What is Strategic Human Resource Management?

By Rana Sinha

In Human Resource (HR) and management circles nowadays there is much talk about Strategic Human Resource Management and many expensive books can be seen on the shelves of bookshops. But what exactly is SHRM (Strategic Human Resource Development), what are its key features and how does it differ from traditional human resource management?

SHRM or Strategic human resource management is a branch of Human resource management or HRM. It is a fairly new field, which has emerged out of the parent discipline of human resource management. Much of the early or so called traditional HRM literature treated the notion of strategy superficially, rather as a purely operational matter, the results of which cascade down throughout the organisation. There was a kind of unsaid division of territory between people-centred values of HR and harder business values where corporate strategies really belonged. HR practitioners felt uncomfortable in the war cabinet like atmosphere where corporate strategies were formulated.

Definition of SHRM

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 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.

How SHRM differs from HRM

In the last two decades there has been an increasing awareness that HR functions were like an island unto itself with softer people-centred values far away from the hard world of real business. In order to justify its own existence HR functions had to be seen as more intimately connected with the strategy and day to day running of the business side of the enterprise. Many writers in the late 1980s, started clamoring for a more strategic approach to the management of people than the standard practices of traditional management of people or industrial relations models. Strategic human resource management 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 effect people management programs in the long run and often globally. Therefore the primary goal of strategic human resources is to increase employee productivity by focusing on business obstacles that occur outside of human resources. 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. Communication between HR and top management of the company is vital as without active participation no cooperation is possible.

Key Features of Strategic Human Resource Management

The key features of SHRM are

• There is an explicit linkage between HR policy and practices and overall organizational strategic aims and the organizational environment
• There is some organizing schema linking individual HR interventions so that they are mutually supportive
• Much of the responsibility for the management of human resources is devolved down the line

Trends in Strategic Human Resource Management

Human Resource Management professionals are increasingly faced with the issues of employee participation, human resource flow, performance management, reward systems and high commitment work systems in the context of globalization. Older solutions and recipes that worked in a local context do not work in an international context. Cross-cultural issues play a major role here. These are some of the major issues that HR professionals and top management involved in SHRM are grappling with in the first decade of the 21st century:

• Internationalization of market integration.
• Increased competition, which may not be local or even national through free market ideology
• Rapid technological change.
• New concepts of line and general management.
• Constantly changing ownership and resultant corporate climates.
• Cross-cultural issues
• The economic gravity shifting from 'developed' to 'developing' countries

SHRM also reflects some of the main contemporary challenges faced by Human Resource Management: Aligning HR with core business strategy, demographic trends on employment and the labour market, integrating soft skills in HRD and finally Knowledge Management.

References

1. Armstrong, M (ed.) 192a) Strategies for Human Resource Management: A Total Business Approach. London:Kogan Page
2. Beer, M and Spector,B (eds) (1985) Readings in Human Resource Management. New York: Free Press
3. Boxall, P (1992) 'Strategic Human Resource Management: Beginnings of a New Theoretical Sophistication?' Human Resource Management Journal, Vol.2 No.3 Spring.
4. Fombrun, C.J., Tichy, N,M, and Devanna, M.A. (1984) Strategic Human Resource Management. New York:Wiley
5. Mintzberg, H, Quinn, J B, Ghoshal, S (198) The Strategy Process, Prentice Hall.
6. Truss, C and Gratton, L (1994) 'Strategic Human Resource Management: A Conceptual Approach', International Journal of Human Resource Management, Vol.5 No.3

Rana Sinha is a cross-cultural trainer and author. He was born in India, studied and lived in many places and traveled in over 80 countries, acquiring cross-cultural knowledge and building an extensive network of professionals. He has spent many years developing and delivering Cross-cultural Training, Professional Communications skills, Personal Development and Management solutions to all types of organizations and businesses in many countries. He now lives in Helsinki, Finland and runs http://www.dot-connect.com, which specializes in human resource development as well as communication and management skills training with cross-cultural emphasis. Read his cross-cultural blog http://originalwavelength.blogspot.com

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