The main aim of strategic HRM is to integrate business strategy with HR strategy.
In the old times, the business environments were different, the markets were more stable, there was not much continuous advancement in technology, there was less variety in products and services, customers did not have much choice and competition was not at an all-time high.
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But with globalization setting in, the trade barriers between the countries have been reduced drastically. To fight these upcoming challenges businesses need to be foresighted and create strategies to be able to sustain and continuously grow.
In strategic human resource management, it is made sure that the human resource policies and procedures are well aligned with the strategic objectives of the organization. The knowledge and talent of the workforce has a very vital role to play in the success of a business.
Realizing the fact that since the global economy has opened a lot of opportunities for competent resources, attracting, managing, nurturing and retaining them has become the most critical issue for any organization.
Model of strategic management
At each step of strategic management model the focus on human resources is aligned with the strategic plan for the business. Since strategic management is very different from traditional ways of running a business, there can be seen a huge difference between the traditional and strategic approach to human resource management.
Model of strategic management consists of the major five steps:
- Defining Organizational Goal
- Analyzing the environment
- Formulation of strategies
- Implementation of Strategies
- Strategy evaluation
Defining Organizational Goal
The first step in strategic management starts with evaluating the company’s mission, vision, goal and values. While doing so the organization aligns a collection of HR practices, programs and policies to facilitate the achievement of the organization’s strategic objectives.
Analyzing the environment
SWOT (Strengths, Weaknesses, Opportunities, Threat) analysis is an important tool used in strategic management. It looks into the strength and weakness of the organization, the opportunities available outside the organization and the threats faced from the competition. While doing so it not only focuses on employee relations but also on their relations with the internal and external customers.
Formulation of strategies
Management evaluates all the factors and formulates strategies on the corporate, business and specific functional levels. While doing so strategies are framed from a long term perspective which requires HR to be proactive and align HR strategies to various time frames in a flexible manner.
Implementation of Strategies
Once the strategies are formulated activities need to be performed to implement them. It deals with the leadership style, structure of the organization and the management of human resources. Unlike the traditional bureaucratic roles and policies, strategic HR replaces specialization by cross training, teamwork is encouraged, permits employees to carry out job responsibilities in a free-flowing way by encouraging autonomy at various levels.
This is the final phase where it is measured whether the strategies implemented has led to achieve the desired results. HR aims at increased performance, enhancing employee satisfaction etc. To achieve this they ensure effective management of staffing, selection, development, training and retention to fit with the organization strategy and culture.