Strategic HR: Role, Challenges, and Business Strategy Report

This report comprehensively analyzes the strategic role of Human Resources (HR) within an organization, exploring various facets such as the strategic partner role, change agent, employee champion, and administrative expert. It details key HR processes including developing HR strategy, understanding company objectives, evaluating HR capabilities, and implementing strategies. The report also highlights investment orientation factors, challenges like lack of top management support, and barriers to strategic HR. Furthermore, it delves into common HR challenges, strategic work design elements such as outsourcing, mergers, and acquisitions. It explores the impact of technology on HR and the alignment of HR strategies with different business strategies, including low-cost, differentiation, and innovation. The report concludes with a discussion of outcomes, challenges, and the importance of employee skill development, job design, and organizational sustainability. This report is a valuable resource for students seeking to understand the complexities and strategic importance of HR management.

Chapter-4
Strategic Role of HR
1) Strategic Partner: Involve senior HR manager in strategic decision Making.
2) Change Agent (Helps implement change): Change Agent means enabling a form of
a company meeting for continuous. It also shape the organization to increase the
productivity, capacity, & efficiency.
3) Employee Champion: means creating people friendly policy & regulation in such a
way that increases employees contribution & commitment to the organization.
4) Administrative Expert: cost effective way of managing labor forces & renovating
organizational architecture as needed.
5) Human Capital steward: Human capital steward means creating an environment
culture in which employee voluntarily contribute their skills, ideas& innovation
towards the goal of the company.
6) Knowledge facilitator: HR updates necessary for employees skill & knowledge. HR
provides competitive advantage through strategically designed employee
development.
7) Relationship Builder: HR is responsible to develop network in work culture that
allows individual to work together with the strategic focus.
8) Rapid Deployment Specialist: HR is responsible for creating flexible talent pool
who can cope up with uncertainty/ change embrace & adopts in global knowledge
competition, restructure & changes.
9) Direct the company toward future strategic focus: HR should create talent pool so
that they can create future long-term goals. So, its HR’s responsibility to advise &
assist the company.
10)Ensure optimum utilization of organization resources: The success of HR lies
with how you can manage the work, through less resources or minimum level of cost
to save their cost & have good output. EG: Banking Sector.
11)Develop Employee skill & knowledge for organizational sustainability: The
responsibility of HR to update skill & knowledge by providing training & we should
hold them to be sustainable & be well aware of current trends.
Strategic Challenges
1) Lack Of Adequate Support From Top Management: HR management giving a
plan to the company & if the owner & top management not supporting , it will be a
challenging issue for managers to implement as it becomes a question of money,
resources & fund, no one can’t gain anything.
2) Fear of Failure: if HR managers are afraid of getting terminated, they will not get
motivated.
3) Rigidity of HR Practices: some companies HR practices are not flexible at all.

4) Lack of strategic reasoning: it means the company does not have the defined strategy
or target for which they don’t know the exact reason or don’t have any plans of how
they would spend their money & resources.
Barriers To Strategic HR
Many organizations have a difficult time taking a strategic approach to HR. A number
of reasons contribute to this are
1) The most organization adopt a short-term mentality & focus on current
performance. Performance evaluation & competition throughout the organization tend
to be based on current performance.
2) The many HR managers do not think strategically given their segmented
understanding of the entire business. HR management is a complex & ever-changing
function requiring a tremendous amount of technical knowledge.
3) That most senior managers lack the appreciation for value of HR & its ability to
contribute to the organization from a strategic perspective. Simply fail to realize the
contribution HR can make as a strategic partner.
4) Few functional managers see themselves as HR managers & are concerned more
with technical aspect than the Human aspect.
5) Difficulty in quantifying many of HR outcomes & benefit of HR programs.
6)The fact that human assets are not owned by organizations & therefore are seen as
high-risk investment than capital asset.
7) Strategic HR maybe restricted because of the incentives of change that might arise.
Taking a strategic approach to HR may mean making drastic changes how work is
organized, how employees are hired, trained & developed.
Strategic HRM
Strategic HRM is the management of HR philosophies & practices to enable the achievement
of the organizational strategy. These philosophies & practices form a system that attracts,
develops, motivates & train employees who ensure the survival of the organization & its
member.
Chapter-1
Process Of Developing HR Strategy
1) Understand your companies objectives & goals.
2) Evaluate or audit HR capability.
3) Analyzing your current HR capacity in light of the company’s goal.
4) Estimate your company’s future HR requirement.
5) Determine the tools required for employees to complete the job.
6) Implement HR strategy, which means maintaining HR process, acquisition, growth,
Training etc.

7) Evaluation & corrective action, area of improvement, follow & record the progress,
restructure the action and so on.
Investment Orientation Factor
It means the organizations willingness to invest in its human resources. It is determined by
certain factors; those factors are called Investment Orientation factors.
1) Management Values: The organizations investment on human resource management
is determined by senior level management. If the management values the HR actions
positively then the authority can make it compulsory to invest on HR.
2) Attitude Toward Risk: Investment in human resources is inherently riskier due to lack
of absolute “ownership” of the asset.
3) Nature of Employee Skills: The more likely that skills developed by employees are
marketable outside the firm, the more risky the firm’s investment in the development
of those skills.
4) Utilitarian/bottom line mentality: An attempt is made to quantify employee worth to
the organization through a cost-benefit analysis. The “soft” benefits of HR programs
and policies are difficult to objectively quantify because they affect many different
organizational areas and have differential effects on individual employees.
5) Ability Of outsourcing: Given availability of cost-effective outsourcing, investments
in HR should produce highest returns & sustainable competitive advantages.
Chapter-3
Common challenges of HR
1) Change in management & business needs.
2) Leadership development
3) Foster the innovation
4) Fear of failure.
5) Resistance from trade union.
6) Adequate support from the top management.
7) Succession Planning: filling out the higher position level in an organization.
8) Compensation.
9) Product quality/ uniqueness.

Source of Employee Value
1) Technical Knowledge: Markets, Processes, Customers, Environment
2) Ability to Learn and Grow: Openness to new ideas, Acquisition of knowledge and
skills
3) Decision Making Capabilities: Motivation, Commitment.
4) Teamwork: Interpersonal skills, Leadership ability.
Chapter-6
Job design: Restructuring the job.
a) Job specialization: An expertise in a specific line.
b) Job Enlargement: Increasing the number of tasks.
c) Job Rotation: Changing the role of the job. EX: senior officer can be a cashier.
d) Job Enrichment: Increasing responsibilities.
e) Vertical Loading: Distribution of responsibilities based on different hierarchy/
position.
*The Job characteristics model has 3 dimensions:
A) Core Dimension: it is a theory or model that is designed to enhance motivation,
performance, satisfaction & reduce turnover.
1. Skill Variety: Multiple skills to perform a job.
2. Task identity: List or piece of works a person does from start to end.
3. Task Significance: The importance or significance of the job.
4. Autonomy: Freedom or power to perform the job.
5. Feed Back: It allows employees to gain the sense of accomplishment from the job.
B) Critical Psychological States: The factor that influence work outcomes. According to
this model the presence of 5 core job dimensions lead employee to 3 psychological states.
Such as meaningful job, responsible outcome & acquire knowledge(evaluation).
1. Meaningful Job: the degree to which an employee perceive that the work is being
valued & worthwhile by 5 core job dimensions created a psychological state.
2. Responsible Outcome: The degree to which an employee feel accountable &
responsible of his work.
3. Acquire Knowledge: The degree to which an employee know & understand how well
they are performing the job.
C) Personal & Work Outcome: These are outcomes that are achieved on the basis of
job characteristics & psychological support. If the core dimension create a psychological
state that will give outcome to the company. It is beneficial for both the employee &
employer.
*Strategic Work design

1) Outsourcing & offshoring: Outsourcing involves contracting some of the
organization’s noncore work activities to outside specialists who can do the job more
effectively, often for less than it costs the organization to do such work in-house. Once
an organization identifies its core competencies the things that it does better than its
competitors anything remaining may be expendable. A simple cost benefit analysis
can allow managers to determine the efficacy of outsourcing a particular function.
2) Merger & Acquisition: Mergers and acquisitions are tools businesses use to achieve
organizational objectives. Tools that have profound impacts on the employees of the
organizations at every level as two organizations attempt to integrate into one. A
merger is generally defined as the joining of two or more different organizations under
one common owner and management structure. An acquisition is the process of one
corporate entity acquiring control of another corporate entity by purchase, stock swap
or some other method.
3) Strategic Alliance: A strategic alliance is an arrangement between two companies to
undertake a mutually beneficial project while each retains its independence. The
agreement is less complex and less binding than a joint venture, in which two
businesses pool resources to create a separate business entity
4) Job Rotation: Job rotation is the systematic movement of employees from one job to
another within the organization to achieve various human resources objectives such as
orienting new employees, training employees, enhancing career development, and
preventing job boredom or burnout.
*Impact of Technology Relationship with strategic HR issues:
1) Necessary Expansion/ Contraction Of Work Force: The adaptation of new technology
has both the positive & negative sides. The expansion has been resulted by creating
new jobs for the IT professionals, technological experts & trainers, making their life
smoother & easier. On the other hand, contraction has been resulted by reducing the
workforce with automation.
2) Training Needed To Utilize New Technology: When adopting new technology,
training is necessary to operate new technology.
3) Cost For Hiring, Severance, Training: When new technology is adopted, the cost could
increase, because of new hiring for new technology, change of benefit package &
more.
4) Effective Management of Change: Change might occur in terms of hierarchy, structure
& responsibilities.
5) Impact on work group dynamics: Before adopting new technology, people used to
work in group where for now they are working individually.
Corporate and Business Strategy leads to Strategy

1)B/C Strategy: low-cost strategy
HR Strategy: cutting labor costs and providing facilities
2) B/C Strategy: Providing compensation
HR Strategy: increase productivity
3) B/C Strategy: Training and development
HR Strategy: employees are built up with new skills and knowledge to achieve goals
4) B/C Strategy: Downsizing
HR Strategy: dismiss non productivity employees
5) B/C Strategy: Competitive pay
HR Strategy: high salaries are paid
6) B/C Strategy: Innovation
HR Strategy: can make strong human capital
7) B/C Strategy: Globalization
HR Strategy: expand their business high money market
8) B/C Strategy: Differentiation
HR Strategy: they focus on the innovation and they can highlight their products
9) B/C Strategy: Benefit packages
HR Strategy: provide flexible benefits
10) B/C Strategy: Enhanced hiring performance
HR Strategy: high performance management
11) B/C Strategy: Democracy
HR Strategy: creating freedom so that anyone can raise their voice to share their ideas
12) B/C Strategy: Employee relations
HR Strategy: build good relationships with co workers
13) B/C Strategy: Cultural diversification
HR Strategy: enhance organizational effectiveness by collective decision making
Outcomes and Challenges

1) Low-cost strategy
Outcomes: Efficiency can be boosted by getting more tasks done in comparatively lesser
time
Challenges Low profit margin, which could reduce competition and innovation
2) Providing compensation
Outcomes: Productivity in relation to compensation starts with employees feeling valued
which increases motivation and loyalty.
Challenges: adequate support from top management, if it lacks it will be difficult for
managers to gain anything as it is a question of money
3) Training and development
Outcomes: come up with innovation, Reduced employee turnover, Enhanced company
image
Challenges: Change management and business needs, leadership development
4) Downsizing
Outcomes: Bringing transparency, Retains talent
Challenges Fear of failure, employee moral reduces
5) Competitive pay
Outcomes: low turnover rate and increase productivity by retaining talented employees
Challenges Lack of motivation can result due to pay structure
6) Innovation
Outcomes: good product quality and uniqueness
Challenges Requires change management and maintenance of good relationship
7) Globalization
Outcomes: increased cultural diversity, new perspective, wider talent pool, more
innovation
Challenges: Leadership development
8) Differentiation
Outcomes: uniqueness, it creates more value to the company, develops brand loyalty
Challenges: Foster innovation, fear of failure and adequate support from top management
9) Benefit packages
Outcomes: high productivity, less turnover rate
Challenges: HR needs to keep updated with day-to-day responsibilities to know about the
performances, making unbiased employment decisions

10) Enhanced hiring performance
Outcomes: increased productivity, high talent pool
Challenges: Lack of training
13) Cultural diversification
Outcomes: new perspective, wider talent pool, more innovation
Challenges: Less integration among employees, hiring talent could be difficult because of
different law and regulations