HR Strategy: Context of HR System

 The “Five Factors” Influencing the HR System
• External Environment
• Social: social values, roles, trends, etc.
• Political: political forces, changes. Ex. Bush presidency and its agenda for Social Security.
• Legal: laws, court decisions, regulatory rules.
• Economic: product, labor, capital, factor markets

 The Workforce
• Demographics

 Organization Culture
• Weak vs. Strong culture
• “Type” of culture

 Organization Strategy
• What are a firm’s distinctive competencies?
• What is the basis that competitive strategy be sustained?
• What are a firm’s strategic objectives?
• Compare corporate and Business strategies

 Technology of Production & Organization of Work
• Physical layout/employee proximity
• Required employee skills
• Ease of monitoring employees’ input

Critical Thinking Questions:

• Should a company monitor the HR environment and imitate “Best Practices” of HR from successful firms? What caveats would you want to apply to applying Best HR Practices?
• Give an example of a type of Organizational Culture that would reinforce strategy: What type of HR practices would fit with this culture?
• What type of HR practices would fit with jobs with tasks that are highly ambiguous, uncertain and creative? What about predictable, routine and certain tasks?

Importance of HRM Strategy for HRM Employees:

The HRM Employees use the HRM Strategy as the basis for the goal setting process within the HRM Function to navigate their own performance the right direction.
The HRM Strategy has to be a public document freely available to all the HRM Employees to let them identify their own role in the strategy. The HRM Employees need a chance to discuss the HRM Strategy to know exactly the content. The understanding to the content of the HRM Strategy can help them to unblock any fear and to become more productive.
The new HRM Strategy should not make the employees to believe they will be changed for the new employees who fit the new strategy better. The HRM Employees need to identify their role and their gaps against the new HRM Strategy to know how to cross the gaps in their current skills and competencies. The HRM Strategy provides the employees with the possibility to plan their own goals in the long term point of view and it can bring better understanding to all the initiatives of the HRM Function.