THE ESSENCE OF STRATEGIC HUMAN RESOURCE MANAGEMENT

INTRODUCTION

The term, Strategic Human Resource Management, conveys the sense of human
resource management in a strategic context. In order for this to take place there has to
be some connection made with the strategic process through which the aims of an
organization are managed, that is, its strategic management.
If a global company is to function successfully, strategies at different levels need to inter-
relate. Throughout the first half of our century and even into the early eighties, planning
with its inevitable companiopn, strategy- has always been a key word, the core, the
near-ultimate weapon of good and true management. In this lecture we examined the
theoretical debates on the nature and signaficance of the new HRM model.

LEARNING OUTCOMES

• Familiarity with the subject matter of Strategic Human Resource Management in

outline terms, I,e. the subject`s scope.
• Understanding of the philosophical and conceptual framework for Strategic
Human Resource Management, I,e. the linkages between the subject and
corporate/organizational strategies, the significance of people as potential
contributors to corporate purposes, the value of people as entities in themselves,
and the importance of strategic thinking as a means for survival and growth in the
future.

SHRM

Strategic Human Resource Management is an approach to making decisions on the

intentions of the organization concerning people-essential components of the
organization`s business strategy. It is about the relationship between HRM and Strategic
management in the organization. Strategic HRM refers to the overall direction the
organization wishes to pursue in achieving its objectives through people.

Strategic HRM can be regarded as an approach to dealing with longer-term people

issues as part of the strategic management thurst of the business. It covers macro-
organisational concerns relating to structure and culture, organizational effectiveness
and performance, matching resources to future business requirements, and the
management of change.

Defined by Wright and Snell (1989):

SHRM deals with `those HR activities used to support the firms competitive strategy.

Miller (1989):

Strategic Human Resource Management encompasses those decisions and actions

which concern the management of employees at all levels in the business and which are
directed towards creating and sustaining competitive advantage.
Walker (1992):

The means of aligning the management of human resources with the strategic content of
the business.

THE AIMS OF SHRM

SHRM aims to provide a sense of direction in an often turbulent environment so that

organizational and business needs can be translated into coherent and practical policies
and programmes. SHRM should provide guidelines for successful action, and the
ultimate test of the reality of strategic HRM is the extent to which it has stimulated such
action.

THE CONCEPT OF STRATEGIC HUMAN RESOURCE MANAGEMENT

1. Human Resources – a strategic issue

• There is an overall corporate purpose and that the human resource

dimensions of that purpose are evident.
• A process of developing strategy within the organization exists and is
understood, and that there is explicit consideration of human resource
dimensions.
• The organization at all levels establishes responsibility and accountability
for human resource management.
• It includes the responsibility to identify and interact in the social, political,
technological and economic environments in which the organization is
and will be doing business.

2. The need for a Concept

Much of the literature provides evidence that strategic integration is not well developed
and advances reasons why to achieve it would be beneficial to organizations.
Organisation advocated an increase in the input of human resource considerations at
strategic planning, an attitude of treating employees as assets, more participation and
involvement for employees, effective and open communications, less rule-oriented
policies and practices, better training and career development opportunities, reward and
recognition tied to performance.

3. Models and frameworks of strategic human resource management

a) The fomburn, Tichy and Devanna model of HRM: The early

HRM model developed by Fombrun (1984) emphasizes the
interrelatedness and the coherence of human resource
management activities. He wrote that three core elements are
necessary for firms to function effectively:

• Mission and strategy

• Organization structure
• Human resource management
They defined strategy as a process through which the basic mission and objectives of
the organization are set, and a process through which the organization uses its
resources to achieve its objectives. They also made a distinction between the three
levels of managerial work:
• Strategic levels: policy formulation and overall goal setting
• Managerial levels: concerned with the availability and allocation of resources to
carry out the strategic plan.
• Operational levels: day-to-day management

But their most important conclusion war that:

HR systems and organizational structures should be managed in a way which is

congruent with organizational strategy.

b) The Harvard Model of HRM

The analytical framework of the Harvard model offered by Beer consists of six basic
components:
• Situational factors
• Stakeholders interests
• Human resource management policy choices
• HR outcomes
• Long-term consequences
• Feedback through which the outputs flow directly into the organization and to the
stakeholders

C) The Guest model of HRM

David Guest (1989) has developed a more prescriptive theoretical framework,

reflecting the view that a core set of integrated HRM practices can achieve superior
individual and organizational performance.

The central hypothesis of Guests model is that if an integrated set of HRM practices is
applied in a coherent fashion, with a view to achieving the normative goals of high
commitment, high quality and task flexibility, then superior individual performance will
result. The Guest model has six components:

• An HRM strategy
• A set of HRM policies
• A set of HRM outcomes
• Behavioural outcomes
• A number of performance outcomes
• Financial outcomes.

THE MEANING OF STRATEGIC HRM

According to Hendry and Pettigrew (1986), strategic Human resource Management 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
• Seeing the people of the organization as a strategic resource for the
achievement of competitive advantage.

STRATEGIC INTEGRATION: INTEGRATING BUSINESS AND HR STRATEGIES

The whole concept of strategic HRM is predicted on the belief that HR strategies should
be integrated with corporate or business strategies. Strategic integration is necessary to
provide congruence between business and human resource strategy so that the latter
supports the accomplishment of the former and indeed, helps to define it. The aim is to
provide strategic fit and consistency between the policy goals of human resource
management and the business.

THE REQUIREMENTS FOR STRATEGIC HRM

Strategic HRM is most likely to be practiced in organizations with the following

characteristics:
• Strong, visionary and often charismatic leadership from the top.
• Well articulated missions and values.
• A clear expressed business strategy which had been implemented successfully.
• A positive focus on well understood critical success factors
• The organization offers a closely related range of products or services to
customers.
• A cohesive top management team.
• A personnel/HR director who plays an active part in discussing
corporate/business issues as well as making an effective and
corporate/business-oriented contribution on HR matters.