STRATEGIC HRM DEFINED
Strategic HRM is an approach to making decisions on the intentions and plans of the organization concerning the employment relationship and its recruitment, training, development, performance management, reward and employee relations strategies, policies and practices. The key characteristic of strategic HRM is that it is integrated. HRM strategies are generally integrated vertically with the business strategy and horizontally with one another. The HRM strategies developed by a strategic HRM approach are essential components of the organization's business strategy.
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Concerns of strategic HRM
Strategic HRM is concerned with the relationship between human resource management and strategic management in the firm. Strategic HRM refers to the overall direction the organization wishes to pursue in order to achieve its goals through people. It is argued that, because intellectual capital is a major source of competitive advantage, and in the last analysis it is people who implement the strategic plan, top managernent must take these key considerations fully into account in developing its corporate strategies. Strategic HRM is an integral part of those strategies.
Strategic HRM addresses broad organizational issues relating to organizational effectiveness and performance, changes in structure and culture, matching resources to future requirements, the development of distinctive capabilities, knowledge management and the management of change. It is concerned with both meeting human capital requirements and the development of process capabilities, that is, the ability to get things done effectively. Overall, it will consider any major people issues that affect or are affected by the strategic plan of the organization. 'The critical concerns of HRM such as choice of executive leadership and formation of positive patterns of labour relations, are strategic in any firm.'
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The focus of strategic HRM
Strategic HRM focuses on actions that differentiate the firm from its competitors. It develops declarations of intent which define means to achieve ends, and it is concerned with the long term allocation of significant company resources, and with matching those resources and capabilities to the external environment. Strategy is a perspective on the way in which critical issues or success factors can be addressed, and strategic decisions aim to make a major and long term impact on the behaviour and success of the organization.
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The meaning of strategic HRM
Strategic HRM has four meanings:
•the use of planning;
•a coherent approach to the design and management of personnel systems, based on an employment policy and manpower strategy, and often underpinned by a 'philosophy';
•matching HRM activities and policies to some explicit business strategy;
•seeing the people of the organization as a 'strategic resource' for the achievement of 'competitive advantage'.
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AIMS OF STRATEGIC HRM
The fundamental aim of strategic HRM is to generate strategic capability by ensuring that the organization has the skilled, committed and well‑motivated employees it needs to achieve sustained competitive advantage. Its objective is to provide a sense of direction in an often turbulent environment, so that the business needs of the organization, and the individual and collective needs of its employees, can be met by the development and implementation of coherent and practical HR policies and programmes. Strategic HRM should provide unifying frameworks which are at once broad, contingency based
and integrative.
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STRATEGIC HRM MODELS
There are three models: high performance management (high performance working), high commitment management and high involvement management. Within the framework of the concept of strategic HRM, these describe various approaches to its development and implementation.
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High performance management
High performance working involves the development of a number of interrelated processes that together make an impact on the performance of the firm through its people in such areas as productivity, quality, levels of customer service, growth, profits, and ultimately the delivery of increased shareholder value. This is achieved by 'enhancing the skills and engaging the enthusiasm of employees' the starting point is leadership, vision and benchmarking to create a sense of momentum and direction. Progress must be measured constantly.
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High commitment management
One of the defining characteristics of HRM is its emphasis on the importance of enhancing mutual commitment . High commitment management has been described as 'A form of management which is aimed at eliciting a commitment so that behaviour is primarily self‑regulated rather than controlled by sanctions and pressures external to the individual, and relations within the organization are based on high levels of trust.'
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High involvement management
This approach involves treating employees as partners in the enterprise whose interests are respected and who have a voice on matters that concern them. It is concerned with communication and involvement. The aim is to create a climate in which there is a continuing dialogue between managers and the members of their teams in order to define expectations and share information on the organization's mission, values and objectives. This establishes mutual understanding of what is to be achieved and a framework for managing and developing people to ensure that it will be achieved.
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Setting out the strategy
The following is an example of the headings under which a strategy and the plans for implementing it could be set out.
•Basis:
‑ business needs in terms of the key elements of the business strategy;
‑ environmental factors and analysis (SWOT/PESTLE);
SWOT = strengths, weaknesses, opportunities, threats.
PESTLE=political,economic,social,technology,legal, environment.
‑ cultural factors ‑ possible helps or hindrances to implementation.
•Content ‑ details of the proposed HR strategy.
•Rationale ‑ the business case for the strategy against the background of business needs and environmental/ cultural factors.
•Implementation plan:
‑ action programme;
‑ responsibility for each stage; ‑ resources required;
‑proposed arrangements for communication, consultation, involvement, training and change management;
‑project management arrangements.
•Costs and benefits analysis ‑ an assessment of the resource implications of the plan (costs, people and facilities) and the benefits that will accrue, for the organization as a whole, for line managers and for individual employees. As far as possible these benefits should be quantified in terms of value added.
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HRM AND HRD are outcomes of STRATEGIC HRM.
HRM includes [ you must be aware of it already ]
-HRM planning
-manpower planning
-recruitment / selection
-training / development
-compensation / benefits
-employee relations/ labor relations
-safety / health
etc etc
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HR DEVELOPMENT includes
-org. learning
-training
-education
-development
-e learning
-management development
-career planning /development.
-orientation
-induction
-performance management
etc etc
hope this is useful to you
REGARDS
LEO LINGHAM