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Understand how the strategic management of human resources contributes to the ACH vehement of organization objectives. Importance of Strategic human resource management is the process of integrating human resources function with the strategic objectives of the organization. In, order to achieve organization goal. The next section explores how human resource management has been modified to reflect the step changes in markets and production requirements over time.
We will describe the nature of the changes to major business eras, leading to an appreciation of how skills acquirement have reflected these major changes. After explaining what is meant by strategy, the third section develops key strategic issues in human resource development. We will also investigate how human resources can play a profoundly important part in developing and implementing strategy within an organization. Next, the emergence of human resources as a strategic issue is explored in greater depth.
This section explains the critical differences between many Western firms’ and Japanese approaches to human resource development. We will show that human resource development needs to be in place alongside other important human resource issues, including industrial relations, and describe how human resources can become part of the core competence of an organization. The main things why the strategic human resource management? It should be self -confident.
Organization consists of people, and so the development of these people should be a key task of organization. If people were to speak to senior – level managers within firms they would, typically, identify how important their staff are. However, these same senior -level managers will often concentrate on slashing budgets related to human resources development. They may also have no qualms about downsizing the number of employees at the same time. What is sometimes not clear, though, is that people really do matter in organizations.
People matter because in the highly competitive environment which firms now facer human capital has become a precious commodity is gaining any short of advantage over other firms. Human Resource Development is a vital area for firms because ideas for innovation, quality and continuous improvement, as well as other critically important inputs needed to compete in the modern, highly competitive business world, come from people and not from machines.
The extent to which people will provide suggestions for improvements in all forms will depend, to a large extent, on human resource development strategies within firms. The need to develop human resources on an ongoing basis has not always been so prominent. However, the overwhelming evidence seems to be that organizations do not fully understand the strategic importance of human resource development. Many firms are too quick to downsize or ‘right size’ in the pursuit of cost-cutting initiatives.
Other strategic decisions, including mergers and acquisitions, may threaten the culture that had human resource placement as part of its core capabilities. 1. 2 purpose of Strategic Human Resource Management Activities The fundamental purpose of strategic human resource management activities is to generate strategic capability by ensuring that the organization has the skilled, engaged and well-motivated employees it needs to achieve sustained competitive advantage.
In according with the resources – based view as described Boxful theory, the strategic goal will be to create firms which are more intelligent and flexible than their competitors by hiring and implementing more talented employee and by improving their skills base Strategic human resource management is largely about integration and adoption. It purpose is to ensure that Human resource management is fully integrated with the strategy and strategic needs of the firm.
Human resource policies cohere both across policy areas and across hierarchies and human resources practices are adjusted, accepted and used by line managers and employees as part of their everyday work. When considering the aims of strategic Human Resource Management it is necessary to address the issue of the extent to which HRS strategy should take onto account ethical considerations the interests of all the stakeholders in the organization and employees in general, as well as owners and management and the responsibilities of the organization to the wider community.
Strategic HRS is underpinned by three concepts, namely the resource-based view, strategic fit and strategic flexibility. The resources-based view To a large extent, the philosophy of strategic HRS is based on the resource based view. This states that it is the range of resources in an organization, including its human resources, that produces its unique character and creates competitive advantage . The resource based view as developed and expanded provides a durable basis for strategy and builds on and provides a unifying framework for the field of strategic human resource management.
That competitive advantage arises first when firms within an industry are heterogeneous with respect to the strategic resources they control and, second, when these resources are not perfectly mobile across firms and thus heterogeneity can be long-lasting. Creating sustained competitive advantage therefore depends on the unique resources and capabilities that a firm brings to competition in its environment. These resources include all the experience, knowledge, judgment, risk-taking propensity and wisdom of individuals associated with a firm.
For a firm resource to have the potential for creating sustained competitive advantage it should have four attributes: it must be valuable, rare, imperfectly imitable and substitutable. To discover these resources and capabilities, managers must look inside their firm for valuable, rare and costly-to imitate resources, and then exploit these resources through their organization. Strategic fit Strategic fit refers to the two dimensions that distinguish strategic Human Resource Management. First, vertically, it entails the linking of human source management practices with the strategic management processes of the organization.
Second, horizontally, it emphasizes the coordination or congruence among the various human resource management practices. ‘ Strategic flexibility Strategic flexibility is defined as the ability of the firm to respond and adapt to changes in its competitive environment. Environmental differences will affect a flexibility strategy. Stable, predictable environment the strategy could be to develop people with a narrow range of skills or not to develop multi skilled people and to elicit a narrow range of behavior (e. G. Get job descriptions). In a dynamic, unpredictable environment, however, organizations might develop organic Human Resource systems that produce a human capital pool with people possessing a wide range of skills who can engage in a wide variety of behaviors. The need is to achieve resource flexibility by developing a variety of ‘behavioral scripts’ and encourage employees to apply them in different situations, bearing in mind the increased amount of discretionary behavior that may be appropriate in different roles.
It can be argued that the concepts of strategic flexibility and fit are incompatible, fit’ implies a fixed legislations between the Human Resource strategy and business strategy, but the latter has got to be flexible, so how can good fit be maintained, But that the concepts of fit and flexibility are complementary fit exists at a point in time, while flexibility has to exist over a period of time. 1. 3 Contribution of strategic human resource management to achievement of an organization goal. Modern developed economies are increasingly relying on human capital to gain their competitive advantage.
In such a knowledge economy, it is the skills and knowledge of employees rather than just the abilities inherent in genealogy and machinery that are crucial. The capacity of an organization to manage its talent is what will set it apart from other competitors. Our people are our most valuable resources and the key to the development of a knowledge based economy. Only by developing our own local human resources and providing opportunities for continuing education for people of all walks of life can we prepare ourselves for the changes in the marketplace.
This is of most importance to the well-being of our people and the long-term development. However, talented people are scarce; as a result companies just pay closer attention to the issue of talent management, in terms of attracting, recruiting, and developing talent in an economy that is increasingly knowledge-based. The contribution of human resource management function to an organization’s strategy is underscored by reviewing the overall functions of strategic planning.
These include periodic forward scanning, analysis based on longer time frame, communication about goals and resource allocation, framework for short-term plan evaluation and integration, institutionalizing longer term time horizons necessary for investments, and decisional criteria or short-term decision making. It is impossible to address these critical issues without bringing in the human resources factor at each element of the process. In the early development of strategic management, there was little concern about the human resources function until the actual implementation began.
Rarely was the human resource brought into the planning process. Now this is changing. Strategy and human resource planning are integrated early in the process. There are several benefits of integrating human resource planning with strategic planning, making it imperative for this integration to be regularly pursued. Some experts have suggested that the human resource manager be labeled Director of People Strategy. Because of the importance of strategy in the success of firms and the critical ingredient of human resources in the strategic plan, human resource managers are finding themselves heavily involved in the strategic planning process.
Because strategy is related to the organizational goals, the ultimate opportunity to show the contribution of human resources begins in the strategic planning arena. The strategic importance of human resources has been widely recognized. As a result, strategic human resource management (SHRUG) has en argued to be positively related to organization performance. More especially, Human Resource Management, has been linked to increased productivity, good customer service, improved efficiency, increased firm value, greater profitability or financial returns and overall organizational survival.
Strategic role of HRS as “organizational systems designed to achieve competitive advantage through people”. In turn, competitive advantage may be defined as a set of capabilities or resources giving an organization an advantage that leads to superior performance relative to that of competitors. In this respect, the main focus of SHRUG is on integrated combinations of HRS practices, through which organizations should create competitive advantage rather than simply adapting to the existing context.
A review of the literature reveals five interrelated approaches to the link between the competitive position Of an organization and the creation Of superior human assets. First, the resource-based approach of competitive advantage focuses on the relationships between a firm’s internal resources, its profitability and the ability to stay competitive through its strategy formulation. According to this approach, a resource is considered as an internal strength only if it meets the five criteria for sustainable competitive advantage.
Specifically, a resource must be immobile, be difficult to replicate, have no close substitutes, be rare and create value. The central idea of the resource-based theory is that a firm’s systems, among its other attributes, enable the organization to achieve success relative to competitors. Another approach focuses on the way human resource systems support competitive advantage and organizational learning through people. This perspective implies that human resource management would focus on how the integration of organizational resources, practices and capabilities can lead to sustainable competitive advantage.
To understand this integration researchers have used notions of internal or horizontal fit and external or vertical fit. Management must have a clear understanding of internal fit and the way such fit facilitates organizational learning and adaptation.