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Human Resources Strategy

Human resources management concerns the human side of the management of enterprises and employees’ relations with their firms. Its purpose is to ensure that the employees of a company, i.e. its human resources, are used in such a way that the employer obtains the greatest possible benefit from their abilities and the employees obtain both material and psychological rewards from their work.
Human resources management has strategic dimensions and involves the total deployment of human resources within the firm. Thus, for example, human resources management will consider such matters as:
  • the aggregate size of the organization’s labor force in the context of an overall corporate plane (how many divisions and subsidiaries the company is to have, design of the organization, etc.)
  • how much to spend on training the workforce, given strategic decisions on target quality levels, product prices, volume of production, and so on
  • the desirability of establishing relations with trade unions from the view-point of the effective management control of the entire organization
  • the wider implications for employees of the management of change (not just the consequences of alterations in working practices).

The strategic approach to human resources management involves the integration of personnel and other human resources management considerations into the firm’s overall corporate planning and strategy formulation procedures. It is proactive, seeking constantly to discover
new ways of utilizing the labor force in a more productive manner thus giving the business a competitive edge.
Practical manifestations of the adoption of strategic approach to human resources management might include:
  • incorporation of a brief summary of the firm’s basic human resources management policy into its mission statement
  • explicit consideration of the consequences for employees of each of the firm’s strategies and major new projects
  • designing organization structures to suit the needs of employees rather than conditioning the latter to fit in with the existing form of organization.
Possession of human resources strategy implies recognition of the crucial importance of the human resources function and the need therefore to have an human resources specialist in the senior management team, e.g. as a member of the firm’s board of directors. More than ever before, human resource managers are expected to contribute to productivity and quality improvement, the stimulation of creative thinking, leadership and the development of corporate skills.

Devising A Human Resources Strategy

The first step in devising an human resources strategy is to assess the size, nature, scope and human resources requirements of the future organization (rather than the business as it stands) and to define the measures necessary to supply the human resources needed to attain company goals.  Human resources strategies should be formulated after other major functional strategies have been determined. Thus the firm must decide its strategic objectives, specify its production and marketing strategies, organization structure and operational plans, and then address the issue of how best to manage the human resources required to implement the chosen options. 
The selected organization system is particularly important as it defines accountability and responsibility structures, job descriptions and performance requirements, possibly the firm’s culture and management style, and recruitment and training requirements.
Next, the firm must compare its present human resources with the demands implied by the above. The comparison needs to examine:
  • existing and desired organizational climates (cultures) including leadership style and employee participation mechanisms
  • the types of people required in terms of skills, attitudes and performance capabilities
  • motivation and reward systems
  • current and anticipated skills requirements
  • management succession programs
  • the firm’s training and employee development capabilities.
Further matters requiring examination include potential obstacles to the efficient use of the firm’s human resources, the quality of internal communications, techniques for measuring performance, and general personnel policies. Gaps between actual and desired situations will become apparent. Measures for bridging these gaps should now be defined.

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