Strategic human resource management is designed to help companies best meet the

needs of their employees while promoting company goals. Human resource management
deals with any aspects of a business that affects employees, such as hiring and firing, pay,
benefits, training, and administration. Human resources may also provide work incentives,
safety procedure information, and sick or vacation days.

Strategic human resource management is the proactive management of people. It

requires thinking ahead, and planning ways for a company to better meet the needs of its
employees, and for the employees to better meet the needs of the company. This can
affect the way things are done at a business site, improving everything from hiring practices
and employee trainingprograms to assessment techniques and discipline.

Companies who work hard to meet the needs of their employees can cultivate a work
atmosphere conducive to productivity. Human resource management is the best way to
achieve this. Being able to plan for the needs of employees by thinking ahead can help to
improve the rate of skilled employees who chose to remain working for a company.
Improving the employee retention rate can reduce the money companies spend on finding
and training new employees.

When creating a human resources plan, it is important to consider employees may

want or need and what the company can reasonably supply. A larger company can usually
afford training and benefit programs that smaller companies cannot afford to offer. This
does not mean that a smaller company should not engage in strategic human resource
management. Providing specialized on-site training, even if provided by senior members of
the company, and offering one-on-one assessment and coaching sessions, can help
employees reach peak performance rates.

An important aspect of strategic human resource management is employee

development. This process begins when a company is recruiting and interviewing
prospective employees. Improved interviewing techniques can help to weed out applicants
that may not be a good match for the company.

After being hired on, a strong training and mentoring program can help a new member
of the staff get up to speed on company policies and any current or ongoing projects they
will be working on. To help employees perform at their best, a company can follow up with
continual training programs, coaching, and regular assessment. Investing in the
development of its employees can allow a company to turn out more consistent products.

Strategic human resource management is essential in both large and small

companies. In small companies, this may be as simple as the owner or manager taking a
little time every day to observe, assist, and assess employees, and provide regular reviews.
Larger companies may have a whole department in charge of human resources and
development. By meeting the needs of the employees in a way that also benefits the
company, it is possible to improve the quality of staff members. Taking the effort to provide
employees with the tools they need to thrive is worth the investment.
The human resource management that aims to improve the productive
contribution of individuals while simultaneously attempting to attain
other societal and individual employee objectives has undergone
drastic change with the passing of years.

We all know that HRM is concerned with the "people" & keeping the
fact in mind that HRM helps in acquiring, developing, stimulating &
retaining the outstanding employees as it gives both effectiveness &
efficiency to the working of the organization, it has been started being
used strategically & is now termed as Strategic human resource
management.

The changing role of HRM:

The role of human resource management is changing & is changing

very fast, to help companies achieve their goals. HRM has gone
through many phases – from hiring & firing to relationship building,
from there tolegislation role, & now its role is shifting from protector
& screener to strategic partner & as a change agent.

Defining SHRM:

o Organizational use of employees to gain or keep a competitive

advantage against competitors.

o Involves aligning initiatives involving how people are managed with

organizational mission and objectives.

In today's flattened, downsized & high-performing organizations,

highly trained & committed employees – not machines – are often the
firm's competitive key.

Perhaps the most drastic change in HR's role today is its growing
involvement in developing & implementing the company's strategy.

In order to understand the modern aspect of HR i.e. SHRM, lets

discuss the terms which would help us in understanding the concept:

o Core Competency can be defined as - A unique capability in the

organization that creates high value and that differentiates the
organization from its competition.

o Mission Statement explains purpose and reason for existence; it is

usually very broad, but not more than a couple of sentences & it
serves as foundation for everything organization does.

o Strategy: the company's plan of how it will balance its internal

strengths & weaknesses with external opportunities & threats in order
to maintain a competitive advantage, earlier this role was performed
by the line managers, but now it is carried by the HR manager.

Strategies increasingly depend on strengthening organizational

competitiveness & on building committed work teams, & these put HR
in a central role. In the fast changing, globally competitive & quality
oriented industrial environment, it's often the firm's employees – its
human resources – who provide the competitive key. And so now it is
a demand of the time to involve HR in the earlier stages of
development & implementing the firm's strategic plan, rather than to
let HR react to it. That means now the role of HR is not just to
implement the things out but also to plan out in such a manner that
the employees can be strategically used to get edge over the
competitors, keeping in mind the fact that this is the only resource
(HUMANS), which cannot be duplicated by the competitors.

The Strategic Management Process includes:

– Determining what needs to be done to achieve corporate objectives,

often over 3 - 5 years
– Examining organization and competitive environment
– Establishing optimal fit between organization and its environment
– Reviewing and revising strategic plan

The Stage in the Process of Strategic Management:

Mission statement- Business definition and future plan for success.

Environmental analysis- OT analysis and preparing to meet
environmental pressures.
Organizational self-assessment- SW analysis and chalking road map
for attaining goals.
Establishing goals and objectives- Laying concrete figures that will help
in benchmarking the performance. These benchmarks will lead to the
development of strategy that will decide how the company intends to
meets its environmental challenges with given environmental and
resource constraints in the time to come.
Benefits of a Strategic Approach to HR:

* Facilitates development of high-quality workforce through focus on

types of people and skills needed
* Facilitates cost-effective utilization of labor, particularly in service
industries where labor is generally greatest cost
* Facilitates planning and assessment of environmental uncertainty,
and adaptation of organization to external forces
* Successful SHRM efforts begin with identification of strategic needs
* Employee participation is critical to linking strategy and HR practices
* Strategic HR depends on systematic and analytical mindset
* Corporate HR departments can have impact on organization's efforts
to launch strategic initiatives

Human Resources Life Cycle:

The above diagram is divided into four different colours each indicating
a separate stage of HR life cycle. Each stage has specific actions or
steps that form respective stage for e.g. in third stage there are six
different steps involved such as step 3 to step 8. These four stages
cover all actions or functions pertaining to HR manager's job and they
are related with strategic plan of the organisation.

The cycle starts with laying down a strategic plan, linking HR functions
in it, and it provides the basis for Manpower planning and internal
mobility. The Manpower planning will lead to the function of acquiring
right people for the right job and in accordance recruitment as well as
selection exercise will be designed and tools selected. For e.g. if a
automobile company decides to launch a new four-wheel model in the
time to come their focus will be on Research and Development and
then on Market Testing and last but foremost production and after
sales. This new plan will act as the guideline for the company and will
help in determining how many people do we need and what
qualifications they should posses and how many of them can be kept
on full-time rolls and as permanent employees.

The next Stage is for sustaining and retaining those who are hired and
making sure that they work efficiently and help the company move in
the selected direction. They should also facilitate the smooth
movement of the company in the desired direction and should result in
achievement of corporate goals and objectives effectively and
efficiently. Employee's performance should be rated and compared
with the benchmarks, recorded deviations are to be corrected, and
precautionary measures for the future are implemented. In last stage
the separation or farewell to those who are non-performing or may be
to those who have completed their job or task i.e. project teams, is
bided.

Factor Linkages of HR Plans and Strategies:

Given diagram presents various factors that have an impact on HR

plans and Strategy and how are they interlinked with each other. Their
interactions and impact on each element and the resulting change in
HR Plan and policy is also indicated clearly.

The table given above takes into consideration two of the generic
strategies and the strategic focus required to generate each of these
competitive advantages along with HR strategy and activities needed
to be done by HR Department to help the organization in generating
these strategic advantages and to move successfully towards desired
goals and objectives.

To understand these linkages we can look at them as tasks and steps

needed to be taken in order to complete the tasks. The selected
strategic focus should be very clear and well integrated into
organizational policy and clearly communicated to HR Department to
help in drafting suitable HR strategy and last in carrying out all
activities.

Conclusion:

Ideally HR & top management work together to formulate the

company's overall business strategy; that strategy then provides the
framework within which HR activities such as recruiting & appraising
must be crafted. If it is done successfully, it should result out in the
employee competencies & behavior that in turn should help the
business implement its strategies & realize its goals.

According to an expert "the human resources management system

must be tailored to the demands of business strategy".

In order to be successful the employees should be developed in such a

manner that they can be the competitive advantage, & for this the
human resource management must be an equal partner in both the
formulation & the implementation of the corporate & competitive
strategies.
Introduction

Liberalization and indust6rialisation has paved an increasing pressure on

organizations in India to change from indigenous, costly, sub-optimal levels of
technology to performance based, competitive and higher technology provisions. The
response to liberalization has created opportunities for technology upgrading and
sophistication, resource mobilization from new sources, highly competitive
input/output market, high growth and buoyant environment and HRM issues
associated with strategic initiatives of diversification, mergers and acquisitions,
restructuring, joint ventures, strategic alliances and for overall internationalization of
the economy (Som, 2002). change from a regulated environment to a free market
environment has direct implications for SHRM practices in India (Krishna and
Monappa, 1994, Rao, 1999) and HRM specialists and the HRM departments are
under severe pressure to bring about large-scale professionalized changes in their
organizations in order to cope with the challenges brought about by economic
liberalization (Rao et al., 2001; Som, 2002). Strategic Human Resource Management
(SHRM) has received a great deal of attention in recent years, most notably in the
fields of Human Resource Management (HRM), Organizational Behavior, and
Industrial Relations. An area that demands greater understanding is that of Strategic
Human Resource Management (SHRM). SHRM is concerned with top managements
attention and approach to HRM as a critical strategic dimension affecting firm
performance; which is the objective of this article. Strategic human resource
management (SHRM) enhances productivity and the effectiveness of organizations.
Their implementation in organizations has proven that when organizations employ
such personnel practices (mentioned in this paper) they are more able to achieve
their goals and objectives. This article first describes what the word Strategy means
and shifts its focus on HRM at a strategic level highlighting its importance in the
present day organizations. The paper then highlights what best practices (as a result
of strategic planning) the organizations can adopt that would ensure them of
success.

What are Strategies?

Strategy is a multi-dimensional concept going well beyond traditional competitive

strategy concepts. Strategies are broad statements that set a direction. Strategies
are a specific, measurable, obtainable set of plans carefully developed with
involvement by an institution's stakeholders. These action statements are linked to
an individual or individuals who are accountable and empowered to achieve the
stated result in a specific desired timeframe. They are patterns of action, decisions,
and policies that guide a group toward a vision or goals.

Strategic human resource management (SHRM)

]. Strategic Human Resource Management (SHRM) is an area that continues to evoke

a lot of debate as to what it actually embraces. Definitions range from 'a human
resource system that is tailored to the demands of the business strategy' (Miles and
Snow 1984) to 'the pattern of planned human resource activities intended to enable
an organization to achieve its goals' (Wright and McMahan 1992).
Strategic human resource management (SHRM) is a concept that integrates
traditional human resource management activities within a firm's overall strategic
planning and implementation. SHRM integrates human resource considerations with
other physical, financial, and technological resources in the setting of goals and
solving complex organizational problems (Legnick-Hall & Legnick-Hall, 1988) SHRM
also emphasizes the implementation of a set of policies and practices that will build
employee pool of skills, knowledge, and abilities (Jackon and Schulerm 1995) that
are relevant to organizational goals. Thus a larger variety and more complete set of
solutions for solving organizational problems are provided and the likelihood that
business goals of the organization will be attained is increased (Mechelin, 1996).

Strategic Human Resource Management (SHRM) is an area that continues to evoke a

lot of debate as to what it actually embraces. Definitions range from 'a human
resource system that is tailored to the demands of the business strategy' (Miles and
Snow 1984) to 'the pattern of planned human resource activities intended to enable
an organization to achieve its goals' (Wright and McMahan 1992). Although the
difference between these two seems subtle, the implications of the difference are
considerable. Where in the first definition human resource management is a
'reactive' management field in which human resource management becomes a tool
to implement strategy, in the latter definition it has a proactive function in which
human resource activities actually create and shape the business strategy (Sanz-
Valle et al. 1999).

Strategic HRM can be regarded as a general approach to the strategic management

of human resources in accordance with the intentions of the organisation on the
future direction it wants to take. It is concerned with longer-term people issues and
macro-concerns about structure, quality, culture, values, commitment and matching
resources to future need. It has been defined as:

All those activities affecting the behaviour of individuals in their efforts to formulate
and implement the strategic needs of business. (SCHULER, R.S., 1992)

The pattern of planned human resource deployments and activities intended to

enable the forms to achieve its goals. (WRIGHT, P.M. and MCMAHAN, G.C. (1992)

Approaches of the SHRM,

o attempts to link Human Resource activities with competency based

performance measures
o attempts to link Human Resource activities with business surpluses or
profit

These to approaches indicate two factors in an organisational setting. The first one is
the human factor, their performance and competency and the later is the business
surplus. An approach of people concern is based on the belief that human resources
are uniquely important in sustained business success. An organization gains
competitive advantage by using its people effectively, drawing on their expertise and
ingenuity to meet clearly defined objectives. Integration of the business surplus to
the human competency and performance required adequate strategies. Here the role
of strategy comes into picture. The way in which people are managed, motivated and
deployed, and the availability of skills and knowledge will all shape the business
strategy. The strategic orinetation of the business then requires the effective
orinetation of human resource to competency and performance excellance.

Benefits of SHRM

1. Identifying and analyzing external opportunities and threats that may be crucial to
the company's success.
2. Provides a clear business strategy and vision for the future.
3. To supply competitive intelligence that may be useful in the strategic planning
process.
4. To recruit, retain and motivate people.
5. To develop and retain of highly competent people.
6. To ensure that people development issues are addressed systematically.
7. To supply information regarding the company's internal strengths and
weaknesses.
8. To meet the expectations of the customers effectively.
9. To ensure high productivity.
10. To ensure business surplus thorough comopetency

Barriers of SHRM

Barriers to successful SHRM implementation are complex. The main reason is a lack
of growth strategy or failure to implement one. Other major barriers are summarized
as follows:

1. Inducing the vision and mission of the change effort.

2. High resistance due to lack of cooperation from the bottom line.
3. Interdepartmental conflict.
4. The commitment of the entire senior management team.
5. Plans that integrate internal resource with external requirements.
6. Limited time, money and the resources.
7. The statusquo approach of employees.
8. Fear of incomopetency of senior level managers to take up strategic steps.
9. Diverse work-force with competitive skill sets.
10. Fear towards victimisation in the wake of failtures.
11. Improper strategic assignments and leadership conflict over authority.
12. Ramifications for power relations.
13. Vulnerability to legislative changes.
14. Resistance that comes through the legitimate labour institutions.
15. Presence of an active labour union.
16. Rapid structural changes.
17. Economic and market pressures influenced the adoption of strategic HRM.
18. More diverse, outward looking approach.

HR Practitioners Role

The HR managers have keen role in the effective planning and implementation of the
policies and decisions that in tune with the business changes. They should act as
strategic partners and be proactive in their role than mere reactive, passive
spectators. The HT managers should understand how far their decisions contribute to
business surplus incorporating human competency and performance to the
organisation. Strategic HR managers need a change in their outlook from seeing
themselves as relationship managers to strategic resource managers. Kossek (1987,
1989) argues that major HRM innovations occur when senior management takes the
lead and adoption of innovative SHRM practices is dependent on the nature of
relationship of the HR Department with the CEO and the line managers. Legge
(1978) commenting on the actions of the personnel practitioner in the innovation
process suggests that adoption of an innovation by an organization depends largely
on HR practitioners' credibility with information and resource providers. HR
Department and HR managers in these innovative organizations play a strategic role
(Ulrich, 1997) linking the HR strategy with the business strategy of the organization.
A crucial aspect concerning SHRM is the concepts of fit and flexibility. The degree of
fit determines the human resource system's integration with organization strategy.
It is the role of HR Managers to ensure this fit in between Human Resource System
with the Organization Strategy.

Conclusion

As global business competition shifts from efficiency to innovation and from

enlargement of scale to creation of value, management needs to be oriented towards
the strategic use of human resources. Strategic human resources management
practices enhance employee productivity and the ability of agencies to achieve their
mission. Integrating the use of personnel practices into the strategic planning
process enables an organization to better achieve its goals and objectives.
Combining human resource practices, all with a focus on the achievement of
organizational goals and objectives, can have a substantial affect on the ultimate
success of the organization. To manage future operations effectively, it is essential
that companies produce "business leaders" and "innovators" through SHRM
Approach.