PROJECT ON

Strategic HR Management and Planning

SUBMITED TO

Dr. D.Y. PATIL COLLEGE OF ARTS, COMMERCE, & SCIENCE

PIMPRI PUNE 411018

‘Batchelor of Business Administration’

Guided To- submitted by -

Dr. Shivajirao patil Ganesh choudhari

 GULDED CERTIFICATE

This is to certify that GANESH CHOUDHARI has completed his project

report on Strategic HR Management And Planning under my guidance satisfactorily.
The Project work is of original nature and not copied from any other earlier project
work and further no part has been submitted to any university as a full or partial
fulfillment condition for passing any examination. His observation and conclusions
are based on data collected by his during in plant training.

Place: -PUNE
Date:

 DECLARATION

TO,
The Director,
Dr. D. Y. Patil ACS College,
Sant Tukaram Nagar Pimpri,
Pune-Maharashtra411018
Respected Sir,

I, the under signed here by that project report titled ‘Strategic HR Management and
Planning.’ under the guidance of PROF. Shivajirao patil and submitted to Pune
University, for partial fulfillment of their requirement of the award of
the Degree of Batchlor of Business Administration, written and submitted by me
under the guidance of PROF. Shivajirao patil empirical findings in this project are
based on data collected by myself while preparing the project report. I have not
copied from any report. I understand that any copying is liable to be punished in a
way the University authorities deem fit.

Place: - PUNE
Date: -

 ACKNOWLEDGMENT

I would like to express my sincere thanks to the head of department DR. Prashant
Kalshetti. Our project guide Shivajirao patil & Dr. D.Y PATIL, ACS College for
giving the valuable guidance in preparation of the project.

I would like acknowledge the important contributions of my group.

We all contribute their own hard work to complete this project by

itself.

The success of any project depends on the effects of the team. We

would like to acknowledge the support & efforts of all the people

who made active or passive contribution for this study. This project

is very impactful to our society.

Specially I would like to thankful to Sir for their valuable

suggestion which helps me a lot for the project.

5
 INTRODUCTION

The previous vignette illustrates a mistake many healthcare organizations make

when they develop and attempt to implement their strategic business plan
without consideration of human resources. Sunset failed to consider the crucial
role of an adequate quantity and quality of human resources in the successtul
implementation of its business strategy.

Like most other service industries, the healthcare industry is labor

intensive. One reason for healthcare's reliance on an extensive worktorce is that
it is not possible to produce a service and then store it for later consumption. In
healthcare, the production of the service that is purchased and the consumption
of that service occur simultaneously. Thus,
the interaction between healthcare consumers and healthcare providers is an
integral part of the delivery of health services. Given the dependence on
healthcare professionals to deliver service, the possibility of wide variations in
service quality must be recognized within an employce (as skills and
competencies change over time) and among employees (as particular
individuals or representatives of various professions provide a service)
The intensive use of labor and the variability in professional practice require
that leaders in the healthcare field manage the performance of the people
involved in the delivery of services.

Effective management requires that healthcare executives understand the

factors that influence the performance of their employees. These factors include
the traditional human resources management (HKM) activities (i.e., recruitment
and selection, training and development, appraisal, compensation, and
employce relations) and the environmental and other organizational aspects that
impinge on human resources (HK) activities.

STRATEGIC HUMAN RESOURCES MANAGEMENT

Strategic human resources management (SHRM) is the comprehensive set of

managerial activities and tasks related to developing and maintaining a
qualified workforce. This work- torce contributes to organizational
eftectiveness, as dehined by the organization's strategic goals. SHRM occurs in
a complex and dynamic environment Within the organizational context. A
significant trend today is for HR managers to adopt a strategic perspective of
their job and to recognize critical links between Organizational and Hk
strategies (Fottler, Khatri, and Savage 2010).
This book explains methods for increasing the probability of hiring competent
people and of those people ably performing needed tasks after hire. To
implement these methods and practices, organizations must

determine requirements tor positions,

recruit and select qualified people,

Train and develop employees to meet tuture organizational needs, and

provide adequate rewards to attract and retain top pertormers.

All of these functions must be managed within society's legal constraints—

legisla- tion, regulation, and court decisions. This chapter emphasizes that HR
functions are performed within the context of the overall activities of the
organization. These functions are influenced or constrained bv
the environment, the organizational mission and strategies that are being
pursued, and the systems indigenous to the institution

 SIGNIFICANCE OF SHRM

Why study SHRM! How does this topic relate to the career
interests or aspirations of present or future healchcare executives? Staffing the
organization, designing jobs, building tears, developing employee skills,
identifying approaches to improve pertormance and customer service, and
rewarding employee success are as relevant to line managers as they are to HR
managers. A successtul healthcare executive needs to understand human
behavior, work with employees effectively, and be knowledgeable about
numerous systems and practices available to put together a skilled and
motivated worktorce. The executive also has to be aware of economic,
technological, social, and legal issues that affect human resources and, in turn.
facilitate or constrain efforts to attain strategic objectives.

Healthcare executives do not want to hire the wrong person, experience high
turnover, manage unmotivated employees, be taken to court for discrimination
actions, be cited for unsafe practices, have their patients' satisfaction
undermined by poorly trained staff, or commit unfair labor practices. Despite
their best efforts, executives often fail at HRM because they hire the
wrong people or do not motivate or develop their staff. You are likely to
manage people at some point in your career in healthcare management.
Carefully studying this book and implementing effective HR management
techniques will help you avoid the aforementioned mistakes.

Healthcare executives do not want to hire the wrong person, experience high
turnover, manage unmotivated employees, be taken to court for discrimination
actions, be cited for unsafe practices, have their patients' satisfaction
undermined by poorly trained staff, or commit unfair labor practices. Despite
their best efforts, executives often fail at HRM because they hire the
wrong people or do not motivate or develop their staff. You are likely to
manage people at some point in your career in healthcare management.
Carefully studying this book and implemening effective HR management
techniques will help you avoid the aforementioned mistakes.

However, achieving a competitive advantage through human resources must be

based on the unique combination of an organizations human capital, strategy,
and core capabilities that differs from organization to organization (Becker and
Huselid 2006).

 This means that healthcare executives cannot simply rely on the benchmarks
and strategies of others, even though they may be suggestive of better
approaches to managing people. Instead, healthcare executives must develop
their own HR strategies. If they can successfully develop and implement these
strategies, they may well achieve a sustained competitive advantage
in their markets. The future belongs to healthcare managers who can improve
organization performance while managing change through engaged and
committed employees. Collis and Montgomery (2008) maintain that
organizations can achieve a sustainable competitive advantage through people if
the following conditions are met:

* ’The human resources are valuable because they improve the efficiency or
etectiveness of the organization.

* The human resources are rare because employees knowledge and skills are
not
equally available to competitors

* The human resources are difficult to emulate and cannot be easily copied by
other

* The human resources are organized so that employce talents can be combined
and deployed as needed at a moments notice

Organizations achieve Competitive advantage through SHRM for the following

reasons:

* SHRM encourages proactive rather than reactive behavior.

* Company goals are communicated explicitly.

* There is a focus on gaps between the current situation and a vision of the
future

* Line managers are involved in the human resources planning process.

* Human resource opportunities and constraints are identihed in implementing

strategic plans.

HR BEST PRACTICES

Studies have shown that effective management of human resources can increase
profitability, annual sales per employee, productivity, market value, and growth and
earnings per share
(Messersmith and Guthrie 2010; Kaufman 2010). In these studies, a survey was used
to study the sophistication of the organizations HR practices and responses, resulting
in a score from 0 to 100, where a high score represented practices considered "state of
the art. Performance was measured using accounting financial data. Results indicate
that organiza- tons with better HR practices experienced greater increases in financial
performance relative to others (Becker, Huselid, and Ulrich 2001).

In addition, a survey of 200 chief financial officers (CFOs) revealed that 92 percent
believed that managing employees effectively also improves customer satisfaction
(Mayer, Ehrhart, and B. Schneider 2009). Customers also have reported that they are
more satisfied when the climate of the organization is more positive, employees
generally get along well, and turnover is low (Nishii, Lepak, and B.
Schneider 2008). Exhibit 1.1 summarizes HRM practices that appear to enhance the
effectiveness and outcomes of organizations. These practices seem to be present in
organizations that are elective in managing their human resources
and they recur repeatedly in studies high-performing organizations. In addition, these
themes are interrelated and mutually reinforcing; it is difficult to achieve positive
results by implementing just one practice on its own (Pfeffer 1998).

While these HR practices generally have a positive impact on organizational per-

formance, their relative effectiveness may also vary depending on their alignment (or
lack thereof) among themselves and with the organization's mission, values, culture,
strategies, goals, and objectives (Ford et al. 2006). These HRM practices may vary in
their impact on various types of healthcare organizations, depending on how well
each one is aligned with and reintorces the others as well as how well it is aligned
with various aspects with the overall business strategy.

Certain HR practices are associated with excellent organization performance (Lepak

et al. 2007). It is extraordinarily difficult to prove whether high organization
performance leads to excellent HR practices or whether good HR practices cause
better organization performance (Wright et al. 2005). However, it seems reasonable
that organizations should consider implementation of HR practices associated with
the best-performing organizations. The bad news about achieving competitive
advantage through the workforce is that it takes time to accomplish (Pfeffer 1998).
The good news is that, once achieved, such com- petitive advantage is likely to be
more enduring and harder for competitors to duplicate.
10

Most of these HR best practices are described in more detail throughout the book.
Although the evidence presented in the literature shows that effective HRM practices
can strongly enhance an organizations competitive advantage, it tails to indicate why
these practices have such an influence. In this chapter, we describe a model--the
SHRM-that attempts to explain this phenomenon.

11

 * Assessing the organization's environment and mission

* Formulating the organization's business strategy

* Identifying HR requirements based on the business strategy

*Comparing the current HR inventory-_numbers, characteristics, and

practices- with future strategic requirements

* Developing an HR strategy based on the differences between the current

inventory and future requirements

*Implementing the appropriate HR practices to reinforce the business strategy

and to attain competitive advantage

Changes in the external and internal environments have a direct impact on how
organizations are run and people are managed. Some external changes represent
opportunities for the organization and others represent threats. Environmental
scanning is the systematic monitoring of major environmental forces impacting the
organization. Internally, changes may also occur in terms of the organization's
strengths and weaknesses as leadership, culture, and organizational capabilities
change.

The organization's mission, vision, and values must also be assessed to

determine an appropriate business strategy. Examples include being a low-cost
provider or differentiating the organization based on a unique service or outstanding
customer services. After the business strategy has been determined, the organization
must develop an HR strategy that will reinforce the business strategy by making sure
that human resources are available in the right numbers, with the right skills, and at
the right time to implement the formulated business strategy.

SHRM has not been given as high a priority in healthcare as it has received in many
other fields. This neglect is particularly surprising in a labor-intensive field that
requires the right people to be in the right jobs at the right times and that often suffers
staffing short ages. In addition, the literature in the field as early as the 1990s has
offered fairly strong evidence that organizations that use more progressive HR
approaches achieve significantly better financial results than do comparable, although
less progressive.

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13
THE SHRM PROCESS

As illustrated in exhibit 1.3, a healthcare organization is made up of systems that

require constant interaction within the environment. To remain viable, an
organization must extend its strategic planning and thinking to external changes
because the internal components of the organization are affected by these changes.
The characteristics, performance levels, and alignment in operating practices among
these systems improve organizational and employee performance. HR goals,
objectives, process systems, culture, technology, and workforce closely align with
one another (internal alignment) and with various levels of organizational strategies
(external alignment)

INTERNAL AND EXTERNAL ENVIRONMENTAL ASSESSMENT

Environmental assessment is a crucial element of SHRM. Changes in the legal and

regulatory climate, economic conditions, and labor market realities mean that
healthcare organizations face constantly changing opportunities and threats. These
opportunities and threats make particular services or markets more or less attractive.
Among the trends currently affecting the healthcare environment are greater work-
force diversity, aging of the workforce, labor shortages, changing worker values and
attitudes, and advances in technology. Healthcare executives have responded to these
external environmental pressures through various internal structural changes,
including developing network structures, joining healthcare systems, participating in
mergers and acquisitions, forming work teams, implementing continuous quality
improvement, allowing telecom- muting, leasing employees, outsourcing work, using
additional temporary or contingent workers, and implementing medical tourism. In
addition to assessing their organizational strengths and weaknesses, healthcare
executives need to assess their internal systems; their human resources' skills,
knowledge, and abilities; and their portfolio of service markers.
Managers should develop HR policies and practices that are closely related to,
influenced by, and supportive of the strategic goals and plans of their organization.
Organizations, either explicitly or implicitly, pursue a strategy in their operations
Deciding on a strategy involves determining the products or services that will be
created and the markets to which the chosen services will be offered. After the
selections are made, the methods to compete in the chosen market must be identified
from among the available or potential internal resources.

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15
OBJECTIVES

HR planning comprises putting the right number and kind of people at the right place,
at the right time, and making them do things for which they are suited, to achieve
business goals. In the era of industrialization, structured HR planning has become a
really important aspect. It is carried out in a particular sequence of steps
which begins with analysing the current inventory of manpower available.

The managers need to suitably make plans for future requirements, by forecasting
along with developing employment and training programmes. Employment
opportunity originates from technology up-gradation, innovation, and continuous
search for newer scope and ideas. For example, after launching NC machines,
the use of old conventional machines has mostly been discontinued in large
companies. The new generation machines have opened up opportunities for
employment for software engineers, growth of air conditioner manufacturers, etc.

HR also calls for deciding the position to be filled based on the workload for a
considerable period of time by means of personnel planning and forecasting, building
a pool of potential candidates who are capable of performing the required tasks
through internal and external recruitment, using the most
suitable selection tools tailor-made for the position, and populating the HR inventory/
information system.

While negotiating during an interview, the financial as well as the non-financial

offers must be discussed openly to prevent attrition at a later stage. HR planning
manifests its importance as the key to managerial functions, efficient utilization,
motivation, better industrial relations, and higher productivity.

Human Resource planning is an important aspect of manpower management and

administration. A large pool of manpower exists, but utilizing them for the right job at
the right time is a major managerial task. Manpower is the quantity of productive
people who can be used in any organization as human capital and as assets to achieve
the common goal.

16

1. Provide Information:

The information obtained through HRP is highly important for identifying surplus
and unutilised human resources. It also renders a comprehensive skill inventory,
which facilitates decision making, like, in promotions. In this way HRP provides
information which can be used for other management functions.

2. Effective Utilisation of Human Resource:

Planning for human resources is the main responsibility of management to ensure

effective utilisation of present and future manpower. Manpower planning is
complementary to organisation planning.

3. Economic Development:

At the national level, manpower planning is required for economic development. It is

particularly helpful in the creating employment in educational reforms and in
geographical mobility of talent.

4. Determine Manpower Gap:

Manpower planning examine the gaps in existing manpower so that suitable training
programmes may be developed for building specific skills, required in future.

5. To Forecast Human Resource Requirements:

HRP to determine the future human resource needed in an organisation. In the

absence of such a plan, it would be difficult to have the services of the right kind of
people at the right time.

17

6. Analyse Current Workforce:

HRP volunteers to assist in analysing the competency of present workforce. It

determines the current workforce strengths and abilities.

7. EffectiveManagement of Change:

Proper HR planning aims at coping with severed changes in market conditions,

technology products and government regulations in an effective way. These changes
call for continuous allocation or reallocation of skills evidently in the absence of
planning there might be underutilisation of human resource.

8. Realising Organisational Goals:

HRP helps the organisation in its effectively meeting the needs of expansion,
diversification and other growth strategies.

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