Strategic HRM Evolution: The Role of SHRM in Optimizing the Most Valuable Asset

HRM

Human Resources Management (HRM) is a management function that deals with recruiting, selecting, training and developing human resource in an organization. It is concerned with the “people” dimension in management. It includes activities focusing on the effective use of human resources in an organization. It is concerned with the development of a highly motivated and smooth functioning workforce. It also includes planning, acquiring, developing, utilizing and maintaining ‘human resources’ in the achievement of organizational goals (Jain, undated)  

Strategy

Strategy is about deciding where you want to go and how you mean to get there. A strategy is a declaration of intent: ‘This is what we want to do and this is how we intend to do it.’ Strategies define longer-term goals but they are more concerned with how those goals should be achieved. Strategy is the means to create value. A good strategy is one that works, one that guides purposeful action to deliver the required result (Armstrong, 2006)

Strategic Management

Strategic management means that managers are looking ahead at what they need to achieve in the middle or relatively distant future. It deals with both ends and means. As an end it describes a vision of what something will look like in a few years’ time. As a means, it shows how it is expected that the vision will be realized. Strategic management is therefore visionary management, concerned with creating and conceptualizing ideas of where the organization should be going. But it is also empirical management, which decides how in practice it is going to get there (Armstrong, 2006)

Strategic HRM (SHRM)

Strategic Human Resource Management, shortly known as SHRM is a function of management which entails development of policies, programs and practices related to human resources, which are then aligned with business strategy, so as to achieve strategic objectives of the organization. Its primary purpose is to improve the performance of the business and maintain a culture that encourages innovation and works continuously to gain competitive advantage (Key differences, undated).

The aim of SHRM is that companies must adjust their HR strategy within the periphery of overall business objectives, thus ensuring that HR practices are in tune with the strategic objectives of the organization. It lays down a clear corporate strategy and vision for future. A major pro of strategic human resource management is that it ascertains and analyses external opportunities and threats to the business organization (Key differences, undated).

Comparison chart HRM vs SHRM (Key differences, undated)

Haan and Main (2023) emphasized that SHRM is important because it helps the business to,

·       Improve employee performance: SHRM can help businesses improve employee performance by creating systems to track and improve performance. 

·       Develop the workforce: SHRM can help businesses develop the workforce by identifying employees’ development needs and providing training and resources to help them improve. 

·       Create a positive work environment: SHRM can help businesses create a positive work environment by managing employee relations. 

·       Reduce turnover: SHRM can help businesses reduce turnover by designing compensation and benefits programs that attract and retain employees. 

·       Improve productivity: SHRM can help businesses improve productivity by improving employee performance and creating a positive work environment.

According to Armstrong (2006) the fundamental aim of SHRM is to generate strategic capability by ensuring that the organization has the skilled, committed and well-motivated employees it needs to achieve sustained competitive advantage. Its objective is to provide a sense of direction in an often-turbulent environment so that the business needs of the organization, and the individual and collective needs of its employees can be met by the development and implementation of coherent and practical HR policies and programs

SHRM framework (Armstrong, 2006)

 

Strategic human resource management is a process that helps companies achieve their goals by better managing their workforce. By taking the time to develop a SHRM plan, companies can ensure that they have the right people in place to achieve their goals. While developing a SHRM plan can be time-consuming, the benefits outweigh the costs. Not only will a well-executed SHRM plan help you achieve your company’s goals, but it will also help you retain top talent and keep your employees engaged in their work (Haan and Main, 2023)

References

Jain, G (Undated) Introduction to HRM: Meaning, definition, scope, objectives and functions of human resource management, inflibnet.ac.in [ebook] Available at : https://ebooks.inflibnet.ac.in/mgmtp01/chapter/introduction-to-hrm-meaning-definition-scope-objectives-and-functions-of-human-resource-management/ [Accessed on 08.04.2024].

Armstrong, M (2006) Strategic human resources management: a guide to action [ebook], 3^rd. London and Philadelphia: Kogan page. Available at : http://dspace.vnbrims.org:13000/jspui/bitstream/123456789/4163/1/Strategic%20human%20resource%20management.pdf [Accessed on 03.04.2024].

Key differences (Undated) Difference Between HRM and SHRM. Keydfferences.com      [Online] Available at : https://keydifferences.com/difference-between-hrm-and-shrm.html [Accessed on 24.03.2024]

Haan, K. and Main, K. (2023) Strategic Human Resource Management :2024 Guide, Forbes.com [Online] Available at: https://www.forbes.com/advisor/business/strategic-human-resource-management/#:~:text=The%20main%20difference%20between%20human,achieve%20the%20company's%20overall%20goals [Accessed on 24.03.2024]