What is HR Strategy?

Here you can see a infographic prepared by Maria Lopez & myself about how we understand should be the best way to implement a HR Strategy succesfully in order to get the goals proposed by the Business Strategy.

HR Strategy

The Globalization of individual companies and capital markets over the past two decades has changed the business landscape. The most of firms have expanded operations overseas, and even strictly domestic businesses are facing competition from abroad. To respond to global competition is more necessary than ever to implement a right HR strategy in order to improve the productivity and effectiveness of the business.

HR strategy must be aligned with the organization’s vision, mission and goals. In developing an HR strategy, the company must analyze the characteristics of its industry, determine its competitive advantage, and identify key processes and key people. Creating different strategies for all groups of people in the organization may be necessary, depending on their skills, knowledge and responsibilities.

In developing any corporate strategy the approach is to begin by addressing three key strategic questions:

  1.  Where are we now?
  2.  Where do we want to be?
  3.  How do we get there?

HR is a critical area to help the organization and all we do must be relevant to our corporate objectives.

That´s why the human resources also have to add two others questions in developing such a strategy two critical questions must be addressed:

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

In order to answer these questions four key dimensions of an organization must be addressed. These are:

  • 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
  • Human Resources systems: the people focused mechanisms which deliver the strategy – employee selection, communications, training, rewards, career development, etc.

HR strategy

Frequently in managing the people element of their business senior managers will only focus on one or two dimensions and neglect to deal with the others. Typically, companies reorganize their structures to free managers from bureaucracy and drive for more entrepreneurial flair but then fail to adjust their training or reward systems.

When the desired entrepreneurial behavior does not emerge managers frequently look confused at the apparent failure of the changes to deliver results. The fact is that seldom can you focus on only one area. What is required is a strategic perspective aimed at identifying the relationship between all four dimensions.

If you require an organization which really values quality and service you not only have to retrain staff, you must also review the organization, reward, appraisal and communications systems.

The pay and reward system is a classic problem in this area. Frequently organizations have payment systems which are designed around the volume of output produced. If you then seek to develop a company which emphasizes the product’s quality you must change the pay systems. Otherwise you have a contradiction between what the chief executive is saying about quality and what your payment system is encouraging staff to do.

15 thoughts on “What is HR Strategy?”

  1. your article regarding the human resource strategy was very informative. It shows that a good hr strategy can bring success. Employees are essential for goal attainment.

  2. Very informative and educative…I have been looking forward to a write up on HR strategy that is very understandable and achievable.

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