Skylark

Group Leader:

Hafiz Syed AsadBAM 9211

Other members:

Arslan Aslam BAM 9234

Arslan Khalid BAM 9222
Topic:
Linking between Human Resource
Management (HRM) and Business
Strategy
HRM Business Strategy
 Human Resource Management
(HRM)

Human Resource Management

(HRM) is the function within an
organization that focuses on
recruitment , management and
providing direction for the people
who work in the organization.
The role of HRM in organizations

 Change agent and problem solver

 Adviser/ innovator

 Employee advocate

 Service provider
 What is Business Strategy?
“Business strategy is a long
term plan of action designed
to achieve a particular goal or
set of goals or objectives”.
 Levels of Strategy
There are three levels of strategy;

Corporate level Strategy

Business/Competitive level Strategy

Operational level Strategy

Corporate Strategy:

addresses the entire strategic scope of the

organization.

 This is the "big picture" view of the organization

and includes deciding how the resource
allocation process—how cash, staffing, equipment
and other resources are distributed—is typically
established at the corporate level
 Corporate Level Strategy
Diversification Strategy; Penetrating into new product
line.

Vertical Integration Strategy; Producing its own raw

materials or selling its products direct.

Consolidation Strategy; Combining of two or more firms

and reduces company size.

Geographic Expansion Strategy; Expands the company’s

business.
Business level Strategy:

Concerned with how a business competes successfully

in a particular market. It concerns strategic decisions
about choice of products, meeting needs of customers,
gaining competitive advantage over competitors,
creating new opportunities .
Business Level Strategy
Cost Leadership strategy; Reducing economic
costs below competitors.

Differentiation; Positioning a brand in such a way as

to differentiate it from the competition and establish an
image that is unique

Focus; The selection of a segment in the industry to

serve the exclusion of others.
Operational Strategy :
It is concerned with how operational departments like
marketing, finance, R & D, involve in business.

 It is input for corporate and business level strategy.

Operational strategy therefore focuses on issues of
resources, processes, people etc.
Strategic Managers for All Levels
 HRM In Strategic Types
Different strategies require different types of
employees.

Role Behavior; are the behaviors required of an

individual in his or her role as job holder in a social work
environment.
 Integration In HRM
Integration is the heart of HRM having two forms;

Vertical Integration

Horizontal Integration
Vertical Integration
Vertical integration is about Effectiveness of HR. 
HR is effective when it contributes to the mission and
objectives of the organization.

'do the right things'  Overall objectives &

strategy of business

HR Practices
Horizontal Integration
Horizontal integration is that all HR activities feed
into each other and support each other.
Resourcing

“Do the things in right way”

T&D

HR Practices

Motivation

Maintenance
HR Strategic Fit
Corporate
Strategy

Business
Strategy

HR Vertical Fit
Strategy

HR System Training Rewards

( perf. Mgmt)

Horizontal Fit
Strategic Management:
A process for analyzing a company’s competitive
situation, developing the company’s strategic goals,
and devising a plan of action and allocation of
resources that will help a company achieve its goals.

There are two components of Strategic Management Process;

1. Strategy Formulation
2. Strategy Implementation
 Strategy Formulation
2-8

External
Analysis

- opportunities
- threats
Mission Goals Strategic
Choice
- reason for - what it
being hopes to - ways to
achieve fulfill goals
and mission
Internal
Analysis
- strengths
- weaknesses

HR Input
2-12

The Role of HR in Strategy Formulation

Administrative One-Way Two-Way Integrative
Linkage Linkage Linkage Linkage

Strategic Strategic Strategic

Planning Planning Planning Strategic
Planning

HR
Function
HR HR HR
Function Function Function
Strategy Implementation
Organizational
structure

Types of Task
information design
Product
market Performance
strategy
Selection,
Reward
T&D of
system people
Strategic Human Resource Management

“ All those activities affecting the behavior of

individuals in their efforts to formulate and
implement the strategic needs of the
business and achieve organizational goals.”
(SHRM)
Strategic HR Management
HR Practices

- recruitment - job analysis

- training - job design
- performance - selection
management - development
- labor relations - pay structure
Strategic HR Needs - HR planning - incentives Firm
Choice - benefits Performance
- skills
- productivity
- behaviors
- quality
- culture
HR HR Actions - profitability
Capability
- skills - behaviors
- abilities - results
- knowledge

Emergent Strategies
Strategic HRM Objectives and Plans

Integrity Cost
containment

Link of HR
Plan/
Strategy with
Org Obj
Social
Responsibility
Customer
service

Org
Effectiveness
Strategic Formulation of HRM
Analyze the problems in business

Diagnose factors influencing the

situation

Conclusion and recommendations

(alternative strategies)

Action planning ; how overcome the

problems

Resource planning; what resources

we need, how we allocate

Benefits; how satisfy business needs

 Strategic Implementation of HRM

Strategic Staffing

Strategic Human Resource Implementation

Strategic Performance Management

Strategic Compensation Management

 HRM Scorecard
Report card of effectiveness of specific
person.
Basic Model of
How to Align
HRM
with Business
Strategy