Developing a HRM strategy

Faced with rapid change organizations need to develop a more focused and coherent approach to managing people. In just the same way a business requires a marketing or information technology strategy it also requires a human resource or people strategy.

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.

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.

There are seven steps to developing a human resource strategy and the active involvement of senior line managers should be sought throughout the approach.