SHRM

Strategic Human Resource Management

Strategic Human Resource Management

Introduction

Strategic human resource management (SHRM) is a major field of human resource management (HRM) concerned with the ways in which HRM is critical to the viability of the firm and with the ways in which it may lay a basis for sustained competitive advantage. A reasonably effective human resource (HR) strategy is a necessary condition of business viability: All firms need to recruit and motivate people who have the skills to conceive and conduct the firm's business. Outstanding HR strategies can help firms to achieve superior performance.

Conceptual Overview

Strategic HRM is interested in relationships among HR activities and in relationships between patterns of HR activities—variously called HR strategies, models, bundles, styles, or systems—and the firm's internal and external contexts. It is concerned with mapping the HR strategies firms adopt, with understanding why they do so, and with building theory on how HR strategy can be used to enhance organizational effectiveness. Going beyond a shareholder to a stakeholder perspective, it is also concerned with the links between HRM and employee and societal well-being.

The identification and diagnosis of HR strategy is no easy task. Only the largest firms tend to have explicit goal statements for their overall HR strategy. Even when they do, one must be careful in taking them at face value. In HRM, aspirational rhetoric may mask a more opportunistic and pragmatic reality, and broad policies are always open to the interpretations of managers, both general and specialist, and sometimes their active subversion. Furthermore, particular patterns of HRM are laid down at certain critical moments in an organization's history, and managers find themselves working within these traditions without necessarily being able to explain how all the pieces got here. HR goals may not be seriously analyzed unless some kind of crisis emerges in the firm's growth or performance that forces reconsideration and restructuring. The complexities are greatest in large, diversified, and transnational firms where HR strategies typically vary across job categories, workplaces, industries, and countries.

Analysis must start somewhere, however. The field of SHRM gained impetus from the work of Michael Beer and his colleagues at Harvard Business School who developed an important conceptual framework in 1984. This framework sees managers interacting with stakeholder interests (such as those of shareholders, employees, and, where they exist, unions) and situational factors (such as business strategy, the labor market, and technology) to develop their own HR choices. These lead to HR outcomes (such as various levels of employee competence and commitment), which, in turn, have longer-term impacts on organizational effectiveness and on societal and individual well-being.

An organization's need for leadership as opposed to management depends upon two variables: 1) the need for change in terms of meeting global competition, functioning with new technology, environmental instability, rapid growth, etc., and 2) the complexity of the operation in terms of size, technology, geographical dispersion, number of products, etc. The greater the need for change, the greater the need for leadership. The greater the complexity, the greater the need for management ...