Strategic human resource management

Strategic human resource management (Strategic HRM) is a fairly new concept in business practice with only a handful of executives being able effectively put it into use. Whereas general human resource practice is aimed at ensuring productivity of the human resources in the organization, strategic HRM goes a step further to factor in the generic strategies of the company in the determination of their HR practices. Academic researchers view this approach as a crucial step in ensuring that companies are able to create a competitive advantage based on the unique competencies of its human resources.

For effectiveness to be realized there must be a ‘fit’ between strategic human resource management and the generic strategies. This implies that the HR practices must be organized and sequenced in a manner that ensures the overall goals of the organizations are achieved. Incentive schemes, working schedules, working conditions, the attitude towards employees, involvement of employees in making decisions and the delegation of responsibilities are among the practices that can be applied in different measures in order to achieve the desired results. As strategic management experts would point out, the range of incentives that can be used in organizations is not limitless. Several organizations would in many occasions adopt the same range of incentive programs albeit with differing results depending on how the programs are constituted and the extent to which they fit in with the organizations’ generic strategies. The managers must evaluate the different compositions (with varying proportions of each program) and determine which ones would be most effective for the achievement of their goals. There is also a growing need for factoring in the human resource management perspectives into the generation of organization’s generic strategies. This would be a significant deviation from the common practice in many organizations where human resource managers’ views are not sought or summarily ignored in the generation of organizational strategies.    

The main significance of strategic human resource management is its ability to enable organizations to utilize its unique internal competencies to create a competitive advantage in the market. With growing competition around the world, organizations are increasingly turning towards the enhancement of their internal competencies. More and more market researchers have in recent times observed that many of the best performing companies give credit to the unique contribution to their employees whom they say give their best in achieving the company goals. The popularity of strategic human resource management is on the rise and it is expected that more creative ways of ensuring the effectiveness of human resources will continue to be discovered.  

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