Strategic Human Resource Management supports long-term business objectives by using an overall strategic framework.
It focuses on resourcing issues in the long-term and how this fits into the context of the evolving nature of the work in question and the business’ objectives which are then used to inform other HR strategies, determining how they are integrated into the overall business strategy.
It is heavily dependent on the evolving nature of the work itself.
The Basis For Strategic Human Resource Management
People should be managed with a planned and logical framework, which reflects the business strategy.
This ensures that they are managed in a way that is necessary for the delivery of organisational value.
Strategic Human Resource Management has been described as dealing with how Human Resource Management influences organisational performance.
Strategic Human Resource Management differs from strategic planning as strategic planning is a more formal process.
Strategic Human Resource Management can encompass several individual HR strategies such as:
- Delivering fair and equitable rewards;
- Improving employee performance;
- Streamlining organisational structure.
However, these strategies alone do not form Strategic Human Resource Management.
Strategic Human Resource Management is the overall framework that determines how each strategy is to be delivered, linking people with organisations by integrating Human Resource Management strategies into corporate strategies.
Strategic Human Resource Management And Business Planning
A good business strategy is well informed by people and factors.
The most successful businesses utilise their human capital.
People are often referred to as a business’ most important asset. Employees’ knowledge and skill set are assets in which a company should invest.
Taking the approach that Strategic Human Resource Management comes from an organisation’s business strategy is too simplistic, the two must work together.
The way in which people are managed, and the skills they have should inform the business strategy.
How Does This Link To Workforce Planning?
Workforce planning is a key area of people strategy, which helps organisations plan and understand what skill set they will need in the future, as well as supporting their long-term business goals.
Strategic Human Resource Management And Human Capital Management
Human capital is an organisation’s collective workforce’s skills, ability and knowledge. Human capital management works on the assumption that people are treated as assets rather than costs.
Its primary focus is ensuring the adoption of an integrated and strategic approach to managing people.
Human capital management is a function that can strengthen Strategic Human Resource Management by:
- Highlighting the significance of management through measurement, and giving advice and guidance on how and what to measure;
- Focusing attention on the need to base Human Resource Management strategies on the requirement to create value through people, furthering organisational objectives;
- Clarifying the link between Human Resource Management and business strategy.
Soft Or Hard Strategic Human Resource Management?
Soft Strategic Human Resource Management places more emphasis on the human relations aspect of people management, highlighting the need for continuing development, communication, work-life balance and job security.
Hard Strategic Human Resource Management highlights the profit to be obtained in investing in human resources in the interests of the business.
The best Strategic Human Resource Management should aim to achieve a balance somewhere in between the two.
There are five different approaches to Strategic Human Resource Management:
- The Resource-Based Approach
This approach will deal with methods that increase an organisation’s strategic capability by the development of senior managers and other staff who can think and plan strategically and who understand the main strategic issues.
- Strategic Fit
This approach proposes that the HR strategy should not only be aligned with the business strategy it should be an integral part of it, creating a more coherent approach.
This focuses on improving performance through people in areas such as productivity, customer service, profits and share value.
- High Commitment Management
Aims at achieving commitment from employees so that they self-regulate rather than being micromanaged, increasing levels of trust within the organisation.
- High Involvement Management
This approach deals with communication and involvement.
Employees are treated as partners in the organisation who’s concerns and interest and listened to and acknowledged.
When implemented and used properly, Strategic Human Resource Management can generate strategic capability by ensuring that the organisation has the skilled, committed and well-motivated employees it needs to achieve sustained competitive advantage.