Strategic Human Resource Management
Strategic HRM can be defined as a well planned approach to the hands-on management of an organization’s employees to gain a mutual benefit through better alliance of corporate policies and strategic priorities (Business Dictionary, 2014).
To put this in relation to our organization, strategic HRM will be aimed at meeting the needs of all employees while promoting company goals. Strategic HRM, if implemented correctly, will enable our organization to work towards meeting the needs of our employees to promote a good and productive work atmosphere thus improving the retention rate of skilled employees, and also reducing the costs of searching for and training new employees.
The role of strategic HRM can be classified into four main functions, namely: acquisition, development, motivation, and maintenance of human resources (Aboueleish, 2012).
Acquisition is the process of selection and recruitment of people. It consists of identifying the required skills for a job and matching available human resources to the job. The recruitment process must be strategically integrated with the organizational strategies in order to enable effective responses to the challenges of survival and development in today’s business world (UK Essays, 2013).
Development is the process of improving the skills, knowledge and ability of employees. This can be achieved through training and career development.
Motivation is the process of encouraging employees to perform and deliver to the best of their ability. This is possible through implementation of motivators and monitoring performance.
Maintenance helps to maintain employee motivation and commitment by providing good working conditions to ensure employee satisfaction and retention.
These functions can be achieved through creation and implementation of HR strategies. HR strategies outline what the organization aims to do about its HR policies and practices and how to integrate those with the business strategy. Well planned and executed HR strategies enable the organization to measure progress and evaluate outcomes against objectives (Armstrong, 2006).
Human Resource Strategies
A good HR strategy should value employees, make them well-informed about the organization, and clearly identify their role in a team or as individuals. It should also show how employees can be developed and make progress within the organization, and how their contributions can be rewarded.
An effective strategy is one that will satisfy the needs of the business, and therefore has to be based upon detailed analysis and study, and be able to address requirements and problems. It should take into account the needs of the employees, line managers, organization, and all other stakeholders. Boxall and Purcell (2003) emphasize that ‘HR planning should aim to meet the needs of the key stakeholder groups involved in people management in the firm.’
‘Strategy is the determination of the basic long-term goals and objectives of an enterprise, and the adoption of courses of action and the allocation of resources necessary for carrying out these goals’ (Chandler, 1962).
The main concerns of strategic HR is to meet the business needs and also the needs of the employees. HRM addresses these needs through the use of HR strategies, and the results impact organizational performance. In Guest et al (2000) the relationship between HRM and performance was modeled as shown in Figure 1 below.
[pic 1]
Figure 1 – The link between HRM and organization performance (from Guest et al, 2000)
The model shows clearly that HR strategy and practices affect employee competence, commitment and flexibility. This affects the quality of goods and services and productivity, which in turn affects the performance. Hence it is important to choose, develop, and implement the right strategy.
Just as all organizations are different, HR strategies are different too. There is no set standard of HR strategy. Armstrong and Long (1994) and Armstrong and Baron (2002) carried out research on HR strategy and revealed many variations. However, HR strategies can be classified into two basic types: overarching or general strategies and specific strategies relating to the different aspects of HRM (Armstrong, 2006).
Overarching or general strategies describe the general objectives of the organization about people management, development, retaining, ensuring that employees are committed, motivated and engaged. These are mainly concerned with the overall effectiveness of the organization: achieving human resource advantage by employing better people, and creating a good work environment.
Specific strategies address in detail the organization’s intention in areas of talent management, continuous improvement, knowledge management, resourcing, learning and developing, reward, and employee relations.