Strategic management seeks to coordinate and integrate the activities of the various functional areas of a business in order to achieve long-term organizational objectives. A balanced scorecard is often used to evaluate the overall performance of the business and its progress towards objectives… Strategic management provides overall direction to the enterprise and is closely related to the field of Organization StudiesStrategic planning and management are more than a set of managerial tools. They constitute a mind-set, an approach to looking at the changes in the internal and external environment that confront the manager. Using planning and management tools strategically, then, involves essentially a way of thinking, a mental framework or approach, as well as a set of analytic tools. For strategic management to be effectively used the manager must develop a strategic mentality
Organizations are working towards an outward-focused view of the way services should be provided – a fundamental shift from the traditional focus on internal concerns. At the same time, major opportunities for improvement may arise from developments such as new information and communications technologies, and the availability of additional financial resources such as the Invest to Save Budget. In many cases the response to the problem or opportunity will:
- require the continuous attention of senior management
- affect most or all of the organization
- have long term implications
- require substantial resources
- Be interconnected with other issues and developments.
What is Strategy?
A strategy is a step-by-step plan of action prepared by an organization and by which it aims to achieve its plan or plans, thus, ensuring its success and survival.
What is Strategic human resource management?
This is the step-by-step plan of action by which an organization employs, utilizes or manages, develops, and deploys its human resources in order to attain its defined corporate mission and objectives.
A human resource strategy is devised in respect of recruitment, employee deployment, motivation and engagement, and employee retention.
By doing this, an organization puts itself in the position of being able to achieve its mission and objectives through its human resources.
This follows from the way how strategic human resource is strategically defined.
This is the effective way of organizing the workforce by the adoption of a specific strategy, where employees’ performance can help to achieve the planned organizational targets, such as increasing revenue or improving the profit margin.
Strategic human resource management is “human resource management” carried out in a strategic way. The human resource activities are linked to the achievement of the organization’s overall objectives.
This is the new way of managing human resources as compared to personnel management.
To ensure a high probability of success in the implementation of strategic human resource management, a number of things are necessary.
- Strategic recruitment where the right person is selected to fill the right job and according to organizational needs
- Using the right mix of incentives to motivate and engage employees who then can concentrate improving their performance
- Appointment of the right HR Head to provide the necessary leadership in making HR as a strategic partner
- An HR mission statement with well defined HR objectives drawn up in alignment with the overall organizational objectives
- Provision of the right set of training to every level of employees on an on-going basis
- Performance management system to identify high-performing employees for the purpose of giving rewards befitting their performance, work quality and output
Issues of SHRM
The strategic human resource choices involved in low cost of production strategy include:
- Train some of the employees in the area of time management, material handling at work etc.
- Retrenchment of surplus employees caused due to superior speed
- Pay for performance
- Promotions based on efficiency
- High quality work environment at the production place.
These human resource issues are also known as functional strategies of HRM.
Approach to SHRM
This is the new way of managing people ensuing from the strategic human resource definition.
Human resources with all the competencies and potential are required to attain the HR objectives. These objectives are aligned to the organizational objectives by way of a strategic plan.
By achieving the human resource objectives, HR helps to achieve the business plan.
Role of SHRM
Strategic management of employees emphasizes the HR strategic role. This stems from the argument of many “gurus” on HR strategic importance.
One of the foremost things we need to know is the scope of the strategic HR and how successful organizations are leveraging their success on strategic human resource management
HR as Strategic Partner
These are among the important ones.
- Recruiting the right employees. Align corporate values to your recruitment strategy.
- Well-developed competencies of the workforce, and their relevance to organizational core business.
- Participative culture where HR initiatives fully support the overall strategic plan.
- Effective use of information technology.
- Effective leadership through appointment of the right HR Head.
- Identification of human resource practices that make HR as strategic partner, namely, serving the business needs of your organization. Discard ineffective HR practices that do not contribute to the success of your organization.
Why make HR as Organizational Strategic Partner…
Some of the reasons may sound familiar to you.
- To increase productivity of the labor force
- Competency and talent management
- Onset of information technology and the vast amount of knowledge used in the course of the activities of organizations
- The changing business environment
- Effect of globalization on the business landscape
The Human Resource Function and Strategic Business Plan
It was shown in a survey that there is a correlation between being strategic business partner and the effectiveness of the HR function.
You require strategic HR management to ensure that your HR function can fully support the achievement of business objectives.
The administrative reactive approach in people management can no longer support your organization in an increasingly competitive business environment.
Strategy Development and Implementation
Full participation of HR people in strategy development and implementation promotes HR as strategic partner.
Ensure that your HR Manager and HR professionals:
- contribute to business decisions
- develop business acumen to understand how a profitable business is run
- are customer-oriented
- learn how to link HR practices to your organizational business strategy
The Future of SHRM
Proponents of strategic HR management generated tremendous interest on the subject. Some large organizations had implemented it. In contrast, some lament the ineffectual efforts by many organizations in implementing the system.Strategic human resource management is not going to disappear. This is so as long as people continue to run organizations of whatever size and for whatever purpose. It is very certain that people will continue to play pivotal roles.
As the world of business becomes more complex and challenging, strategic human resource management will continue to grow in importance in the success story of organizations.
Importance of SHRM
The organization’s “ends” is its financial success. Human resource strategy is one of the means to attain this. Organizations have always tried to comply with legal obligations in the course of carrying out their business activities. Also, finance and technology are important assets. But people are required to make effective and efficient use of them.
In non-profit organizations, the end is to provide the specified services to the intended group or groups in the most cost-effective way, in the most satisfactory manner, and serving the majority of the target groups.
Effective development and implementation of an HR strategy requires HR professionals who are conversant in finance, negotiation, change management, and the overall operations of the organization.
An HR strategic plan aligns the HR function to the corporate plan. Good knowledge about the organization, its objectives, systems and processes, can assist HR people in doing this task well.
This all looks so easy on paper. Do this, do that, and you will be aligned with the mission and able to demonstrate your contribution toward it. Obviously, it is not that easy. Private sector, public sector, and some Federal entities have been struggling with this issue even before GPRA was enacted — and that works to our advantage. There is a wealth of information out there that can help — hundreds of articles, books, and studies have been written, numerous tools have been created, and many organizations have already tested a number of approaches. We can learn from all of these successes and failures. Where Do We Go from Here? But the only way to begin is to begin report.. To achieve this goal, we must all work together.
It’s kind of fun to do the impossible.
Dr.Subba Rao .p, Personnel and Human Resource Management, Preface to the second Edition on 21st June, 2002.