Strategic Human Resources Management

Strategic human resources management is more than just the Human Resources Director getting a seat at the top management table. It is much more than declaring that ‘…people are our greatest asset…’

The need for more strategic
human resources management

Human resources departments are living through challenging times.

In the past many were transaction processing and compliance oriented overhead cost centres.

Human Resources management can help the firm to succeed.

To be strategic the management of people should affect profit more than at the margin.

Strategic human resources management
as investment

Some see human resources management as these steps -

  • First, find out which roles have the biggest impact on strategy implementation.
  • Then hire the best performing people you can find to these roles.
  • Finally, supply the best resources and supports you can to these people and reward them highly.

Some see human resources management as a simple sequence as follows.

First, find out which roles have the biggest impact on strategy implementation. Then hire the best performing people you can find to these roles. Finally, supply the best resources and supports you can to these people and reward them highly.

This approach sees talent management as an investment to be managed like a portfolio of valuable assets. Authors such as Becker, Huselid, and Beatty, advocate this method, in their book - The Differentiated Workforce: Transforming Talent into Strategic Impact.

Strategic human resources - organization design and managerial leadership practices

Other work suggests that ineffective strategy execution is more to do with poor structure and systems. This moves the emphasis away from underperforming employees. This means things like -

  • Find out which roles have the biggest impact on strategy implementation.
  • Hire the best performing people you can find to these roles.
  • Supply the best resources you can to these people, and reward them well.

These things set the agenda for an integrated human resources management (HRM) system. Such a scheme helps the organization achieve its strategic business results. It facilitates fairness. It builds trust among members of the organization. This contrasts with piecemeal approaches, which can lead to the poor relationships seen in many organizations.

This requisite organization approach aims at greater employee engagement. This helps improve strategy execution.

Team of champions or champion team?

The first approach emphasizes getting stars into starring roles. This may suit professional sports teams and performing arts organizations. These organizations rely on ‘star power’.

The second approach builds a champion team of ordinary capable people. This suits most organizations.

Strategic HR management chooses the approach for the business.
The challenge for HR managers is to link what they do with the overall performance of the business.

Return from Strategic Human Resources Management to Business Strategy.

Return from Strategic HRM to Simply Strategic Planning Home Page.


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