Steps in developing HRM strategy

Step 1: Get the 'big picture'

Understand your business strategy.

• Highlight the key driving forces of your business. What are they? e.g. technology, distribution, competition, the markets.
• What are the implications of the driving forces for the people side of your business?
• What is the fundamental people contribution to bottom line business performance?

Step 2: Develop a Mission Statement or Statement of Intent

That relates to the people side of the business.

Do not be put off by negative reactions to the words or references to idealistic statements - it is the actual process of thinking through the issues in a formal and explicit manner that is important.

• 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 capability issues.

Vigorously research the external business and market environment. High light 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?

From this analysis you then need to review the capability of your personnel department. Complete a SWOT analysis of the department - consider in detail the department's current areas of operation, the service levels and competences of your personnel staff.

Step 4: Conduct a detailed human resources analysis

Concentrate on the organization's COPS (culture, organization, people, HR systems)

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

Exhaust your analysis of the four dimensions.

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 highlight the options for managerial action generate, elaborate and create - don't go for the obvious. This is an important step as frequently people jump for the known rather than challenge existing assumptions about the way things have been done in the past. Think about the consequences of taking various courses of action.

Consider the mix of HR systems needed to address the issues. Do you need to improve communications, training or pay?

What are the implications for the business and the personnel function?

Once you have worked through the process it should then be possible to translate the action plan into broad objectives. These will need to be broken down into the specialist HR Systems areas of:

• employee training and development
• 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 plans

The ultimate purpose of developing a human resource 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 to then frustrate them through a failure to provide ample career and development opportunities.