Strategic Human Resource Management (SHRM)

Relationship between Strategic Human Resource Management and Competitive Advantage

Introduction

The focus of human resource management (HRM) is on managing people within the employer-employee relationship. Specifically, it involves the productive use of people in achieving the organization's strategic business objectives and the satisfaction of individual employee needs. The Strategic Human Resource Management focuses on linking all the human resource activities with the organization's strategic objectives. It was first conceived in the late 1980s in the face of intense competition and evolved extensively in the last 2 decades, especially by the experience which European, American and Japanese business management practices gained in the last 2 decades in their endeavor to gain competitive advantage over their competitors and win customers. Strategic Human Resource Management practices have proved to be a great tool for providing firms with competitive advantage in their approach to pursue a long-term sustainable development. Compared to traditional Human Resource Management, Strategic Human Resource Management (SHRM) is positioned to support corporate strategic role and functions of human resource management. In this essay, we have discussed whether and how the theory of Strategic Human Resource Management can assist organizations in achieving and sustaining competitive advantage (Bayars & Rue, 2003, Pp. 77).

Discussion

Strategic Human Resource Management refers to a series of strategic activities focusing on the human resource development and management that the enterprises employ as their vehicle to approach their goals and objective. SHRM activities are specifically designed and focused to facilitate organizations to understand the goals (needs) of their employees and link them with organizational goal in a way that achievement of one goal will result in the achievement of the latter. Margo Upson mentions that “Strategic human resource management is the proactive management of people. It requires thinking ahead, and planning ways for a company to better meet the needs of its employees, and for the employees to better meet the needs of the company. This can affect the way things are done at a business site, improving everything from hiring practices and employee training programs to assessment techniques and discipline.” It is important to consider what employees may want or need and what the company can rationally supply when generating a human resources plan. Margo Upson indicates that a larger company can usually afford training and benefit programs that smaller companies cannot afford to offer. This does not mean that a smaller company should not engage in strategic human resource management. Providing specialized on-site training, even if provided by senior members of the company, and offering one-on-one assessment and coaching sessions, can help employees reach peak performance rates. Highly motivated employees tend to be more productive and have lower rates of absenteeism, turnover and lateness. Highly motivated employees come to work early, work hard and contribute more to the organization's strategic objectives. A global survey by Towers Perrin shows that just 21 per cent of employees feel engaged in their work, while 38 per cent of employees are partially or fully disengaged. This factor indicates that plenty of ...