The role of human resource management in organisations has been evolving dramatically in recent times. The days of Personnel Department performing clerical duties such as record keeping, paper pushing and file maintenance are over. HR is increasingly receiving attention as a critical strategic partner, assuming stunningly different, far-reaching transformational roles and responsibilities. Taking the strategic approach to human resource management involves making the function of managing human assets the most important priority in the organisations and integrating all human resource policies and programs to the framework of a company’s strategy.
Concept of Strategic Human Resource Management
SHRM is the pattern of planned human resource developments and activities intended to enable an organisation to achieve its goals. This means accepting the HR function as a strategic partner in both the formulation of the company’s strategic, as well as in the implementation of those activities through HR activities. While formulating the strategic plan HR management can play a vital role, especially in identifying and analysing external threats and opportunities. Business strategies cannot be kept isolated from HR policies. In fact, for building organisational competitiveness, streamlining of HR with business and planning strategies is crucial. The business environment is constantly changing that puts forward critical success factors like greater flexibility, dynamic nature of the roles, process based on team efforts or on cross-functional integration etc., coupled with
future business challenges for realising the growth, strategic decisions have to be aligned with HR.
Strategic Human Resource Management offers three critical outcomes: increased performance, enhanced customer and employee satisfaction and increased shareholder value. These outcomes are accomplished through effective management of staffing, retention and turnover processes, selection of employees that fit with both the organisational strategy and culture, cost-effective utilisation of employees through investment in identified human capital with the potential for higher return; integrated HR programmes and policies that clearly follow from corporate strategy; facilitation of change and adaptation through a flexible, more dynamic organisation; and a tighter focus on customer needs, emerging markets and quality.
According to Hendry and Pettigrew (1986), Strategic Human Resource Management include:
1. the use of planning
2. a coherent approach to the design and management of personnel system, based on an employment policy and manpower
strategy, directed by a philosophy
3. Matching HRM policies and strategies to some explicit business strategies
4. considering people as a Strategic Human Resource Management for having a competitive advantage.