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ST RTEGIC HUM N RESOURCE M N GEMENT

CHAPTER 03: THE CONCEPT of STRATEGIC HRM

Strategic HRM DefinedStrategic human resource management (strategic HRM or SHRM) is an approach

to managing human resources that supports long-term business goals and outcomes with a strategic

framework. The approach focuses on longer-term people issues, matching resources to future needs,

and macro-concerns about structure, quality, culture, values and commitment. It is necessarily

dependent on the evolving nature of work itself, which is explored in our Megatrends series and our

Profession for the Future strategy.

In general, SHRM is about aligning and linking all HR processes, procedures and initiatives with the

strategic objectives of the organization. It is a task for Human Resources to revisit all processes and

procedures; they need to be simplified, streamlined and refurbished. This is the fairest and simplest

definition of the Strategic Human Resources Management.

Other Definitions of Strategic HRM

Authors Definitions

Bratton J, (2001) Strategic HRM as the process of combining the

function of HR with the strategic organizational

objectives in order to develop performance.

Kaplan and Hurd, (2002) Strategic human resource management is a

collection of tasks and processes shared jointly byline managers and human resources to solve

business issues based on people.

Kostova and Roth, (2002) The macro organizational approach to look the

function and role of human resource management

in the big organization is termed as Strategic HRM.

Leug, (2003) Strategic human resource management focuses on

actions that varied the organization from its

competitors.

Michie and Sheehan, (2005) Strategic human resource management is the

pattern of scheduled HR tasks and deployment

intended to enhance an organization to gain itsaims.

Dessler, (2011) Strategic HRM means making and implementing

practices and policies of human resource that

generates the behaviors and competencies of

employee that the organization requires to gain its

strategic goals.

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Findings of Strategic HRM DefinitionsFrom all the above discussed definitions of strategic human resource

management, we have found some important findings about these. The findings are mentioned below

Strategic human resource management is a complex process that is constantly evolving and the

subject of ongoing discussion by academics and other commentators.

Its definition and relationships with other aspects of business planning and strategy are not

absolute and opinions vary.

There are many definitions of the strategic Human Resources Management. The organization

should not blindly follow just one methodology; it should create a healthy mix that will fit the

needs.

Strategic HRM is concerned with the followings:

Analyze the opportunities and threats existing in the external environment.

Formulate strategies that will match the organizations (internal) strengths and

weaknesses with environmental (external) threats and opportunities. In other words,

make a SWOT analysis of organization.

Implement the strategies so formulated.

Evaluate and control activities to ensure that organizations objectives are duly

achieved.

References

Kaplan, N.J. and J. Hurd. 2002. Realizing the Promise of Partnerships, Journal of

Business Strategy 23(3), 38-42.

Kostova, T. and K. Roth. 2002. Adoption of an Organizational Practice by Subsidiaries

of Multinational Corporations, Academy of Management Journal 45(1), 215-233. Armstrong, Michael, Baron, Angela, (2003), Strategic HRM: The Key to Improved

Business Performance, CIPD, London, p xviii.

Leug, A. 2003. Different Ties for Different Needs: Recruitment Practices

of Entrepreneurial Firms at Different Developmental Phases, Human

Resources Management 42(4), 303-320.

Michie, J., & M. Sheehan. 2005. Business Strategy, Human Resources, Labor

Market Flexibility and Competitive Advantage, International Journal of

Human Resource Management 16(3), 445-464.

YourArticleLibrary.com: The Next Generation Library. (2014). Strategic Human Resource

Management: Meaning, Benefits and Other Details | HRM. [online] Available at:http://www.yourarticlelibrary.com/hrm/strategic-human-resource-management-

meaning-benefits-and-other-details-hrm/35236/ [Accessed 13 Jun. 2016].

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Basis of Strategic HRM

Strategic HRM defines the organizations intentions and plans on

how its business goals should be achieved through people. The basis strategic HRM is actually

based on three propositions and these are mentioned below

1.

The human resources or human capital of an organization play a strategic role in its

success and are a major source of competitive advantage.

2. HR strategies should be integrated with business plans (vertical integration).

Allen and White (2007) stressed, The central premise of strategic human resource

management theory is that successful organizational performance depends on a close fit or

alignment between business and human resource strategy. Boxall et al (2007) also believed

that The major focus of strategic HRM should be aligning HR with firm strategies.

3.

Individual HR strategies should cohere by being linked to each other to provide mutual

support (horizontal integration).

So, Strategic HRM can be regarded as a mindset underpinned by certain concepts rather than a

set of techniques. It provides the foundation for strategic reviews in which analysis of the

organizational context and existing HR practices leads to choices on strategic plans for the

development of overall or specific HR strategies.

Findings about the Basis of Strategic HRM

From the above discussions about the three propositions based on

which Strategic HRM is constructed, we can summarize the below findings

1. HR strategies are essentially plans and programs that address and solve fundamental

strategic issues related to the management of human resources in an organization.

2. The focus should be on the integration or alignment of the organizations HR practices,

policies and programs with corporate and strategic business unit plans.

3.

The vertical integration between HRM and business strategy contributes to effectivemanagement of human resources, improvement in organizational performance and

finally the success of a particular business.

4. There are two ways of vertical fit integration. These are

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One-way Vertical Fit:

Aligning HRM systems to the business strategy;

HR as strategically reactive HR where alignment is taken as the partnering

role of HR & HR is highly integrated with business processes;

Align the human resources to three kinds of competitive strategies,

namely innovation, quality enhancement and cost reduction strategy.

Twoway Vertical Fit:

Aligning to the business strategy & contribute in the strategy

formulation;

HR as strategically proactive HR that involves creating future strategic

alternatives;

Creating a culture change, identifying mergers & acquisition possibilities,

tracking the market & proactively making change.

5. Benefits of integration of HRM into the business strategy or plan are:

Providing a broader range of solutions for solving complex organizational

problems;

Assuring the successful implementation of corporate strategy;

Contributing a vital ingredient in achieving and maintaining effective

organizational performance;

Ensuring that all human, technical and financial resources are given equal and

due consideration in setting goals and assessing implementation capabilities;

Providing long-term focus to HRM; and

Helping a firm to achieve competitive advantage.

6. The Horizontal fit integration focuses on the following issues:

Aligning various HRM systems to each other, connections created between and

within the people processes; and

HR practices should be linked to organizational strategy, but these practices also

need to be strategically linked to each other to ensure that they are promoting

the same goals.