PERSONNEL STRATEGY, The concept of HR strategy - Human Resource Management


As a result of mastering the material of the chapter, the student must:


• the basis for the development and implementation of the concept of personnel management, personnel policy of the organization and be able to apply them in practice;

• the fundamentals of strategic personnel management and can apply them in practice;

• the basics of HR planning and how to apply them in practice;

• the basis for the development and use of innovations in the field of personnel management and use them in practice;

be able to

• contribute to the planning, creation and implementation of projects in the field of personnel management

• participate in the implementation of the program of organizational changes (including in crisis situations) in the part of solving personnel management tasks, overcome local resistance to change;


• the skills to collect information to analyze internal and external factors that affect the effectiveness of staff activities

• skills of analyzing the competitiveness of the organization's strategy in the field of recruiting and attracting personnel.

The concept of HR strategy

A strategy is an interconnected set of long-term measures or approaches in order to strengthen the viability and power of the organization in relation to its competitors.

The goal of the strategy is to achieve long-term competitive advantages that will ensure the company's high profitability and sustainable profit. Thus, strategy is a generalized model of the actions necessary to achieve the set goals by coordinating and allocating the resources of the organization. A comparison of the goal and strategy is shown in Fig. 5.1.

Matching the strategy of the goal

Fig. 5.1. Matching the goal strategy

The organization's strategy provides a direct link between the overall mission of the organization (mission), policies and specific activities that must be subordinated to the achievement of common strategic goals. The ratio of these concepts is presented in Table. 5.1.

In essence, the strategy is a set of rules for making decisions that the organization is guided by in its activity (Table 5.2).

Table 5.1

Value of concepts: "mission", "strategy", "policy" & " and business lines





The reason for the existence of the organization, its core values ​​and ideals

Providing high quality products and services, observing world standards


Long-term organizational goals and conceptual approaches to achieving

The strategy of personnel management. The strategy of production diversification. Price strategy. Quality Management Strategy


More detailed approaches to the main strategic partners and, the most important principles and rules of doing business

Personnel policy. The policy of financing new projects. Marketing Policy


Specific steps and actions to implement the organization's strategy and policies

Programs of personnel selection and training, organization of advertising of services

The organization strategy can be described by two main parameters: the duration of planning and the type of strategy.

By duration of planning is understood the level of perspective: strategic, managerial, practical. The type of strategy sets the main objectives of the organization: entrepreneurial, dynamic growth in profitability, liquidation, and stability.

Given the depth of planning and the type of objectives, the head of the enterprise should develop specific scenarios for working with personnel, choose the type of leadership that is most effective taking into account the situation in the organization, the level of planning and the specifics of the organization's strategy.

Table 5.2

HR strategies related to the organization's main strategic directions

Organization Strategy

Human Resource Strategy

Cost Reduction

Reducing staff, reducing wages, increasing productivity, rescheduling posts, negotiating changes in terms of collective agreements


Aggressive hiring and recruiting policies, increasing wages, creating new jobs, expanding training and development of personnel


Managing staff turnover, selective layoffs, organizational development, movement and replacement of personnel. Engaging staff in the work

Radical changes in emphasis and responsibility

Special creation of posts, reduction of posts. Specialized training and development

Acquiring or absorbing services (functions)

Selective layoffs, staff mobility, job combination, orientation and training in managing cultural differences

Organization strategies can be grouped, taking as a basis one of the specific strategies (according to M. Porter).

The cost control strategy is based on reducing your own costs compared to the costs of competitors through mandatory control over costs or by adjusting the size of the enterprise and the volume of products, thereby achieving a higher production efficiency. That low prices can serve as a kind of barrier for the emergence of new competitors.

The differentiation strategy is aimed at putting products (services) on the market more attractive in the eyes of the consumer than competing products. These additional special qualities may contain the following elements: image, service, an extensive network of branches for rendering services. This strategy is a reliable and long-term way of obtaining a level of profits above the industry average, since customers who prefer the same brand are less susceptible to price.

Focusing is a strategy in which an enterprise focuses on a certain group of consumers, or on a limited part of the product mix, or on a specific geographic market.

Determining the type of market strategy - a breakthrough, evolutionary development or survival - is based on the results of prediction and choice of priorities. Depending on the phase of the cycle and the state of the economy, market strategy can focus on developing an emerging market, a fundamentally new product that implements basic innovations. This promises the possibility of rapid expansion of the market, but is associated with greater risk, significant investment. The breakthrough strategy usually requires direct or indirect state support (subsidies, tax, credit, customs benefits, etc.); development and strengthening of positions on the already mastered market on the basis of product modernization, differentiation and flexible change of assortment of goods, improvement of customer service.

The evolutionary strategy relies on improving innovation and, as a rule, does not involve state support; it should only ensure equal conditions for competition by implementing antitrust measures.

In crisis situations, survival strategy is often used, the goal of which is to adapt to the deteriorating situation, while preserving the main potential of the enterprise and the region's industries. At the same time, obsolete products that are not in demand are being withdrawn from production, the scale of innovation and investment activity is decreasing, there is a reorientation to new markets, retraining of personnel and its partial reduction. The state should support promising technologies, freed workers, but should not preserve obsolete production. The survival strategy should be combined with a breakthrough strategy as the basis for revitalization and future recovery.

Having studied the external environment and the internal reserves of the organization, the management of the enterprise faces the problem of choosing a strategic alternative. The following types of strategic alternatives are known: limited growth, growth, reduction and a combination of these three strategies.

The limited growth strategy is used in mature organizations that are firmly on their feet. Usually they are satisfied with the existing situation. The management of such enterprises adheres to the old, once successful strategy: with a minimal risk to themselves they set goals from what has been achieved.

Growth strategy assumes a constant increase in the level of indicators of the previous period. It is applied to dynamically developing enterprises with rapidly changing technologies. Growth can be internal or external: internal growth occurs by expanding the range of goods or services; external growth is the merger of companies. Growth can lead to conglomerates (holdings).

When the goals pursued are set below what has been achieved, this means that the management of the enterprise resorts to a reduction strategy. The following variants of the reduction strategy are known: liquidation of an enterprise (complete sale of inventories and assets of the organization); cutting off excess (discontinuation of certain activities); reduction and reorientation (reduction of part of its activities).

The construction of a small firm's strategy is based on available resources, staff competence, ideas, ambitions, initiative, enterprise. The same situation holds true for larger firms, but the medium term forecast of strategic development remains the main condition for resolving these problems. For a longer period, there is another relationship, the reverse of the above. The strategic ambitions and long-term objectives of the management of firms for a long-term period determine the prospect of working with the staff, i.e. lay the possibility of strategic management of the development of the basic competencies of personnel to those required for implementation.

Strategies for combining all the alternatives are often followed by large enterprises that are active in several industries.

Strategic choice must be definite and unambiguous. When choosing a strategy, there are two possible ways:

• eliminate bottlenecks based on identifying the main narrow link, after the elimination of which all processes are fuller; an example is the spiral B. Mebeca (Figure 5.2);

• The unsuccessful chance to choose and use the most favorable of the available opportunities.

According to experts, the most characteristic features of the activities of all fast-growing enterprises, regardless of their size and specialization are: the orientation to the fullest satisfaction of the needs of the customer and the flexibility of strategies that allow to adapt to any conditions.

Spiral V. Meheca

Fig. 5.2. Spiral In. Meheca

The choice of a specific strategy is determined by the long-term goals of the organization, its internal resources, traditions.

Strategic management is understood as management, which relies on human potential as the basis of the organization, orientates production activities to customer needs, implements flexible regulation and timely changes in organizations that meet the challenge of the environment and allow to achieve competitive advantages, which together allows the company to survive and achieve its strategic goal (Figure 5.3). Thus, the strategy includes: identifying the long-term goals of the development of the organization, the methods and time of their achievement, as well as the system for assessing the degree of implementation of these goals, the general course of action of the organization for a specific period.

The traditional approach to the organization's strategy is based on the idea of ​​it as one of the organizational management processes.

Since the late 1980's. there was a new approach to the concept of strategy, which, without repealing the previous provisions, clarified certain accents:

Evolution of strategic management

Fig. 5.3. Evolution of strategic management

• In the strategy, all the components are equally important (both development and implementation), because at the implementation stage there may be unpredictable factors that significantly affect the end result;

• The strategy is relevant not only to the outside of the organization's activities, but also to internal factors (organizational culture, staff expectations, structure, etc.);

• Human resources have a strong influence on the implementation of the developed strategy and have their strategic status.

Under the current conditions of global competition and acceleration of scientific and technological progress, organizations are under constant pressure from competitors, forcing them to improve their products or services, expand their range, and optimize production and management processes. Therefore, modern companies are in a state of constant change, from the speed of implementation of which the success of the company largely depends. The key to mastering innovative management lies in the effective use of available human resources, and this can be done only if the management of personnel is part of the overall development strategy of the organization,

Table 5.3

The relationship between the organization's strategy and HR strategy

Organization Strategy Types

HR strategy

Components of the HR strategy

Entrepreneurial strategy

Accept projects with a high degree of financial risk, a minimum number of actions. Resource satisfaction of all customer requirements. The focus is on the rapid implementation of immediate measures, even without appropriate development

Search and attraction of work and co-innovators, initiative, contact, with a long-term orientation, not afraid of responsibility. It is important that leading employees do not change

Selection and placement of personnel: the search for people who are able to take risks and bring the matter to the end. Remuneration: on a competitive basis, impartial, if possible satisfying the tastes of the employee.

Score: based on results, not too hard.

Personal development: Informal, mentor-oriented.

Planning of movement: in the center - the interest of workers. Selection of a workplace that corresponds to the interests of the employee

Dynamic Growth Strategy

The degree of risk is lower. Constantly comparing current goals and creating a foundation for the future. The organization's policies and procedures are recorded in writing, as they are necessary here for more strict control, and as a basis for further development of the organization

Employees should be institutionalized, flexible in changing conditions, be problem-oriented and work in close cooperation with others

Selection and placement of personnel: the search for flexible and loyal people who are at risk.

Reward: fair and impartial. Evaluation: based on clearly defined criteria.

Personality development: emphasis on qualitative growth of the level and field of activity.

Planning of movements: take into account today's real opportunities and various forms of career advancement

Profitability Strategy

The focus is on maintaining the existing level of profits. Efforts that require financial costs are modest, perhaps even termination of employment. The management system is well developed, there is an extensive system of various procedural rules

Focuses on the criteria for the number and effectiveness of personnel; terms - short-term; results - with a relatively low level of risk and a minimum level of employee commitment

Selection and placement of personnel: extremely tough Remuneration: based on merit, seniority and in-house representations of justice.

Score: narrow, results-oriented, carefully thought out.

Personality development: emphasis on competence in the field of assigned tasks, experts in a narrow field

The liquidation strategy

Sale of assets, elimination of loss opportunities, in the future - reduction of employees (as far as possible). Almost or not attention is paid to attempts to save the enterprise, as further profits are expected to fall

Focuses on the need for employees for a short time, a narrow orientation, without a great commitment to the organization

The recruitment is unlikely due to a reduction in staff. Payment: based on merit, slowly growing, without incentives.

Evaluation: strict, formal, based on management criteria.

Development, training: limited, based on official necessity.

Promotion: those who have the necessary skills, have the opportunity to advance

The cycle strategy (cyclical)

The main thing is to save the enterprise. Measures to reduce costs and personnel are carried out in order to survive in the near future and to gain stability for the long term. Moral state of depression

Employees must be flexible in a changing environment, focused on larger goals and longer-term prospects

Multifaceted workers are required. Payment: incentive system and merit testing. Score: by result.

Training: great opportunities, but with careful selection of applicants.

Varied shapes

Ninification. The relationship between the business strategy and the HR strategy is presented in Table. 5.3.

In practice, various companies rarely stop at any one option. Most common strategy is a combination of different strategies, based on the significance and expected result of each.

Matching implies a tight link between the HR and business strategies, but the latter is forced to be flexible, while maintaining the closest match possible. Strategic flexibility - the ability of an organization to respond to changes in the competitive environment and adapt to these changes. It is believed that the concepts of flexibility and consistency are incompatible. The concepts of correspondence and flexibility complement each other: the correspondence exists at a certain time point, while flexibility must exist over a period of time. The model of the correspondence/flexibility of strategic personnel management is shown in Fig. 5.4. In the upper part of this model, the constituent of conformity is illustrated, i.e. the methods by which the company strives to match the practical actions of human resources management, the skills and abilities of employees and the types of their behavior to the immediate competitive needs of the company dictated by the business strategy.

Ensuring the alignment (binding) of the organizational and personnel strategy is carried out at the level of judgment by building a matrix in which a key element of the HR strategy is defined for each element of the business strategy.

The connection between the entrepreneurial strategy and various aspects of the HR strategy is shown in Table. 5.4.

The differences in the organization's environment will influence the flexibility/compliance strategy. In a stable, predictable environment, the best strategy is to develop a limited range of skills (or keep a constant number of skills in people) and to cultivate the narrow spectrum of behavioral behaviors with the help of job requirements. In a dynamically developing unpredictable environment, companies can develop organic human resource systems that create a reserve of human capital from people with a wide range of skills (Figure 5.5).

Flexibility/Matching Model

Fig. 5.4. Model flexibility/ alignment

Table 5.4

Binding human and entrepreneurial strategies

Entrepreneurial strategy

HR strategy (HR strategy)

Provide Resources

Human resource development


Achieving a competitive advantage through innovation

Attracting and retaining highly qualified people with a propensity for innovative action and a good track record in innovation

Developing strategic ability and providing incentives and conditions for increasing innovative qualities

Provide financial incentives and reward for successful innovation

Achieving competitive advantage through quality

Using a sophisticated selection process to accept people who can provide quality and high levels of customer service

Encouraging the development of the learning organization and supporting initiatives to achieve universal quality and customer care with a specialized training course

Relationship of remuneration with quality of results and achievement of high standards of customer service

Achievement of competitive advantage through leadership in costs

Development of core and peripheral employment structures; Involving people who are able to create additional value; in the case of staff reduction planning and management of this process from a humane perspective

Conducting training aimed at increasing labor productivity; training on a "just-in-time" method that is closely related to the immediate needs of the business and can launch a process of significant efficiency improvement

Revision of all pay systems in order to ensure an optimal price-quality ratio and to avoid unnecessary costs

Achieving a competitive advantage by using people who are qualitatively better than competitors' employees

Using a complex hiring and selection procedure based on a thorough analysis of the special abilities required for the organization

Development of the process of organizational learning; encouraging self-directed learning through the use of personal development plans as part of the performance management process

Develop an efficiency management process so that it allows both material and non-material remuneration related to competence and skills to be applied; achievement of competitive salary levels

Priorities for the HR strategy of a self-developing organization

Fig. 5.5. Priorities for the HR strategy of a self-developing organization

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