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STARTEGIC HUMAN RESOURCE MANAGEMENT

CHAPTER 03: THE CONCEPT of STRATEGIC HRM


Strategic HRM Defined
Strategic 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
Bratton J, (2001)

Kaplan and Hurd, (2002)

Kostova and Roth, (2002)

Leug, (2003)

Michie and Sheehan, (2005)

Dessler, (2011)

Definitions
Strategic HRM as the process of combining the
function of HR with the strategic organizational
objectives in order to develop performance.
Strategic human resource management is a
collection of tasks and processes shared jointly by
line managers and human resources to solve
business issues based on people.
The macro organizational approach to look the
function and role of human resource management
in the big organization is termed as Strategic HRM.
Strategic human resource management focuses on
actions that varied the organization from its
competitors.
Strategic human resource management is the
pattern of scheduled HR tasks and deployment
intended to enhance an organization to gain its
aims.
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.

Findings of Strategic HRM Definitions


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

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 effective
management 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

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.
Two way 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.