A successful human resources strategy complements a company's mission and goals -- so what works for an industry giant won't necessarily be suitable for your small business.
Explore our related content An approach to managing human resources, strategic human resource management supports long-term business goals and outcomes with a strategic framework. This factsheet looks at how the concept of strategic HRM has developed since the early s and makes a distinction between strategy and strategic planning.
It then looks at strategic HRM in relation to business strategy, human capital management and business performance. As a result organisations should manage people within a planned and coherent framework that reflects the business strategy.
This helps ensure that the various aspects of people management work together to develop the performance and behaviours necessary for creating and distributing value. It means understanding the requirements and interests of a range of organisational stakeholders business owners, customers, shareholders, employees and wider society and building an effective framework of sustainable relationships between them.
In such a framework no stakeholder is viewed simply as an input in the organisational value chain, rather they are all contributors to and recipients of the shared-value created by the business activities.
Organisations must define their own unique strategy according to their specific context, culture and objectives. This is where HR professionals are instrumental in applying their expertise to understanding organisational circumstances, and designing human capital value chains that reflect stakeholder demands.
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What is strategic human resource management? Strategic human resource management strategic HRM is an approach to managing human resources that supports long-term business goals and outcomes with a strategic framework.
The approach focuses on longer-term people issues, matching resources to future needs, and macro-concerns about structure, quality, culture, values and commitment.
It states that strategic human resource management is a complex process that is constantly evolving and the subject of ongoing discussion by academics and other commentators.
Its definition and relationships with other aspects of business planning and strategy are not absolute and opinions vary. The issue of strategic HRM initially came to prominence around the early s, at which time academics developed definitions of strategic HRM as: The undertaking of all those activities affecting the behaviour of individuals in their efforts to formulate and implement the strategic needs of business2.
The pattern of planned human resource deployments and activities intended to enable the organisation to achieve its goals3. They also argue that strategy is not the same as strategic planning because: Strategic planning is the formal process that takes place, usually in larger organisations, defining how things will be done.
In themselves these strategies are not strategic HRM. Rather, strategic HRM is the overall framework that determines the shape and delivery of the individual strategies, systematically linking people with organisations by integrating HRM strategies into corporate strategies5 to deliver organisational value.
Strategic HRM and business strategy A good business strategy is informed by people factors. This is driving demand for greater evaluation and reporting of human capital data see below. The intangible value of an organisation relating to the people it employs is gaining recognition among accountants and investors, and its implications for long-term sustained performance is now generally accepted.
The two must inform one another. The way in which people are managed, motivated and deployed, and the availability of skills and knowledge, should all shape the business strategy. It is now increasingly common to find business strategies that are inextricably linked with, and incorporated into, strategic HRM, defining the management of all resources within the organisation.
Individual HR strategies, however, may be shaped by the business strategy.
So if the business strategy is about improving customer service this may be translated into discrete HR strategies involving the use of training plans or performance improvement plans. Links with workforce planning One important area of people strategy is workforce planningwhich helps organisations meet their future skills needs and support their long-term business goals.
There has recently been a renewed interest in this issue, largely driven by the realisation that in a fast-changing economy some degree of planning is vital to ensure the organisation is developing sufficient capacity to adapt to new trends and take advantage of emerging opportunities.Discuss the main factors that have contributed to the growth of the field of strategic HRM.
and the market system is more appropriate for this type of strategy. Specifically. which is characterised by hiring from outside an organisation. Strategic human resource management (strategic HRM) is an approach to managing human resources that supports long-term business goals and outcomes with a strategic framework.
The approach focuses on longer-term people issues, matching resources to future needs, and macro-concerns about structure, quality, culture, values and . Key points from this chapter are: Given the significant developments in the world economy and the field of SHRM it is now timely to analyse SHRM from an international perspective.
SHRM in an international context can be better examined by focusing on three perspectives – MNE, cross-cultural HRM and comparative HRM. Discuss The Main Factors That Have Contributed To The Growth Of The Field Of Strategic Hrm. 1. What are the main factors/HRM procedures that have contributed to the success of Google?2.
Describe some of the negative aspects of Google's culture. Human Resource Management (HRM) is the term used to describe formal systems devised for the management of people within an organization.
Human Resource Management is a strategic and logical approach to the management of an organization most valued assets: the employees who individually and collectively contribute to the achievement of its objective.