Academic journal article Review of Management

Strategic Human Resource Management: A Reality Check

Academic journal article Review of Management

Strategic Human Resource Management: A Reality Check

Article excerpt

Introduction

The process of globalization, international competition, innovation, and technology has persuaded organizations for being cost effective and efficient to survive and prosper. One of the most critical roles realized for the same is by the human resources function, as they are the one among all other resources who can bring competitive advantage to the firm. Without HR nothing can be accomplished and without well trained, well developed, well appreciated and well managed HR, modern organizations cannot meet the challenges of the globalization age (Farazmand, 2004). So HRM has increasingly been seen as one of the key functions in the development and implementation of strategic responses to this pressure (Ulrich, 1997). Business and HR practitioners and academicians are also of the opinion that by aligning HR policies and practices with business strategies, the field of HRM can become greater strategic contributor to organizational performance and success (Mathis and Jackcon 2003; Khandekar and Sharma 2005). Chandra and Shen (2009) discuss that, if HRM wants to create added value for the organization, it has to become a strategic partner with the business in achieving business goal.

The practices under strategic HR have impacted the world of work significantly. It has the capability to alter the traditional ways of managing organization and people within it. So the pressure of being strategic is held equal importance to even non-profit organizations can also be called "third" sector organizations.

Strategic HRM

With tremendous pressure put in by liberalization, the HR had to transform itself from just being a support system to a strategic partner in business policy. When HRM functions are driven by business strategy it comes under the purview of strategic HR. Strategic HRM is a link between HRM and strategic management processes of an organization. By strategic we mean that HR activities should systematically design and intentionally linked to an analysis of business and its context (Schuler, Jackson and Storey, 2001). SHRM emphasize on coordination and congruence among the various HRM practices like HR Planning, recruitment, selection, training and development, reward and compensation as they plays crucial roles in the achievement of strategic goals (Chew and Chang, 1999).

Strategic HR and Talent Management

Whatever Strategic HR does in form of recruit, retain, develop, reward and make people perform is part of Talent Management. Companies that engage in talent management are strategic and deliberate in how they source, attract, select, train, develop, retain, promote, and move employees through the organization. Research done on the value of such systems implemented within companies consistently uncovers benefits in these critical economic areas: revenue, customer satisfaction, quality, productivity, cost, cycle time, and market capitalization. Such benefits are equally important for Donor Driven or Non Profit Organizations as well, the only recognized difference is that they don't sell products but aimed at providing high quality services which is not possible without well-organized HR processes, as here "people work for the people".

Need to be strategic

Academics, practitioners and consultants argued that if HRM wants to create added value for the organization, it has to become a strategic partner with the business in achieving its business goals. Recent decades have seen HR becoming a unique and differentiating asset, playing an increasingly important role in organization (Chandra and Shen, 2009). The role HR professionals have now become more critical than ever, on one hand they have the responsibility to create highly sophisticated workforce which can work in technologically enabled industries and on the other they have to bear the burden of delaying and rightsizing leading employment loss to the traditional workforce with making an organization successful and cost effective at the same time. …

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