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Sinha (2007) defined strategic human resource management 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 organisation 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.

One related journal on strategic HRM was written by Azhdar, Farhad, and Cusworth. This

journal explains the relationship between strategic management and employee relation in the

electronic manufacturing industry and therefore strategic HRM focuses on the overall

direction of the firm in pursuit of its stated goals and objectives. Personally, I couldn¶t agree

no more with the result from the study shows significant level of integration between HR and

business strategy and stronger when top management viewed employees as a strategic

resource.

The 3 researchers start the study by clarifying the difference between HRM and strategic

HRM. Out of many literature surveys they conducted, they conclude that the traditional HRM

did not place the emphasis on µpeople¶ and therefore paid more attention to µtask¶ at the

expense of people and their development, while strategic HRM emphasis total contribution

on the firm; innovative and creative behaviour; overall effectiveness and cross-functional

integration. In my point of view, strategic HRM 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 affect people management programs in the long run and

often globally.

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Thus, 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.

The first hypothesis is to identify nature of relationship between the core competencies of the

firm (quality of product/service1, and HR capabilities2) and the firm¶s performance. The

result shows that both give positive relationship between product/service quality & HR

capabilities and firm¶s performance. No doubt that nowadays, for a firm to better perform in

this competitive market, they can¶t just focus on producing a good quality offering, but also

to be able in managing its own people. Why? The main reason is because people are assets

that should be properly managed too!

The second hypothesis is to identify the relationship between top managers¶ attitude on HR

effectiveness and the level of linkage between HR and business strategy. Result is that, the

level of integration between HR and business strategy was significant and stronger when top

management viewed employees as strategic resource. This shows that the top level

management now has realised on new belief that the principal source of competitive

advantage actually lies within the firm itself (Steph, 2008).

Based on the study, it has proved that with good conduct of HRM, this will lead to better

performance of a firm in term of quality, profitability, and also customer satisfaction (Noe,

Hollenbeck, Gerhart, & Wright, 2004). Although the study only covers the British electronic

manufacturing industry, however, the growing trend of HR department has given big impact

for worldwide.

 
1
Product/service quality described the extent to which the efficiency of the production process provided a
competitive advantage.
2
HR capabilities described the extent to which firms viewed skilled human resource as their source of
competitive advantage.

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No doubt, strategic thinking in HR is a choice that firms make. Though, there is a wide gap

between theorization and implementation. This gap can only be reduced with practical testing

of the HR philosophy and its core values.

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