What are Strategies?

Strategy is a multi-dimensional concept going well beyond traditional competitive

strategy concepts. Strategies are broad statements that set a direction. Strategies are a
specific, measurable, obtainable set of plans carefully developed with involvement by an
institution's stakeholders. These action statements are linked to an individual or
individuals who are accountable and empowered to achieve the stated result in a
specific desired timeframe. They are patterns of action, decisions, and policies that
guide a group toward a vision or goals.

Strategic human resource management is designed to help companies best meet the
needs of their employees while promoting company goals. Human resource
management deals with any aspects of a business that affects employees, such as
hiring and firing, pay, benefits, training, and administration. Human resources may also
provide work incentives, safety procedure information, and sick or vacation days.

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.

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

Approaches of the SHRM,

attempts to link Human Resource activities with competency based performance
measures

attempts to link Human Resource activities with business surpluses or profit

These to approaches indicate two factors in an organisational setting. The first one is
the human factor, their performance and competency and the later is the business
surplus. An approach of people concern is based on the belief that human resources
are uniquely important in sustained business success. An organization gains
competitive advantage by using its people effectively, drawing on their expertise and
ingenuity to meet clearly defined objectives. Integration of the business surplus to the
human competency and performance required adequate strategies. Here the role of
strategy comes into picture. The way in which people are managed, motivated and
deployed, and the availability of skills and knowledge will all shape the business
strategy. The strategic orinetation of the business then requires the effective orinetation
of human resource to competency and performance excellance.

Facts [+]

The Center for Human Resources at the University of Pennsylvania was founded in 1921.
The Center's mission is to foster research on the strategic role of HR management in
such areas as employment, labor relations, public policy, diversity, and training and
education. The Center supports its mission through research, regular meetings,
information bulletins, and conferences and public forums.

Benefits of SHRM

1. Identifying and analyzing external opportunities and threats that may be crucial to
the company's success.

2. Provides a clear business strategy and vision for the future.

3. To supply competitive intelligence that may be useful in the strategic planning

process.

4. To recruit, retain and motivate people.

5. To develop and retain of highly competent people.

6. To ensure that people development issues are addressed systematically.

7. To supply information regarding the company's internal strengths and

weaknesses.

8. To meet the expectations of the customers effectively.

9. To ensure high productivity.

10. To ensure business surplus thorough competency

Barriers of SHRM
Barriers to successful SHRM implementation are complex. The main reason is a lack of
growth strategy or failure to implement one. Other major barriers are summarized as
follows:

1. Inducing the vision and mission of the change effort.

 2. High resistance due to lack of cooperation from the bottom line.

3. Interdepartmental conflict.

4. The commitment of the entire senior management team.

5. Plans that integrate internal resource with external requirements.

6. Limited time, money and the resources.

7. The statusquo approach of employees.

8. Fear of incompetency of senior level managers to take up strategic steps.

9. Diverse work-force with competitive skill sets.

10. Fear towards victimisation in the wake of failures.

11. Improper strategic assignments and leadership conflict over authority.

12. Ramifications for power relations.

13. Vulnerability to legislative changes.

14. Resistance that comes through the legitimate labour institutions.

15. Presence of an active labour union.

16. Rapid structural changes.

17. Economic and market pressures influenced the adoption of strategic HRM.

18. More diverse, outward looking approach.

Traditional human resource management focuses on the administrative tasks of human resource
management. For example, refers to the completion of the organization's mission, specifically
management of the organizations involved in the relationship between people and things, people and
things to achieve a good match.

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. (Boxall, P 1992) With strategic
human resource management, the company focuses on strategy and operational matters instead of
simply engaging in the administrative tasks that are required for every business. This adds more
responsibility to the human resources department.

The aim of this report is to study and analysis the difference between Strategic HRM and
conventional HRM in different points in business field.

History and background of strategic human resource management

With the development of information technology-oriented high-tech, Internet and e-commerce

applications, the human and the New Economy (knowledge-based economy), knowledge of the
decisive role in creating organizational competitive advantage is increasingly obvious. The advent of
the era of global competition, the competition into a new frontier. HR strategies are essentially plans
and programmes that address and solve fundamental strategic issues related to the management of
human resources in an organisation (Schuler, 1992). They focus on alignment of the organisations
HR practices, policies and programmes with corporate and strategic business unit plans (Greer,
1995). Strategic HRM thus links corporate strategy and HRM, and emphasises the integration of HR
with the business and its environment.

2.1 Consideration of conventional HRM

With the fast changing environment of the business, economic globalization and the competition
among businesses increase fierce led to the business rethink how to organize and management the
human resource. Since the traditional HRM aim to daily administration management cause the HRM
is shortage of strategic and guiding the management system thus cannot response to the complex,
changeable, expanse environment which brought us an increasing number demanding of flexible
and innovation the changes in strategy. Reduced productivity of workers and industrial innovation
deteriorate, the traditional HRM facing the big challenge. All these changes forced the professionals
and managers thinking deeply of the source of advantage of the competitive. Most of them started to
find out from inner business, then the based on resources, ability and knowledge the competitive
statement developed. The roots of HRM go back as far as the 1950s, when writers like Drucker and
McGregor stressed the need for visionary goal-directed leadership and management of business
integration (Armstrong, 1987).

2.2 Explore the SHRM

In the nearly 20 years, SHRM in research content and scope got lots of progress. The main
shortcoming: Steering based on the strategic management of the resource base from environment-
based strategic management.

Business strategy

Typologies for characterizing the business strategies used by firms abound, but the two most
frequently cited in discussions of HRM were proposed by Miles&Snow (1978) and Porter (1980,
1985). Miles& Snow classified organizations as prospectors, analysers, or defenders. Prospectors
actively seek new products and markets and, therefore, seek to grow; analysers also seek to grow,
but in a more stable and predictable way through the internal development of new products rather
than creation of new markets; Porters (1985) competitive strategies distinguish among firms that
compete on the basis of cost leadership, product differentiation, and market focus. According to the
above analysis, strategic HR offers three critical outcomes: increased performance enhanced
customer and employee satisfaction and increased shareholder value. These outcomes are
accomplished through effective management of staffing, retention and turnover processes, selection
of employees that fit with both the organizational strategy and culture, cost effective utilization of
employee through investment in identified human capital with the potential for higher return ;
integrated HR programs and policies that clearly follow from corporate strategy facilitation of change
and adaptation through a flexible more dynamic organization ;and tighter focus on customer needs,
emerging markets and quality.( Charles J. Fombrun and Noel M.Tichy and Mary Anne Devanna;
1984)

Difference between Strategic HRM and conventional HRM

Focus

Strategic HR shifts attention as against the traditional HRs focus on employee relations to
partnership with internal and external groups. Strategic HRM based on important of human beings
as core, people as capital, emphasizing a dynamic, psychological adjustment and development, is a
"service centre", the management point of departure is a "focus on the people" to achieve the system
of people and things optimization enable enterprises to achieve the purpose of the best economic
and social benefits. Traditional HRM based on "things" as centre, people will be regarded as a cost,
and treat them as a "tool". Stressing the static control and management of a single aspect of the
"things" is a "centre of power" the style of management and the purpose is control people.

In firing, no manager enjoys firing employees, but this important decision-making can contribute to
the strategic effectiveness of a business in a certain situations. Traditional HR departments can be
hesitant to fire existing employees, regardless of how many issues may arise or how badly the
employee's productivity and efficiency may drop over the years. (David Ingram; No Date)

In SHRM, except focus on whether the candidates suitable for the particular position with job
matching, they also pay special attention to the values of the candidate meets the company's core
values, whether the company can provide other factors for the candidate development expectations
of future to ensure that the recruitment of candidates long-term services for enterprises. Knowing
who to let go can be just as important as knowing who to promote when building a happy, productive
workforce. (David Ingram; No Date)

Performance appraisal

According to the needs of corporate strategic, SHRM based on combining with the staff capacity to
develop a comprehensive performance management system, concerned about the enterprise wide
performance management, including performance planning, performance assessment, performance
evaluation, performance feedback and performance incentives, the whole process; Paying more
attenuation to performance feedback corporate performance and incentives, to ensure that
employees continuously improve performance while enabling spiralling. Traditional HRM is only
concerned with the performance evaluation and punishment, most of them play the role of the
corporate police are only responsible for the fault finding, find loopholes, it is impossible to form a
scientific performance management system. ( Charles J. Fombrun and Noel M.Tichy and Mary Anne
Devanna; 1984)

Reward system

The SHRM role of reward systems is to consider what behavioural impact they can have in
organizations. The research so far on reward systems suggests that potentially they can influence
the following factors which, in turn, influence organizational effectiveness.

Attraction and retention

Motivation

Culture

Reinforce and define structure

Cost

The design of an effective reward system demands not only a close articulation between the
business strategy of an organization and the reward system, but also a clear fit between the reward
system and the other design features of the organization. The implication of these for-reward
systems, it is also impossible to design an effective reward system in the absence of knowing how
other design features of the organization are arrayed. So the key strategic decisions about the
reward system need to be made in an interactive fashion in which tentative reward system design
decisions are drive by the business strategy and then are tested against how other features of the
organization are being designed.

Appropriate reward system practise:

Conventional

With strategy

Promotion

Top management have power to make decisions

Open posting for all jobs; Decision-making process through all the groups

Status symbols

A great many, carefully allocated on the basis of job position

Few present, low emphasis on organization level

Base rate

Based on job performed; high enough to attract job applicants

Based on skills; high enough to provide security and attract applicants

Incentive plan
Piece rate

Group and organization wide bonus, lump sum increase

Communication policy

Very restricted distribution of information

Individual rates, salary survey data, all other information made public

Decision-making locus

Top management

Close to location of person whose pay is being set

Training

SHRM based on the need of enterprise development, offering the full systematic completely training
program for individual development. Ensure a steady stream of transport required for various types
of talent for the enterprise to achieve the rapid development of enterprise and staff career
development of win-win. Conventional HRM is responsible only for new employees into the
enterprise organization and discipline, labour safety, quality management and other aspects of
training, and rarely will organize the training of employees; limited to departments limitations
reasons, it is not possible to establish a comprehensive human resource training and development
system.

Performance Management

Strategic human resource management based on the needs of corporate strategy, combined with the
ability of employees to develop a comprehensive performance management system, pay attention to
the enterprise-wide performance management, including the whole process of performance
planning, performance assessment, performance evaluation, performance feedback and
performance incentives; Pay more attention on performance feedback and incentives to ensure
continuously improve employee performance, in order to achieve enterprise performance spiral.
Conventional HRM is only concerned with performance evaluation and punishment, most of them
play a corporate role of the police is only responsible for the fault-finding, looking for vulnerabilities, it
is impossible to form a scientific performance management system.

The value of strategic HRM

Achieving the value of strategic human resource management is improving the staff capacity and
organizational performance, and enhance staff capacity in conjunction with corporate strategy and
SHRM and organizational performance; therefore need to focus on thinking about how to refine and
create excellent corporate culture, the development of personalized of employee career planning,
and pay special attention to the in-depth development of the corporate human resources. The value
of the traditional human resource in the normative and rigor, that is, whether the affairs are well-kept,
whether to see maintained and under control employees, however most of the work just stop at the
surface. SHRM emphasizes an important position in the overall business, focused on change
management and people management are warning management model that take a forward-looking
attitude and take preventive measures. Imagine if without the aid of modern means to learn how can
timely scattered throughout the country, even at home and abroad a variety of human resources-
related data and information? How human resource can do the work of a forward-looking? With
state-of-the art, modern scientific management tools to build a systematic and comprehensive
human resource management system has become a trend and inevitable. Traditional personnel
management focused on standardized management and transaction management is a post-
administration. Almost all of the work done by hand, even if the adoption of modern management
tools can only be used alone only for personnel departments simple personnel management system,
impossible to build up the system, a comprehensive human resource management system.

Summary

However, the traditional HRM focuses mainly on employee relations; SHRM focuses on partnerships
with internal and external customers. The traditional HRM has only short-term goals, however SHRM
has long-term goals. HRM has staff specialists, SHTM has line managers. Comparing the two
models: Conventional HR management lacks focus on the overall strategic initiatives of the company,
but it works in strategic human resources management. For the SHRM , it has very clear route:
Brands TacticHuman Resource Management Departmentestablish the relevant HRM
strategiesTo develop an appropriate human resource policiesUnderstand employees demand
Increase employees satisfactionProductivity / service improvementCustomer satisfaction and
loyaltySustainable development of enterprises

Difference Between HRM and SHRM

November 21, 2016 By Surbhi S Leave a Comment

The
term HRM expands to Human Resource Management; it implies the
implementation of management principles for managing the workforce of an
organisation. When conventional HRM is compared and contrasted with the
strategic HRM or SHRM, it becomes easier to understand. SHRM is the process
of aligning the business strategy with the companys human resource practices, so
as to attain strategic goals of an organization. Take a glance at the article
presented here that explains the difference between HRM and SHRM.

Content: HRM Vs SHRM

1. Comparison Chart

2. Definition

3. Key Differences

4. Conclusion

Comparison Chart

BASIS FOR
HRM SHRM
COMPARISON

Meaning Human resource management SHRM is a managerial function

(HRM) implies the governance of which implies framing of HR
manpower of the organization in a strategies in such a way to direct
thorough and structured manner. employees efforts towards the goals
of organization.

Nature Reactive Proactive

Responsibility lies Staff specialist Line manager

with

Approach Fragmented Integrated

Scope Concerned with employee Concerned with internal and external

relations relations

Time horizon Short term Long term

 BASIS FOR
HRM SHRM
COMPARISON

Basic factor Capital and products People and knowledge

Change Follows change Initiates change

Accountability Cost center Investment center

Control Stringent control over employees It exhibits leniency.

The Difference Between Strategic & Traditional HR

by Jared Lewis

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Traditional and strategic human resources models differ significantly from each other. Many
businesses have moved toward the strategic HR model because of its utility in building a
business. Strategic human resources management is geared toward developing strategic
plans that fit within the larger structure of the company's plans, whereas traditional HR
management is almost purely administrative in nature. Understanding the difference
between traditional and strategic human resources can be important for the development of
your small business.
1. Examine the role of human resources managers as they have been traditionally
understood. Human resources managers are often perceived as individuals responsible for
hiring and recruiting workers for open jobs within a company or corporation. Aside from the
hiring and recruiting aspect of the their job, human resources managers and professionals
spend a considerable amount of time performing administrative tasks such as completing
paperwork for new employees or training them for their new positions.

2. Note the primary difference in strategic HR, which is the fact that strategic human
resources professionals are recognized as being strategic partners within the company. They
work alongside top executives and other management professionals to determine how to
best fit human resources initiatives within the overall strategic trajectory of the organization.
Company strategy plays a more important role in the development of human resource
policies than do basic administrative matters.

3. Recognize how the roles of the human resources manager traditionally have been defined.
Traditional HR managers are primarily concerned with the acquisition and exit of workers
from an organization. They also have played a role in training and development that is
integral to the functioning of the company for which they work. Aside from these duties,
human resources managers also administer pay plans and benefits received by employees.

4. Compare the differences between the two models. Traditional HR management lacks focus
on the overall strategic initiatives of the company, whereas these are primary in strategic
human resources management. Human resources policies and procedures revolve around
these strategic plans and are developed in response to these plans. The traditional human
resources department may develop policies in response to such plans, but it does not
necessarily play an integral role in the planning process.