The Concept of Strategic HRM Strategic human resource management has been defined as: All those activities affecting the behavior of individuals in their effort to formulate & implement the strategic needs of the business. (Schuler, 1992) Strategic HRM can be regarded as an approach to the management of human resource in accordance with the intentions of the organization on the future direction it wants to take. It is concerned with the longer term people issues as part of the strategic process of the business. The fundamental aim of SHRM is to generate strategic capabilities by ensuring that the organization has the skilled, committed and well-motivated employees it needs to achieve sustained competitive advantage. The rationale of SHRM rests …show more content…
Fit is achieved by examining each aspect of the business strategy and then assessing its people management implications as the basis for formulating integrated HR strategies. Horizontal fit occurs when the various HR strategies cohere and are mutually supporting. Vertical fit is generally considered for attaining organizational goals by initiating HR activities supporting a firm’s objective. Fit must exist in an organization but when circumstances change there may no longer be a fit. But an excessive persuasion of fit may inhibit flexibility of approach in times of turbulent conditions. If the business strategy either not clearly defined or in an emergent phase, it would mean lack of HR strategy fit. Human Capital It is the skill, knowledge and abilities of an individual that create value. Therefore it is very important to attract, retain, develop and maintain human capital. Ernst & Young’s Measures that Matter survey found that more than one-third of the data used to justify business analysts’ decision were non-financial. Their top 10 list of non-financial measures most valued by investors include 8 human capital factors. Strategy Formulation Propositions Boxall (1993) had given some useful propositions related to formulation of HR strategy: There’s no single HR strategy in a …show more content…
Modelling the dynamics of the vision- ensure that the dynamic nature of the future is taken into account. vi. Bridging into action Classical Sequential Approach If the information is present and the mission and business strategies have been articulated, the classical sequential approach can be followed which a neat and logical approach, incorporating all the actions that ideally should take place. Implementing HR Strategies For an effective implementation of HR strategies, it is necessary to engage top level management, also commitment, cooperation and involvement of line managers and staff is important. The problem with strategic HRM is that too often there is a gap between the rhetoric of the strategy and the reality of what happens to it. Factors contributing to gaps are: ► The tendency of employees in diverse organization to accept only those initiatives relevant to their own areas. ► The tendency of long serving employees to cling to the status quo. ► Complex or ambiguous initiatives may not be understood or perceived differently. ► Employees will be hostile to initiatives if they are in conflict (e.g.- downsizing) ► Initiatives perceived as threat. Etc. HR Practitioners as
Strategic objectives are, in general, externally focused and according to the management guru Peter Drucker fall into eight major classifications: (1) Market standing: desired share of the present and new markets; (2) Innovation: development of new goods and services and of skills and methods required to supply them; (3) Human resources: selection and development of employees; (4) Financial resources: identification of the sources of capital and their use; (5) Physical resources: equipment and facilities and their use; (6) Productivity: efficient use of the resources relative to the output; (7) Social responsibility: awareness and responsiveness to the effects on the wider economy community of the stakeholders; (8) Profit requirements: achievement of measurable financial well-being and growth.
Strategic human resource management can be defined 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 organization 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 (Sinha, 2007). This is the effective way of organizing the workforce by the adoption of a specific strategy, where employees' performance can help to achieve the planned organizational targets, such as increasing revenue or improving the profit margin. However, there is no common strategic human resource definition that fits every situation (Lotinggi, 2008). This paper will focus on strategic human resource management at Smarte Carte, Inc. and attempt to make a determination if the company uses SHRM effectively or if there are areas where improvements could be made.
In the 1980’s, the birth of a new concept called ‘Human Resource Management’ was born. This trend comes after an intense period of Taylorisation, Fordism and now, McDonaldisation. HRM came to counter balance these trends and to consider the concept of the Man as a Man and not as a machine. For the last several decades, the interests of companies in "strategic management" have increased in a noteworthy way. This interest in strategic management has resulted in various organizational functions becoming more concerned with their role in the strategic management process. The Human Resource Management (HRM) field has sought to become integrated into the strategic management process through the development of a new discipline referred to as Strategic Resource Management (SHRM). In current literature, the difference between SHRM and HRM is often unclear because of the interconnections linking SHRM to HRM. However, the concepts are slightly different. Thus, we can ask, what is strategic human resource management? What are the main theories and how do they work? What do they take into account and how are they integrated? What are the links between SHRM and organization strategy? In order to answer to these questions, we will precisely define strategic human resource management, followed by a look at the different approaches built by theorists, and finally, we will see the limits between the models and their applications depending on the company’s environment. Discussion Strategic Human Resource Management: definition Strategic human resource management involves the military word ‘strategy’ which is defined by Child in 1972 as "a set of fundamental or critical choices about the ends and means of a business". To be simpler, a strategy is "a statement of what the organization wants to become, where it wants to go and, broadly, how it means to get there." Strategy involves three major key factors: competitive advantages (Porter, 1985; Barney, 1991), distinctive capabilities (Kay, 1999) and the strategic fit (Hofer & Schendel 1986). Strategies must be developed with a relevant purpose to sustain the organizational goals and aims. SHRM is one of the components of the organizational strategies used to sustain the business long-term. SHRM defined as: “all those activities affecting the behaviour of individuals in their efforts to formulate and implement the strategic needs of the business. (Schuler, 1992)” or as “the pattern of planned human resource deployments and activities intended to enable the firm to achieve its goals.
Person-Organization fit theories play an important role when organizations want to attract new employees. Person-Organization fit, abbreviated as P-O fit, is a popular theory, however its origin is unclear. “Models of P–O fit have grown increasingly popular as explanations of organization attraction and choice during the last decade (Kristof, 1996, as cited in Roberson, Collins & Oreg, 2005, p. 324)”.
There are a range of different factors which impact on an organisation’s business and its HR function. Strategies allow companies to get a direction and scope of an organisation for the long term, having long term goals is advantageous for the organisations because it allows a company to gather resources within a challenging environment and actively meet the needs of markets, surpass the competition and fulfil the expectations of stake holders.
Jules and Holzer (2001) noted that Strategic Human Resource Management enhances employee productivity and the ability of government agencies to achieve their mission. One can conclude that it is the same for learning institutions as SHRM focuses on the issues and goals of the organisation and strive to implement plans collectively to achieve those goals. In contrast to traditional Human resource management, SHRM focuses on improving the effectiveness of the entire learning community and helps to improve the organisations by creating and implementing plans that will continuously raise the competencies and capabilities of the members of an organization for the overall achievement of the organization (Ulrich 1997).
This paper will attempt to give a broad overview from the available literature within three areas. First, the paper will explore the historical relationships of HR and organizational strategy. Second, the paper will give an overview of current practices and trends. Lastly,...
The strategic management process implies sequential and interrelated activities, situation analysis (scanning and evaluating the current organizational content and internal environments), strategy formulation (developing and then choosing appropriate strategies), strategy implementation (putting strategies into action), and strategy evaluation (evaluating the implementation and outcome of strategies), leading to some outcome. These interrelated activities result in a set of strategies the organization uses in doing business. To manage strategically means to analyze the current situation, develop appropriate strategies, putting those strategies into action and then evaluating and changing those strategies as needed. The three main types of
Understanding the strategic potential of HRM is a relatively recent phenomenon. Strategic HRM attempts to bring HRM to the boardroom. It requires personnel policies and practices to be integrated so that they make a coherent whole, and also that this whole is integrated with the business or organisational strategy.
Human Resources professionals (HR) initial roles remain closely aligned with personnel and administration, performing duties such as hiring people, budgeting, to help their organization function well. However, effective HR Professionals serve a much more pertinent role to their organization, by using their knowledge skills and abilities to help their organization become more successful. Thus, it is important for HR professionals to work closely with the management they serve in order to gain a better understanding of the organization’s vision, and what the organization hopes to achieve. Human Resource Management needs to align their strategic planning with the organization’s strategy in order to develop and maintain a completive advantage in the field they are competing.
The current organization’s framework and hierarchy are designed through simple social and power selection rather than capabilities and knowledge. Such process is non-efficient and decreases productivity. Therefore, through the incorporation and implementation of Person Job Fit, the organization will concentrate on finding an individual whose skills, knowledges, and abilities matches the job position. Consequently, Person Job Fit will efficiently maximize job performance and minimize any controversy.
In the fields of management and business, Strategic Human Resource Management (SHRM) has been a powerful and influential tool in order to motivate employees to perform productively. (Ejim, Esther, 2013). According to Armstrong (2011), SHRM refers to the way that the company use to approach their strategic goals through people with a combination of human resource policy and practices. The purpose of SHRM is to produce strategic capability that the organisation must ensure such that employees are skilled, committed, and well-motivated in order to achieve a sustainable competitive advantage, (Armstrong, 2011). Particularly, the organisation must be able to carefully plan strategic human resource ideas, aimed to increase the productivity.
Best fit is a cross link between the Hard HR model. Besides, both of the models attempts to link HR practices and organizational External environment. With the “Best fit” theory businesses shadows a cost leadership structure to narrow down the jobs and sophisticate with very less job security to employees, while most of the companies follow different theories to highlight training and development. However, this argues that SHRM activities must be involved with each other to get linked to the strategic objectives and aims of the business. To a certain degree there isn’t a specific way or strategy to cultivate a best fit for an organization “It is clear that combining techniques greatly increases accuracy , the combination of intelligence tests with structured interview, integrity test or work sampling leads to a substantial improvement in validity" (Schmidt and Hunter,
One of the causes that influences an organization’s human resource is its strategy. A strategy refers to a plan that in place to guide business operations and activities. The business strategy then provides schedules and activities for the employee, and as a result affects the human resource. The scope is to build on qualifications and capabilities, therefore influences human resource to higher capacity while the unsuitable distribution of tasks may dampen human resource to poor results. Managers in the organization play a significant role in influencing human resource. The type of leadership structure and leadership style implemented by the organization establishes the level of encouragement that a leader and their leadership have on human resource. An ineffective leadership will fail to mobilize human resource into performing required tasks due to poor control of employees. Effective leadership influences human resource management responses to the management’s needs towards competitiveness. Ammi, F. T., & Mushatt, S.
Changing Roles. Traditionally, HR has been an administrative position-processing paperwork, benefits, hiring and firing, and compensation. However, recently HRM has moved from a traditional to a strategic role, the emphasis is on catering to the needs of consumers and workers. Before, HR was seen as the enemy and employees believed that HR’s main purpose was to protect management. Now, the position requires HRM to be more people oriented and protect their human capitol, the staff. In addition, human resource management has to be business savvy and think of themselves as strategic partners in the 21st century.