Lecture 2:

Strategic Human Resource Management

MGT 351 - UHM

Learning Objectives
• Basic concepts of Strategic HRM.
• Key differences between HRM and SHRM.
• Understand the Strategic Management Process.
• Types of strategy in SHRM
• The SHRM tools

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Strategic HRM
• Strategic human resource management (SHRM) involves a future-
oriented process of developing and implementing HR programs that
address and solve business problems and directly contribute to major
long-term organizational goals.

• SHRM goes beyond traditional HR to proactively drive ROI and long-

term organizational success.

• The primary principle of strategic human resource management is to

improve business performance and uphold a culture that inspires
innovation and works unremittingly to gain a competitive advantage.  3
HRM v/s SHRM
Basis for HRM SHRM
comparison
Nature Reactive Proactive
Responsibility/Role Line Authority Staff Authority
Approach Fragmented Integrated
Scope Concerned with Concerned with internal
employee relations and external 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 Strict control over Exhibits leniency
employees

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Basic Concepts
• Strategy: Course of action.

• Strategic Plan: The plan and decisions made about the

organization's goals and the ways in which the
organization will achieve those goals and maintain
competitive advantage.

• Strategic Management Process: The process of

identifying and executing the organization’s strategic
plan by matching the organization’s capabilities
(strengths and weaknesses) with the demands of the
environment (competitors, customers and suppliers).
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Strategic Management Process

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Types of Strategy

Corporate Level
Strategy

Business 1 Business 2
Competitive Strategy Competitive Strategy

Business 1 Business 1
Functional Functional Business 2
Strategy Strategy Functional
Strategy
Marketing Dept. HR Dept.
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Corporate Strategies

Corporate
Strategy

Vertical
Concentration Diversification Geographical
Integration
Competitive Strategy

Competitive
Strategy

Cost
Differentiation Focus
Leadership
Understanding ‘Strategic Fit’
• All of the firm’s activities must be tailored to or fit the
chosen strategy such that the firm’s functional strategies
support its corporate and competitive strategies.

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 STRATEGIC HR TOOLS

STRATEGIC HRM TOOLS

STRATEGY MAP THE HR SCORECARD DIGITAL DASHBOARDS

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