Strategic human resource management

Introduction

The organisations compete for the best human resources, capital, technology, market share etc. This competition is characterised by a continuous change in customer tastes, fashions and needs. In order to cope with such changes and with the struggle to win customers, managers need highly flexible but robust human resource management strategies so that they can pursue, gain and sustain the existing and emerging competitive advantage.

Strategic Human Resource Management (SHRM) is necessary for all types of organisations, that is, public or private, local or foreign, small, medium or large. The only difference lies in the nature and scope of such strategies. In Tanzania for example, we have experienced the development of strategic plans as part of on-going public sector reforms. These plans take human resource management more seriously than has been the case in the past. Most recently, the government has developed potentials for using excellence models from businesses to guide public service delivery. Such models rely heavily on strategic plans. The idea is to inculcate and nurture a culture of excellence in public service delivery through better human resource management. This forms part of the drive to value citizens as customers who demand business like attitudes and services from civil servants. It departs from the tradition in which civil servants were seen as ‘rulers’ and citizens as ‘the ruled’. This departure is explicitly required in human resource strategies in order to create an environment where employees can be fully committed. The private sector has an even greater need for human resource strategies because, as observed earlier, they make a difference in securing a competitive advantage. This chapter intends to highlight the key issues in strategic human resource management and the role of strategic human resource management in business and organisational strategies.

Therefore, at the end of this chapter the reader should be able to:

· Describe the meaning of strategic human resource management and why managers need human resource strategies.

· Explain the relationship between corporate/business strategies and human resource strategies.

· Examine the requirements for effective development and the implementation of human resource strategies.

· Assess the relevance of strategic fit in organisational performance.

· Explain challenges facing managers in developing and implementing human resource strategies and how such challenges can be used as opportunities.

· Share some lessons from African organisations.

Strategy and strategic human resource management

Strategic human resource management (SHRM) has attracted the attention of many scholars in human resource management, particularly those who shaped the development of the human resource management concept. Several definitions have been developed but they are not independent of ideas of general strategic management. For the purpose of raising and comparing issues covered in the areas of strategic human resource management, three definitions are offered below.

The first is from Harrison (1993: 36) who defines strategic human resource management as:

an overall and coherent long term planning and shorter term management, control and monitoring of an organisation‘s human resources so as to gain from them the maximum added value and best position them to achieve the organisation’s corporate goals and mission.

This definition is about decision making and the process involved in terms of putting decisions into action. The main focus here is on planning for human resources, putting management systems in place so that staffing functions maximise the use of people as required by the organisation. In other words, strategic human resource management exists only if the future of the organisation is set and human resource strategies are developed and used to realise the future through the present. An aspect of short-term management control and monitoring is necessary for the realisation of the mission and goals.

Chaturvedi, in Karadjova-Stoer & Mujtaba (2009) consider strategic human resource management as ‘linking human resource with strategic goals and objectives in order to improve business performance and develop organisational culture that fosters innovation and flexibility’. This definition is derived from both resource dependency and strategic management theories within the environment where success of the organisation is based on the ability to develop the most robust business strategy, coupled with having the right people to pursue it. However, it is important to note here that the word ‘business’ also covers transactions for profit.

Therefore, the achievement of the desired future for the organisation is seen in terms of the ability to manage employees as the only resource that can mobilise and manage other resources. Therefore, failure to make the right decisions about people management leads to failure of the future of the organisation.

Walker (1992) is more interested in the means rather than the end of strategic human resource management. The author points to the need for linking such means with the strategic component of the organisation, thus strategic human resource management is about the methods of aligning the management of human resource with the strategic content of the business.

The general understanding derived from this definition is that staffing functions (recruitment, selection, placement, appraisal, rewards etc), which are used as a means of managing people should be directly linked to the strategic choice of the organisation. Such choice could be growth, survival, merger, closures, diversification etc. Bhatia (2007: xiii) supports the same conceptualisation of linking organisational strategy with people management by defining SHRM as:

The overall direction the organisation wishes to pursue in order to achieve its goal through people as a strategic resource for the achievement of competitive advantage.

From this perspective, the goal is to generate strategic capability by ensuring that the organisation has talented, skilled, committed, and well-motivated staff. From the above definitions and scope of strategic human resource management, it is tempting to suggest that as much as it is not possible to come up with a comprehensive definition of strategic human resource management that will not be too wordy and confusing, or too short to give a clear picture of the strategic issues involved, human resource management could also be defined as the process of managing the workforce such that the organisation achieves a sustained competitive advantage over others. Here, market forces are the drivers for strategic decision-making processes and implementation of staffing functions. In this case, strategic human resource management is both a proactive and reactive management process that transcends organisational life span.