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Strategic human resource managementis the practice of attracting,

developing, rewarding, and retaining employees for the benefit of both the
employees as individuals and the organization as a whole
It was the work of influential management gurus(for example Ouchi, 1981;
Peters & Waterman, 1982), - affirming the importance of the effective
management of people as a source of competitive advantage
SHRM involves the development of a consistent, aligned collection of
practices, programs and policies to facilitate the achievement of the
organizations strategic objectives.
As a result, the goals of a human resource department reflect and support
the goals of the rest of the organization.
Strategic HRM is seen as a partner in organizational success, as opposed to a
necessity for legal compliance or compensation.
Strategic HRM utilizes the talent and opportunity within the human resources
department to make other departments stronger and more effective.
Thestrategic HRMis used during the dramatic changes in the
It stimulates the engagement and empowerment of employees and
Their responsibilities are enlarged and lifted, and Human Resources has a
primary focus to keep the momentum and raise the participation of key
The Strategic Human Resources Management is always proactive;
It has to work actively with employees to engage them and keep their
focus on the redesign of the business.
A number of human resources objectives support organizational goals,
such as profitability, business reputation, ethics and principles
Strategic management is the art and science of formulating,
implementing, and evaluating cross-functional decisions that enable
organization to achieve its objectives
Kaplan and Hurd (2002) define that strategic human resource
managementis a collection of tasks and processes shared jointly by line
managers and human resources to solve business issues based on people
According to Donald F. Harvey Strategic management is that set of
managerial decisions and actions that determine the long-term
performance of a corporation.
It includes environmental scanning, strategy formulation, strategy
implementation and evaluation and control.
The study of strategic management, therefore, emphasizes monitoring
and evaluating environmental opportunities and threats in the light of a
corporations strengths and weaknesses.
Aims/Objectives of SHRM
The fundamental aim of strategic HRM is to generate a perspective on the way in
which critical issues relating to people can be addressed
Succession Planning:
Succession planning identifies employees who show promise and aptitude.
It then provides them with the training and development they need for
transitioning into higher-level positions or more responsible roles within the
Workforce Mobility:
Increasing the number of different job functions employees can perform
strengthens an organizations business continuity plan in the event employees
are unable to fulfill their responsibilities due to illness, termination or retirement.
Workforce mobility increases profitability; companies that are able to fill
positions with existing resources can minimize hiring costs for new employees.
Employee Engagement
Raising employee enthusiasm and creating excitement about
employee contributions guarantee that employees become
fully engaged.
Supporting employee engagement efforts through polling
employee views and opinions and providing competitive
compensation and benefits packages also impact the
companys business reputation and reflect strong business
Executive Leadership
Business acumen and forward-thinking business ideas and
innovations are attributes executive leadership wants in its
human resources professionals
Shifting the human resources focus from transactional to
Traditional HRM Strategic HRM
Responsibility for Staff personnel in the HR department Line managers,all
HR programmes managers responsible for people are
HR managers
Focus of activities Employees relations, Partnerships with internal and
motivation, productivity external customers
,compliance with laws
Role of HR Reactive and transactional Proactive and transformational,
change leader
Initiative for change Slow, piecemeal, fragmented, Fast, flexible, systematic, change
not integrated with larger issues initiatives implemented with other HR
Time horizon Short term Consider various time frames as
necessary (short, medium, or long)
Control Bureaucratic control through Control through flexibility as few
rules, procedures and policies restrictions on employee behaviour
as possible
Job design Focus on scientific management Broad job design, flexibility, teams
principles-division of labour, and groups and cross -training
independence and
Approaches to SHRM
the main approaches to SHRM are divided into three main
1. Universalistic or best practice approach
This approach to HRM relates to the viewpoint that there is a
set of best HRM practices and their adoption is going to
generate positive results regardless of the circumstances
associated with organisations.
best practices in relation to a wide range of HR issues such as
employee recruitment and selection, training and
development, employee motivation are readily identifiable and
transferable across organisations.
2. Contingency or best fit approach
This approach, disagrees with the presence of universal
prescriptions to HR issues and stresses the need for integration
between HR policies and a wide range of other organisational
This linkage of HR strategies with business strategies is also
referred to as external fit or vertical integration
Best fit also states that HR strategies should match the stages
of development of the firm ie. Start up, maturity, decline,
degeneration, regeneration or transformation.
3. Configurational approach or HR Bundles approach
This approach to SHRM emphasizes the need for horizontal
integration or internal fit
Configurational approach recognises the validity of best
practices, but at the same time, accepts the importance of
adjustment of HR policies with the overall organisational
Bundling refers to the development and implementation of
several HR practices together so that they are interrelated
and internally consistent.
Challenges of SHRM
Shifts in demographics, including the growth of a
multigenerational workforce.
Loss of mid-level jobs as technology requires different, higher-
level skills
The skills gapa disconnect between educational standards
and organizational demand.
Eroding physical barriers to work and the increased
globalization of business.
The emergence of new models of work.
The Future Doesn't Unfold As Anticipated
Impedes Flexibility
HR Strategy
A coordinated set of actions aimed at integrating an
organisations culture, organisation, people and systems in
order to achieve business goals
A human resources management strategy is the overall plan that
leads the implementation of specific HRM functional areas.
HRM strategies guide personnel decisions that ensure the best fit for
the organization.
All functional areas of HRM strategies need to match the overall
business strategy.
Some companies may divide these strategies into four major areas:
culture, people, organization and human resource systems.
Types of HR Strategies
All organizations are different, all HR strategies are
Some strategies are simply very general declarations of
intent; others go into much more detail.
Two basic types of HR strategies can be identified:
1) overarching strategies; and
2) specific strategies relating to the different aspects of
human resource management.
1. Overarching HR strategies
Overarching strategies describe the general intentions of the organization i.e.
how people should be managed and developed,
what steps should be taken to ensure that HRM processes help attract and
retain the people it needs, and
ensure so far as possible that employees are committed, motivated and
They are likely to be expressed as statements of aims and purpose that set the
scene for more specific strategies.
They are concerned with overall organizational effectiveness
Developing high performance work systems and generally creating a great place
to work.
GlaxoSmithKline: 'We want GSK to be a place where the best people do their
best work.'
Lands' End: 'Based on the principle that staff who are enjoying themselves, are
being supported and developed, and who feel fulfilled and respected at work,
will provide the best service to customers.'
2. Specific HR strategies
Specific HR strategies set out what the organization intends to do in areas such as:
Talent management - how the organization intends to 'win the war for talent'.
Continuous improvement - providing for focused and continuous incremental
innovation sustained over a period of time.
Knowledge management - creating, acquiring, capturing, sharing and using
knowledge to enhance learning and performance.
Resourcing - attracting and retaining high quality people.
Learning and developing - providing an environment in which employees are
encouraged to learn and develop.
Reward - defining what the organization wants to do in the longer term to
develop and implement reward policies, practices and processes that will further
the achievement of its business goals and meet the needs of its stakeholders.
Employee relations - defining the intentions of the organization about what needs
to be done and what needs to be changed in the ways in which the organization
manages its relationships with employees and their trade unions.
Criteria For An Effective HR
An effective HR strategy that achieves what it sets out to achieve.
In particular, it:
will satisfy business needs;
is founded on detailed analysis and study, not just wishful thinking;
can be turned into actionable programmes that anticipate
implementation requirements and problems;
is coherent and integrated, being composed of components that fit
with and support each other;
takes account of the needs of line managers and employees generally
as well as those of the organization and its other stakeholders.
Formulation of HR Strategies
Step 1: Defining the business strategy
List your organisations HR policies against the
stated aims of the business plan.
Can you identify any gaps?
Step 2: Analyse the context
Assess what information you have available to
assess the
competencies of your employees, for example, from:
training needs analysis
development plans
performance management data
job descriptions
management feedback.
Step 3: Identify business needs
Look at each business need in turn, whether specific or a declaration of intent.
Map this against the list of existing HR practices.
Get a group of line and HR colleagues to rate each practices likely
contribution to achieving that need.
Step 4: Identify key HR issues
The key HR issues are those that directly affect the achievement of business
They may be arranged under general headings such as organisation structure
or development, or they may be more specific such as the need to develop
intellectual capital or to improve communication and reporting relationships.
Step 5: Develop the strategic framework
The strategic framework will define the main strategic goals, their
interconnections and their priorities.
The links between them will need to be identified so that mutually supporting
processes can be developed
Step 6: Define specific HR strategies
Amplify the strategic framework by statements of the business needs
the various individual HR strategies are designed to satisfy.
explain how they will meet the needs, the resources required, the
programme for implementation (this will involve prioritisation) and
their benefits in terms of added value
Step 7: Assess HR capability and resources required
The next step is to assess the capacity of HR to do what has to be
done. This means looking at two things:
to assess strengths and weaknesses in relation to the demands
that will be made. The weaknesses may include inadequate
processes or gaps in HR activities that will inhibit the ability to
meet strategic goals.
Assess the extent to which the function itself how it is structured
and the skills of its members is capable of responding to new
demands. If additions have to be made, then a cost-benefit
analysis must be carried out to answer the question What added
Implementing the Strategic HR
1. Agreement with the plan
Ensure that the board chair, executive director and senior managers
agree with the strategic HR plan
2. Communication
The strategic HR plan needs to be communicated throughout the
organization. Your communication should include:
How the plan ties to the organization's overall strategic plan
What changes in HR management policies, practices and activities will be
made to support the strategic plan
How any changes in HR management will impact on staff including a
timeframe if appropriate
How each individual member of staff can contribute to the plan
How staff will be supported through any changes
3. Legislation and mandate
Ensure that the actions you are considering are compliant with existing
laws, regulations and the constitution and bylaws of your organization.
4. Organizational needs
Whether you are increasing or reducing the number of employees, there
are implications for space and equipment, and on existing resources such
as payroll and benefit plans.
5. Evaluation
HR plans need to be updated on a regular basis. You will need to establish
the information necessary to evaluate the success of the new plan.
Benchmarks need to be selected and measured over time to determine if
the plan is successful in achieving the desired objectives.
SHRM and Organisational
SHRM represents a transformation that is relatively new in the
field of human resource management
An important role of strategic human resource management is
about focusing the management in employees as a tool to
gain competitive advantage.
Benefits of SHRM to Organisation
Contributing to the goal accomplishment and the survival of the
Supporting and successfully implementing business strategies of the
Creating and maintaining a competitive advantage for the company,
Improving the responsiveness and innovation potential of the company,
Increasing the number of feasible strategic options available to the
Participating in strategic planning and influencing the strategic direction
of the company as an equally entitled member of top management,
Improving cooperation between the HRM department and line
Role of Top Management in Strategic
The term "top management" refers to a relatively
small group of people include president, chief executive
officer, vice president, and executive vice president.
The insights of these executives play such a critical
role, a number of writers have stressed the importance
of matching the characteristics of these executives with
the firm's strategies.
The Top Mgmt. must understand that strategic management is his
responsibility. Parts of this task, but certainly not all of it, can be
The Top Mgmt. is responsible for establishing a climate in the
organization that is congenial to strategic management.
It is responsible for ensuring that the design of the process is
appropriate to the unique characteristics of the company.
The CEO determines whether there should be a corporate planner. If
so, the Top Mgmt. generally should appoint the planner (or planners)
and see that the office is located as close to that of the Top Mgmt. as
The Top Mgmt. should have face-to-face meetings with executives for
making plans and should ensure that there is a proper evaluation of
the plans and feedback to those making them.
The Manhagement is responsible for reporting the results of the
strategic management process to the board of directors.
The chief executive officer (Top Mgmt.) is responsible for the final
decisions, but its decisions is the culmination of the ideas,