What is meant by Strategy?
Strategy is a multi-dimensional concept going well beyond traditional competitive strategy concepts. Strategies are broad statements that set a direction. Strategies are a specific, measurable, obtainable set of plans carefully developed with involvement by an institution’s stakeholders. These action statements are linked to an individual or individuals who are accountable and empowered to achieve the stated result in a specific desired timeframe.
They are patterns of action, decisions, and policies that guide a group toward a vision or goals. Strategic human resource management is designed to help companies best meet the needs of their employees while promoting company goals. Human resource management deals with any aspects of a business that affects employees, such as hiring and firing, pay, benefits, training, and administration. Human resources may also provide work incentives, safety procedure information, and sick or vacation days.
Strategic human resource management is the proactive management of people. It requires thinking ahead, and planning ways for a company to better meet the needs of its employees, and for the employees to better meet the needs of the company. This can affect the way things are done at a business site, improving everything from hiring practices and employee training programs to assessment techniques and discipline. In Human Resource (HR) and management circles nowadays there is much talk about Strategic Human Resource Management and many expensive books can be seen on the shelves of bookshops. But what exactly is SHRM (Strategic Human Resource Development), what are its key features and how does it differ from traditional human resource management?
SHRM or Strategic human resource management is a branch of Human resource management or HRM. It is a fairly new field, which has emerged out of the parent discipline of human resource management. Much of the early or so called traditional HRM literature treated the notion of strategy superficially, rather as a purely operational matter, the results of which cascade down throughout the organisation. There was a kind of unsaid division of territory between people-centred values of HR and harder business values where corporate strategies really belonged. HR practitioners felt uncomfortable in the war cabinet like atmosphere where corporate strategies were formulated.
Definition of SHRM
Strategic human resource management can be defined as the linking of human resources with strategic goals and objectives in order to improve business performance and develop organizational culture that foster innovation, flexibility and competitive advantage. In an organization SHRM means accepting and involving the HR function as a strategic partner in the formulation and implementation of the company’s strategies through HR activities such as recruiting, selecting, training and rewarding personnel.
How SHRM differs from HRM
In the last two decades there has been an increasing awareness that HR functions were like an island unto itself with softer people-centred values far away from the hard world of real business. In order to justify its own existence HR functions had to be seen as more intimately connected with the strategy and day to day running of the business side of the enterprise. Many writers in the late 1980s, started clamouring for a more strategic approach to the management of people than the standard practices of traditional management of people or industrial relations models. Strategic human resource management focuses on human resource programs with long-term objectives. Instead of focusing on internal human resource issues, the focus is on addressing and solving problems that effect people management programs in the long run and often globally. Therefore the primary goal of strategic human resources is to increase employee productivity by focusing on business obstacles that occur outside of human resources. The primary actions of a strategic human resource manager are to identify key HR areas where strategies can be implemented in the long run to improve the overall employee motivation and productivity. Communication between HR and top management of the company is vital as without active participation no cooperation is possible.
Key Features of Strategic Human Resource Management
- There is an explicit linkage between HR policy and practices and overall organizational strategic aims and the organizational environment
- There is some organizing schema linking individual HR interventions so that they are mutually supportive
- Much of the responsibility for the management of human resources is devolved down the line
- attempts to link Human Resource activities with competency based performance measures
- attempts to link Human Resource activities with business surpluses or profit
These to approaches indicate two factors in an organizational setting. The first one is the human factor, their performance and competency and the later is the business surplus. An approach of people concern is based on the belief that human resources are uniquely important in sustained business success. An organization gains competitive advantage by using its people effectively, drawing on their expertise and ingenuity to meet clearly defined objectives. Integration of the business surplus to the human competency and performance required adequate strategies. Here the role of strategy comes into picture. The way in which people are managed, motivated and deployed, and the availability of skills and knowledge will all shape the business strategy. The strategic orientation of the business then requires the effective orientation of human resource to competency and performance excellence.
The Center for Human Resources at the University of Pennsylvania was founded in 1921. The Center’s mission is to foster research on the strategic role of HR management in such areas as employment, labor relations, public policy, diversity, and training and education. The Center supports its mission through research, regular meetings, information bulletins, and conferences and public forums.
Benefits of SHRM
- Identifying and analysing external opportunities and threats that may be crucial to the company’s success.
- Provides a clear business strategy and vision for the future.
- To supply competitive intelligence that may be useful in the strategic planning process.
- To recruit, retain and motivate people.
- To develop and retain of highly competent people.
- To ensure that people development issues are addressed systematically.
- To supply information regarding the company’s internal strengths and weaknesses.
- To meet the expectations of the customers effectively.
- To ensure high productivity.
- To ensure business surplus thorough competency
Barriers of SHRM
Barriers to successful SHRM implementation are complex. The main reason is a lack of growth strategy or failure to implement one. Other major barriers are summarized as follows:
- Inducing the vision and mission of the change effort.
- High resistance due to lack of cooperation from the bottom line.
- Interdepartmental conflict.
- The commitment of the entire senior management team.
- Plans that integrate internal resource with external requirements.
- Limited time, money and the resources.
- The statusquo approach of employees.
- Fear of incompetency of senior level managers to take up strategic steps.
- Diverse work-force with competitive skill sets.
- Fear towards victimisation in the wake of failures.
- Improper strategic assignments and leadership conflict over authority.
- Ramifications for power relations.
- Vulnerability to legislative changes.
- Resistance that comes through the legitimate labour institutions.
- Presence of an active labour union.
- Rapid structural changes.
- Economic and market pressures influenced the adoption of strategic HRM.
- More diverse, outward looking approach.