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Strategic Human Resource Management: Neelima Pinnamaneni Daliang Xu Dr. Henry Findley
Strategic Human Resource Management: Neelima Pinnamaneni Daliang Xu Dr. Henry Findley
Neelima Pinnamaneni
Daliang Xu
Introduction:
world is also entering into an era of fierce competition noticed by takeovers and mergers.
This illuminates the type of dynamic and complex business environment that companies
have to face. The rapid change in the environment reminds us that, for a business to
survive, it has to focus on its core competencies and discover in order to keep ahead of
the competitors. The field of Strategic Human Resource Management has evolved mainly
in accordance to the fact that human resources need to be managed strategically for the
firm to enjoy sustainable competitive advantage over competition. Several scholars have
noted that managing people is tedious than managing technology or capital (Barney, 1991;
Lado and Wilson, 1994). Firms that learn how to manage their human resources well
would have an advantage over others in long run since acquiring and deploying human
resources effectively and efficiently is difficult and takes longer time. (Wright et al.,
1994).
practices that directly affect or influence the people, or human resources, who work for
Strategic Human Resource Management (SHRM) implies a concern with the ways
Human Resource Management practice as the decisions and actions, which concern the
(Huselid, 1995; Youndt et al., 1996; Delery and Doyt, 1996). Ian Clark defines Strategic
HRM that “centers on how organizations can improve their competitive performance by
Wright and McMahan define Strategic HRM as “the pattern of planned human
resource deployments and activities intended to enable the firm to achieve its goals.” The
definition implies four components to Strategic HRM. First, it focuses on a firm’s human
policies and practices as a means by which people of the firm gain competitive advantage.
Third, both the “pattern” and” plan” describe the goal and process of strategy, described
as” fit.” The definition has the people, practices, and planned pattern are all purposeful, in
“goal achievement”
Number of theoretical models has been developed to explain what exactly SHRM
requires in an organization and the processes by which SHRM contributes to the bottom-
line success of a firm. There is an overlap among the various theoretical perspectives
from which they are derived. No single process is correct and each one points to different
aspects of the process needed for developing an effective strategic HR function. The
Universalistic approach: John Delery and Harlod Doty describe universalistic approach
set of “correct” HR procedures and policies. There is no single best way to manage
human resources and strategy. The set of HR practices include: High levels of
decision making, High pay levels, Extensive employee training and so on.
Strategic fit approach: Contrary to the universalistic approach strategic HRM involves
matching specific HR practices to the firm’s overall business strategy. External fit refers
to how well HR practices align with specific aspects of the external environment.
Internal Service Provider: In this approach Strategic HRM, involves the role of HR
professionals in providing HR services to business units within the firm. The goal is to
enhance the effectiveness and efficiency of the operations of the concerned business unit
customers.
Configurational: The configurational approach to SHRM suggests that there are various
program or policy.
Resource based Model: This model of SHRM is based on the idea that organizations
gain competitive advantage with the resource (employees) that are valuable, rare, difficult
with high competence levels for competitors to imitate or acquire success by enhancing
1) Strategy-focused Approach: Authors Mathis& Jackson and Beer et al view HRM and
SHRM to be identical. They define that HRM by its nature itself is strategic. The
suggests HRM planning. This view is not accepted by many of the scholars and view
(short-term). The author views that the HR functions performed at the strategic
management level are SHRM. The managerial and operational level HR functions do
not come under SHRM and would rather be considered as functional HRM activities.
3) Content-focused Approach: Torrington & Hall identifies that in the model of HRM
process there are always some elements and in every such elements there are some
strategic aspects that are referred to as SHRM. According to this approach the
functional aspects of HRM elements can also be included with the organization’s
some competitive objectives that are achieved through some business strategies. In
order to formulate and implement such strategies appropriate HRM systems are
a) Transforming HR staff:
strategic planning, team building and having global perspective. Most HR units will
strategic view.
relevant structure for the HR function depends on the nature of the firm’s business,
size of the firm and firm’s overall business strategy. In some organizations
SHRM is to find a structure that meets the pressing needs of business strategy and
allow the HR unit provide services designed to help the firm achieve strategic
objectives.
Dave Ulrich suggested that one of the key roles of HR staff is to be “administrative
reengineering administrative and other processes within the firm and find ways to share
service efficiency and save money. Several processes are needed to enhance the
improvement, by examining the gaps between the “as is” process and what the
c) The ultimate process involves HR staff to rethink how they create value to the
firm in terms of value perceived by the customers rather than perceived by the
involves top management, with the help of outside consultants, to go through and
analyze the current and future condition of the organization. To achieve full
Strategic Human Resource Management 7
integration, HR managers should not only have the ability to influence the
development and selection of information used in decision making but should also
important and relevant HR issue for HR staff and line managers. HR fit involves making
sure HR activities make sense and help the organization achieve its goals and objectives.
a) Vertical fit: This aspect of vertical fit concerns the coincidence between HR
b) Horizontal fit: This relates to the extent to which HR activities are mutually
c) External fit: The third aspect concerns how well HR activities match the
Ensuring these aspects of fit requires HR practice choices. The challenge is to develop
internally consistent configurations of HR practice choices that help implement the firm’s
strategy and enhance its competitiveness. There is a need for strategic flexibility along
with strategic fit for the long-term competitive advantage of the firm. Fit is defined as
meet the demands of dynamic environment. The two types of flexibility identified are:
d) Resource Flexibility: is the extent to which a firm can apply its resources to a
variety of purposes. It also involves the cost, difficulty, and time needed to
decision-making and other systems that allow it to move resources fastly from
Major changes are required to link the human resource function to the user
organization. Most personnel functions are linked to the operational business activities.
With the addition of new managerial and strategic activities, new linking mechanisms
i. Step 1. Provide the business with good human resource databases. These
issues that impact the long-term human resource context of the organization.
ii. Step 2. Alter the senior management role when it comes to human resource
iii. Step 3. The line organization must alter its incentive and control systems so
and operational levels. This will entail ongoing audits of the human resource
Also adjustments must be make in budgeting for human resource services, as some of
these adjustments will require new sources of corporate funding. (Tichy, N; Fombrun, M;
identifying managers, unions, customers, and employees even the suppliers and
The strategic objectives should be identified for functional units along with
c) Dollar value of HR programs: The third issue relates to the monetary costs and
asses HR.
be different types like” Internal Benchmarking” that deals with the firm
comparing practices in one part of the organization against those in the internal
Strategic Human Resource Management 10
business strategy. SHRM elevates human resources management from micro level
(individual personal level) to the macro level (business strategy level). SHRM includes
global business and social trends and should be able to perform environmental scanning.
SHRM also includes internal human resource analysis. HR professionals must analyze
human resources against current and future business strategies and identify the gaps
between them.
SHRM is also intended to assist management in the best use of internal labor
market. Hence an absolute requirement for analysis would be effective use of computer-
based human resource information systems. SHRM includes organizational analysis and
design. Hence HR professionals had to provide management not only with analysis, but
important than the traditional planning elements. The strategic HR considerations are as
follows:
field of human resource management and in the field of strategic management. The
concept is based mainly on the human resource, which is considered as human capital in
to support the company’s first formal strategic planning process. The program involved
all the senior officials, chairman in strongly reinforcing the importance of new strategic
planning process. This had become a successful key in turning around the troubled bank
managers. Many companies have been very strategic in developing managers. The
appraisal system should also be effective at the strategic level for the evaluation of
executive talent. The reward system should encourage set of desired strategic behaviors
from managers. Hence every organization must develop its own strategic position in
Conclusion:
have to carefully design strategies and relate to human resources for effective utilization
includes the kind of Strategy Company, has to follow in terms of greater performance and
the pattern should be taken care in maintaining Strategic Human Resource Management.
Strategic Human Resource Management 13
References
Fish, C; Schoenfeldt L; Shaw, J (2003) Human Resource Management (5th ed.) Boston:
Houghton Mifflin
in the 21st century Human resource Management Review Vol.8 Issue 3, P187,
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