Strategic Human Resources Management
Schuler and Jackson (2007),
stated that strategic human resources management (SHRM) is fundamentally about
‘systematically linking people with the firm’ (Schuler and Jackson, 2007). The
key strategic management activity identified by Thompson and Strickland (1996),
is ‘deciding what business the company will be in and forming a strategic
vision of where the organization needs to be headed – in effect, infusing the
organization with a sense of purpose, providing long-term direction, and
establishing a clear mission to be accomplished’ (Thompson and Strickland,
1996). Therefore, the HR strategies are integrated with business strategy and
work together to maximize the utilization of the ‘human capital’ and through
that, achieve the long-term corporate goal of the organization. Wright and McMahan
(1992), explained that the field of HRM has sought to become integrated with
the strategic management process through the development of a new discipline
referred to as strategic human resource management strategic HRM (Wright and McMahan,
1992).
Aims of SHRM
‘The fundamental aim of
strategic HRM is to generate organizational capability by ensuring that the organization
has the skilled, engaged, committed and well-motivated employees it needs to
achieve sustained competitive advantage’ (Armstrong, 2014). The objective of
the SHRM is to ensure that it has effective HR practices developed and
implemented to have productive employees at the workplace. And this is geared
towards aligning with the business strategy of the organization. Alvesson (2009), state that strategic HRM is about how the employment relationships for all
employees can be managed in such a way as to contribute optimally to the
organization’s goal achievement (Alvesson, 2009). Therefore, establishing the employment
relationship for all employees is a fundamental and vital practice of SHRM. CIPD
(2021), asserts that strategic HRM should take account of the need to foster
employee engagement and related states, such as motivation and commitment, all
of which support organizational performance (CIPD, 2021). However, the development
and implementation of strategic human resources practices alone are
insufficient in bringing in the desired result and that needs to be assessed
for their effectiveness. For example, in the organization, I worked for
previously, HR sent selected employees overseas for training and when the
employees returned back and continued to work, HR simply did not make an effort
to analyze the effect of the training offered to those employees. Therefore, HR
needs to ensure that it adheres to complete and effective HRM practices. The
quality of strategic HRM is best shown by collecting key performance indicators
of people analytics that show the impact of strategic practices on both the HR
functions and the wider organization (CIPD, 2021). Thus, the outcome of KPI
needs to be analyzed and necessary follow-up actions are to be taken.
According to Delery and Doty
(1996), SHRM literature draws
on three dominant modes of theorizing: namely the universalistic, contingency
and configurational perspective (Delery and Doty, 1996). Thus,
emphasize
the importance of the relationship between strategic human resources management
and organizational performance.
Universalistic theory (Best practice)
According to Luthans and
Summer (2005), adopting best practices will inevitably lead to superior
organizational performance. HRM best practices become
effective only when identified practices gain commitment to implementation.
Thus, the universalistic perspective maintains that organizations will see
performance gains by identifying and implementing best practices irrespective
of the product market situation, industry or location of the firm (Pfeffer,
2001). However, Becker et al (2001), contradict the notion of universalistic
practice stating organizational high-performance work systems are highly
idiosyncratic and must be tailored carefully to each firm’s individual
situation and the specific context in order to provide maximum performance (Becker
et al., 2001). Thus, universalistic practice tends to overlook the details which
could make the difference between organizations, sectors, and countries.
Contingency theory (Best fit)
‘Best fit emphasizes that HR
strategies should be congruent with the context and circumstances of the
organization. Best fit can be perceived in terms of vertical integration or
alignment between the organization’s business and HR strategies’ (Armstrong,
2014). According to the contingency theory effectiveness of HR practices is
revolved around contextual factors. As stated by Schuler and Jackson (1987), to
achieve the maximum effect of best fit it is necessary to match the role
characteristics of people in an organization with the preferred strategy.
Boxall and Purcell (2008), have proposed a model that combines both best practice and best fit (Boxall and Purcell, 2008). The opinion is shared by other researchers too as Stavrou et al. (2010), found that there may be merit in both approaches where the debate is between general principles/bundles (training and development, staffing, compensation and benefits, communication and participation, and planning) and the manner in which they are carried out... It seems that the ‘best fit’ and ‘best practice’ approaches of the HR-performance relationship are not necessarily mutually exclusive. On the contrary, they may be combined to provide a more holistic picture (Stavrou et al., 2010). Therefore, the motive of HRM is to ensure that an effective model is practiced. For example, recruitment and selection, training and development, performance appraisal, and rewards and recognition are effectively implemented. Thereby, achieving the ultimate objective of strategic HRM practices that is aligned and integrated with the corporate strategy of the organization.
References
Alvesson, M. (2009). Critical perspectives on strategic HRM,
in (eds) Storey, J., Wright, P.M., and Ulrich, D., The Routledge Companion to
Strategic Human Resource Management, Abingdon, Routledge, pp 52–67
Armstrong, M., (2014, 2014a).
Armstrong’s handbook of Human Resource Management Practice, 13th
edition, Ashford Colour Press Ltd., UK
Becker, B.E., Huselid, M.A., and
Urich, D. (2001). The Human Resource Scorecard: linking People, Strategy and
Performance. Boston: Harvard Business School Press.
Boxall, P., and Purcell, J.
(2008). Strategic human resources management: where have we come from and where
should we be going? International Journal of Human Resources Management,
2(2), pp. 183-203.
Chartered Institute of
Personnel and Development. (2021, 2021a). Strategic Human Resources Management:
Understand how strategic HRM works, and its relationship with business
strategy, human capital management and performance CIPD: London. [Online]
Available at: https://www.cipd.co.uk/knowledge/strategy/hr/strategic-hrm-factsheet#gref [Accessed
on November 29, 2022]
Delery, J.E., and Doty D. H. (1996). Modes of theorizing in strategic human resources management: Tests of universalistic, contingency, and configurational performance predictions, Academy of Management Journal, Vol. 39, No. 4
Luthans, J. D., and Summer, K. E. (2005). Loosely coupled systems: A reconceptualization. Academy of Management Review, 15: 203-223.
Pfeffer, J. (2001). Fighting the war for Talent is Hazardous for your Organization. Stanford: Pearson Education.
Schuler, R S and Jackson, S E (1987) Linking competitive strategies with human resource management practices, Academy of Management Executive, 9 (3), pp 207–19
Schuler, R. S., and Jackson, S. E. (2007). Strategic Human
Resource Management, 2nd edition, Oxford, Blackwell
Stavrou, E. T., Brewster, C. and Charalambousa, C. (2010).
Human resource management and firm performance in Europe through the lens of business
systems: best fit, best practice or both?, The International Journal of
Human Resource Management, 21 (7), pp 933–62
Thompson, A. A., and Strickland, A. J. (1996). Strategic Management,
Concepts and Cases, 9th edition, Chicago, IL, Irwin
Wright, P.M., McMahan, G. C. (1992).
Theoretical perspectives for strategic human resource management. Journal
of Management, 18(2), 295–320. https://doi.org/10.1177/014920639201800205
Hi Afzal, good introduction on SHRM and it's Theories. According to Snell et al. (1996), strategic human resource management is described as "systems established by organizations to generate a competitive advantage via people." Employees are recognized by SHRM as an essential resource and a potential source of competitive advantage.
ReplyDeleteFurther SHRM, or strategic human resource management, is described as "the process of increasing an organization's capacity to implement innovative business strategies" in Mabey et al. (1998)'s research. Strategic human resource management is the process of designing and implementing HR strategies and processes that inspire and direct people to develop the skills and attitudes essential for an organization to achieve its long-term goals. This process is referred to as the design and implementation of HR strategies and processes (Dessler, 2017).
Thank you for your comment Vidura. According to Rees and Smith (2017), SHRM can be viewed as being about attempts to link HR practice to an explicit HR strategy, which is in turn linked to the strategy of the organization. Thus, SHRM ensures its practices are integrated with that of the corporate strategy to achieve the long-term objectives of the organization.
DeleteGood Introduction Afzal, Strategic HRM outlines an organization's goals and strategies for achieving them through its workforce. It is founded on three tenets: first, that human capital is a significant source of competitive advantage; second, that people implement the strategic plan; and third, that the organization should adopt a methodical approach to defining its goals and the path to achieving them (Armstrong, 2006).
ReplyDeleteThank you for your comment Zacky. According to Azmi (2019), SHRM can be seen as an organizational system designed to achieve sustainable competitive advantages through people. Thus, the HRM function has evolved into SHRM to facilitate corporate objectives.
DeleteGreat content on SHRM, now more and more organizations are more towards rapid growth phase and globalization pushes organizations towards SHRM as it allows talent sourcing and management in a highly effective manner.
ReplyDeleteThank you for your comment Rahman. According to Storey (2009), SHRM is concerned with the constellation of policies and practices relating to the interaction between people and organizations designed to enable an organization to achieve its purposes. Therefore, the purpose of SHRM is to achieve a competitive advantage by creating value for the customers, employees, and the organisation through the effective implementation of HR practices.
DeleteGreat content on SHRM, now more and more organizations are more towards rapid growth phase and globalization pushes organizations towards SHRM as it allows talent sourcing and management in a highly effective manner. (Chadwick, C, et al., 2015)
DeleteGood content, in addition (Scott et al, 2005) The HR function remains among the least influential in most organizations, and competitive strategies have not typically been based on the skills, capabilities, and behaviors of employees.
ReplyDeleteThank you for your comment Kandeepan. Armstrong (2006), stated that strategic human resources management (SHRM) is an approach to the development and implementation of HR strategies that are integrated with business strategies and support their achievement. Thereby, HRM adopts universalistic, contingency, or configurational concepts based on organizational policy.
DeleteAn interesting viewpoint regarding the issue has been proposed by Wylie (2004), according to which members of management primarily should be able to maintain the level of their own motivation at high levels in order to engage in effective motivation of their subordinates. Accordingly, Wylie (2004) recommends managers to adopt a proactive approach in terms of engaging in self-motivation practices
ReplyDeleteThank you for your comment Nimesha. According to Doyle (2005), there is absolutely no doubt that the manager is the largest contributor to employee motivation or lack of motivation. Managers’ relationships with employees are crucial factors. Therefore, managers should ensure justice and fairness when dealing with employees.
DeleteGreat blog Afzal,Llopis (2012) draws attention to the increasing relevance of the work-life balance problem for modern employees and stresses its negative impact on the level of employee motivation. Specifically, Llopis (2012) reasons that unless employees achieve an adequate level of work-life balance in personal level, management investment on the level of employee motivation can be wasted
ReplyDeleteThank you for your comment Isuri. Yes, non-monetary reward like work-life balance is an important factor of motivation as some employees prefer to spend quality time with their family and friends. Greater responsibility and longer hours are no longer automatically linked in the public perspective (Clutterbuck, 2003).
DeleteInteresting blog post. In addition, "Strategic HRM" is a result, according to Snell et al. (1996), defined as "organizational systems designed to produce sustainable competitive advantage through people." However, for some, SHRM is seen as a method, namely as "the method of integrating HR practices to business strategy" (Ulrich, 1997). SHRM is similarly defined by Bamberger and Meshoulam (2000) as "the process through which organizations aim to integrate the human, social, and intellectual resources of their members to the strategic needs of the enterprise." The result is "HR strategy," which, in the words of Ulrich (1997), "the mission, vision, and priorities of the HR department."
ReplyDelete