Strategic human resource management

From CEOpedia | Management online
Strategic human resource management
See also

Strategic Human Resources Management is an attitude to managing people which is based on the concept concerning how the organisation's goals will be achieved through its human resources by means of integrated HR strategies, policies, and practices. It is built upon the fundamental assumption that the human resources of an organization play a strategic role in its success (Armstrong M., 2011, p. 63).

According to the definition presented in Dictionary of Human Resources and Personnel Management the human resources (also called personnel) is the employees which organisation has available and human resources management is the responsibility for an organisation's productive use and constructing dealings with its employees (Ivanovic A., Colin P., 2015).

The concept of Strategic Human Resource Management comes from the 1990s. Business organisations exist in an extremely competitive environment with limited resources. At that time occurs the strategic importance of human resources - the way they are managed, developed, integrated, engaged, retained and utilized to gain corporate competitive advantage. Managing those resources effectively gives the organisation an explicit competitive advantage (Deb T., 2006, p. 46).

Aims of Strategic HRM

The fundamental objective of strategic HRM pictured by Michael Armstrong is to make organizational abilities by ensuring that the organization has the skilled, engaged, committed and well-motivated employees it needs to achieve maintained competitive advantage. SHRM has three main objectives (Armstrong M., 2014, p. 18):

  • first to achieve integration - the vertical alignment of HR strategies with business strategies and the horizontal integration of HR strategies.
  • The second objective is to contribute to the formulation of business strategy by highlighting the attention to ways in which the business can capitalize on the advantages provided by the strengths of its human resources.
  • The third aim is to supply a sense of direction so that the business needs of the organization and the individual and the aggregate needs of its employees can be met by the development and implementation of cohesive and practical HR policies and programs.

Differences between traditional HRM and strategic HRM

Tapomoy Deb distinguish a few issues concerning differences between these two concepts (Deb T., 2006, p. 46):

  • The traditional way focuses on instruments and procedures and also internal requirements, neglect of external trends, while strategic way focuses on business goals and strategies as well as considerate of the internal and external environment.
  • Approach to work in a traditional way is piecemeal: insufficient coordination of Human Resources Management areas and centers on short-term, contrarily is in strategic mode. The attitude is holistic: conceptual integration of HRM areas and for the most part, it centers on long-term.
  • In the first conception, personnel is considered as a cost, in contrast to the second conception where Human Resource is considered as a potential.
  • In the first conception, personnel is recognised as a cost, in contrast to the second conception where Human Resource is considered as a potential.
  • The Human Resource department in the traditional way has low status and has fixed planning derived from production or sales plans, and in the strategic Human Resources department is recognised as a strategic partner and participation in strategic planning is proactive.


Author: Natalia Supernak