Strategic Human Resource Management.docx

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1 Strategic Human Resource Management-A Vision For The Future

STRATEGIC HUMAN RESOURCE MANAGEMENT-A VISION FOR THE FUTURE

Author: S.Senthilkumar, Assistant Professor, Dept. of Management Studies,

Tagore Institute of Engineering and Technology

Co-author: V.Madhankumar,

I MBA Dept. of Management Studies,


ABSTRACT

Human Resource Management (HRM) as a function of management has come a long way. The

traditional version of HRM, Personnel management (PM) is a concept that can be appropriately

related to the old model of organization, is bureaucratic in character, with less suppleness, and

higher degree of centralization and formalization, i.e., adherence to rules and regulation. HRM,

on the other hand refers to the overall philosophy about the organization and how people should

be managed and is not merely limited to certain specific functions. HRM focuses on congruence

and commitment instead of compliance and control.

Strategic human resource management (SHRM) is a concept that integrates traditional human

resource management activities within a firm's overall strategic planning and implementation.

SHRM integrates human resource considerations with other physical, financial, and

technological resources in the setting of goals and solving complex organizational problems

SHRM involves three steps:

Forecasting, Strategy formulation, Implementation.

Strategic human resources management practices enhance employee productivity and the ability

of agencies to achieve their mission. Integrating the use of personnel practices into the strategic

planning process enables an organization to better achieve its goals and objectives.


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STRATEGIC HUMAN RESOURCE MANAGEMENT-A VISION FOR THE FUTURE

Author: S.Senthilkumar, Assistant Professor, Dept. of Management Studies,


Co-author: P.Madankumar, P.Vijayakumar,

I MBA Dept. of Management Studies,


Concept of HRM

In the past, when currency and technology was not in existence, an important resource

that worked was Human. Since then, till at present, nothing is able to success or replaces

significance of Human as a resource. It is true that nowadays, we also have other resources

existing like machine, money or land. It is also true that we have developed and are capable of

developing lots of incredible technology and systems, but the power that a human being has, the

power of using the intelligence, none of the above mentioned resources can acquire that. We all

know that no machine is made by itself; it is the human brain that invents it. A machine can only

get a work done; it cannot help in idea generation. A machine can only work on

getting instructions but a human brain also uses logics and brainwave with it.

An organizational workforce also consists of humans which is indeed indispensible.Organizations cannot work without workforces. As we all know, every

Organization performs a diversity of functions and every function requires people to be

dynamically present in it. Pointless to say, all the organizations in the world are running because

there is a resource called Human Resource. These Human Resources in organizations are well

known as Employees. Undeniably, Human Resources or the Employees are the backbone of

any organization. It is obvious that when so many employees are working at one place, there has

to be a managing body which takes care of its day to day functions. It helps in ensuring that the

objectives for which the employees are working is met on time. It also ensures the effective and

optimum utilization of the people to attain those set organizational objectives and goals. This

managing body is the Human Resource Department of any organization and the function


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which it performs is called Human resource Management, which in simple words is

managing a very vital resource called Employees.

In the competitive environment of open economy Human Resource Management with the

increased modern trends becoming significant factor for the efficient running of organization

Human resource management emerged from personnel management and personnel management

emerged from manpower planning. The consideration of changes taking place in managing

human resource led to adaptation of strategic HRM the consideration of strategy and HRM

system jointly led to the emergence of strategic human resource management

Human Resource Management (HRM) has come to be recognized as an inherent part of

management, which is concerned with the human resources of an organization. Its objective is

the maintenance of better human relations in the organization by the development, application

and evaluation of policies, procedures and programmes relating to human resources to optimize

their contribution towards the realization of organizational objectives.

In other words, HRM is concerned with getting better results with the collaboration of

people. It is an integral but distinctive part of management, concerned with people at work and

their relationships within the enterprise. HRM helps in attaining maximum individual

development, desirable working relationship between employees and employers, employees andemployees, and effective modeling of human resources as contrasted with physical resources. It

is the recruitment, selection, development, utilization, compensation and motivation of human

resources by the organization.

Strategic human resource management is a complex process which is constantly evolving

and being studied and discussed by academics and commentators. Strategic Human Resource

Management (SHRM) is an area that continues to evoke a lot of debate as to what it actually

embraces. Definitions range from 'a human resource system that is tailored to the demands of the

business strategy' (Miles and Snow 1984) to 'the pattern of planned human resource activities

intended to enable an organization to achieve its goals' (Wright and McMahan 1992).


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Strategic human resource management (SHRM) is a concept that integrates traditional

human resource management activities within a firm's overall strategic planning and

implementation. SHRM integrates human resource considerations with other physical, financial,

and technological resources in the setting of goals and solving complex organizational problems

(Legnick-Hall &Legnick-Hall, 1988) SHRM also emphasizes the implementation of a set of

policies and practices that will build employee pool of skills, knowledge, and abilities (Jackon

and Schulerm 1995) that are relevant to organizational goals. Thus a larger variety and more

complete set of solutions for solving organizational problems are provided and the likelihood

that business goals of the organization will be attained is increased (Mechelin, 1996).

Strategic Human Resource Management (SHRM) is an area that continues to evoke a lot

of debate as to what it actually embraces. Definitions range from 'a human resource system thatis tailored to the demands of the business strategy' (Miles and Snow 1984) to 'the pattern of

planned human resource activities intended to enable an organization to achieve its goals'

(Wright and McMahan 1992). Although the difference between these two seems subtle, the

implications of the difference are considerable. Where in the first definition human resource

management is a 'reactive' management field in which human resource management becomes a

tool to implement strategy, in the latter definition it has a proactive function in which human

resource activities actually create and shape the business strategy (Sanz-Valle et al. 1999).

Strategic HRM can be regarded as a general approach to the strategic management of

human resources in accordance with the intentions of the organisation on the future direction it

wants to take. It is concerned with longer-term people issues and macro-concerns about

structure, quality, culture, values, commitment and matching resources to future need. It has been

defined as:

All those activities affecting the behaviour of individuals in their efforts to formulate and

implement the strategic needs of business. (SCHULER, R.S., 1992)

The pattern of planned human resource deployments and activities intended to enable the

forms to achieve its goals. (WRIGHT, P.M. and MCMAHAN, G.C. (1992)


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Steps in SHRM

SHRM involves three steps: forecasting, strategy formulation, and implementation.

Forecasting is the attempt to predict future events that will impact the organization and itsneeds through the analysis of the organizations internal and external environments. HR strategy

formulation involves the development of initiatives that are aligned with the organizations

mission statement, strategic objectives, strengths and weaknesses, and opportunities and threats.

HR strategy implementation involves putting the HR plan into action with HR programs that

support the organizations overall strategy.

Human Resource Strategic formulation is dynamic and evolutionary and is subject to

change as outside environmental conditions, competition or internal conditions change.

At times it may appear that the strategy is simply one of reaction rather than pro-action,

that is, the company is reacting to the latest threat. While the reactive label might be appropriate

if every course of action a firm undertook was in response to a threat, it certainly would not be

appropriate if the firm followed a well formulated strategy but was able to modify it as

conditions changes. In this case the firm would be proactive-establishing plans and strategy

ahead of time-but flexible.

Historically, HR community has remarked on the difficulty they have had getting to the

table with top organization management. HR is commonly consulted after decisions have been

made in order to help implement any major changes. Considering the invaluable perspective HR

has how decisions will impact organization resources HR professionals have been frustrated that

they are not involved sooner in the plan.

So what are HRs contributions toward mission accomplishment? Most line managers

would like to see HR become more involved and innovative, but they also admit that it would be

extremely difficult for them to get their jobs done without the help HR already provides.What

kind of value can HR bring to the organization decision-making table? Other corporate functions


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have no problem demonstrating their value. Why has HR not been able to capitalize on this

strength?

First, HR has not historically had the statistics or data that can excite management and

show how HRM influences organization success. Second, HR has focused on internal operations

rather than activities that impact the entire organization.

HRM alignment is still evolving, and there are several steps organizations can take to help it

along:

Fully integrate human resources management into the business planning process. Organization executives need to recognize the value that HR can impart to discussions

about organization activites, priorities, and golas. HR leaders need to understand

organization mission needs and be able to contribute substantive, creative solutions to

meet these needs.

Focus on organizational activities that assist in organization decision-making.

When HR demonstrates that it can have an impact on organization direction then it will gain

credibility with organization executives.

Approaches of the SHRM,

attempts to link Human Resource activities with competency based performancemeasures

attempts to link Human Resource activities with business surpluses or profit

These two approaches indicate two factors in an organisational setting. The first one is the

human factor, their performance and competency and the later is the business surplus. An

approach of people concern is based on the belief that human resources are uniquely important in

sustained business success. An organization gains competitive advantage by using its people

effectively, drawing on their expertise and ingenuity to meet clearly defined objectives.

Integration of the business surplus to the human competency and performance required adequate

strategies. Here the role of strategy comes into picture. The way in which people are managed,


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motivated and deployed, and the availability of skills and knowledge will all shape the business

strategy. The strategic orientation of the business then requires the effective orientation of human

resource to competency and performance excellence.

Benefits of SHRM

1. Identifying and analyzing external opportunities and threats that may be crucial to the

company's success.

2. Provides a clear business strategy and vision for the future.

3. To supply competitive intelligence that may be useful in the strategic planning process.

4. To recruit, retain and motivate people.

5. To develop and retain of highly competent people.

6. To ensure that people development issues are addressed systematically.

7. To supply information regarding the company's internal strengths and weaknesses.

8. To meet the expectations of the customers effectively.

9. To ensure high productivity.

10. To ensure business surplus thorough competency

Barriersof SHRM

Barriers to successful SHRM implementation are complex. The main reason is a lack of growth

strategy or failure to implement one. Other major barriers are summarized as follows:

1. Inducing the vision and mission of the change effort.

2. High resistance due to lack of cooperation from the bottom line.

3. Interdepartmental conflict.

4. The commitment of the entire senior management team.

5. Plans that integrate internal resource with external requirements.

6. Limited time, money and the resources.

7. The statusquo approach of employees

8. Fear of incomopetency of senior level managers to take up strategic steps.

9. Diverse work-force with competitive skill sets.

10. Fear towards victimisation in the wake of failtures.


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11. Improper strategic assignments and leadership conflict over authority.

12. Ramifications for power relations.

13. Vulnerability to legislative changes.

14. Resistance that comes through the legitimate labour institutions.

15. Presence of an active labour union.

16. Rapid structural changes.

17. Economic and market pressures influenced the adoption of strategic HRM.

18. More diverse, outward looking approach.

Conclusion

As global business competition shifts from efficiency to innovation and from enlargement of

scale to creation of value, management needs to be oriented towards the strategic use of human

resources. Strategic human resources management practices enhance employee productivity and

the ability of agencies to achieve their mission. Integrating the use of personnel practices into the

strategic planning process enables an organization to better achieve its goals and objectives.

Combining human resource practices, all with a focus on the achievement of organizational goals

and objectives, can have a substantial affect on the ultimate success of the organization. To

manage future operations effectively, it is essential that companies produce "business leaders"

and "innovators" through SHRM Approach.

References

1. Schuler, R.S. (1992) strategic human resource management: linking people with the needs of

the business. organizational dynamics . vol 21, no 1. pp18-32.

2- Boxall, P. and Purcell, j. (2003)strategy and human resource management.Basingstoke:

palgravemacmillan.

3- K. Aswathappa,HumanResource & Personal Management(3rd

edition)TMH (2002), 39-50.

4- BiswajeetPattanayak, HumanResource Management; PHI(2nd

edition),309-326.

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