Strategic Human Resource Management is a pattern of planned human resource deployment and activities intended to enable an organization to achieve its goals. Strategic human resource management explains the organization’s intentions on how its business goals should be achieved through people.
Strategic Human Resource Management is a process that involves the use of overarching approaches to the development of HR strategies, which are integrated vertically with the business plan and horizontally with one another. These strategies define intentions and plans related to overall organizational considerations, such as organizational effectiveness, and to more specific aspects of people management, such as resourcing, learning, and development, reward and employee relations.
Approaches to Strategic Human Resource Management
The five approaches to Strategic HRM.
- Resource-based strategy
- Achieving strategic fit
- High-performance management
- High- commitment management
- High-involvement management
1. The resource-based approach
A fundamental aim of resource-based HR strategy is to develop strategic capability achieving a strategic fit between resources and opportunities and obtaining added value from the effective deployment of resources. A resource-based approach will address methods of increasing the firm’s strategic capability by the development of managers and other staff who can think and plan strategically and who understand the critical strategic issues. The resource-based approach is founded on the belief that competitive advantage is obtained if a firm can get and develop human resources that enable it to learn faster and apply its learning more efficiently than its rivals.
2. Strategic Fit
The HR strategy should be aligned with the business strategy (vertical fit). Better still, HR strategy should be an integral part of the corporate strategy, contributing to the business planning process as it happens. Vertical 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. Horizontal integration with other aspects of the HR strategy is required so that its different elements fit together. The aim is to achieve a coherent approach to managing people in which the various practices are mutually supportive.
3. High-performance management
High-performance human resource management seeks to make an impact on the performance of the firm through its people in such areas as productivity, quality, and levels of customer service, growth, and profits and, ultimately, the delivery of increased shareholder value.
4. High-commitment management
One of the defining characteristics of Strategic Human resource management is its emphasis on the importance of enhancing mutual commitment. High-commitment management is a form of management which is aimed at eliciting a commitment so that behavior is primarily self-regulated rather than controlled by sanctions and pressures external to the individual, and relations within the organization are based on high levels of trust.
5. High-involvement management
This approach involves treating employees as partners in the enterprise whose interests are respected and who have a voice on matters that concern them. It is concerned with communication and involvement. The aim is to create a climate in which a continuing dialogue between managers and the members of their teams takes place to define expectations and share information on the organization’s mission, values, and objectives. This establishes a mutual understanding of what is to be achieved and a framework for managing and developing people to ensure that it will be achieved.
Limitation of Strategic Human Resource Management
The concept of Strategic Human Resource Management appears to be based on the belief that the formulation of strategy is a rational and linear process. This indicates that the overall HR strategy flows from the business strategy and generates specific HR strategies in the major areas. The process takes place by reference to systematic reviews of the internal and external environment of the organization, which identify the business, organizational and HR issues that need to be dealt with. However, strategic HRM in real life does not usually take the form of a formal, well-articulated and linear process that flows logically from the business strategy.