Strategy Human Resources is also widely known as Human Resources Strategy. No matter where you are working, either in a large corporate or just in a smaller enterprise, human resources strategy is the very basic form of everything to do in HR department.
In this post, there will be a detailed explanation about the human resources strategy definition, how to create it and the daily practices as well as the HR strategy framework. We will also end up the post by giving some examples of HR strategy. So don’t go anywhere if want to explore HR strategy.
Strategy Human Resources Definition
Have you clearly understood what strategy human resources is? The exact definition states that HR strategy is a business’s overall plan for managing the capital owned by a human and supporting it with its business activities. HR strategy comes with the direction for all the key areas of HR such as hiring, development, performance appraisal and compensation.
Strategy Human Resources is a long-term plan that guides HR practices throughout the company or organization. In this regards, there are a set of HR strategy characteristics as follows:
- An analysis of the organizational and external environment is required.
- The implementation takes at least one year.
- The character and direction of HR management activities are shaped by the HR strategy.
- This HR strategy is helpful in the deployment and allocation of organizational resources.
- HR strategy is always revised every year.
- It also incorporates the expert judgment of senior HR management.
- It is number-driven.
- The strategy results a specific behavior.
These characteristics usually show a good overview of what a strategy human resources consist of.
How to Create a Strategy Human Resources
It is quite possible that you may not understand anything if you have not experienced in working in HR. However, it becomes a must-learn topic if you are now in HR department.
How do you create the human resources strategy? This is a very basic question about understanding HR strategy. Well, the standard causal model of HRM is a very useful model as one of the key HR models. This model views where the HR strategy is originated and how it influences HR execution and business performance.
If you are using the model, you will be able to find out that HR Strategy is the result of the broader strategy used for business. This way, HR activities creates value when they are in line with the goals setup by the company or organization. Simply put, if HR strategy is aligned with the business strategy, HR will give such a good impact to the performance of the company or organization.
Basically, the overall business strategy is designed based on the past and the present. So, the things that HR achieves in the present is the result of HR did in the past along with the company’s internal capabilities. After all, SWOT analysis is the tool used in creating Strategy Human Resources.
SWOT analysis maps the organization’s internal strength and weaknesses as well as the external threats and opportunities. The strengths include the companies’ core about know-how and know-what. These are defined as the companies’ production capacity, existing brands, sales capabilities, marketing, channels, R&D expertise and other human capital factors.
In SWOT analysis, the company’s strategy influences its strengths to capitalize on the opportunities available in the market. At the same time, the strategy tries to avoid the threats and minimize the weaknesses impact.
As a result, you will find out your company’s value proposition. The example of value proposition around us is the “every day low prices” presented by Walmart.
Basically, if you want to create HR strategy, create it based on the organizational strategy that touches on all the key areas in Human Resources. Those key areas include recruitment, performance appraisal, development, compensation and succession planning.
One clear example the result of HR strategy is an HR mission statement and vision. These are created with the concrete and high-level actions about how you are executing the mission and vision.
Daily Practices of HR Strategy
Once you decide on creating and implementing an HR strategy, there are some best daily practices to pay attention to:
- HR professionals must be involved in the process of creating the strategy. They should also know the strategy that the team is going to create. This is aimed to build communication between the professionals and the professionals in the team.
- Management of buy-in and HR budget are critical to execute the strategy.
- HR initiatives must be in line with the HR strategy. In this case, HR practices and initiatives must follow the strategy.
- Performance incentives must be directly connected to the strategy execution. This way, a person will work better and harder if the goals are aligned with the incentives.
- Use metrics to measure the strategic goals to make the strategy effective along with the consistent management.
- HR strategy should be made in a long-term plan. However, it is changeable to adapt to the external environment.
Notice, these practices are helpful enough in creating, implementing and executing the Strategy Human Resources.
An Example of Strategy Human Resources
There are some best examples of HR strategy you need to know but we take only Netflix to review. In most cases, a good example is so inspiring that other people start thinking about to create HR strategy.
Netflix is one of the best examples of how an HR strategy presents a good result. Netflix manages its people. This way, Netflix applies its strategy by hiring only A players. This was considered a great opportunity. Letting go of B players made the remaining employees feel not only happier but also more productive. One of the engineers said, “I have learned that I’d rather work by myself than with subpar performers.”
Consequently, invaluable people became redundant when the company grew. Simply put, A players will be removed since their skills are no longer fit no matter how precious their contributions they had ever given to the company.
According to Netflix, working with A players only also impacted the policies in the holiday. There was pressure to make the paid-off-time policy formal especially after Netflix went public. After the researches had been conducted, a system was finally used by McCord. This way, the employees were able to take as much time as they think it was proper.
The Framework of HR Strategy
The last thing we are going to learn about Strategy Human Resources is the framework of HR strategy. In this regards, there are 10 –step approaches to defining the strategy and its delivering value.
- Understand the business strategy to understand the market forces and identify the impact on HR strategy.
- Define HR strategy by creating a roadmap.
- Segment HR customers by identifying the different customer groups.
- Prioritize HR investment that are much of advantage for the key customers.
- Design your HR services by going through the HR focus areas, analyze the process and identify it.
- Make sure that the right HR service delivery model is effective to help meet the organization’s goals.
- Establish the right HR capabilities by identifying the recent skills and competencies as required by HR strategy.
- Improve HR operational excellence continuously by optimizing what you do in HR.
- Create an HR brand in the wider organization.
- Measure the impact of HR products and services to know the efficiency of HR processes.
Overall, this review is just a little thing to know about Strategy Human Resources you may need to know in a glance. Understanding HR strategy takes a deep learning and creating it also takes times. So, hopefully, this post will give you such a valuable information about HR strategy, thus, you will have a background knowledge before going into a deep understanding.