STRATEGIC HUMAN RESOURCE MANAGEMENT

INTRODUCTION
The term, Strategic Human Resource Management, conveys the sense of human resource
management in a strategic context. In order for this to take place there has to be some
connection made with the strategic process through which the aims of an organization are
managed, that is, its strategic management.

If a global company is to function successfully, strategies at different levels need to inter-

relate. Throughout the first half of our century and even into the early eighties, planning
with its inevitable companion, strategy- has always been a key word, the core, and the
near-ultimate weapon of good and true management. In this lecture we examined the
theoretical debates on the nature and significance of the new HRM model.

SHRM
Strategic Human Resource Management is an approach to making decisions on the
intentions of the organization concerning people-essential components of the
organization’s business strategy. It is about the relationship between HRM and Strategic
management in the organization. Strategic HRM refers to the overall direction the
organization wishes to pursue in achieving its objectives through people.

Strategic HRM can be regarded as an approach to dealing with longer-term people issues
as part of the strategic management thrust of the business. It covers macro-organizational
concerns relating to structure and culture, organizational effectiveness and performance,
matching resources to future business requirements, and the management of change.

Defined by Wright and Snell (1989):

SHRM deals with `those HR activities used to support the firms competitive strategy.

Miller (1989):

Strategic Human Resource Management encompasses those decisions and actions, which
concern the management of employees at all, levels in the business and which are
directed towards creating and sustaining competitive advantage.

Walker (1992):
The means of aligning the management of human resources with the strategic content of
the business.

THE AIMS OF SHRM

SHRM aims to provide a sense of direction in an often-turbulent environment so that
organizational and business needs can be translated into coherent and practical policies
and programmers. SHRM should provide guidelines for successful action, and the
ultimate test of the reality of strategic HRM is the extent to which it has stimulated such
action.

THE CONCEPT OF STRATEGIC HUMAN RESOURCE MANAGEMENT

1. Human Resources – a strategic issue

• There is an overall corporate purpose and that the human resource

dimensions of that purpose are evident.
• A process of developing strategy within the organization exists and is
understood, and that there is explicit consideration of human resource
dimensions.
• The organization at all levels establishes responsibility and accountability
for human resource management.
• It includes the responsibility to identify and interact in the social, political,
technological and economic environments in which the organization is and
will be doing business.

2. The need for a Concept

Much of the literature provides evidence that strategic integration is not well developed
and advances reasons why to achieve it would be beneficial to organizations.
Organization advocated an increase in the input of human resource considerations at
strategic planning, an attitude of treating employees as assets, more participation and
involvement for employees, effective and open communications, less rule-oriented
policies and practices, better training and career development opportunities, reward and
recognition tied to performance.

3. Models and frameworks of strategic human resource management

a) The Fomburn, Tichy and Devanna model of HRM: The early

HRM model developed by Fombrun (1984) emphasizes the
interrelatedness and the coherence of human resource
management activities. He wrote that three core elements are
necessary for firms to function effectively:
 • Mission and strategy
• Organization structure
• Human resource management

They defined strategy as a process through which the basic mission and objectives of the
organization are set, and a process through which the organization uses its resources to
achieve its objectives. They also made a distinction between the three levels of
managerial work:
• Strategic levels: policy formulation and overall goal setting
• Managerial levels: concerned with the availability and allocation of resources to
carry out the strategic plan.
• Operational levels: day-to-day management

But their most important conclusion war that:

HR systems and organizational structures should be managed in a way, which is

congruent with organizational strategy.

b) The Harvard Model of HRM

The analytical framework of the Harvard model offered by Beer consists of six basic
components:
• Situational factors
• Stakeholders interests
• Human resource management policy choices
• HR outcomes
• Long-term consequences
• Feedback through which the outputs flow directly into the organization and to the
stakeholders

C) The Guest model of HRM

David Guest (1989) has developed a more prescriptive theoretical framework,

reflecting the view that a core set of integrated HRM practices can achieve superior
individual and organizational performance.

The central hypothesis of Guests model is that if an integrated set of HRM practices is
applied in a coherent fashion, with a view to achieving the normative goals of high
commitment, high quality and task flexibility, then superior individual performance
will result. The Guest model has six components:

• An HRM strategy
• A set of HRM policies
• A set of HRM outcomes
• Behavioral outcomes
 • A number of performance outcomes
• Financial outcomes.

THE MEANING OF STRATEGIC HRM

According to Hendry and Pettigrew (1986), strategic Human resource Management has
four meanings:

• The use of planning

• A coherent approach to the design and management of personnel systems based
on an employment policy and manpower strategy and often underpinned by a
philosophy.
• Matching HRM activities and policies
• Seeing the people of the organization as a strategic resource for the achievement
of competitive advantage.

STRATEGIC INTEGRATION: INTEGRATING BUSINESS AND HR

STRATEGIES

The whole concept of strategic HRM is predicted on the belief that HR strategies should
be integrated with corporate or business strategies. Strategic integration is necessary to
provide congruence between business and human resource strategy so that the latter
supports the accomplishment of the former and indeed, helps to define it. The aim is to
provide strategic fit and consistency between the policy goals of human resource
management and the business.

THE REQUIREMENTS FOR STRATEGIC HRM

Strategic HRM is most likely to be practiced in organizations with the following

characteristics:
• Strong, visionary and often charismatic leadership from the top.
• Well articulated missions and values.
• A clear expressed business strategy which had been implemented successfully.
• A positive focus on well understood critical success factors
• The organization offers a closely related range of products or services to
customers.
• A cohesive top management team.
A personnel/HR director who plays an active part in discussing corporate/business issues
as well as making an effective and corporate/business-oriented contribution