III. Creating a Strategy Oriented HR System
A value-creating strategy-oriented HR process consists of three basic components which comprise what some experts refer to as a company’s basic HR architecture:
1) HR professionals who have the strategic skills required to build a strategy oriented HR system; 2) HR policies and activities that comprise the HR system itself; and 3) Employee behaviors and competencies that the company’s strategy requires that emerge from the actions and policies of the firm’s strategy-supporting HR system.
A. The High Performance Work System – Managers and HR experts advocate that the HR system itself be a high-performance work system, maximizing the overall quality of human capital throughout the organization.
1. Evidence suggests that high performance HR practices, combined with new technology, produce better productivity, quality, sales, and financial performance.
2. HPWS practices include high-involvement organizational practices, high-commitment work practices, and flexible work assignments, as well as practices that foster skilled workforces and expanded opportunities to use those skills.
B. Translating Strategy into HR Policy and Practice – The basic model of how to align HR strategy and actions with business strategy is outlined in Figure 3.9. HR management formulates HR strategies, policies, and practices aimed at achieving the desired workforce skills, attributes, and behaviors. Metrics are identified which can be used to measure the extent to which new HR initiatives are supporting management’s strategic goals.
C. HR Strategy in Action: An Example – This example illustrates how Einstein Healthcare’s HR managers formulated and used HR strategies to execute strategic plans. The example explains how the vision to change the organization into a comprehensive healthcare network providing a full range of high-quality services in various local markets required numerous changes in the organization and human resources. Behavioral outcomes by the CEO from which HR developed five key HR strategies aimed at creating the required employee competencies, skills and behaviors. Specific programs and practices were then developed by HR which contributed directly to achieving the organization’s strategic aims.