMENT

INDEX

Serial no. Chapter no. Description Page no.

Chapter 1 Introduction 5

2. Chapter 2^ Book Reviews^10

3. Chapter 3^ Article Reviews^14

4. Chapter 4^ SHRM at Nestle^26

5. Chapter 5^ SHRM at NTPC^33

6. Chapter 6^ Analysis & Conclusion^39

Annexure 41

1.3 KEY FACTORS OF SHRM PROCESS-

• The external environment – which is very dynamic in the current global business scenario.
• The business strategy - it affects and is affected by the SHRM process and which gives the organization a well thought of direction.
• The internal environment – the organisational context and the general culture which is prevalent in the organization.
• The outcomes of the SHRM process – which should be evaluated both quantitatively as well as qualitatively.

1.4 PRACTICAL ROLE OF SHRM-

• Build a Strategic Framework: Mission Statement, Vision, Values.
• Help in goal setting. Look Beyond Traditional Goals.
• Create Leadership Vision and culture of innovation.
• Support Company's Brand (employees as customers approach).
• Manage a cross cultural work-force.
• Manage the young, overambitious recruits.
• Manage continuous competitiveness in a changing business environment and technology and product delivery systems.
• Keep HR cost to minimum possible.
• Create employee loyalty programmes.
• Design and utilize assessment metrics for evaluation of SHRM process.

1.5 AN EXAMPLE OF A QUANTITATIVE TECHNIQUE FOR ASSESSMENT

OF THE EFFECTIVENESS OF THE SHRM PROCESS:

THE SELECT TO PROFIT LOOP-

THE SELECT TO PROFIT LOOP is a quantitative technique which organizations employ to ascertain whether an employee is a profit centre or a cost centre. Right from the time of selection, there are certain activities which are carried out vis-à-vis the employee which incur some costs; and certain activities undertaken by the employee generate revenues for the company. Now, by evaluating all these activities, it can be found out whether the revenue generated by the employee outweighs the costs incurred on him or not. Thus, organizations can directly link the selection of a candidate to the net profit he/she expected to generate.

SELECT

PROFITS REWARD

PRODUCTI^ MOTIVATE V-ITY

SALES COSTS

ENROLL TRAIN EVALUATE

1.8 NEED FOR SHRM-

• Increase competition in both local and global markets requires organizations to involve their people in developing the strategy for a sustainable competitive advantage.
• Maintaining a competitive advantage by becoming a low cost leader or a differentiator is possible through good HR practices, as best practices in terms of the working of human capital within an organization are hard to replicate.

1.9 ADVANTAGES OF SHRM-

• Each employee becomes a profit centre.
• Accountability at all levels in the organizational hierarchy increases.
• Business can meet ever increasing customer demands.
• Employees become pro-active; align their personal goals with the goals of the organization.

AND THE BOTTOM-LINE IS….

Good HRM = Good financial results

HRM

Financial results

CHAPTER 2

BOOK REVIEWS

2.1 BOOK 1-

“Roadmap To Strategic HR- Turning a Great Idea into a Business Reality” By Ralph Christensen

The book illustrates a practical approach for turning Human Resource into a crucial component of success. For decades now, human resources professionals have sounded the drumbeat of change: HR must transform itself from an administrative function into a strategic business partner. But it has been said so often, for so long, and with so little concrete, real-life information on how to actually achieve this new mission, that the message often sounds like a wouldn't-it-be-nice scenario.

But it isn't. More and more traditional HR activities are being farmed out to service centers, external vendors, and line managers. The work of HR is changing, and more and more professionals realize that to succeed in the future they must be part of the team that makes important business decisions.

Roadmap to Strategic HR is a sorely needed prescription for achieving strategic focus in complex organizations. Drawn from the author's more than 25 years of experience and insights as an HR practitioner at Hallmark and other companies, the book outlines a 10- step, results-oriented plan for making the transition. It helps one integrate top-quality tactical work with innovative internal systems—talent systems, training systems, reward systems, or work processes—that will meet the strategic business demands of your organization.

2.2 BOOK 2-

“Human Capital Management-Achieving Added Value Through People” By Angela Barron & Michael Armstrong

The book provides a planned & proactive process of partnership with top management to achieve desired long term organizational growth and direction while satisfying the individual objectives and growth of best employees.

Strategic HRM discusses that every employee has a right and looks forward to both horizontal and vertical growth with room for experimenting with ideas and testing entrepreneurial spirit within and organization have to continuously adapt to this requirement by changing and expanding. No one likes to work with stagnant organization or organization without sharing growth with employees-Promotions, participations and financial rewards.

Thus, organizations have to continuously adapt by changing and expanding and must look after the following processes-

• Careful and extensive systems for recruitment selection and training (RST).
• Formal system for sharing information with employees.
• Clear job design; High level participation processes; monitoring of attitudes.
• Performance appraisals (self-appraisal system should be followed for all executive positions in my view).
• Properly functioning grievance procedures (with both procedural and technical justice visible).
• Promotion and compensation schemes that provide for the recognition and reward of high- performing employees.

The changing profile of New Age young workers has to be built in HR policies like flexibility of work time, freedom for experimenting, quick growth and sense of identity with projects of company.

It is also seen that Top management/owners in Indian companies still have commodity approach underpaying, disallowing delegation, curbing enterprise and failing to communicate organizational goals. Such organizations have little chances of growth or survival for long in new environment. Here role of HR leadership is most crucial to transform the organizations into innovative, learning and flexible organization where employees find it exciting to work with lot of room with all round positive environment within the organization.

3.1.3 LITERATURE REVIEW IN THE ARTICLE-

• Devanna et al. (1981) put forth a number of reasons why strategic orientation may lack in the HR function. A major one is that the top management does not perceive it important to include the HR department in the decision making process.
• HR departments must develop competencies in dealing with strategic issues, business awareness and the ability to quantify its own the contributions/ significance.
• Tony Rucci states that the three significant barriers to HR playing a more proactive role in the next ten years are “a) Lack of basic economic literacy among HR professionals, b) Lack of comfort among HR professionals to take risks and c) HR professionals who do not demonstrate courage of conviction about their principles” (Huselid and Becker, 1999: 362).

3.1.4 BASIC CONCEPTS ON WHICH THE MODEL IS DEVELOPED- One-way Vertical Fit- It talks about aligning HRM systems to the business strategy and the partnering role of HR where HR is highly integrated with business processes.

Two-way Vertical Fit- In this particular scenario the HRM systems not only align to the business strategy, but also contribute in the strategy formulation the HR department’s role as a strategic partner emerges in the two-way vertical fit. This includes activities like creating a culture change, identifying mergers and acquisition possibilities, tracking the market and proactively making changes.

Horizontal Fit- It refers to the alignment of various HRM systems to each other and the alignment of key HR systems and processes with for bringing out desired behaviors and culture in the organization.

This model follows the concept of interactive business and HR strategy so that each contributes to the formulation of other.

• Elements of HR like acquiring, managing and developing the competencies are important for the success of strategy implementation.
• Issues like high turnover of employees, lack of morale and motivation, low employee satisfaction, undesirable work-place politics etc. are looked into and their likely impact on strategy implementation are examined.
• Various HRM systems like recruitment and selection, performance management, compensation, training and development, career management, etc. need to be aligned with the HR strategy. Policies and practices of various HRM systems are set or modified according to the strategy implementation needs. Based on the concept of horizontal linkage, HRM systems also need to be aligned to each other.

3.1.5 CONCLUSION-

Anything less than the complete process described in the model increases the possibility of failure. Organisations can no longer ignore the necessity of an integrated three-stage process for SHRM that should at least include:

1. Efficient and inter-linked HRM systems linked to business strategy and
2. Monitoring mechanisms to identify and correct any sort of misalignment. The enablers/deterrents for each stage is another important contribution of this paper.

3.2 ARTICLE NO. 2-

“Maximizing Your Return On People” By Laurie Bassi and Daniel Mc Currer (Harvard Business Review – March 2007)

3.2.1 INTRODUCTION- This article explains the various innovative tools to show which investments in employees are driving company performance and which one should emphasize upon to advance strategic goals. for every company its people are the only source of long term competitive advantage and companies that fail to invest in employees jeopardize their own success and even survival.

According to the authors investment in Human capital management can be directly linked to organizational performance. They have explained methods for measuring bottom line contributions of investment in human capital management (HCM)-like leadership development, job design etc.

3.2.2 HCM DRIVERS- The authors with the help of various Employee and management surveys have identified a core set of HCM drivers that predicts performance across a broad array of organizations and operations. These drivers are as follows:

1. Leadership practices
2. Employee engagement
3. Knowledge accessibility
4. Workforce optimization
5. Learning capacity

In each of these categories HCM practices are further sub divided into groups such as under leadership practices: communication, supervisory skills etc.

3.3 ARTICLE NO. 3-

“Transforming HR Function from Reactive to Proactive” By Jaclyn Lee

3.3.1 CISCO-

CISCO is an armed security business, became a private and commercial business after takeover by Temasek Holdings Pte Ltd in June 2005.It came to be known as CISCO Security Pvt. Ltd. All 4200 employees were transferred to the new company.

3.3.2 THE EARLIER SCENARIO AT CISCO- It was merely administrative in nature, HR practices were irrelevant to the business resulting in very high staff turnover and uncompetitive salaries. All Business unit heads crafted their own people policies to cope up with increasing competition. The HR an obstacle to change and hinged onto bureaucratic practices that effected business and people practices.

3.3.3 THE CHANGE PROCESS- However when the company was in the process of transition, HR function was completely overhauled and transformed to a strategic function to facilitate the transition of the company to a private company. HR aligned itself with the critical needs of business. The objective of the new HR team was to shape the CISCO manpower and talent to support the new philosophy and the mission of its business to deliver high quality services to its clients.Major considerations for the new HR transformation were:

• Understanding the business strategy and aligning HR strategy with it.
• Understanding the needs of the business units and their unique challenges.
• Identifying the key factors causing the high attrition.
• Identifying the key factors causing the loss of key talents.
• Building key HR pillars to deliver core HR services.
• Building the employer brand positioning of CISCO to attract talents.
• Building a strong human capital development program to strengthen key competencies needed for the business.

3.3.4 THE HR PILLARS-

To achieve the above objective the following key HR pillars were formed-

• Manpower Planning and Recruitment
• Aligning human capital development
• Strategic compensation and benefits
• Employee engagement
• HR systems and service delivery

3.3.5 THE KEY CHALLENGES- HR transformation to a commercial enterprise was a challenging task. The Toughest job was to convince existing staff to transform from a back end function to a front line area. However Effective communication played an important role in overcoming these challenges.

3.3.6 CONCLUSION- To conclude the new role of HR was to shape the CISCO manpower and talent to support the new philosophy and the mission of its business to deliver high quality services to its clients thereby reflecting the strategic role of HR function.