Human Resource Management & Strategic Human Resource Management (HRM vs. SHRM)

 

Recruiting and selecting is the most important function in Human Resource Management and hiring the right person is very crucial for an organization to be succeeded as Collins (2001:13) points out that

People are not your most important asset. The right people are.

The dynamic fast paced competitive business environment requires organizations to recruit skilled and knowledgeable people who can help the businesses sustain in the long run. Bratton and Gold (2007) specified HRM as a means of achieving organizational effectiveness through deploying employees’ talent by the use of idiosyncratic HR programs and practices. Human resource management is the process that helps organizations get competitive edge over other competitors by recruiting and retaining the right people for the organization, developing & improving their competencies and knowledge through training and development, managing the performance of employees well through a precise Performance Management System, motivating & empowering employees in the decision making process, encouraging employees’ involvement in the accomplishment of organizational objective, ensuring a stand out compensation and benefit package, setting a proper disciplinary and grievance policy and the like. HRM plays a crucial role for organizations to succeed (Armstrong, 2004 and Bratton and Gold, 2007).

Human Resource Management (HRM)is defined by McCourt and Eldridge (2003:2) as “The way an organization manages its staff and helps them to develop”. Armstrong (1994) mentioned that human resource management (HRM) is all about managing human resources and deploying their skills and knowledge to attain organizational goals. HRM perceives people as prime assets for an organization who are capable of driving an organization towards success if precise HR strategy, policies and practices are prevalent within an organization (Hailey et al., 2005). HRM policies and practices must be aligned with organizational strategy to achieve organizational objectives. When the top management makes new strategic decisions, the HRMP must be changed and designed to meet these new decisions. When a strategic decision is made, HR practices need to be improved and updated, for example, by changing selection criteria, job description, job evaluation, performance management, compensation structure, disciplinary policies and the like to match the new strategic decisions. The role of HRM in an organization is to create a well-managed workforce able to achieve its strategic goals. Therefore HRM policies and practices must be aligned with the strategic intentions. (Thompson and Richardson, 2000). The authors (2000:58) point out that –

Human resources (HR) strategies are everywhere measured by HR policies and practices.

To help achieve organizational efficacy, HR strategy coordinates and applies HR policies and practices, hence influences the behavior of people of the organization (Wang and Shyu, 2008).

An organization can manage the performance of its employees well by ensuring their job satisfaction (Purcell et al., 2004). According to Bower (2003 cited in Avdelidou-Fischer 2007), how employees behave, their performance, motivation, passion for work, and morale are all connected to job satisfaction. If employees have job satisfaction, they feel motivated and show greater commitment to their jobs and their performance will be beyond expectation, which in turn influence their ability to achieve organizational objectives. A highly satisfied workforce means an exceedingly retainable workforce. HRM acts as a key stimulant to ensure the well-being of the employees in the workplace so employees stay satisfied and remain loyal to their organizations.

Strategic HRM, SHRM

The focus of Strategic Human Resource Management (SHRM) is to fulfill organizational strategy by deploying the policies and practices of HRM. SHRM is all about creating a relationship between business strategy and HR strategy and always concerned with long-term people issue and the improved organizational performance (Thompson and Richardson, 2000).

It has been asserted that improved organizational performance is the only way to lead to successful business which necessitates outstanding performance in leadership, productivity, adaptation to change, process improvement, and enhancement of knowledge, skills, abilities and competencies. To improve the organizational performance, it is important to bring efficiencies in the production line, implement the Total Quality Management (TQM), improve the organizational environment, ensure continuous performance measurement, encourage team work, assure and maintain free and flexible work structure and the like (Chien, 2004). The function of SHRM is to ensure the above by aligning HR strategy with business strategy in order to ensure the fulfillment of corporate goals (Chien, 2004).

In accordance with Armstrong (2000, p. 41) –

Strategic HRM is an approach to making decisions on the intentions and plans of the organization concerning the employment relationship and its recruitment, training, development, performance management, reward, and employee relations policies and practices.

SHRM helps build relationship between HRM and the strategic management and supports the organization to achieve its objectives by deploying the best of the people in the organization. SHRM also ensures the skilled, committed and well-motivated employee in the organization to achieve the competitive advantage (Armstrong, 2000).

Strategic human resource management is stated by Green et al. (2006, p.561) “as both horizontal fit of HR practices and vertical fit between HR practices and business strategies”. People within the organization must be communicated well concerning business strategy and HR strategy as they are the one who are responsible for implementing the strategies. So a precise understanding of what are the business and HR strategies, who are responsible for what, how to act and when to act is extremely important to ensure the achievement of corporate goals and SHRM is the means to achieve them by precisely deploying and implementing HR strategies. Strategic fit is sometimes known as ‘matching model’ or integration. Internal fit or horizontal integration is related to coherence that is interconnection and mutual reinforcement of HR policies and practices. Horizontal integration takes place in an organization when line manager and HR specialist manager shared their values for implementing policies (Armstrong, 2000). On the other hand, a firm is likely to gain competitive advantage if they practice external fit because external fit maintains a good link with other departments in the organization and supports all the strategic dimensions exist within organization (Stavrou and Brewster, 2005).

Strategic human resource management is positively correlated with organizational performance (Green et al., 2006). A clear understanding of the work practices is likely to reinforce employees’ contribution, which will lead to the attainment of organizational performance (Cooke, 2000). If the employees are educated with proper knowledge and skills, well communicated with the organizational objectives and supported by the organization, superior performance can be received from the employees needed to achieve organizational objectives (Chien, 2004). Armstrong (1999) specified that higher level of performance can be achieved from the employees by properly communicating business and HR strategies to employees, clearly specifying their roles in the attainment of the strategies, ensuring the training of employees to improve current knowledge and skill base, developing organization climate that will foster motivation, ensuring an environment where the employees feel that they are valued, developing behavioral commitment, having an improved job design, performance management and reward management system and the like.

 

References:

• Armstrong, M. (1994), Human resource management: strategy and action, London: Kogan page limited.
• Armstrong, M. (1999), A handbook of human resource management practice, 7th ed., London: Kogan page limited.
• Armstrong, M. (2000), Strategic human resource management: a guide to action, 2nd ed., London: Kogan page limited.
• Armstrong, M. (2004), Strategic human resource management: a guide to action, 3rd ed., London: Kogan page limited.
• Avdelidou-Fischer, N. (2007), “The Relationship between Organizational Structures and Performance: The Case of the Fortune 500”, International Finance Review, Vol. 7, pp. 169–206.
• Bratton, J. and Gold, J. (2007), Human resource management: theory and practice, 4th ed., New York: Palgrave Macmillan.
• Chien, M. H. (2004), A study to improve organizational performance: a view from SHRM, Journal of American Academy of Business. 4(1/2).
• Collins, J. (2001), Good to Great: Why Some Companies Make the Leap … and Others Don’t, Random House Business, London.
• Cooke, L. F. (2000), The future of work: Human Resource Management Strategy to Improve Organizational performance: a route for British firms?, Economic & Social Research Council, 9.
• Green, K. W., Wu, C., Whitten, D. and Medlin, B. (2006), The impact of strategic human resource management on firm performance and HR professionals’ work attitude and work performance, The International Journal of Human Resource Management, 17(4).
• McCourt, W. and Eldridge, D. (2003), Global Human Resource Management, Edward Elgar, Cheltenham.
• Purcell, J. and Hutchinson, S. (2007), Front-line managers as agents in the HRM performance causal chain: theory, analysis and evidence, Human Resource Management Journal, 17(1).
• Stavrou, E. T. and Brewster, C. (2005), “The configurational approach to linking strategic human resource management bundles with business performance: myth or reality?”, Management Review, 16(2).
• Thompson, M. and Richardson, R. (2000), The impact of human resource practices on business performance, Quality Focus, 4(1).
• Wang, D. S. and Shyu, C. L. (2008), “Will the strategic fit between business and HRM strategy influence HRM effectiveness and organizational performance?”, International Journal of Manpower, 29(2).


Posted by: Farid Ahmed

 

 

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