Strategic Issues In Human Resource Management
by Amit Bhagria on Tuesday, April 6th, 2010 | No Comments
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Strategic management seeks to coordinate and integrate the activities of
the various functional areas of a business in order to achieve long-term
organizational objectives. A balanced scorecard is often used to
evaluate the overall performance of the business and its progress
towards objectives… Strategic management provides overall direction to
the enterprise and is closely related to the field of Organization Studies.
Strategic planning and management are more than a set of managerial
tools. They constitute a mind-set, an approach to looking at the changes
in the internal and external environment that confront the manager.
Using planning and management tools strategically, then, involves
essentially a way of thinking, a mental framework or approach, as well
as a set of analytic tools. For strategic management to be effectively
used the manager must develop a strategic mentality.
Organizations are working towards an outward-focused view of the way
services should be provided – a fundamental shift from the traditional
focus on internal concerns. At the same time, major opportunities for
improvement may arise from developments such as new information and
communications technologies, and the availability of additional financial
resources such as the Invest to Save Budget. In many cases the
response to the problem or opportunity will require the continuous
attention of senior management of the organization.Be interconnected
with other issues and developments.
What is Strategy?
A strategy is a step-by-step plan of action prepared by an organization
and by which it aims to achieve its plan or plans, thus, ensuring its
success and survival.
What is Strategic Human Resource Management?
This is the step-by-step plan of action by which an organization
employs, utilizes or manages, develops, and deploys its human
resources in order to attain its defined corporate mission and objectives.
A human resource strategy is devised in respect of recruitment,
employee deployment, motivation and engagement, and employee
By doing this, an organization puts itself in the position of being able to
achieve its mission and objectives through its human resources.
This follows from the way how strategic human resource is strategically
This is the effective way of organizing the workforce by the adoption of a
specific strategy, where employees‘ performance can help to achieve
the planned organizational targets, such as increasing revenue or
improving the profit margin.
Strategic human resource management is ―human resource
management‖ carried out in a strategic way. The human resource
activities are linked to the achievement of the organization‘s overall
This is the new way of managing human resources as compared to
To ensure a high probability of success in the implementation of
strategic human resource management, a number of things are
Strategic recruitment where the right person is selected to fill the right
job and according to organizational needs Using the right mix of
incentives to motivate and engage employees who then can concentrate
improving their performance Appointment of the right HR Head to
provide the necessary leadership in making HR as a strategic partner An
HR mission statement with well defined HR objectives drawn up in
alignment with the overall organizational objectives Provision of the right
set of training to every level of employees on an on-going basis
Performance management system to identify high-performing
employees for the purpose of giving rewards befitting their performance,
work quality and output
Issues of SHRM
The strategic human resource choices involved in low cost of production
Train some of the employees in the area of time management, material
handling at work etc. Retrenchment of surplus employees caused due to
superior speed Pay for performance Promotions based on efficiency
High quality work environment at the production place.These human
resource issues are also known as functional strategies of HRM.
Approach to SHRM
This is the new way of managing people ensuing from the strategic
human resource definition.
Human resources with all the competencies and potential are required to
attain the HR objectives. These objectives are aligned to the
organizational objectives by way of a strategic plan.
By achieving the human resource objectives, HR helps to achieve the
Role of SHRM
Strategic management of employees emphasizes the HR strategic role.
This stems from the argument of many ―gurus‖ on HR strategic
One of the foremost things we need to know is the scope of the strategic
HR and how successful organizations are leveraging their success on
strategic human resource management
HR as Strategic Partner
These are among the important ones.
Recruiting the right employees. Align corporate values to your
recruitment strategy. Well-developed competencies of the workforce,
and their relevance to organizational core business. Participative culture
where HR initiatives fully support the overall strategic plan. Effective use
of information technology. Effective leadership through appointment of
the right HR Head. Identification of human resource practices that make
HR as strategic partner, namely, serving the business needs of your
organization. Discard ineffective HR practices that do not contribute to
the success of your organization.
Why make HR as Organizational Strategic Partner…
Some of the reasons may sound familiar to you.
To increase productivity of the labor force Competency and talent
management Onset of information technology and the vast amount of
knowledge used in the course of the activities of organizations The
changing business environment Effect of globalization on the business
The Human Resource Function and Strategic Business Plan
It was shown in a survey that there is a correlation between being
strategic business partner and the effectiveness of the HR function.
You require strategic HR management to ensure that your HR function
can fully support the achievement of business objectives.
The administrative reactive approach in people management can no
longer support your organization in an increasingly competitive business
Strategy Development and Implementation
Full participation of HR people in strategy development and
implementation promotes HR as strategic partner.
Ensure that your HR Manager and HR professionals:
contribute to business decisions develop business acumen to
understand how a profitable business is run are customer-oriented learn
how to link HR practices to your organizational business strategy
The Future of SHRM
Proponents of strategic HR management generated tremendous interest
on the subject. Some large organizations had implemented it. In
contrast, some lament the ineffectual efforts by many organizations in
implementing the system.Strategic human resource management is not
going to disappear. This is so as long as people continue to run
organizations of whatever size and for whatever purpose. It is very
certain that people will continue to play pivotal roles.
As the world of business becomes more complex and challenging,
strategic human resource management will continue to grow in
importance in the success story of organizations.
Importance of SHRM
The organization‘s ―ends‖ is its financial success. Human resource
strategy is one of the means to attain this. Organizations have always
tried to comply with legal obligations in the course of carrying out their
business activities. Also, finance and technology are important assets.
But people are required to make effective and efficient use of them.
In non-profit organizations, the end is to provide the specified services to
the intended group or groups in the most cost-effective way, in the most
satisfactory manner, and serving the majority of the target groups.
Effective development and implementation of an HR strategy requires
HR professionals who are conversant in finance, negotiation, change
management, and the overall operations of the organization.
An HR strategic plan aligns the HR function to the corporate plan. Good
knowledge about the organization, its objectives, systems and
processes, can assist HR people in doing this task well.
This all looks so easy on paper. Do this, do that, and you will be aligned
with the mission and able to demonstrate your contribution toward it.
Obviously, it is not that easy. Private sector, public sector, and some
Federal entities have been struggling with this issue even before GPRA
was enacted — and that works to our advantage. There is a wealth of
information out there that can help — hundreds of articles, books, and
studies have been written, numerous tools have been created, and
many organizations have already tested a number of approaches. We
can learn from all of these successes and failures. Where Do We Go
from Here? But the only way to begin is to begin report.. To achieve this
goal, we must all work together.
It‘s kind of fun to do the impossible.
Dr.Subba Rao .p, Personnel and Human Resource Management,
Preface to the second Edition on 21st June, 2002.
1. HR Management: FAQs/Basics
Strategic Human Resource Management
Looking for information specific to the management of human resources,
the human resource profession, the roles of a human resources
professional or the strategic partnership of human resources managers
with leadership teams? You've found it here. Read more to understand
the opportunities for value added from human resources professionals in
The Human Resources Department As a Profitability Factor
What would you do if you had a Human Resurces employee in an HR
department who could improve company profit margins, positively
impact the cost of goods sold, lower the day‘s sales outstanding, and
increase the price/earning ratio while liquidating overhead costs - and
still deliver flawless transactional and traditional Human Resources
services? You'd ask: Why is this employee wasting time in an HR
department? Or, why didn‘t I demand this level of HR department
performance years ago?
How to Do Human Resources Strategic Planning
Need basic information about Human Resources' strategic planning and
management as a function or department within an organization? What
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Develop a Human Resources Department Business Plan
If you‘re a department leader, your boss will likely one day ask: ―What is
your plan for your department?‖ Your Human Resources‘ department...
How HR Thinks
The employee question seems simple, straight-forward, and easy to
answer. Right? Not if your job is in Human Resources. Even a simple
employee question raises countless red flags for an employer‘s HR
team. HR walks that five-pronged path. How does HR satisfy all five
stakeholders while treating the current employee fairly? Use the quest
A New Role for HR: Support Your Company's Brand
"I once read an article in which Mickey Mantle tells about a recurring
dream. He's racing to get to Yankee Stadium in a panic, because he's
late for the game. To his horror the gates to the field are locked. He finds
a hole in the centerfield fence and sticks his head through. As he tries to
wiggle through the small hole he wakes up drenched in sweat!‖ Like
Mickey Mantle, one HR challenge …
How to Get a Seat at the Executive Table: Ten Tips
Do you influence your company's direction? Contribute to the corporate
discussion about customers, products and strategy? Are you a
participant in senior level meetings? Do managers seek your opinion? If
you can answer "yes" to these questions and you also initiate people
programs and processes, welcome to the executive board room. You've
Create Your Personal Vision Statement
Your personal vision statement guides your life. Your personal vision
statement provides the direction necessary to guide the course of your
days and the choices you make about your career. Your personal vision
statement is the light shining in the darkness toward which you turn to
find your way. Your personal vision statement illuminates your way. Find
out how to develop your personal vision statement.
How to Implement Strategic Planning: Vision Statement, Mission
Statement, Values, More
In an earlier article, I gave you a strategic planning framework, samples,
and examples for creating your organization‘s mission statement, vision
statement, and more. As a result of the strategic planning article, people
ask: now that I know what all of this strategic planning should look like,
how do I actually make strategic planning happen in my organization?
This strategic planning question strikes at the heart of how to make
change of any kind happen in your organization. Find out how.
Identify and Live Your Personal Values
Values are traits or qualities that are considered worthwhile; they
represent your highest priorities and deeply held driving forces. When
you are part of any organization, you bring your deeply held values and
beliefs to the organization. There they co-mingle with those of the other
members to create an organization or family culture.
Thinking Strategically First Makes Strategic Planning Work
Strategic planning for organizations is not fun. Strategic planning is often
done under duress because it is required. Strategic planning is important
yet many plans are found on bookcases, not on the desktops being
used. Done well, strategic plans provide a useful focus that energizes
and moves the organization toward its mission, plus it provides a
document to recruit others to the mission.
Strategic Planning Pitfalls - to Avoid
I have mixed feelings about what many companies call strategic
planning but creating an overall direction for your company, office, or
work group is necessary for success. People need to feel as if they are
part of something bigger than themselves. At the same time, they need
clear direction to know what "bigger thing" they are part of. Learn
strategic planning pitfalls to avoid.
HR as Product: Be the Brand of Choice
It is time for Human Resources practitioners to rethink their role and that
of the HR department, not only for the purposes of contributing to the
organization's bottom line, but also for their own survival.
How Real Women Get Ahead: The Woman’s Advantage at Work
Forget what you‘ve heard about ―being one of the boys,‖ ―having it all,‖
and ―going for the jugular.‖ Here is how real working women get ahead.
Working women favor smarts and skills over sexy, communicate
superbly, and earn and learn from line management positions. Learn
more about how real working women get ahead: the woman‘s advantage
HR’s Role in Promoting Corporate Social Responsibility
When companies are global, an important challenge in garnering
success is to respect other cultures and workforce environments and
start forming a global profile or social consciousness. Recognize these
differences with a sound Corporate Social Responsibility (CSR) plan that
can simultaneously increase shareholder value, boost employee
engagement and increase employer brand recognition
Outsourcing is paying a second party to perform one or more of your
internal processes or functions. Business process outsourcing of certain
functions is an increasingly popular way to improve basic services while
allowing HR professionals time to play a more strategic role in their
organizations. Frequently outsourced: payroll, 401(k)...
Recession Planning for Employees
Given the downward spiral of CEOs' confidence and with the talk about
a potential recession, what have you done to plan for the possibility that
the downturn becomes severe and impacts employees? These are
some of the actions to take in recession planning for employees, for your
HR department and other departments within your business, perhaps for
your whole company, if recession looms.
Reinventing HR from the Classroom to the Boardroom
We need to reinvent the field of HR in our HR educational programs and
in our businesses. HR needs to be more strategic to gain a seat at the
―proverbial‖ table, and we need to be more business-oriented. However,
the whole HR community must invest to educate, certify, and mentor HR
professionals, or we will never see the industry gain the respect it
deserves. We can reinvent the field of HR.
Strategic Human Resources: Avoiding Circular Conversations
We've been talking about making Human Resources strategic for
decades, but organizational readiness, resistance to change, and
complicated and expensive technology issues continue to get in the way.
So strategic human resources remains a challenge. But, if you do the
right math and talk about the bottom line, strategic human resources
thinking will occur.
The Strategic HR Coach
A new definition of the coaching role for the HR professional is
recommended. Look at how coaching differs from some of the other
human resources roles.
Why HR Should Never Report to Finance
These leadership and management tips will help you create a profitable
business and develop the talented workforce you need for progress,
resiliency and agility. Every organization needs checks and balances.
HR reporting to finance ties the hands of the people most likely to
advocate for effective people policies and organization development,
your HR staff.
Why HR Should Report to the CEO
People are the most important resource of your business. Often stated,
but seldom totally believed, organizations will learn this important fact.
Your biggest challenge will be attracting and retaining a superior
workforce. Your HR staff members are key players in recruiting and
retaining staff. They are the heart of helping you form a positive,
employee and customer-oriented culture.
Why Human Resources Leaders Need Degrees
Human Resources leaders need degrees. If you are considering a
career in HR, or trying to advance your current HR career, a Bachelors
degree, and even a Masters degree, will assist you. As organizational
expectations of the potential contributions of an HR pro have increased,
the need for the HR leader to possess both experience and a degree
has increased, too. Find out why a degree is essential.
Poll: Why Is Creating a Personal Vision Statement Important?
Do you have a personal vision statement? If so, why? If not, why not?
How do we give our customers what they want while still giving them
what they need? This article makes an interesting observation on the
changes needed in HR departments today.
Strategic human resource management or SHRM is a branch of HRM. It
emerged from the discipline of human resource management and is a
fairly new field. Strategic HRM is 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 and competitive advantage.‖ SHRM in an organization means
―to accept and involve the functions of HR as a strategic partner in
formulating and implementing the company‘s strategies through human
resource activities which may involve recruiting, selecting, rewarding and
training company personnel. In spite of the similarity in names, HRM and
SHRM are two different practices; SHRM is basically a part of the
complete HRM process. Besides that SHRM focuses more on long-term
objectives rather than the in-house objectives with employees dealt by
HRM. In the late 1980‘s writers started stating strong opinions for a
much more strategic approach to managing people than was the
standard practice of that time. They clamored for the change of
traditional management practices of industrial relations and people to the
modern more improved ones.
The center point of SHRM is to address and solve problems that effect
management programs centering on people in the long run and more
than often globally. We can say that the main goal or objective of SHRM
is to increase productivity not only in the employees but in the business
overall, it achieves this by focusing on business problems and obstacles
outside of the human resources range. SHRM identifies important
human resource areas where strategies can be implied for the
improvement of productivity and employee motivation. To achieve good
results communication between human resource and top management
of the organization is of utmost importance as cooperation is not
possible without active participation.
Key features of SHRM
The key features of strategic human resource management are given
• Some organizing strategies or schemes link individual human resource
interventions so that they are ‗mutually supportive‘
• A great amount of responsibility is transferred down the line for the
management of HR
• There is a precise link between overall organization strategy,
organization environment, HR policies and practices.
Development in SHRM
In recent times HRM professionals have been facing challenges with
employee participation, performance management, employee reward
systems, high commitment work systems and human resource flow
because of globalization. Traditional models and techniques have no
place in today‘s business world; also local companies which go global
cannot use the same tactics in the global business world. Top
managements and HR professionals that are involved in strategic
human resource management face a wide range of issues which include
some of the following:
• Rapid change in technology
• Introduction of new concepts of general management
• Globalization of market integration
• Increased competition, which may not necessarily be local
• Resultant corporate climates
• Constantly changing ownership
• Cross-cultural issues
• Economic gravity- shifting from developed to developing countries.
Strategic human resource management is crucial large as well as small
companies. In small companies this process may be as simple as the
manager or the owner himself taking time to observe employees, along
with assisting, assessing and giving regular reviews. However larger
companies will require a whole department to be in charge of such
activities for the development of employees. The quality of staff
members can be improved by meting their needs in such a way that it
may benefit the company. Investing in employees and providing them
with tools they need to thrive and prosper in the company proves to be a
good investment in the long run for the company.
Purcell and Boxall argue that, ―Strategic HRM is concerned with
explaining how human resource management influences the
performance of an organization.‖ They also point out that, ―Strategy is
not the same as strategic plans.‖ Strategic planning defines how things
need to be done and it usually takes place in larger organizations in the
form of a formal process. However, it is also true that strategy exists in
all organizations regardless of their size; though it may not necessarily
be written down or expressed. SHRM defines how the organization
behaves and tries to cope with its business environment. Because
strategic human resource management is based on human resource
management principles it always incorporates the concepts of strategy;
which proves that human resource management is actually a coherent
approach to the management of workforce [people].
Business strategy and SHRM
All good business strategies, at least the ones which have a chance of
succession are formed by ―the people factor‖. One of the main factors
behind reporting human capital data and evaluation is the need for
proper information; to be fed into the business strategy formation
procedure. People have become the biggest asset in the majority of
organizations. This requires for the skills, abilities and knowledge to be
organized and implemented for maximum effect so that the organization
may create value. The intangible value of organizations lies in the
people that it employs. This value is being recognized by investors and
accountants and in now generally accepted that it has signs of sustained
performance in the long run. In this case it would be too simplistic to
suggest that strategic human resource management is part of business
strategy. In this case, the two must be mutually informative in the way
people are motivated, managed, deployed and the availability of
knowledge and skill should shape business strategy. It has now a
regular occurrence to find strategic human resource management
inextricably linked with and also incorporated into business strategies.
Strategic human resource management and human capital
Many writers have argued that HCM and SHRM is the same thing, and
though the concept of the two strategies is quite similar, there are still
some points that set the two apart. The following SHRM definition by
Dyer and Holder shows three main features: ―Organizational level –
because strategies involve decisions about key goals, major policies and
the allocation of resources they tend to be formulated at the top.‖ ―Focus
– strategies are business-driven and focus on organizational
effectiveness; thus in this perspective people are viewed primarily as
resources to be managed toward the achievement of strategic business
goals.‖ ―Framework – strategies by their very nature provide unifying
frameworks which are at once broad, contingency-based and integrative.
They incorporate a full complement of HR goals and activities designed
specifically to fit extant environments and to be mutually reinforcing or
synergistic.‖ This argument is based on the fact that both strategic
human resource management and human capital management in their
proper sense rest on the assumption that people are treated as assets
rather than costs. It also assumes that both processes focus on the
importance of taking on a mixed and strategic approach to the
management of people, which is one of the main concerns of
stakeholders in any organization.
The concept of human capital management strengthens and
complements the concept of SHRM this concept is explained in the
following definition by Dyer and Holder: ―It draws attention to the
significance of ‗management through measurement‘, the aim being to
establish a clear line of sight between HR interventions and
organizational success providing guidance on what to measure, how to
measure and how to report on the outcomes of measurement. It
underlies the importance of using the measurements to prove that
superior people management delivers superior results and to indicate
the direction in which HR strategies need to go reinforcing attention on
the need to base HRM strategies and processes on the requirement to
create value through people and thus further the achievement of
organizational goals defining the link between HRM and business
strategy strengthening the HRM belief that people are assets rather than
costs Emphasizing role of HR specialists as business partners.‖ For this
reason it can be said that both SHRM and HCM can be regarded as
important mechanisms in the process of managing people and also form
the basis for the achievement of HCM advantage through a resourceful
Strategic human resource management takes on the main modern
challenges which are faced by human resource management. This may
include the following:
• Knowledge management
• Aligning human resource with core business strategies
• Demographic trends on employment as well as the labor market
• Integrating soft skills in human resource departments
So, strategic human resource management is designed to assist
organizations to meet the needs of their employees in the best way they
can so that company goals can be promoted. We can also say that
SHRM is actually managing people proactively because it requires
planning ways for an organization to meet the needs of its employees,
thinking ahead, and also helping the employees to meet the needs of the
organization. This process changes the outlook and affects the way
things are done at a business site, in other words it helps to integrate
modern ideas and models into the traditional human resource practices
to come up with better solutions which not only benefit the employees
but the organization. This is mainly a process where everything is
improved, from the hiring of employees, to the training, assessment and
discipline techniques used by the HRM department.