Strategic Approach to Hrm

Strategic Approach to Hrm

Introduction

As every organization consists of people, it is very important for the organization to be able to manage their people effectively and efficiently. Therefore, every organization has a division or department that manages this people-related issue. The department is usually called human resource department and the way organization manage their people is called Human Resource Management (HRM).

HRM has changed over the time. HRM has been an issue in academic literature or organizational context. Many concepts about HRM have been introduced by scholars. One of them is strategic human resources management (SHRM). This concept uses strategic approach which means that the HRM plays strategic role in the organization.

The purpose of the essay is to explain the characteristic of the strategic HRM and evaluate how the strategic HRM can help achieve the organizational objectives by using the existing theories or model. In this essay, the theories or models used are Harvard Model and Guest Model.

However, there are some limitations in making this essay. The limitations are time, kind of sources, and word limit.

The Characteristics of Strategic Approach to HRM

HRM plays an important role in an organization. As nowadays the world environment is changing and has entered the globalization era, organizations face more competitive environment. Therefore, practicing HRM using strategic approach has become increasingly more important. In the old days, HRM is not linked or integrated to the organizational strategic planning in many organizations. But now, many organizations practice HRM using strategic approach as Buyens and Vos (2001) suggested that the HR field has evolved from personnel management to HRM and after that from HRM to SHRM. HRM practices, even in China which used to be closed economy, has changed in the past two decades, for instance, strategic HRM has been practiced by many MNEs in China (Braun and Warner, 2002). Ozcelik and Aydinli (2006) also found that strategic HRM has been implemented in many companies in Turkey.

In strategic HRM, internal and external environment are considered as factors that affect HRM so that HR manager need to identify and consider the internal and external environment of the organization (Stone, 2005). Internal environment is factors that are from inside the organization, such as organizational structure, strategy, culture, etc. In the other hand, external environment is from outside the organization such as political, economic condition, technological, culture, etc. By assessing the internal and external environment, HR manager can develop effective HR strategies that are not contradicting with the overall organizational strategy and are adaptive to the changing environment as the HR strategies become more flexible. It also means that the HR strategies have to be in line with the organizational strategy in order to achieve organizational objectives. Morrow (2000) even argued that in strategic approach, the business strategy is one that guides the formulation of HR strategies and policies. In other words, it can be said that HRM is linked to strategic management (Schuler et al., 2001). Thompson and Strickland (1998) divided strategic management into five major activities which are establishing vision, mission and general strategy; identifying business issue and setting business objective; creating strategic plans; developing and implementing the strategic plans and last is evaluating and revising. One example of linkage between HRM and strategic management activities is in the recruitment process, HR manager has to recruit people that are able to understand the organization’s vision, objective, and the overall strategy have the competencies to work according to them.

Another feature of this concept is the HR manager is also involved in developing the organizational strategy. This involvement is very important to make sure that organizational strategy can be carried out using the available human resources in the organization, such as number of employees, competencies or skills and even the personality that the current employees have. Moreover, this involvement also allows the organization to know how many more competent people need to recruit if the current human resource is not sufficient.

Becker and Huselid (2006) argued that strategic HRM focuses on organizational performance rather than individual performance. It is believed that strategic HRM can lead to high organizational performance because this concept tries to maximize the utilization of human resource available in the organization as the HR strategies are developed not only by using the ideas, skills, and knowledge of the