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Strategic Human Resource Management

Gajaba Perera-Gunawardena
Management Consultant

Strategic Human Resource Management

SHRM is the practice of aligning business strategy with that of HR practices to achieve the strategic goals of the organization. The idea behind SHRM is that companies must fit their HR strategy within the framework of overall Business objectives and hence ensure that there is alignment between the HR practices and the strategic objectives of the organization.

What is SHRM?
Broadly speaking, SHRM is about systematically linking people with the organization; more specifically, it is about the integration of HRM strategies into corporate strategies. HR strategies are essentially plans and programs that address and solve fundamental strategic issues related to the management of human resources in an organization (Schuler, 1992).

Strategic human resource management (SHRM)

Strategic human resource management involves the development of a consistent, aligned collection of practices, programs (strategies), and policies to facilitate the achievement of the organizations strategic objectives (Mello, 2002).

Effective HR Strategy Formulation and Implementation

Organizational Strategies
Fit Consistency

Consistency Fit



HR Strategies

Improved Firm Performance

Fit Consistency


Organizational Characteristics

Organizational Capabilities

The success of HR strategies depends on the situation or context in which they are used. An HR strategys effect on firm performance is always dependent on how well it fits with other factors. This slide depicts the key factors that firms should consider in determining which HR strategies will have positive impact on firm performance: organizational strategies, environment, organizational characteristics, and organizational capabilities.

Organizational HR Strategies
Organization Development interventions specifically prescribe Strategic Interventions to align the organization processes with the strategic direction of the Organization.

intervention overview
human process interventions human resources management interventions

strategic interventions

Cummings & Worley, 8e (c)2005 Thomson/South-Western


human process interventions

coaching training and development process consultation and team building third-party interventions (conflict resolution) organization confrontation meeting intergroup relationships large-group interventions

Cummings & Worley, 8e (c)2005 Thomson/South-Western


human resources management interventions

goal setting

performance appraisal
reward systems career planning and development

managing work force diversity

employee stress and wellness

Cummings & Worley, 8e (c)2005 Thomson/South-Western


What is Organizational Culture?

A system of meaning shared by the organizations members
Cultural values are collective beliefs, assumptions, and feelings about what things are good, normal, rational, valuable, etc.

Organization Culture

A firm's organizational culture is shown by:

The way it does business How it treats customers and employees The autonomy or freedom that exists in the departments or offices The degree of loyalty expressed by employees

Human Resource Management


Organization Culture

Organization culture represents the perceptions held by the employees

There is no one "best" culture for the development of human resources

Culture can:

Impact behavior, productivity, expectations Provide a benchmark for standards of performance

Human Resource Management


Work Group

An employees experiences are largely influenced by the work group

A group is two or more people who: Consider themselves a group Work interdependently to accomplish a purpose Communicate and interact with one another on a continuous basis In many cases, work next to each other

Human Resource Management


Cultures Overall Function

Culture is the social glue that helps hold an organization together by providing appropriate standards for what employees should say or do.

Performance Management

Copyright 2008 John Wiley & Sons, Inc.


Strategic Reward Systems I: Pay for Performance

Reward Systems in most cases should be consistent with other HR systems. The Reward System is a key driver of: HR Strategy Business Strategy Organization Culture

MBAO 6030 Human Resource Management

Performance: what is the issue?

Organisational performance

Employee performance

Perf. Mng.+ Mng. Perf.

(mgt process)

Performance Management system

Performance Appraisal System

Performance Bonuses & Pay Progression

Knowledge Management
Knowledge Management (KM) refers to a multidisciplined approach to achieving organizational objectives by making the best use of knowledge. KM focuses on processes such as acquiring, creating and sharing knowledge and the cultural and technical foundations that support them.

Creating a Climate of Trust

High levels of trust lead to high performance in teams. Research shows strong links between the level of trust in a team and Synergetic Performance

Trust: A Key to Team Effectiveness

Trust: a belief in the integrity, character, or ability of others. The

primary responsibility for creating a climate of trust falls on the manager. Trust is the key to establishing productive interpersonal relationships.


Trust encourages self-control, reduces the need for direct supervision, and expands managerial control.

Why Focus on Trust?

More effective cooperation and collaboration Better knowledge transfer between team members Increased productivity Higher levels of creativity and innovation More effective working relationships