Strategic HRM

Strategic HRM refers to the management of a firm’s human resources in such a way
so as to achieve strategic objective of the firm. It is the process of defining how the
organization’s goal will be achieved through people by means of HR strategies and
integrated HR policies and practices.
Basically, Strategic Human Resource Management refers to the management of
human resource in an organization in a strategic way, in an appropriate way by
making people do what they need to do to achieve the objective that has been laid
down by the organization for current as well as future course of time.

Why Strategic HRM?

To help firm achieve competitive advantage by lowering cost, by increasing source of
product and service differentiation, or by both.
Here by competitive advantage, we mean having advantage over other competitor in
the industry regarding the similar product or services that other firms are providing
what type of uniqueness does we provide in our offer that other are not giving
because of which our customer prefers us over them.

The following are benefits of strategic human resource management: -

 Increased job satisfaction.

 Better work culture.
 Improved rates of customer satisfaction.
 Efficient resource management.
 A proactive approach to managing employees.
 Boost productivity.

Steps in Strategic human resource management

 Understanding company’s objective.

It is the most basic step of having through understanding of your aim objective
and mission for both long-term and short-term plan so that the best can me
communicated to HR personnel to formulate effective resource strategy.
 Assessing HR capability.

Before making any strategy, it is necessary to understand your employee which

will better assist you in attaining objectives of the organization. It will also help
you to know which employee are expert in particular area and what type of
training they require in future aspect. Additionally, you will get insight of skills
your employees are having.

 Formulation of new business and mission statement.

After evaluating the HR capabilities next step will be what should our new
business be, what product it will be, how it will differ from other competitors.
What will be company’s new mission and vision.

 Conversion of mission into strategic goals.

May be the mission is “Providing good service satisfaction” may be one thing
and bringing it into reality is another, it also depends how important the
mission is to another department. For an example any Bank thought for the
same, now the Branch Manager wants goal from their employee so that more
customer engagement can be increased and more people connect to the bank.

 Formulate strategies to achieve the strategic goals.

A strategy is course of action. It shows how the Bank will work from what it is
and to what it wants to become keeping in mind the mission and vision given
the threat, opportunities weakness and strength. What action will be taken to
bring changes in operation department, what changes need to be done in IT
department for software that is used by the bank so that the queries of
customer can be resolved, what type of training need to be provided to the
employee. All these need to be done for achieving the mission.

 Implement the strategy.

 Strategy implementation means converting strategy in action and result. It also
involves implementing all management function- planning, organizing, staffing,
leading and controlling.
 Evaluate performance.

Strategies don’t always succeed. Managing strategies is ongoing process as the

competitor will brings new product with new specification, quality, price,
technology, specification. So, the strategies should be changed accordingly.
Managing strategies keeps strategy up to date. Strategic evaluation help in
answering many important questions. Are all the resources working as they
were planned, what are the issues of discrepancy, are we in situation to
change our strategy and many more.

SUBMITTED TO, SUBMITTED BY,

Dr Meenakshi Kaushik Sabyasachi

(PGDM, 1 year)