A Guide to Developing an Effective
HRM Strategy

Developing an HRM (Human Resource Management) strategy involves identifying and aligning HR policies, practices, and procedures with the overall goals and objectives of the organization. There are various ways required to make a strong HR strategy. Everything starts with business. Also, critical HR challenges and crucial approaches need to be defined and strategically aligned. All this happens within the current or unborn structural or cultural context.

What are the two critical interrogatives that must be addressed in the progress of an HRM strategy?

• What kind of people do you need to manage and run your business to meet your strategic business objective?
• What people programs and initiatives must be designed and implemented to attract, develop, and retain staff to compete effectively?

In answer to these questions, we can use 4 key dimensions of an organization.

•  Culture- The beliefs, values, norms, and management style of the organization
• Organization- The structure, job roles, and reporting lines of the organization.
• People- the skill levels, staff potential, and management capability
• HR system- the people-focused mechanisms that deliver the strategy of employee selection, communication, training, reward, career development, etc...

The following steps to be followed in developing an HRS and the active involvement of the senior line manager should be sought throughout the approach.

Classical approaches to strategy formulation.

The HRM strategy formulation process involves assaying both external and internal factors impacting the association's HR function, defining strategic goals aligned with broader organizational ambitions, and developing specific HR strategies to achieve these goals. Implementation planning is pivotal, including detailed plans for execution, monitoring, and evaluation of HR strategies. Uninterrupted advancement is emphasized, with regular review and updates to assure alignment with evolving organizational requisites and best practices in HR management, eventually driving organizational success and competitive advantage.

Source: own development

Get a deeper understanding of strategy formulation by watching this video. 👇👇👇

Now let us discuss the steps of Strategy Development

Strategy development involves a series of essential ways to insure effective planning and execution. initially, it's pivotal to grasp the overarching vision and contexture of the institution. This is followed by composing a clear mission statement or statement of purpose to guide strategic decision-making. Conducting a SWOT analysis helps identify internal strengths and weaknesses as well as external opportunities and threats. thereafter, a detailed HR analysis is conducted to assess the association's human capital geography. The next step involves setting critical people-affiliated issues that may impact the association's strategic goals. With this perceptivity, Step 6 entails developing workable consequences and answers to address correlated issues. Finally, the strategy is enforced, and an evaluation process is established to measure the effectiveness of the action plan, enabling adaptations as necessary for optimal outcomes.

Step 1: Get the ‘big picture.’

• Understand the business strategy.
• Highlight the key driving forces of your business. What are they? Eg: technology, distribution, competition, the markets.
• What are the implications of the driving forces for the people side of your business?
• What new skills and capabilities will be required?
• What is the fundamental people contribution to bottom-line business performance?

Step 2: Develop a mission statement or statement.

That relates to the people side of the business.

• What do your people contribute?

Step 3: Conduct a SWOT analysis of the organization.

Focus on the internal strengths and weaknesses of the people side of the business.

•  Consider the current skill and capabilities issues.
•  Highlight the opportunities and threats relating to the people side of the business.
•  What impact will/might they have on business performance?
•  Consider skill shortages?
• The impact of new technology on staffing levels?

Step 4: Conduct a detailed HR analysis

Concentrate on the organization’s COPS (culture, organization, people, and HR system)

•       Consider: where are you? Where do you want to be?
•       What gaps exist between the reality of where you are now and where you want to be?

Step 5: Determine critical people issues

Go back to the business strategy and examine it against your SWOT and COPS analysis

• Identify the critical people issues namely those people issues that you must address. Those which have a key impact on the delivery of your business strategy.
• Prioritize the critical people issues. What will happen if you fail to address them?

Remember you are trying to identify where you should be focusing your efforts and resources.

Step 6: Develop consequences and solutions.

For each critical issue in high light, the options for managerial action generate, elaborate, and create don’t go for the obvious. This is an important step. Once you have worked through the process it should then be possible to translate the action plan into board objectives. These will need to be broken into the specialist HR system areas of

·       Employee T&D

·       Management development

·       Organization development

·       Performance appraisal

·       Employee reward

·       Employee selection and recruitment

·       Manpower planning

·       Communication

·       Develop your action plan around the critical issues. Set targets and dates for the accomplishment of the key objectives.

Step 7: Implementation and evaluation of the action plan

The ultimate purpose of developing a HR strategy is to ensure that the objectives set are mutually supportive so that the reward and payment systems are integrated with employee training and career development plans. There is very little value or benefit in training people only of then frustrate them through a failure to provide ample career and development opportunities.

Conclusion

Developing a Human Resource Management (HRM) strategy is crucial for any organization to align its HR policies, practices, and procedures with its overall goals and objectives. To develop a powerful HR strategy, organizations must ask critical questions about the kind of people they need to manage and run their business and the programs and initiatives they must implement to attract, develop, and retain staff effectively. By using the four key dimensions of an organization, including culture, organization, people, and HR systems, organizations can define their mission, set objectives, conduct internal and external analysis, analyze existing strategies, and determine corporate and functional strategies. The goal of developing an HR strategy is to ensure that the objectives set are mutually supportive so that the reward and payment systems are integrated with employee training and career development plans. The active involvement of senior line managers is essential throughout the approach, and organizations must implement, monitor, and revise their strategies regularly to achieve success.

 

Reference

·       Sheehan, C., 2005. A model for HRM strategic integration. Personnel review, 34(2), pp.192-209.

·       Kepes, S. and Delery, J.E., 2006. Designing effective HRM systems: The issue of HRM strategy. The human resources revolution: Why putting people first matters, pp.55-76.

·       Personnel Today. (2015). Developing HR strategy: 8 steps towards delivering a successful HR strategy - Personnel Today. [online] Available at: https://www.personneltoday.com/hr/developing-hr-strategy-8-steps-towards-delivering-a-successful-hr-strategy/.

·       Garcia-Carbonell, N., Martin-Alcazar, F. and Sanchez-Gardey, G., 2014. Understanding the HRM-performance link: a literature review on the HRM strategy formulation process. International Journal of Business Administration, 5(2), p.71.

·       www.bing.com. (n.d.). get the big picture in strategy development - Bing video. [online] Available at: https://www.bing.com/videos/search?q=get+the+big+picture+in+strategy+development&&view=detail&mid=9BE35C1086DDF1F4F5A79BE35C1086DDF1F4F5A7&&FORM=VRDGAR&ru=%2Fvideos%2Fsearch%3Fq%3Dget%2Bthe%2Bbig%2Bpicture%2Bin%2Bstrategy%2Bdevelopment%26FORM%3DHDRSC6 [Accessed 13 Apr. 2023].

·       ‌ Katie Sawyer (2019). Deputy. [online] Deputy. Available at: https://www.deputy.com/blog/7-steps-to-strategic-human-resource-management.

·       Amstrong, M.(2006). A handbook of strategic HRM