Creating a Human Resources Strategy

Creating a Human Resources Strategy


Having to create an HR plan, especially for a fast growing company, can be a daunting task, but it is an essential component of an overall business strategy.  For example, if you plan to expand into new markets or provide new services in the near future, will you need to hire new people?  What skill sets are necessary to provide this new service?   Should your recruiting begin now so you’re ready for the start of the New Year?  How will this planned growth affect your hiring and employee training programs in the coming months?  Do you have adequate office space and equipment to accommodate new staff?  These are a few of the many considerations in formulating an effective HR plan.

An effective HR strategy can be formulated by addressing a series of key issues in the following four-step process:

  1. Set Clear Business Goals.

HR planning flows from your company’s operational plan.  The HR plan is a blueprint that highlights your people needs in order to carry out the operational plan.

Human resource strategies are derived from overall business objectives in the same way as investment or marketing strategies.

These goals (like any other objectives) need to be expressed in quantifiable terms so that outcomes can be measured. However, strategic HR objectives go beyond the simplistic calculation and control of staff numbers and minimization of costs.

  1. Match HR Needs to Goals.

Once the business goals have been established, analyse your HR needs in these three areas:

  • Technical Skills. What skills are needed in the organization to meet your business goals?  You may have to “buy” the talent by hiring new people, “build” a skill base through training, or contract some of the work on a temporary basis.
  • People Skills. Do your people have the skills to meet your business goals?  The skills that need careful consideration are likely leadership, customer service, and sales expertise.
  • Does your business have the overall capability to meet any unforeseen needs that might arise?  Can your employees easily switch to different tasks if required?  You may need to hire individuals who will complement those already on your team.
  1. Cost it Out.

You will have to estimate the costs of basic salaries, benefits, training and even the time required to implement HR strategies.  You should be thinking about the cost of entering those new markets, and if you can’t afford it, you may need to rethink your strategy, or maybe even revisit your goals.

  1. Regularly Review.

Review your HR plan every 12-18 months to ensure you still have the right mix of human capabilities.  Otherwise, you could end up developing skills and competencies that are no longer relevant to a fast-changing business.  Part of any good strategy is being prepared for the unexpected, a good example of which is staff turnover.  What form of retention plan do you have in place to address this very important matter?

Another crucial part of any HR strategy is a succession plan for key positions.  It is important for staff to develop in terms of flexibility now, and it’s important to support growth opportunities in the future.

Once you have drafted your strategic HR plan, the next step is to let employees know about it and encourage their input. A carefully crafted HR strategy is an integral part of any business plan, and the amount of thought you give it will determine how it benefits your bottom-line.

Back to the Basics

The following are some of the issues found in a HR strategic plan.

  • Employee recruitment and retention strategy
  • Reward systems strategy for motivating and challenging employees
  • A strategy for creating a work environment that minimizes absenteeism and keeps turnover at desirable levels.
  • A strategy for partnering with the unions
  • A strategy for empowering employees
  • A strategy for management systems
  • A definition of skill requirements and a strategy for attracting such skills
  • A strategy for dealing with business change and its impact on human resources
  • A strategy for developing new skills to match technological change
  • A strategy to evolve the organizational structure to continue price competitiveness and quality levels.
  • A strategy to enhance multinational human resources to meet international competition

Today, while many of the aforementioned strategies are still applicable, one might also see:

  • A strategy for evolving the culture in preparation for a major organizational initiative.
  • A strategy to remodel the physical plant in order to hire older workers to replace less available younger and more physically able workers.
  • A virtual office strategy designed to reduce the need for capital facilities by having employees work at home
  • A strategy that builds toward a net human resources requirement level that is predicated on the organizations current gross human resource inventory.


Specific objectives of the topic include: –

At the end of this topic the trainee should be able to:

  1. Explain the purpose of HRM
  2. Discuss the HRM major policy areas
  3. Formulate HRM policies for an organisation
  4. Implement HRM policies for an organisation



These are continuing guidelines on the approach the organisation intends to adopt in managing its people.  They define the philosophies and values of the organisation on how people should be treated, and from these are derived the principles upon which managers are expected to act when dealing with HR matters.  Hr policies serve as reference points when HR practices are being developed and when decisions are being made about people.

A policy provides generalized guidance on the approach adopted by an organisation and therefore its employees, concerning various aspects of employment.  A procedure spells out precisely what action should be taken in line with the policy.


Discrepancies between the desired conditions and actual or likely future conditions are the sources of objectives.  Objectives simulate decisions on which actions to take to reduce the discrepancy is undertaken.  There are 2 types of objectives at this level:

  1. Efficiency: refers to the comparison between inputs and outputs. Efficient organisations maximize outputs while minimizing inputs.  HR decisions affect an organisation’s efficiency by employing the workforce in the most efficient manner.
  2. Equity: is the perceived fairness of both procedures used to make HR decisions and the decisions themselves. Many people are interested in the rules and procedures used to decide pay increases, hiring, layoffs or promotions, as well as, the effects of these decisions.


HR or employment policies help to ensure that when dealing with matters concerning people an approach in line with corporate values is adopted throughout the organisation.  HR policies provide frameworks within which consistent decisions are made and promote equity in the way in which people are treated.  HR policies by providing guidance facilitate decentralization and delegation.


  • Enable the organisation to carry out its main objectives in a desirable manner.
  • Ensure employees are informed of the expectations and secure their corporation.
  • Protect common interests of all parties in the organisation.
  • Provide for consultative participation by employees in management.
  • Provide security of employment.
  • Provide opportunity for growth in the organisation.
  • Provide for payment of fair and adequate wages.
  • Create a sense of responsibility for those in authority.


  • Definitive, positive clear and easily understood by everyone.
  • Written so as to reserve it against loss and prevent promulgation of numerous, differing and temporary oral policies from multiple sources.
  • Be reasonable, stable but not rigid – be periodically revised, evaluated and assessed.
  • Be in tune with the challenges of the environment.
  • Be formulated with due regard to the interests of all the concerned parties.
  • Be a result of careful analysis of all available facts.
  • Be consistent with public policy.
  • Must have the support of the management and workers.
  • Be uniform throughout the organisation.


  • Past practice of the organisation.
  • Prevailing practices in sister organisations and the environment.
  • Attitudes, ideals and philosophy of the Directors and management.
  • Knowledge and experience gained from handling day-to-day personnel problems.
  • Employee suggestions and complaints.
  • Collective bargaining programmes.
  • Government legislation.
  • Changes in the economic environment.
  • Culture of the business.
  • Extent of unionism
  • Attitudes and social values of the labour force.
  • Goals of the organisation.
  • Technological changes.


HR policies can be expressed as overall statements of the philosophy of the organisation and of its values.

The overall policy defines how the organisation fulfils its social responsibilities for its employees and sets out its attitude towards the workers.  The values expressed in an overall statement of HR policies may explicitly or implicitly refer to the following: –

  • Treating employees fairly and justly. It includes protecting individuals from any unfair decisions made by their managers, providing equal opportunities for employment, promotion and operating an equitable pay system.
  • Taking account of individual circumstances when making decisions which affect the prospects, security or self respect of employees
  • Quality of working life. Continually and consciously aiming to improve the quality of working life as a means of increasing motivation and improving results. It involves increasing the sense of satisfaction people obtain from their work, reducing monotony, increasing variety and responsibility, empowerment and avoiding placing people under too much stress.
  • Working conditions. Providing healthy, safe and pleasant working conditions.


Employment policies cover the following areas:

  • HR Planning. A commitment by the organisation to planning ahead in order to maximize the opportunities to develop their careers within the organisation and to minimise the possibility of compulsory redundancy.
  • Quality of Employees. This would involve recruiting people who have the ability or potential to meet the high standards of performance needed to realize corporate goals.
  • This would state the organisations intention to promote from within, as a means of satisfying its requirements for quality staff. The policy will however recognize that there will be occasions when present and future needs can only be met through external hiring.  The policy will encourage employees to internally apply for jobs.
  • A policy of increasing individual employability by providing career development and learning opportunities.
  • Ethnic monitoring. How the organisation deals with monitoring the employment of ethnic minorities.
  • Age and employment. This would define the approach the organisation adopts to engaging, training and promoting older employees.
  • This should state that it is the organisation’s intention to use its best endeavour to avoid redundancy through redeployment and retraining. However, if redundancy is unavoidable, the organisation will use fairness and equity to those affected, give ample warning and assist in outplacement services – assist the employees get jobs elsewhere.
  • Such a policy should state that employees have a right to know what is expected of them and the consequences if they go against the organisations rules. In handling disciplinary cases the organisation will treat employees in accordance with the principles of natural justice.
  • The policy should state that employees have the right to raise their grievances with the manager and to appeal to a higher level if they feel that their grievance has not been resolved satisfactorily.
  • The policy would define no-smoking rules. Such a policy would spell out whether or not there is a complete ban on smoking and if not, the arrangements for restricting smoking to designated areas.
  • Domestic Violence Policy: How the organisation will recognize issues of domestic violence and their impact on employees productivity; in what particular instances will the organisation intervene and in what ways.
  • Substance abuse. How the organisation treats employees with drink or drug problems
  • HIV & AIDS. How the organisation approaches the employment of people with Aids.
  • Equal Opportunity. This spells out the organisations determination to give equal opportunities to all irrespective of sex, race, creed or marital status. It also should spell how the organisation gives equal opportunity to the disables. The policy should highlight the extent to which the organisation wants to take ‘affirmative action’ to redress imbalances in sex, race, levels of qualifications and skills.
  • Managing diversity. Such a policy recognizes that there are differences among employees and that if these are properly managed, will enable work to be done more efficiently and effectively. Such a policy recognizes that benefits to be made from differences in the organisation. Such a policy; acknowledges cultural and individual differences in the workplace and; emphasizes need to eliminate bias in selection, promotion, performance assessment, pay and learning opportunities.
  • Reward policy. This could cover such matters as; paying market rates, paying for performance, gainsharing (sharing the profits or surplus), equal pay for work of equal value, provision of benefits and importance of non-financial rewards.
  • Employee Development Policy. It should express the organisations commitment to the continuous development of the skills and abilities of employees – to benefit both the organisation and the employee.
  • Involvement and participation. This should spell out the organisations belief in involvement and participation as a means of generating employee commitment. It should also form a basis of organisational communication to staff.
  • Employee relations. This will set out the organisations approach to the rights of employees to represent their interests to management through unions, staff associations etc. It also covers the basis upon which an organisation works with unions.
  • New technology policy. Such a statement would refer to consultation about the introduction of new technology and steps towards minimizing the risk of compulsory redundancy.
  • Health and safety. These cover how the organisation intends to provide healthy and safe places and systems of work.
  • Harassment policy. Such a policy would include; definition of harassment, a statement that such an act is not tolerated and is gross misconduct, definition of the role of managers in prevention and handling of harassment complaints, confidentiality of information, provision for counseling services and a set of procedures for handling harassment cases.
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