HUMAN RESOURCE MANAGEMENT

Strategic Role of Human Resource Management

Strategic Role of Human Resource Management

Introduction

Organizational strategy refers to the overall positioning and competitive approach of an organization in the marketplace. Strategic management is the deliberate effort to align the organization's long-term direction with organizational strategy. Good strategic management integrates organizational functions into a strategic plan so that all organizational units operate in a coordinated fashion in support of the overall strategy. Strategic human resource management (SHRM), then, is the process by which an organization's management integrates its human resource plans and programs with the strategic plan of the organization. SHRM stands in contrast to traditional human resource management (HRM), which contributes to an organization at the operational level. For example, the traditional human resource (HR) concern of selecting job applicants who display skills that are predictive of good job performance may only be implicitly related to the strategic objectives of the organization (McLean, 2004, 80).

Discussion and Analysis

A key feature of Strategic Human Resource Management (SHRM) is the linkage formed between management and HR to align the functions of HR with the direction of the organization. SHRM links human resources vertically and horizontally as well as in present and future time frames. Vertical linkages entail connecting HR practices with the strategic management process of the organization, while horizontal linkages involve the coordination of various practices within HR through a patterned or planned action. HR strategies are linked to organizational plans, anticipated HR needs, and to HR programs that will be implemented to meet those needs. SHRM involves multiple HR processes, such as recruiting, selection, performance management, employee and career development, succession planning, retirement, and termination. Each of these can be linked to an organization's strategic objectives. For example, a planned business expansion into Eastern Europe could be supported by strategic employee development (e.g., providing language and cultural training to key employees to prepare them to meet business needs) or by strategic recruitment and selection (e.g., hiring Eastern European employees prior to the expansion) (Nadler, 1984, 167).

SHRM involves three steps: forecasting, strategy formulation, and implementation. Forecasting is the attempt to predict future events that will impact the organization and its needs through the analyses of the organization's internal and external environments (e.g., mission statement, goals, labor markets, opportunities, and threats). (Nadler, 1984, 167) HR strategy formulation—that is, strategic human resource planning (SHRP)—involves the development of initiatives that are aligned with the organization's mission statement, strategic objectives, strengths and weaknesses, and opportunities and threats. Finally, HR strategy implementation involves putting the HR plan into action with HR programs that support the organization's overall strategy.

Forecasting

Predictability and control increase the precision of forecasting. Predictability is the degree to which one can estimate the occurrence of an event, and control is the ability to orchestrate the likelihood of an event occurring. Greater control implies greater predictability, although some events over which one has little or no control are predictable. Predictability and control have important implications for how forecasting should be approached. Forecasting is more effective when forecasting techniques are ...