Examples Of Human Resource Strategies – Whether you work in a large corporate or a small organization, human resource strategy underpins everything you do in HR. In this article, we’ll give a definition of HR strategy, explain how HR strategy affects day-to-day HR practices, and we’ll conclude with a human resource strategy example.
A human resource strategy is a business’s overall plan for managing its human capital to align with its business operations. Human resource strategy sets the direction for all key areas of HR, including recruitment, performance appraisal, development and compensation.
Examples Of Human Resource Strategies
A very useful model here is the standard causal model of HRM, which is one of the key HR models. This model shows where HR strategy originates and how HR impacts implementation and business performance.
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The model shows that HR strategy is an outcome of broader (business) strategy. This shows that HR activities create value when they are aligned with what the organization is trying to achieve. When there is an alignment (fit) between the two, HR contributes to organizational performance.
The entire business strategy is based on past and present. This is a result of the company’s past and its current internal capabilities. A tool often used to approach this strategy is a SWOT analysis.
In a SWOT analysis, a company’s internal strength and weaknesses and its external threats and opportunities are mapped. Strengths include the company’s core know-how and know-what. They are its production capacity, existing brand, marketing channels, sales capabilities, R&D expertise and other human capital factors.
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A company’s strategy leverages its strengths to exploit opportunities in the market. At the same time, it seeks to overcome threats and reduce the impact of weaknesses.
The result of this strategy-setting is the company’s value proposition. For example, discount retailer Walmart’s value proposition is “everyday low prices.” It describes many internal HR practices, particularly those related to worker compensation. For more unique value propositions, check out this article.
HR strategy depends on organizational strategy. HR strategy touches all key areas of HR. These include recruitment, learning & development, performance appraisal, compensation and succession planning.
An example of an HR strategy is an HR mission statement and an HR vision, with concrete, high-level actions on how to execute on this mission and vision. We will give an example later. Human Resources Mission Statement
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The outcome of an HR strategy is often an HR mission statement. An HR mission statement helps to clearly define where the organization wants to go. All human resource management practices and decisions can be judged based on that statement.
An example is the HR mission statement of Marquette University in Milwaukee, Wisconsin: “The Department of Human Resources creates, promotes, and maintains an environment that supports, develops, and sustains the well-being of Marquette University’s employees, students, and the wider public. community.”
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This mission statement clearly focuses on creating an environment for diverse groups. This makes it easier to take decisions and initiate initiatives about HR involvement in various projects. For example, I would be very surprised if this HR department was not actively involved in (student) community-building projects.
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Digital HR plays a key role in enabling HR strategy. In the final section of this article, we explore the role of digital in more depth. 6 HR Strategy Best Practices
When creating and implementing an HR strategy, there are several best practices to keep in mind.
A good example of human resource strategy is how Netflix has managed its people. After the dot-com bubble burst and the 9/11 attacks, Netflix was forced to lay off a third of its employees.
Netflix’s strategy has always been to hire only A players. This is an opportunity. By letting go of the B-players, the remaining employees are happier and more productive. To quote one of the engineers: “I’ve learned to work by myself rather than with subpar performers.”
Objectives & Nature Of Human Resource Management
It also has ramifications for people who were once invaluable, but became redundant as the company grew. According to Patty McCord, Netflix’s chief talent officer from 1998 to 2012, “If we want only “A” players on our team, we have to be willing to let go of people whose skills are no longer up to par, no matter how valuable their contributions may be. Once upon a time.”
Working with only A players also affected Netflix’s holiday policies. After Netflix went public, there was some pressure to formalize the pay-of-time policy. After some research, McCord decided to use a system in which employees could take as much time as they felt was appropriate in a conversation with their employer.
For a complete overview of Netflix’s unique definition of company culture, see their culture guidelines. HR Strategy Framework
A very useful tool I found while researching for this article was the Deloitte HR Strategy Framework. This framework follows a 10-step approach to defining strategy and delivering value.
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1. Understand business strategy – This involves understanding market forces and identifying how they affect HR strategy and priorities.
2. Define HR Strategy – In this second step, you create a roadmap of how HR will align its strategy and how this will help the organization create a competitive advantage.
3. Segment HR customers – Not all HR customers are equal. In the third step, you segment your different (internal) customer groups and identify the most critical ones. Different customer groups require different policies and procedures.
4. Prioritize HR investments – Your HR budget and other resources are limited. Prioritize investments that benefit your key customers and provide the best ROI. A good technique for prioritizing these investments is to calculate ROI through HR spend.
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5, Design HR Services – In this step, you go through all the HR focus areas and analyze and identify all the processes that need streamlining or re-engineering.
Third, HR practices must deliver value. This is the right side of the standard causal model for HRM.
6. Ensure the Right HR Service Delivery Model – In this step, you assess the current HR service delivery model and assess how effectively it is helping to meet the organization’s goals. You should also analyze key HR enablers such as HR systems, processes and infrastructure. Optimizing these helps deliver HR services that add value to organizational strategy.
7. Build the right HR capabilities – Another HR capability that needs special attention is HR capabilities. By identifying the current skills and competencies and those required to deliver the HR strategy, the skills gap can be identified and filled.
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8. Continually Improve HR Operational Excellence – This phase is about optimization of what we do in HR. By assessing the efficiency of our HR processes, we can continuously improve them.
9. Build the HR brand – Establish the HR department within the wider organization and get information about what HR looks like and how it should work.
10. Measure the effectiveness of HR products and services – In step 8 we examined the effectiveness of HR processes. Ultimately, we want HR processes to be effective. Measuring the impact of our products and services on relevant business outcomes through analytics helps us adapt and improve what we do in HR. This is done through HR Analytics. The end
There is very little information on the Internet about how to build an HR strategy. Although this medium mostly covers digital HR and HR transformation, HR strategy is the starting point for both. I hope this article has taught you where to start when you want to define and implement an HR strategy.
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Creating an HR strategy takes time. Implementing a strategy takes time. But when your strategy is well defined, it can create a tremendous advantage by aligning HR’s activities with the organization’s goals. F A Q
A human resource strategy is a business’s overall plan for managing its human capital to align with its business operations. It sets the direction for all key areas of HR.
A very useful model is the standard causal model of HRM, which is one of the key HR models. It shows where HR strategy originates and how it affects HR implementation and business performance.
The outcome of an HR strategy is often an HR mission statement. An HR mission statement helps to clearly define where the organization wants to go.
Human Resource Strategy
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