Strategic Human Resource Management (SHRM) and its Role in Improving Organisational Performance
Strategic Human Resource Management (SHRM) can be explained as “a general approach to the strategic management of human resources in accordance with the intentions of the organisation on the future direction it wants to take” (Giri, 2008, p.21). In simple terms, SHRM attempts to achieve a high level of integration between corporate strategy and HRM.
SHRM is perceived to be a much wider concept than traditional HRM in a way that SHRM addresses the impact of a range of factors on HR practices. Moreover, four major distinctive points of SHRM from traditional HRM can be specified in the following manner:
a) SHRM concentrates on the level of efficiency of individual employee performances
b) The importance of regularly introducing changes and organisational re-engineering is acknowledged within the framework of SHRM
c) SHRM recognises the role of effective organisational leadership
d) SHRM concentrates on team learning and sharing knowledge within organisations
Evolution of HRM into SHRM, and its increasing role in organisational performance owes to intensifying level of competition in the marketplace. In other words, with the level of competition in the market becoming intense for almost all industries, businesses are actively striving to explore additional sources of competitive advantage.
From this perspective, company human resources are proving to be an effective source of competitive edge through their creativity, and thus strategic approach to HRM is required in order to develop and sustain this important competitive edge.
There are many examples in business world that illustrate positive implications of adopting strategic approach to HRM on organisational performance. For example, in UK based John Lewis plc 81,000 employees are called as Partners (Our Employees, 2012), and accordingly company human resources are treated as strategic partners in the achievement of long-term aims and objectives.
Managers are recommended to approach HR aspect of the business strategically by increasing the level of its integration with other aspects of organisational management in general, and long-term organisational aims and objectives in particular.
Moreover, the adoption of strategic approach to HRM and ensuring its continuity requires from managers at all levels conducting critical analysis of HRM practices within organisation in a regular basis and these analyses have to be conducted with the participation of HR executive and strategic executive management of the organisation.
Giri, Y.L. (2008) “Human Resource Management: Managing People at Work” Nirali Prakashan
Our Employees (2012) John Lewis, Available at: www.johnlewispartnership.co.uk