Strategic human resource management

• Strategic human resource management means formulating and executing

human resource policies and practices that produce the employee
competencies and behaviors that the company needs to achieve its
strategic aims.”- Gary Dessler.
• Strategy is a plan of action designed to achieve a long-term or
overall aim.
• Strategic management provides overall direction by developing
plans and policies designed to achieve objectives and then
allocating resources to implement the plans. Ultimately, strategic
management is for organisations to gain a competitive edge over
their competitors.
Strategic human resource management
• The three levels of strategy are:
• Corporate level strategy: This level answers the foundational
question of what you want to achieve.
• Business unit level strategy: This level focuses on how you're
going to compete.
• Market level strategy: This strategy level focuses on how you're
going to grow.
Components of Strategic Management Process
Strategic human resource management
• Strategic human resource management is the process of linking the
human resource function with the organization’s strategic objectives to
improve performance.
• SHRM is a philosophy of people management based on the belief that
human resources are uniquely important to sustain business success.
• SHRM aims to ensure that the organization’s culture, style, and
structure and the quality, commitment, and motivation of its
employees contribute fully to the achievement of business objectives.
Strategic human resource management
• Strategic human resource management takes these
activities to the next level by hiring and training employees in
alignment with the goals of the business and the vision
statement, mission statement, and organizational
strategies that guide them.
• The formal definition of SHRM is:
• The process and practice of attracting, hiring, developing,
rewarding, and retaining employees for their benefit and the
benefit of each department and the business as a whole.
Strategic human resource management
• A human resource department that works under the auspices of
SHRM must, by necessity, interact with other divisions within your
business in order to:
• Get to know their unique needs
• Understand their goals and how they fit in with the goals of the
business
• Create hiring and retention strategies that align with those goals
• Give those departments what they need to succeed
• Strategic human resource management is a more integral, hands-
on approach to furthering the interests and abilities of your
business.
Strategic human resource management
• 4 Components of Strategic Human Resource Management
• This definition implies the following four components of SHRM:
• 1. It focuses on an organization’s human resources (people) as the primary
source of the organization’s competitive advantage.
2. The activities highlight the HR programs, policies, and practices as the
means through which the organization’s people can be deployed to gain a
competitive advantage.
3. The pattern and plan imply a fit between HR strategy and the
organization’s business strategy (vertical fit) and between all HR activities
(horizontal fit).
4. The people, practices, and planned patterns are all purposeful, directed
towards the achievement of the organization’s goals.
The people, practices, and planned patterns are all purposeful, directed towards the achievement of the organization’s goals.
 Traditional HRM SHRM
Line managers; all managers
Responsibility for HR Staff personnel in the HR
responsible for people are HR
programs department.
managers
Partnerships with internal
Employee relations— ensuring
(employees) and external
Focus of activities employee motivation and
(customers, stakeholders, public
productivity, compliance with laws
interest groups) groups
Proactive and transformational,
Role of HR Reactive and transactional
change leader
Slow, and fragmented, not Fast, flexible, and systemic change
Initiative for change
integrated with larger issues initiatives implemented
Consider various time frames as
Time horizon Short-term necessary (short, medium, or long-
term)
Organic control through flexibility,
Bureaucratic control through rules,
Control as few restrictions on employee
procedures, and policies
behavior as possible
Focus on
scientific management principles— Broad job design, flexibility, teams
Job design
the division of labor, and groups, and cross-training
independence, and specialization
Capital, products, technology, and People and their knowledge, skills,
Important investments
finance and abilities
Accountability Cost center. Investment center.
Strategic human resource management
• the essential features of SHRM can be summarized as follows:
1.There is an explicit linkage of some kind between HR policy and
practices and the overall organizational environment.
2.There are organizing schema linking individual HR interventions so
that they are mutually supportive.
3.Much of the responsibility for the management of human resources is
cascaded down the line.
 A Possible Evolving HR
Organization Example

President
and CEO

Vice
Director
Vice President, Vice Vice
of Safety
President, Strategic President, President,
and
Operations Human Finance Marketing
Health
Resources

Training & Compensation

Staffing (Line
Development (Shared Service
Managers)
(Outsourced) Centers)
© 2008 by Prentice Hall 1-13
 Traditional Human Resource Functions in a
Large Firm
President
and CEO

Vice President,
Vice President, Vice President, Vice President,
Human
Marketing Operations Finance
Resources

Manager, Manager, Manager,

Manager, Manager,
Training and Safety and Labor
Compensation Staffing
Development Health Relations

© 2008 by Prentice Hall 1-14