STRATEGIC HR MANAGEMENT

Strategic HR Management

Strategic HR Management

Introduction

The identification and diagnosis of HR strategy is no easy task. Only the largest firms tend to have explicit goal statements for their overall HR strategy. Even when they do, one must be careful in taking them at face value. In HRM, aspirational rhetoric may mask a more opportunistic and pragmatic reality, and broad policies are always open to the interpretations of managers, both general and specialist, and sometimes their active subversion (Niehaus, 1991). Furthermore, particular patterns of HRM are laid down at certain critical moments in an organisation's history, and managers find themselves working within these traditions without necessarily being able to explain how all the pieces got here. HR goals may not be seriously analysed unless some kind of crisis emerges in the firm's growth or performance that forces reconsideration and restructuring. The complexities are greatest in large, diversified, and transnational firms where HR strategies typically vary across job categories, workplaces, industries, and countries (Mintzberg, 1994).

Discussion

Analysis must start somewhere, however. The field of SHRM gained impetus from the work of Michael Beer and his colleagues at Harvard Business School who developed an important conceptual framework in 1984. This framework sees managers interacting with stakeholder interests (such as those of shareholders, employees, and, where they exist, unions) and situational factors (such as business strategy, the labor market, and technology) to develop their own HR choices. These lead to HR outcomes (such as various levels of employee competence and commitment), which, in turn, have longer-term impacts on organisational effectiveness and on societal and individual well-being (Huselid, 1997).

Organisational Strategy

Organisational strategy refers to the overall positioning and competitive approach of an organisation in the marketplace. Strategic management is the deliberate effort to align the organisation's long-term direction with organisational strategy. Good strategic management integrates organisational functions into a strategic plan so that all organisational units operate in a coordinated fashion in support of the overall strategy (Huselid, 1995).

Strategic human resource management (SHRM), then, is the process by which an organisation's management integrates its human resource plans and programmes with the strategic plan of the organisation. SHRM stands in contrast to traditional human resource management (HRM), which contributes to an organisation at the operational level. For example, the traditional human resource (HR) concern of selecting job applicants who display skills that are predictive of good job performance may only be implicitly related to the strategic objectives of the organisation (Holbeche, 1999).

Steps in SHRM

SHRM involves three steps: forecasting, strategy formulation, and implementation. Forecasting is the attempt to predict future events that will impact the organisation and its needs through the analyses of the organisation's internal and external environments (e.g., mission statement, goals, labor markets, opportunities, and threats). HR strategy formulation—that is, strategic human resource planning (SHRP)—involves the development of initiatives that are aligned with the organisation's mission statement, strategic objectives, strengths and weaknesses, and opportunities and threats (Greer, 1995). Finally, HR strategy implementation involves putting the HR plan into action with HR programmes that support the organisation's overall ...