Today, the business world becomes more global, uncertainty, and competition. Strategic human resource management becomes more important for organizations in the business world environment. Strategic human resource management is the systematic management connect man with the organization (Thomas F. Cummings & Steven Marcus,1994). For the challenges of profitability, work-life balance and increased global competition, effective strategic human resource management will help the organization develop the business and maintain sustainable competitive advantage. Strategic human resource management (SHRM) emphasizes the importance of establishing congruence between human resource policies and organizational strategic goals.
In the real business world, no matter where we go, no matter what kind of companies and organizations, they all can’t survive without strategy, structure, and HR practice. Strategic management seeks to coordinate and integrate the activities of the various functional areas of a business in order to achieve long-term organizational objectives.
Compared with technical HRM, Strategic HRM is considered a relatively ‘new’ concept, despite its continuous development over the past two decades. Although there is still no consensus on an exact definition of SHRM among scholars, broad agreement has been reached on its basic function, which involves designing and implementing a set of internally consistent policies and practices that ensure the human capital of a firm contributes to the achievement of its business objectives (Schuler & MacMillan 1984, Baird & Meshoulam 1988, Jackson & Schuler 1995).It is a common belief in the business world that the human resources of an organization can be a source of competitive advantage, provided that the policies and practices for managing people are integrated with strategic goals and objectives.
‘The major challenges of profitability, work-life balance and increased global competition have made the strategic HRM more important to business success than ever before.’ For this statement, the answer is definitely yes.
In recent days, there are some challenges impact on organizations respective to strategic human resource management. These impacts include profitability, work-life balance and increased global competition.almost all the organizations want to be more profitability in the challenging economy with large competitors, the organizations would like to reduce cost and increase potentials to be profitable. Work-life balance is another challenge of the organization. For those of employees who work for organizations have to mix and match work with everything else that can go on in life, including family, health, hobbies, friendships and considerations. There will be a substantial impact on by reducing absenteeism & turnover, and improving productivity & customer service. Without work-life balance, any career goals or aspirations the employee set will eventually fall flat due to the employee’s own mind or body’s inability to keep up (Kellye Whitney, 2006). Most companies now are facing the environment of increasing global competition. Because of the fall of trade barriers and the decline of the transaction costs, new global competitors are entering different markets.
In order to overcome the challenges above, the organization, the HR manager need to adopt a strategic approach, be part of the top management team, be involved in corporate planning, develop business know-how, become bottom-line oriented and develop a vision for HRM(Raymond J.Stone, 2007 P35). So the strategic HRM become more important than ever before.
Strategic HRM focuses on the linking of all HR activities with the organization’s strategic objectives. Strategic HRM can help organizations determine the best user of human resources to meet organizational goals and can facilitate the integration of HR policies and practices with each other and with the business strategy(What Is HRM, 2010).
Strategic human resource management is one of the means to attain the financial success of the organization. Strategic human resource management affect how organizations are changed, and how they perform. It also affects how employees are treated, affect security of employment and affect the nature of employment, and even the individual relationships is affected by the strategic HRM.
As Davidson states?’Strategic HRM demands HR professionals who have competencies at a general management level and who are willing to accept responsibility for organizational performance outside HRM; who are skilful at selling HRM within their organization so that they achieve the required level of influence and participation at executive and strategic management levels; and who thereby are able to bring their specialist HR functions more closely into alignment with corporate objectives and strategies.'(Davidson,p, 1996) Because of the shift from human resource management to strategic human resource management, more professional approach is needed. The organizations have more demands, so the organization needs more strategic, integrative and accountable approaches to HR practices.
After the development of strategy, it’s important to effective implement the stategy. Implementation is the extent to which the practices have been adopted and is reflected in the intensity of their use. Strategy implementation involves designing an organization’s structure and control systems and evaluating the selected strategies in achieving the organization’s key objectives. For an organization, it’s not easy to turn strategies or plans into individual actions to produce a great business performance. The HR manager and HR professionals should understand how a profitable business if run and analysis very seriously about business needs, corporate culture, and internal and external environment factors and know how to link HR practices to the organizational business strategy.
Strategic human resource management practices are the way used to focus people’s attention on the major strategic issues in the organization. In order to overcome the challenges faced by organizations, strategic human resource management practices should be managing people to improve the performance effective during the strategy process. Strategic HRM practices include recruitment and selection, training and employee deployment, performance appraisal and employee remuneration. All the execute of the activities will help the organization achieve its vision, mission and strategic objectives. That means that all the practices should be “strategic” (Michael Armstrong, 2006).
From the surface to understand, managers would feel that they already engage in selective hiring and recruiting, for example, they would hire the best person. In fact, the key factors for successful recruitment are job analysis and job design. The process of figuring out in advance what kinds of people and skills will be needed in the future is one of the major strategic steps an organization can take to successfully recruit management executives, and it should actually take place prior to the need for recruitment for any particular position (Pynes, 1997). The organization should make a strategic HRM planning to forecast its need, through the accurate and objective understand about candidates select the right person to fill the right job in order to make profit for the company
Strategic human resource management provide a system to improve human resource training combine with the personal development plan, and at the same time ensure that transport steady flow of various types of talent to the organization to achieve the rapid development of the organization and the employees’ career success.
Traditional human resource management is responsible for training the new employees about the organize discipline, labor safety, quality management after they enter the organization, few will organize the training of staff in other areas, so it is hard to establish a comprehensive human resource Training and development system. For example, without good training compatible with organizational goals and the work itself, even the excellent employee might find it difficult to achieve high performance, and some ignoring the importance of work-life banlance which make the staff have difficulty in dealing with the work and their life.
Performance appraisal concerned with determining how well employees are doing their job, communicating that information to employees, agreeing on new objectives and establishing a plan for performance improvement.( Raymond J.Stone, 2007 P295) It is to communicate organizational norms or culture so that employees internalize the organization’s value. Before the HR manage acted a role of police, only have responsible for finding the mistakes. Strategic human resource management concern more on the overall appraisal management, including performance plan, performance assessment, performance evaluation, performance feedback, performance incentive and so on. Pay more attention to performance feedback and incentives, to ensure that increasing employee performance as well as achieve a better organization performance which make the organization more competitive.
Employee remuneration is a critical part of strategic HRM. A systematic approach to remuneration reduces the level of subjectivity and increases the likelihood of an organization attracting, retaining and motivating suitable employees and gaining a competitive advantage. Without a systematic approach to remuneration, an organization will have difficulty monitoring cost-effectiveness, legal compliance, pay equity, the relationship between pay and performance, and whether its remuneration program supports its business strategy.( Raymond J.Stone, 2007 P466)
Finally, in this more and more competitive market. The organization faces many challenges to survive and develop. Those challenges will affect change in organizational strategy. To response those challenges, strategic human resources manager must approach the recruitment and selection process from a strategic perspective. Recruitment and selection strategies and policies must integrate within both strategic HRM and organizational strategies. From the above it’s clear that people will continue to play pivotal roles, and strategic human resource management is now coming to play a very important role in today’s business world. Strategic human resource management is all about strategically managing a business human resources in a manner that works to the overall benefit of the business, overcome the challenges and bring huge profit.