Before we try to explain the meaning of strategic HRM, let us first define the terms ‘strategy’ and ‘strategic management’. The term ‘strategy’ is widely used in and presupposes importance. In the words of the Oxford Concise Dictionary, strategy means ‘generalship’. Thus, strategy is associated with the long-term decisions taken at the top of the enterprise. The original literary meaning of strategy is ‘the art and science of directing military forces’.
The term strategy is frequently being used in the present-day corporate world. It envisages thinking ahead to survive and grow in a highly competitive environment’. Strategy is concerned with determining which option will provide maximum benefits. According to Jauch and Glueck.
“Strategy is a unified, comprehensive and integrated plan that relates the strategic advantages of the firm to the challenges of the environment. It is designed to ensure that the basic objectives of the enterprise are achieved through proper execution by the organization”.
Characteristics of Strategic Human Resource Management(SHRM)
- Recognition of the outside Environment: Outside environment presents some opportunities and threats to the organization in the form of-
- Economic conditions
- Social and demographic change
- Domestic and international political forces
- Technology and so on.
Strategic human resource strategy explicitly recognizes the threats and opportunities in each area and attempts to capitalize on the opportunities while minimizing or deflecting the effect of threats.
- The impact of Competition: The forces of competition in attracting, rewarding, and using employees have a major effect on corporate human resource strategy. Forces play out in local, regional and national labor markets. Labor market dynamics of wage rates, unemployment rates, working conditions, benefits levels minimum wages legislation and competition reputation all have an impact on and are affected by strategic human resource decisions.
- Long-Range Focus: A strategic human resource management should be long-range focus cause this is not easy to change the strategic human resource policy.
- Choice and Decision-making focus: In other words, the strategy has a problem solving or problem preventing focus. Strategy concentrates on the question, “what should the organization do and why?” this action orientation requires that decisions be made and carried out.
- Consideration of all Personnel: A strategic approach to human resources is concerned with all of the firm’s employees, not just its hourly or operational personnel. Traditionally, human resource management focuses on hourly employees, with most clerical exempt employees also included.
- Integration with the Corporate Strategy: Human resource strategy adopted by a firm should be integrated with the firm’s corporate strategy.
The key idea behind overall strategic mgt is to coordinate all of the company’s resources, including human resources; in such a way that everything a company does contribute to carrying out its strategy.
Synergy means the extra benefit or value realized when resources have been combined and coordinated effectively. This concept often referred to as economies of scope, makes the combined whole of the company make valuable than the sum of its parts. It is a true benefit of good strategic management of resources.
Key Features of Strategic Human Resource Management
The key features of SHRM are
- There is an explicit linkage between HR policy and practices and overall organizational strategic aims and the organizational environment
- There is some organizing schema linking individual HR interventions so that they are mutually supportive
- Much of the responsibility for the management of human resources is devolved down the line
Approaches of the SHRM
- Attempts to link Human Resource activities with competency based performance measures
- Attempts to link Human Resource activities with business surpluses or profit