Strategic Human Resource Management (SHRM): An Over View
Introduction
Liberalization and industrialization has paved an increasing pressure on organizations in India to change from indigenous, costly, sub-optimal levels of technology to performance based, competitive and higher technology provisions. The response to liberalization has created opportunities for technology upgrading and sophistication, resource mobilization from new sources, highly competitive input/output market, high growth and buoyant environment and HRM issues associated with strategic initiatives of diversification, mergers and acquisitions, restructuring, joint ventures, strategic alliances and for overall internationalization of the economy (Som, 2002). change
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(WRIGHT, P.M. and MCMAHAN, G.C. (1992)
Approaches of the SHRM, * 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 organisational 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 orinetation of the business then requires the effective orinetation of human resource to competency and performance excellance.
Benefits of SHRM
1. Identifying and analyzing external opportunities and threats that may be crucial to the company's success.
2. Provides a clear business strategy and vision for the future.
3. To supply competitive intelligence that may be useful in the strategic planning process.
4. To recruit, retain and motivate people.
5. To
Contemporary globalization of businesses and growing global market competition has made effective human resource planning as one of the major strategies to forge ahead and remain proactive. It can be said that an organization 's success lies to a great extent to the knowledge, skills, creativity, and dedication of its workforce. Every aspect of an organization needs human capital to drive its activities or operations to achieve individual strategic goals and objectives towards its purpose of existence, growth, and competitive status. Companies can compete at all levels of the marketplace through improved commitment not only through creativity, innovation, and research, but also human resource development (Truong, Heijden, & Rowley, 2010). In this regard, the human resource planning is needed to ensure a systematic analysis of human resource needs so that the right quantity and quality of employees are always available when required. Fundamentally, organizations are looking for the best people that would help drive them to their desired destination of achieving their missions. Therefore, it is important to develop human resource strategies to support organizational strategies, through measures such as forecasting human resource requirements, and effective strategic staffing. Technically, an organization 's mission, goals, and objectives drive its strategy and human resource (HR) and staffing strategy in an interactive manner. The purpose of this
Human resource departments today have a more distinct, calculated position within organizations, and human resource strategy influences the bottom line. “One of the challenges for HR leaders is convincing executive leadership teams that human capital is one of the most important resources in which the company can invest” (Mayhew, 2014, p.). Subsequently, “this return on investment is an essential part of the argument for including HR as part of an overall business strategy” (Mayhew, 2014, p.). Human resource departments utilize the information given to them from company executives and leaders, coupled with their respective expertise on all things personnel, and they plan and implement staffing concerns for the betterment of the organization. From preparing job analysis, to comparing inventory and forecasting, it is the responsibility of human resources to consider the objectives of an organization and fulfill those goals while operating the specific planning relative to HR.
In order to develop a human resource strategy; there must be a linkage of the entire human resource function with the firm’s business strategy in order to improve business strategy execution. The first recommendation
Business environment is facing a rapid change that reminds the business management to focus on its core competencies to survive and sustain in the competitive environment. The core competencies can be developed by strategic human resource management. According to Armstrong (2006) employees are the valued assets for a company. The strategic human resource management is mainly developed in accordance to the fact that human resources need to be managed strategically for the company to enjoy sustainable competitive advantage.
The term Human Resource Strategy is well defined as - “Human Resource management (HRM) is a strategic approach to managing employment relations which emphasises that leverage people 's capabilities is critical to achieving sustainable competitive advantage, this being achieved through a distinctive set of integrated employment policies, programmes and practices.” [ Bratton and Gold,4e,p3]
Human Resources constitute as one of the most imperative components of any organization, be it small scale business or a large conglomerate. Some of the key functions of the Human
The practise of Human Resources is moving from the traditional forms of managing people to a more strategic form whereby the Human Resources function is closely linked with organisational performance and success. This strategic form of human resources has increased the need for the Human Resource professional to understand the linkages between Corporate Strategy, Human Resource Strategy and Employee Integration.
People are biggest asset for every organization and, therefore, to draw, motivate, and preserve the most skilled employees and assign them to jobs for which they are exceptionally well suited is a responsible job for human resource. Therefore, human resources management is done in all type of organizations. Profound management of people is equally indispensable in success of organizations as the sound management of production, finance, and other operations. The human resource management field postulates the infinite diversity of people and their dynamics (McKenzie & Traynor, 2002). To get into this career field, one must have the required education degree by completing many different courses, and have the experience along with skills and
Schuler (1997) summarises Strategic Human Resource Management as expressing how people are to be treated and valued in the workforce as well human resource management's responsibility for articulating the processes which encourage behaviour which is consistent with the organisation's business. In this context strategic human resource management also includes the development of guidelines for the implementation of people-related programs and, the more complex area of co-ordinating and facilitating change.
Historically, operations management and human resource management have been separate fields, only interacting for administrative issues regarding payroll and other matters (Boudreau et al., 2002). However, human resources play an integral role in the development of strategic plans for organizations. Since no operations can take place without the human capital necessary to implement the operations, special attention should be paid to the linkages between the operational strategy and the human resource strategy of the firm. According to Ahamd and Schroeder (2003, p. 19) “human resources are
People are the key to business success. However nowadays of business this is often neglected and people are seen to be a necessary expense. A successful business does not just rely on a person’s power instead it involves continuous effective teamwork and communication. Storey (1995) defines that human resource management is an individual approach to employment management which seeks to achieve competitive advantage through the strategic deployment of a highly committed and capable workforce, using an integrated array of cultural, structural and personnel techniques.
The integrative model of human resource SHRM includes elements of both the control-based and the resource-based SHRM. Desired outcome dictates the elements that will be employed. HR policies can employ elements of commitment, collaboration, traditional and paternal control as needed to support its business strategy. Commitment strategies seek and develop internal talents to meet skill needed. Employees are seen as business partners and competitive advantage agents. Traditional HR and collaborative HR strategies have elements of externally acquiring physical resource or skills. External recruiting in the case of traditional HR strategy and subcontracting and hiring of consultants as part of the collaborative strategy can be used to provide competitive advantages to firms. External talents while providing short term advantages can be a disadvantage in the long term due to cost and potential threat to the firm business. The paternalistic HR strategy provides rewards for employees who learn and follow the company prescriptive directive for success.
Within this essay an in depth analysis will be conducted on the difference between Human Resource Management and Strategic Human Resource Management using contemporary perspectives. Human Resource Management (HRM) is the process of managing human resources in a systematic way. It is a practice devised to maximise the performance of employees and is concerned with the application of management principles to manage organisational personnel while paying attention to the policies and systems of the entity (Delaney & Huselid, 1996). Strategic Human Resource Management (SHRM) is a function of management which entails development of policies, programmes and practices related to human resources, which are aligned with business strategy so as to achieve the strategic objectives of the organisation (Patrick M. Wright, 1992). Its primary purpose is to improve the performance of the business and maintain a culture that encourages innovation and works continuously to gain competitive advantage. In this essay the Resource-Based View, High Performance Management and High Commitment Management perspectives of Strategic Human Resource Management and Traditional and Collaborative
The table below gives us a glimpse into the main functions of SHRM and its differences from traditional functions and responsibilities of HRM:
Organizations strategize on different areas of their business. But there may be many challenges that they have to confront while meeting those challenges Therefore they need the best of the ‘human factor’ in their organizations to execute their strategies. This paper aims at identifying the challenges being faced by the managers of companies with regard to human capital.