Strategic human resource

From CEOpedia | Management online

Strategic human resource management is a comprehensive process of managing an organization's human capital to achieve key business objectives. It focuses on the development of effective policies and practices that align with the mission and values of the organization and support its long-term goals. Strategic HRM includes the development of recruitment, selection, and training programs that maximize employee performance, as well as the development of incentive and reward systems that motivate and engage employees in achieving desired results. It also involves the development of policies and practices that ensure legal compliance, as well as the monitoring of employee performance and providing feedback to ensure that employees are working toward the desired goals.

Example of strategic human resource management

  • Recruitment and Selection: Strategic HRM includes the development of effective recruitment and selection policies and practices that target the best candidates for each position. This process includes creating job descriptions and qualifications, designing selection criteria, designing recruiting and selection tools such as interviews and assessments, and developing a system for evaluating candidates.
  • Performance Management: Performance management is an essential part of strategic HRM. Performance management systems are designed to monitor and measure employee performance, identify areas of improvement, and provide feedback on performance. These systems also provide a way to set goals, track progress, and reward employees for meeting or exceeding expectations.
  • Training and Development: Strategic HRM includes the development of policies and practices that help develop and retain employees. This includes designing and implementing training and development programs that give employees the skills and knowledge they need to succeed in their roles. It also includes providing career development opportunities and incentives to help employees reach their potential.
  • Compensation and Benefits: Strategic HRM includes the development of compensation and benefits policies and practices that reward employee performance and motivate employees to achieve desired results. This includes setting pay scales and creating incentive and bonus programs. It also includes providing benefits that meet the needs of employees and their families.
  • Employee Relations: Strategic HRM also includes the development of policies and practices that foster positive employee relations. This includes creating an open and collaborative work environment, providing opportunities for employee feedback and input, and developing strategies to resolve conflicts. It also includes providing support for employee wellness and work-life balance.

Steps of strategic human resource management

A successful strategy for human resource management begins with understanding the organization’s mission, vision, and values. Here are the steps for developing a successful strategic HRM plan:

  • Assessing the current human resource situation: This includes evaluating the organization’s existing policies, procedures, systems, and processes. It also includes identifying any gaps or areas of improvement.
  • Establishing a strategic plan: This includes creating a mission statement and setting goals, objectives, and metrics that will guide the organization’s HRM efforts.
  • Developing a recruitment and selection strategy: This includes determining the qualifications and skills needed for a successful hire, as well as creating a plan to attract, identify, and select the ideal candidate.
  • Designing a training and development program: This includes creating a plan to ensure that employees have the necessary knowledge and skills to do their jobs. It should also include a plan for continuing education and professional development.
  • Creating an employee compensation and reward program: This involves designing a comprehensive program that rewards employees for their performance, including bonuses and incentives.
  • Establishing an employee engagement program: This includes creating a plan to foster a culture of collaboration, communication, and engagement among employees.
  • Implementing a performance management system: This includes creating a system for measuring, evaluating, and rewarding employee performance.
  • Monitoring and evaluating the effectiveness of the HRM plan: This includes regularly assessing the success of the plan and making adjustments as needed.

Advantages of strategic human resource

The advantages of strategic human resource management include:

  • Increased organizational effectiveness, as strategic HRM helps to ensure that the right people are hired and trained to meet the organization’s goals and objectives.
  • Improved employee engagement and motivation, as strategic HRM helps to create an environment that is supportive of employees and encourages them to perform to the highest standards.
  • Enhanced organizational performance, as strategic HRM helps to ensure that employees are working towards the desired goals and that performance is being monitored and improved.
  • Reduced legal risk, as strategic HRM helps to ensure that the organization is compliant with labor laws and regulations.
  • Improved cost savings, as strategic HRM helps to ensure that the organization is using its resources effectively and efficiently.

Limitations of strategic human resource

Strategic human resource management (SHRM) is an important organizational process that enables organizations to maximize their human capital in order to achieve their key business objectives. However, like any other organizational process, SHRM has certain limitations that must be taken into consideration. These limitations include:

  • Imbalance between short-term and long-term goals: SHRM should focus on both short-term and long-term goals, but oftentimes the focus is on short-term goals, leading to an imbalance in achieving desired results.
  • Limited resources: SHRM often requires substantial financial and human resources, which can be difficult for organizations to allocate.
  • High turnover: SHRM can be costly and time-consuming, leading to a high turnover rate within the organization.
  • Difficulty in measuring effectiveness: It can be difficult to measure the effectiveness of SHRM due to the complexity of the process.
  • Cultural differences: Cultural differences between employees can make it difficult to implement SHRM practices in an equitable manner.
  • Lack of expertise: Organizations may lack the necessary expertise to implement SHRM effectively.

Other approaches related to strategic human resource

Examples of such approaches include:

  • Talent Management - This involves the identification, development, and retention of the best employees to ensure that the organization has the best possible talent to achieve organizational objectives. It includes activities such as hiring, training, performance management, and succession planning.
  • Change Management - This involves the development of strategies to manage changes in the organization, such as restructuring, mergers and acquisitions, and technological changes. It includes activities such as leadership development, communication, and change initiatives.
  • Employee Relations - This involves the development of policies, procedures, and programs to ensure that employees have positive relationships with their employer, including activities such as dispute resolution, grievance procedures, and employee engagement.
  • Workforce Planning - This involves the development of strategies to ensure that the organization has the right number of employees with the right skills and experience to meet organizational objectives. It includes activities such as job analysis, forecasting, and job design.

In summary, strategic human resource management involves the development of policies and practices that align with the organization's mission and values and support the organization's long-term goals. Other approaches related to strategic human resource management include talent management, change management, employee relations, and workforce planning, each of which serve different purposes in achieving the organization's HR objectives.


Strategic human resource — recommended articles
Strategic human resource management — Talent management framework — Organizational change management — Monitoring of performance — Management by objectives steps — Performance appraisal process — Strategy of the organization — Human capital investments — Organizational development

References

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