Strategic Human Resource Management (SHRM) can be defined as approach to the development as well as the implementation of HR strategies that are integrated with the business strategies therefore enabling the organisation to achieve its goals (Armstrong, 2008). An increased incorporation between Human Resource Management (HRM) and the business strategy is one of the most important things in any organisation.
It has been highlighted not only in academic literature over the years, but also by top management professionals that strategic planning as well as personnel planning plays a key role in the success and continuity of any given organisation (Gollan, 2005). In addition to the importance of HR it has also been stated that the management of HR should be directly linked to the management of the organisation along with their strategic plans. In order for the organisation to maintain its integrity and success over the years, four key areas need to be addressed by HR:• Being involved in setting corporate strategy• Understanding HR’s wider role in the business• Developing an HR strategy that complements corporate planning• Turning strategy into actionBeing involved in setting corporate strategyMany organisations usually look at the HR department mainly as an administrative function within the company and therefore tend to ignore aligning it to the overall business strategic plans. One of the main reasons why it is found that HR is not aligned with the strategy if the organisation is because it does not hold a seat at the strategic planning table. The organisation mainly views HR as one who looks at weather the hiring/firing and compensation and benefits are all administered according to legislation. However, the role of HR is quite contrary to the organisations beliefs and it is mainly because of these false understandings that organisation have of HR, that organisations feel that their contribution does not have an impact on the overall strategic business plan (Huselid, Jackson, ; Schuler, 1997).
Nevertheless, the reputation that HR has gathered over the years does seem well deserved. In order for HR to be taken seriously now, senior HR management must highlight their importance when it comes to strategic planning. In order to increase HR’s credibility, they need to show that they can influence the business culture while also making a positive change within the organisation (Ulrich, 1998).
In order to be involved with the overall strategic planning of the organisation, HR needs to be aligned with the organisation and its h=goals and business objectives. Studies have shown that eighty percent of HR department lack any strategic planning that further aids in organisational alignment (Norton, 2001). HR also needs to play a key role when developing the organisations strategy. For this, HR must push forward and show their involvement by presenting senior management with solutions that support the organisation’s needs (Freedman, 2003).Understanding HR’s wider role in the businessHR practitioners play a key role when it comes to contributing to the overall corporate strategy, they are further directly involved with line managers to not only to deliver performance targets but also with situations related to people issues (Armstrong, 2010). In order to carry out these roles these HR practitioners need to understand the strategic goals of the organisation and performance driver related to these goals. They need to have a set of integrated values and an unclouded vision and further make sure that senior management understands the HR implications of its business strategy.
They also need to know the kind of employee behaviour that is required for executing these strategies while also acting as a change agent when developing the organisation and its culture. A model formulated by Ulrich (1998) suggested that HR practitioners not only carry out the role of strategic partners, but also of administrative experts, employee champions and lastly change agents. They need to focus on the needs of employees (Employee advocate), preparing employees to be successful in the future by managing and developing them (Human capital developer), combining multiple dimensions such as business expert, change agent, strategic HR planner, knowledge manager and consultant and using that to align HR to the organisations vision and mission (Strategic partner), using the body of knowledge that they possess to formulate HR strategies that are in line with the organisations core values either through administrative efficiency, policies or interventions (Functional expert), and lastly leading through the collaboration with other functions while setting and enhancing the standards for strategic thinking (leader) (Ulrich & Brockbank, 2005).Developing an HR strategy that complements corporate planningThe development of HR strategies has significantly increased in numerous companies over the years. However what needs to be taken into consideration when developing these HR strategies is that it is in line with that the organisation intends to do and further integrate it with the overall business strategy (Armstrong, 2010). It should meet both the business as well as the human needs within the organisation. According to Richardson and Thompson (1999), any kind of organisational strategy must have elements that the strategy must achieve should have an action plan to see to it that all objectives are then met.
Researches conducted by Armstrong & Long (1994) found there to be several variations in the types of strategies that organisations can have. These strategies are basically a set of HR practices that the organisation intends to implement to increase organisational performance and further hold a competitive edge. Their approach could be in form of high-performance management, wherein strategies aim to impact the performance of the organisation through productivity, growth or profit; high-commitment management, looks at strategies that help enhance mutual commitment within the organisation; and lastly high-involvement management, where strategies are aimed at providing employees with opportunity, skills and motivation to the organisation in situation that demand high levels of commitment and involvement (Camps and Luna-Arocas, 2009). The basic criterion for formulating the HR strategy is that it should satisfy the business needs, it should be based off research and analysis conducted, they should be able to turn those strategies in to plans that can in fact be implemented, they should be relevant to the core business objectives and finally, it needs to consider the needs of internal as well as external stakeholders of the organisation (Boxall and Purcell, 2003).Turning strategy into actionThere is no single method when it comes to developing any given strategy for an organisation. In fact, it is seen that the diverse types of approaches give opportunity to find numerous ways in which change can be managed as well align the people in the organisation to the overall business goals and objectives (Tyson & Witcher, 1994). The process of formulating a new strategy is as important as the final strategy that is being finalized as it helped formulate innovative ideas during the development process.
Dyer & Holder (1988) developed a four-point methodology when it came to formulating HR strategies. Firstly, it needed to be feasible in terms of cost, man power, timeliness and if it were realistic. Second action point would look at the actual desirability of the strategy being planned; weather it was really required. The third point was to determine the main goals of the strategy. This would mean highlighting the main reason for the need of this strategy.
This would mainly be derived from the business goal. And lastly, determining the means of achieving these goals. Once the development process is completed, the last step is to turn the strategy into an action. Due to the nature of strategies, they must always have clearly stated objectives placed beforehand to stay in effect (Dickens, 1843). To overcome any sort of barriers that might hinder the overall business objective, a huge amount of research need to be done to find out the clear needs and objectives.
Along with the strategies and action plans, project management should be conducted to maintain a clear flow of the entire process and finally follow-ups and evaluations need to be taken on a regular basis so that any amendments or implementations can be administered at the earliest to save time and costs