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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 demandIncrease
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.
BASIS FOR
HRM SHRM
COMPARISON

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

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.