Developing and Implementing

Strategic HRM Plans

Chapter 2
Introduction to Human Resource
Management

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LEARNING OBJECTIVES

1. Explain the differences been HRM and personnel

management.
2. Be able to define the steps in HRM strategic
planning.
3. Describe the steps in the development of an HRM
plan.
4. Explain the aspects needed to create a usable
and successful HRM plan.

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Strategic Planning

In the past, human resource management (HRM) was

called the personnel department. In the past, the
personnel department hired people and dealt with
the hiring paperwork and processes
HRM is not only crucial to an organization’s success,
but it should be part of the overall company’s
strategic plan, because so many businesses today
depend on people to earn profits. Strategic planning
plays an important role in how productive the
organization is.

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Examples of Differences between
Personnel Management and HRM
Personnel Management
Focus
Administering of policies
Stand-alone programs, such as training
Personnel department responsible for
managing people
Creates a cost within an organization
HRM Focus
Helping to achieve strategic goals
through people
HRM training programs that are
integrated with company’s mission and
values
Line managers share joint responsibility
in all areas of people hiring and
management
Contributes to the profit objectives of
the organization
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HRM AS A STRATEGIC COMPONENT OF
THE BUSINESS

Four (4) aspects creating a good HRM strategic plan:

1. Make it applicable - should be the guiding principles
for the HRM function
2. Be a strategic partner- Alignment of corporate values
3. Involve people
4. Understand how technology can be used

To be successful in writing an HRM strategic plan,

DYNAMISM is the key

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HRM AS A STRATEGIC COMPONENT OF THE
BUSINESS

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The Steps in creating Strategic Plan

1. Conduct a Strategic Analysis

• Understanding of the company mission and values
• Understanding of the HRM department mission and
values
• Understanding of the challenges facing the
department; Lifecycle Stages and HRM Strategy
2. Identify Strategic HR Issues
• SWOT Analysis
3. Prioritize Issues and Actions
4. Draw Up an HRM Plan

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Lifecycle Stages and HRM Strategy
Life Cycle Training and Labor / Employee
Staffing Compensation
Stage Development Relations
Attract best technical and Meet or exceed labor Define future skill Set basic employee-
professional talent. market rates to attract requirements and begin relations philosophy of
Introduction needed talent. establishing career organization.
ladders.
Recruit adequate numbers Meet external market Mold effective Maintain labor peace,
and mix of qualifying but consider internal management team employee motivation,
workers. Plan management equity effects. Establish through management and morale.
Growth succession. Manage rapid formal compensation development and
internal labor market structures. organizational
movements. development.

Encourage sufficient Control compensation Maintain flexibility and Control labor costs and
turnover to minimize layoffs costs. skills of an aging maintain labor peace.
and provide new openings. workforce. Improve productivity.
Maturity Encourage mobility as
reorganizations shift jobs
around.
Plan and implement Implement tighter cost Implement retraining Improve productivity
workforce reductions and control. and career consulting and achieve flexibility in
reallocations; downsizing services. work rules. Negotiate
Decline and outplacement may job security and
occur during this stage. employment-
adjustment policies

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Sample HR Department SWOT Analysis
STRENGTHS OPPORTUNITIES
• Hiring talented people • Development of HRM staffing plan to meet
• Company growth industry growth
• Technology implementation for business • HRM software purchase to manage training,
processes staffing, assessment needs for an unpredictable
• Excellent relationship between HRM and business cycle
management/executives • Continue development of HRM and executive
relationship by attendance and participation in
key meetings and decision-making processes
• Develop training programs and outside
development opportunities to continue
development of in-house marketing expertise

WEAKNESSES THREATS
• No strategic plan for HRM • Economy
• No planning for up/down cycles • Changing technology
• No formal training processes
• Lacking of software needed to manage business
processes, including go-to-market staffing
strategies

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The HRM Plan

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The HRM Plan
SIX (6) PARTS OF THE HRM PLAN
1. Determine human resource needs
- Understand company operations
1H, 3Ws; How, Why, Who, When
2. Determine recruiting strategy
3. Select employees
- Selection process: assessment process and tools
4. Determine compensation
- How much is too much?
- Determining the right pay for the right job
- Pay systems
5. Develop training
- Company culture, Skills needed for the job, and Human relations
skills
6. Appraise performance
- Employee appraisal, Performance review, 360 review, Career
development review
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Essential Tips in HRM Planning

• Tips in HRM Planning

• Monitor the Plan Constantly
• Measure It
• Sometimes Change Is Necessary
• Be Aware of Legislative Changes

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 Chapter Case
We Merged…Now What?
Earlier this month, your company, a running equipment designer and manufacturer called
Runners Paradise, merged with a smaller clothing design company called ActiveLeak. Your
company initiated the buyout because of the excellent design team at ActiveLeak and
their brand recognition, specifically for their MP3-integrated running shorts. Runners
Paradise has thirty-five employees and ActiveLeak has ten employees. At ActiveLeak, the
owner, who often was too busy doing other tasks, handled the HRM roles. As a result,
ActiveLeak has no strategic plan, and you are wondering if you should develop a strategic
plan, given this change. Here are the things you have accomplished so far:

• Reviewed compensation and adjusted salaries for the sake of fairness. Communicated
this to all affected employees.
• Developed job requirements for current and new jobs.
• Had each old and new employee fill out a skills inventory Excel document, which has
been merged into a database.

From this point, you are not sure what to do to fully integrate the new organization.
1. Why should you develop an HRM strategic plan?
2. Which components of your HR plan will you have to change?
3. What additional information would you need to create an action plan for these
changes?
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