Strategic Human Resource Management in Organizations

Dr. Radhika Kapur

Abstract

The main objective of this research paper is to acquire an understanding of strategic

human resource management in organizations. Within the organizations, human resources are
regarded as key aspects. It is due to knowledge, competencies and aptitude on the part of
human resources that the organizations will be able to enhance their reputation. With the
advent of modernization and globalization and with advancements taking place, it is essential
for the human resources to upgrade their knowledge and skills from time to time. The concept
of strategic human resource management is considered indispensable, as it requires the
human resources policies and practices to be linked with the strategic objectives of the
organizations. In other words, in order to achieve the desired goals and objectives, it is
essential for organizations to ensure that policies and practices formulated are in accordance
to the goals and objectives. The main areas that are taken into account in this research paper
include, meaning and significance of strategic human resource management, models of
strategic management, hierarchy of strategy, human resource strategy models and benefits of
strategic management.

Keywords: Human Resources, Models, Objectives, Organizations, Resources,

Strategic Human Resource Management

Strategic human resource management is referred to the managerial process requiring

human resources policies and practices to be connected to the strategic objectives of the
organization. It is referred to as the process of linking human resource function with the
strategic objectives of the organization to improve performance. The term ‘strategy’ derives
from the Greek word, strategus, meaning ‘commander in chief’. It was first used in the
English language in 1656. The development and usage of the word, suggests that it is
composed of stratos army and agein means to lead. In the management context, the word
strategy has replaced the more traditional term, i.e. long-term planning, to denote a specific
pattern of decisions and actions undertaken by the upper echelon of the organization in order
to accomplish the performance goals. The HR researchers and practitioners have focused
their attention on some important questions. First, what determines, whether an organization
adopts a strategic approach to HRM and how the HR strategy is formulated. The policies and
practices are regarded as essential in making up various kinds of HR strategies (Bratton, n.d.).

Strategic management involves the implementation of managerial decisions and

actions that determine the long-term performance of the organization. In other words, the
human resources need to implement wise and meaningful decisions, which would be
beneficial to the organization in long term as well. Strategic management is regarded as the
continuous activity that requires a constant adjustment of three major interdependent poles,
i.e. values of senior management, environment and resources available (Bratton, n.d.). To
ensure the implementation of strategic human resource management takes place in
accordance to the goals and objectives of the organization in a well-organized manner, the
human resources need to make sure, they up-grade skills and abilities. It is comprehensively
understood that they need to work in co-ordination and integration with each other. Apart
from these factors. They need to generate awareness in terms of modern, scientific and
innovative methods. The implementation of innovative methods in a suitable manner would
lead to generation of desired outcomes.

Meaning and Significance of Strategic Human Resource

Management

Strategic human resource management is referred to as the practice of attracting,

developing, rewarding and retaining employees. Strategic human resource management has
proven to be worthwhile and meaningful to not only employees, but organization as a whole.
The HR departments that practice strategic human resource management do not work on an
independent basis. It is vital for them to establish interaction with the other departments
within the organization. Interaction enables them to acquire an efficient understanding of the
goals and create strategies that align with the objectives as well as the goals of the
organization. As a result of effective communication, the goals of human resource department
reflect and support the goals of rest of the organization. Strategic HRM is seen as a concept,
which would render a significant contribution in achieving organizational success. It makes
use of knowledge and competencies that have been possessed by the human resources. The
human resources not only are required to make use of their knowledge and competencies in
the efficient implementation of job duties, but also in reinforcing the structure and
functioning of the organization (Unit – I. Introduction to Strategic HRM, n.d.).
 When the HR department strategically develops the plan for recruitment, training and
compensation based on the goals of the organization, it is ensuring a greater chance of
organizational success. In the implementation of this concept in a satisfactory manner, there
are certain aspects, which need to be taken into consideration. These include, conducting an
analysis of the opportunities and threats within the existing environment; formulating
methods and strategies that would be in accordance to the organization’s internal strengths
and weaknesses with the environment, i.e. external threats and opportunities. In other words,
SWOT analysis of the organization is worthwhile. Implementation of strategies in an
effective manner is also considered one of the major aspects and evaluation and control of
activities and functions is necessary to ensure the members are wholeheartedly dedicated
towards the achievement of organizational goals and objectives (Unit – I. Introduction to
Strategic HRM, n.d.).

Models of Strategic Management

In the descriptive and prescriptive management texts, strategic management appears

as a cycle, in which several activities follow and feed upon one another. There is an
interconnection between the models of strategic management. The models of strategic
management have been classified into five categories, which have been stated as follows:
(Bratton, n.d.).

Mission and Goals

Within various types of organizations, it is necessary to formulate mission and goals.

Mission provides the description of organization’s values and aspirations. It is the mission of
the organization to provide direction to the individuals regarding how to implement their
tasks and functions in a well-organized manner. When the members of the organization at all
levels of the hierarchy are putting into operation their job duties, they need to be aware of
organization’s mission and goals. Goals are the desired ends sought through actual operating
procedures of the organization. All the members of the organization need to be aware of
mission and goals. When the members of the organization are focusing upon the
implementation of their job duties, when they are formulating measures and policies, when
they are organizing training and development programs and implementing modern and
innovative methods in carrying out various tasks and functions, they are not only geared
towards implementing their job duties in a well-organized manner to generate a source of
income, but they are working diligently and resourcefully towards the achievement of
organizational goals. The tasks and activities of the members of the organization have to be
wholeheartedly dedicated towards the achievement of organizational goals and objectives.

Environmental Analysis

Environmental analysis is the analysis of the internal and external environmental

conditions of the organization. In order to achieve organizational goals and enhance the
structure of the organization, it is necessary to conduct SWOT analysis. SWOT is referred to
strengths, weaknesses, opportunities and threats. Environmental analysis refers to the internal
organizational strengths and weaknesses and organizational opportunities and threats.
Strengths are referred to as positive factors that contribute in enhancing the structure of the
organization, incurring the feelings of job satisfaction among employees and achievement of
organizational goals. These are, training and development programs, infrastructure,
amenities, technologies and equipment, and other facilities that would enable human
resources to carry out their job duties satisfactorily. Weaknesses are referred to as negative
factors that are impediments within the course of implementation of job duties. Some of these
include, lack of resources, unawareness regarding various aspects and so forth.

Opportunities are referred to as an appropriate or favourable time or occasion. Within

an organization, when the individuals are able to exchange views and are able to depict their
skills and abilities and enhance their career prospects, it is stated that they obtain
opportunities for advancements. Threats are referred to factors, which may impose
unfavourable effects upon the individuals. These are referred to as impediments within the
course of their advancements. Therefore, it can be stated, within the organizations,
individuals need to implement policies and programs to augment strengths and opportunities
and alleviate weaknesses and threats.

Strategic Formulation

Strategic formulation involves senior managers in evaluating the interaction between

strategic factors and making strategic choices that guide managers in the achievement of
organizational goals. Some of the strategies are formulated at the corporate, business and
specific functional levels. The term strategic choice gives rise to the question regarding who
makes the decision and why the decision has been made. The notion of strategic choice also
draws attention to the strategic management, as a political process, whereby decisions on
issues and actions are taken by the ‘power-dominant’ group of managers within the
organization. In the political model of strategic management, it is necessary to consider the
distribution of power within the organization. The power lies, how it comes to be there and
how the outcome of competing power plays and coalitions with senior management are
connected to employee relations. The strategic choice perspective on organizational decision
making makes the dialogue on strategy more real and makes provision of important visions
into how the employment relationship is managed. When incorporating strategic choice in the
theory of organizations, one is recognising the fundamentally political process, in which the
restraints and opportunities are functions of the power exercised by decision-makers in the
light of philosophical values.

Strategy Implementation

Strategy implementation is an area of activity that puts emphasis upon the techniques
and methods used by the managers to implement strategies. It refers to the tasks and functions
that deal with various factors. These include, leadership style, the structure of the
organization, the information and control systems, and the management of human resources.
The managers and supervisors are required to inculcate leadership skills that would enable
the individuals to carry out their tasks and activities in a well-organized manner. They need to
guide and lead them in the right direction. The structure of the organization also needs to be
enhanced to ensure the members are rendering a good-quality performance and incurring the
feeling of job satisfaction. Within the structure of the organization, there should be provision
of technologies, facilities, infrastructure and resources, which would contribute efficiently in
the achievement of organizational goals.

The information and control systems are the ones, which help the individuals to make
provision of information to the employees. A control system manages, commands, directs, or
regulates the behaviour of other devices or systems by making use of control loops.
Management of human resources is regarded as one of the indispensable factors that is
necessary for promoting effective growth and development of the organization and
employees. Hence, it is necessary to implement strategies and approaches that are regarded as
important in efficient management of human resources. When these four factors are taken
into consideration, then the model of strategy implementation will be carried out in a suitable
manner.

Strategy Evaluation

Strategy evaluation is an activity that determines to what extent the actual change and
performance is compatible with the desired change and performance. When the members of
the organization have worked diligently and resourcefully towards the formulation of
measures and strategies that are crucial in the attainment of desired goals and objectives, they
need to make sure that strategies and methods are worthwhile. Therefore, it is vital for them
to put into operation the evaluation procedures. The main objective of strategy evaluation is
to identify the limitations and bring about improvements. For instance, when members have
formulated strategies that would be productive and beneficial to them in the implementation
of job duties and have found out through strategy evaluation that there are limitations. Hence,
they would have to work towards putting into operation the methods and procedures, which
would help in identifying the limitations and bringing about improvements. Therefore, it can
be stated that strategy evaluation is regarded as one of the indispensable models of
identifying the limitations and bringing about improvements.

Hierarchy of Strategy

Hierarchy of strategy is referred to as different levels of strategy. These have been

stated as follows: (Bratton, n.d.).

Corporate Level Strategy

Corporate level strategy makes provision of strategies and methods that describes the
overall direction of the corporation. The direction is in terms of general philosophy towards
the growth and management of its various business units. These are the strategies that
determine the business and functions that the corporation wants to get involved in. In order to
augment ones business, the members need to understand what business units should be
acquired, modified or sold. This strategy provides answers to the question of what is the main
objective of business. In devising a strategy for a multidivisional organization involves the
implementation of four types of initiatives. These include, establishment of investment
priorities and steering corporate resources into most of the attractive business units; initiating
actions to improve the combined performance of those business units with which the
organization got first involved; finding ways to bring about improvements in the synergy
between related business units in order to lead to an increase in job performance and making
decisions, when dealing with diversification.

Business Level Strategy

Business level strategy deals with decisions and actions pertaining to each business
unit. The main objective of the business level strategy is to make the unit more competitive in
the marketplace. This level of strategy addresses the question of how do we compete.
Business level strategy is guided by upstream, and corporate level strategy. Business unit
management must formulate a strategy that is appropriate for own operating situation. In
acquiring an efficient understanding of the business level strategy, there are three competitive
strategies, which need to be taken into consideration. These include, cost leadership,
differentiation and focus. The cost leadership strategy makes an attempt to lead to an increase
in the organization’s market share by having the lowest cost unit and price compared with the
competitors.

The alternative to cost leadership is the differentiation strategy. In this strategy, the
managers differentiate between their services and products from those of the competitors in
the same industry, by making provision of distinctive levels of service, product or high
quality for which the customer is prepared to pay the premium price. With the focus strategy,
the managers are prepared to focus upon a specific buyer group or regional market. A market
strategy can be narrow or focused. This allows the organizations to make a selection from
four generic business-level strategies. These are, low-cost leadership, differentiation, focused
differentiation and focused-low cost leadership. Competing organizations within a single
industry can make a selection between any one of the four types of strategies and adopt a
corresponding combination of structure, culture and processes consistent with the strategy in
response to the environment.

Functional Level Strategy

Functional level strategy pertains to the major functional operations within the
business unit, including research and development, marketing, manufacturing, finance and
human resources. This strategy level is primarily concerned with maximising resource
productivity and addresses the question, i.e. how can business level competitive strategy be
supported? In other words, it is vital for the members of the organization to generate
awareness in terms of methods and approaches, which would render a significant contribution
in achieving organizational goals. The human resource management policies and practices are
stated to render an indispensable contribution in the achievement of organizational goals.

The three levels of strategies, corporate, business and functional form a hierarchy of
strategy within large multidivisional corporations. In different corporations, the specific
operation of the hierarchy of strategy might vary between top-down and bottom-up strategic
planning. The top-down approach resembles a cascade in which the downstream strategic
decisions are dependent on higher upstream strategic decisions. The bottom-up approach to
strategy making recognizes that individuals deep within the organizations might render a
significant contribution to strategic planning. Strategic management literature puts emphasis
upon the fact that strategies at different levels must be completely integrated. Strategies at
different levels need to interrelate. The strategy at the corporate level must build upon the
strategies and approaches at the lower level of the hierarchy. However at the same time, all
parts of the business are required to work to accommodate the overriding corporate goals.
(Bratton, n.d.).

Human Resource Strategy Models

Since the early 1990s, academics have proposed three models to differentiate between
ideal types of human resources strategies. These are, control-based model, resource-based
model and integrative model. These have been stated as follows: (Bratton, n.d.).

Control-based Model

The control-based model is based on different types of HR strategies. It is based on

the nature of workplace control and more specifically on managerial behaviour to direct and
monitor the performance of the employees. According to this perspective, management
structures and HR strategies are the techniques to control all tasks and activities within the
working environment. In this manner, they are able to bring about improvements in
productivity and profitability, therefore, emphasis is put on monitoring and controlling of
employee behaviour. The basis of differentiating between human resources strategies has its
roots in the study of labour processes by the industrial sociologists. Implicit in this approach
to managerial control is that the logic underlying an HR strategy will tend to be consistent
with the competitive strategy of the organization. Managers will tend to adopt process-based
controls, particularly when means and ends are uncertain. Therefore, it can be stated that
control-based model enables the members of the organization to establish control on the
implementation of tasks and activities.

Resource-based Model

The resource-based model is the second approach to the development of typologies of

HR strategy. It is grounded in the nature of the reward-effort exchange and more specifically,
the degree to which the managers view their human resources as an asset as opposed to the
variable cost. When the human resources are able to make use of technologies, materials and
resources to carry out their job duties in a well-organized manner, they are able to achieve
personal as well as organizational goals. The knowledge and competencies possessed by
human resources, availability of technologies, materials, tools and equipment and
establishing effective communication skills are regarded as important aspects that would
facilitate in achieving organizational goals. Furthermore, it is vital for the members of the
organization to ensure that they manage the resources, so they can be used to enhance
productivity and profitability. The resource-based model needs to be paid attention to on a
continuous basis.

Integrative Model

The integrative model integrates the two main models of the human resources
strategy. One has to put emphasis on the strategy’s underlying logic of managerial control
and the other is focusing on the reward-effort exchange. Acquisition and development are
concerned with the extent to which the HR strategy develops the human capital approach as
opposed to the external recruitment of human capital. In other words, the organizations are
leaning towards making their workers more competent. Hence, they are making high
investments in the training and development programs. These programs are considered
indispensable in making provision of knowledge to the employees. The up-gradation of
competencies and abilities among employees has to be in accordance to the goals and
objectives of the organization. They need to be well-equipped in terms of usage of
technologies, materials and other resources. Therefore, it can be stated, integrative model is
also beneficial in leading to growth and development of human resources and organization as
a whole.

Benefits of Strategic Management

The strategic human resources framework has the main objective to align the human
resource practices to augment the capabilities that enable the organization to achieve the
goals and objectives. Strategic management makes provision of both financial as well as non-
financial benefits to an organization, which practices it (Unit – I. Introduction to Strategic
HRM, n.d.). The benefits have been stated as follows: (Unit – I. Introduction to Strategic
HRM, n.d.).

Assessing the current HR Capacity – In the assessment of the HR capacity, there is a

need to develop the skills among the workforce. It is apparent that to carry out one’s job
duties satisfactorily and achieve organizational goals, there is a need to focus upon up-
gradation of skills and capabilities on a continuous basis. Furthermore, the managers and
supervisors need to be aware of the skills, already possessed by the workforce and what are
the skills that they need to up-grade. The members of the organization need to make sure,
they possess the essential skills and abilities. The organization of training and development
programs on a regular basis would render an indispensable contribution in augmenting skills
and capabilities of human resources.

Forecasting HR Requirements – Forecasting of HR requirements is based on

conducting an analysis of factors, which would lead in determining, what HR skills would be
required for future. Forecasting HR requirements also enables the individuals to obtain
answers to various questions, such as, what jobs would need to be filled? What skills
individuals need? Staff required to meet the strategic goals of the organization? Is the
organization affecting ones work and ability to retain employees and how is the community
evolving or expecting changes taking place in future? One of the major goals of the
organizations is to make sure, it augments productivity and profitability in future. Hence, in
order to achieve this objective, the human resources are also required to upgrade their skills
and abilities. For instance, when the members of the organization make decisions in terms of
bringing about modern and innovative methods in tasks and activities, they have to make sure
that they augment their understanding in an efficient manner to achieve organizational goals.

Gap Analysis – In the gap analysis, one is able to observe where the organization is in
the present existence and where it has to be in future. In conducting gap analysis, there are
certain aspects, which need to be taken into consideration. These include, number of
employees, skills and aptitude, provision of infrastructure, technologies, materials and
equipment and the resources, which will be required to achieve desired goals. In this case,
one of the important steps that need to be put into operation is, identification of HR processes
and practices. The current HR processes and practices are taken into consideration and one
has to be aware of measures that need to be put into operation to bring about changes. It is
comprehensively understood that with advancements taking place, there is a need to bring
about transformations and put into operation, modern, scientific and innovative methods.
Therefore, it can be stated that gap analysis contributes in bringing about changes and
introducing modern, scientific and pioneering methods in implementation of tasks and
functions.
 Training and Development – When the individuals get recruited and selected within
the organization, they are required to go through training and development programs. In these
programs, the trainers make provision of information to them in terms of various aspects of
the organization. These include, history, departments, personnel, infrastructure, technologies,
civic amenities and facilities, job duties and so forth. In these programs, the trainers are
required to make use of modern and innovative teaching and learning methods in the
implementation of instruction. Within various organizations, the training methods used are of
various types. These include, case studies, vestibule training, lecture methods, role plays and
so forth. Within the course of their jobs also the individuals are required to undergo training
and development programs to augment their knowledge and understanding in terms of
advancements taking place and use of innovative methods. Therefore, it can be stated that
training and development programs are regarded as significant in generating the desired
outcomes.

Restructuring Strategies – Restructuring strategies are the strategies, which are

concerned with causing a reduction in staff members, regrouping of tasks to create well-
designed jobs and reorganising work groups to carry out tasks and functions in an efficient
manner. An organizational restructuring strategies involves redesigning of the operations and
management reporting structures. These would address and make corrections to the issues
that are responsible for problems and difficulties. As organizations make an entry into new
stages, they often need restructuring or reorganization. Making decisions in terms of
restructuring strategies will help the members of the organization in achieving organizational
goals. It is comprehensively understood that achievement of organizational goals is not a
clear and straightforward process. The organizations need to formulate restructuring
strategies, which would help in achieving organizational goals as well as in bringing about
transformations (6 Strategies for Restructuring Your Business, 2017).

Outsourcing Strategies – Outsourcing strategies, functions, processes and activities

are normally implemented within the organization. Outsourcing contracts, repurchasing
through supply contracts the products or results of certain tasks and activities by the
organizations delegated for such activities are not regarded as a new phenomenon. In the past,
outsourcing strategies have undergone a profound evaluation, moving from simple forms of
production contracts, involving third parties to agreements that entail several strategically
important functions. These functions are of various types, i.e. from technological innovation
to logistics, customer relations to post-sales services. In the present existence, organizations
consider outsourcing as a strategic perspective. The main aim is the outsourcing of functions
and processes through a network of stable agreements with competent and professional
outsourcers, who take on the role of providers with or without exclusivity. Therefore, it can
be stated, outsourcing strategies are important benefits of strategic management (Michela &
Carlotta, n.d.).

Recruitment and Selection – Recruitment and selection are important functions in

human resource management. These need to be designed to maximize employee strength in
order to meet the strategic goals and objectives of the organization. These are the processes,
which are concerned with sourcing, screening, shortlisting and selecting the right candidates
for the vacant positions. The scope of recruitment and selection is comprehensive and
consists of variety of operations. Human resources are regarded as crucial assets of the
organization. Therefore, hiring of human resources is one of the important factors. In
implementation of recruitment and selection processes in an operative manner, there are
certain aspects, which need to be taken into account. These are, dealing with excess or
shortage of resources, preparing recruitment policy for different categories of employees,
analysing recruitment policies, processes and procedures, identifying areas, where there could
be scope of recruitment, stating recommendations and selecting the best suitable process of
recruitment for hiring of human resources. Recruitment and selection of right individuals in
the right positions at the right time is regarded as indispensable for leading to progression of
the organization (Recruitment and Selection, 2016).

Collaboration and Integration – Within organizations, the individuals are assigned

various job duties in accordance to their educational qualifications, skills and aptitude. In
some cases, they are required to carry out their job duties independently, but in other cases,
they are required to work in collaboration and integration with others. Collaboration and
integration generates the feelings of job satisfaction among employees, as they are able to
provide solutions to their problems. Furthermore, this aspect also includes collaborating with
other organizations to generate awareness in terms of how to carry out one’s job duties in a
well-organized manner. In this manner, the employees are able to enhance their competencies
and knowledge, which is not available in one’s own organization. Therefore, it can be stated
that working in collaboration and integration is regarded to be of utmost significance in
providing solutions to problems, maintaining good terms and relationships with others, and
incurring the feeling of job satisfaction.
 Managing Performance – It is vital to manage the performance of the employees in
order to generate the desired the outcomes. The strategies that need to be put into operation to
manage the performance need to ensure they are able to adequately identify the flaws and
inconsistencies and help in alleviating the setbacks, which they are experiencing. Managing
performance has to take place on continuous basis. When the employees are making use of
modern, scientific and innovative methods in the implementation of job duties, they need to
ensure they manage the performance in an appropriate manner. In other words, the employees
need to be well-aware in terms of how to make use of modern and pioneering methods. It is
the job duty of the supervisors to direct and guide the employees, so they are able to carry out
their job duties in a well-organised manner and generate the desired outcomes. Therefore, it
can be stated, managing performance is regarded as one of the indispensable benefits of
strategic management.

Coping with Problems and Challenges – Within the organization, there are occurrence
of problems and challenges in number of areas. The members of the organization are required
to cope with number of problems and challenges, irrespective of their job duties and
responsibilities. The members of the organization are required to generate awareness and
augment their understanding in terms of various areas that would facilitate in providing
solutions to the problems. For instance, when the members of the organization need to bring
about improvements in infrastructure, technologies and equipment, they need to pay adequate
attention towards the management of resources. There are three types of resources, which
need to be managed, these include, technical, financial and human resources. Management of
resources is not regarded as an easy task. In other words, the individuals need to cope with
problems and challenges. Therefore, it can be stated, the members need to be aware of
methods and strategies, which would enable them to provide solutions to problems and
achieve organizational and personal goals.

Conclusion

Strategic human resource management is referred to the managerial process requiring

human resources policies and practices to be connected to the strategic objectives of the
organization. In order to carry out the job duties in an appropriate manner and achieve the
desired goals and objectives, it is necessary for the organization to formulate effective and
meaningful strategies. It is the process of establishing connection between human resource
function and the strategic objectives of the organization with the primary objective of
bringing about improvement in job performance. In this case, the practices of attracting,
developing, rewarding and retaining employees are taken into consideration. The models of
strategic management has been classified into five categories, these are mission and goals,
environmental analysis, strategic formulation, strategy implementation, and strategy
evaluation. Hierarchy of strategy is referred to as different levels of strategy. These are
corporate level strategy, business level strategy and functional level strategy. Human
resources strategies models are of three types, control-based model, resource-based model
and integrative model.

Benefits of strategic management are, assessing the current HR capacity, forecasting

HR requirements, gap analysis, training and development, restructuring strategies,
outsourcing strategies, recruitment and selection, collaboration and integration, managing
performance and coping with problems and challenges. Hence, it can be stated, when the
members of the organization implement the strategies in an appropriate manner and focus
upon the above areas, they are able to identify the benefits of strategic management. Strategic
human resource management refers to the human resources that are co-ordinated and
consistent with the overall goals and objectives in order to bring about improvements in the
job performance of human resources. Furthermore, improvements also take place in the status
of the organization. Therefore, it can be stated that implementation of the concept of strategic
human resource management in a well-ordered manner would render a significant
contribution in leading to effective growth and development of organization and human
resources.
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