These practices include: selective hiring, employment security, self-managed team, extensive training, sharing information, diminution of status differences, and stipulation of high pay contingent on organizational performance.
Other authors analyzed by Chang and Huang sustain that SHRM benefits company both directly and indirectly as it modifies passivity into initiative by clearly communicating organizational goals and encouraging the participation of line-managers. In addition, by generating structural cohesion, defined as "an employee-generated synergy that propels a company forward, enabling the firm to respond to its environment while still moving forward" (Chang and Huang, 2005), the SHRM influences positively organizational performance.
Various other testimonials strengthen the idea that a good strategic orientation of human resources will mostly appear in high performance firms, as contrary to the cases of low performance firms, which tended to apply more conventional methods. (Jackson and Schuler, 1995)
Human Resources Management (HRM) and the Strategic Management Process (SMP)
In order to successfully promote organizational performance, the SMP has to contain a series of 5 components.
These are: the vision, that, once formulated will help in creating the mission of an organization. The mission will subsequently be converted into the objectives of performance, for which achievement needing to have developed a set of strategies. Once these strategies implemented, and evaluation process will analyze the obtained performance of the activities. (Thompson and Strickleand, 1996)
The way HRM works in an efficient organization is by submitting its policies and activities to the achievement of SMP objectives. (Jain, 2005)
The trend in today's business world is to see human resources as being "the available talents and energies of people who are available to an organization as potential contributors to the creation and realization of the organization's mission, vision, strategy and goals" (Jackson and Schuler, 2000, p. 37)
Hence, SHRM serves as the route a successful organization will take in order to efficiently work with each of the components of its SMP.
Additionally, the linkage of HR activities with organizational strategies and the synchronization of the various HR activities are better described by the same authors when defining SHRM as being "the pattern of planned human resource developments and activities intended to enable an organization to achieve its goals."
As commented by Massey, the human resources reaches a strategic level, when it establishes the overall objectives and directions for key areas of HRM, with the purpose of ensuring that they will not only be consistent with the business goals, but they will also be a great support in their achievement. (Massey, 1994)
Thus, depending on the direction a certain organization wants to take, will adapt its approach to the strategic management of its human resources, as SHRM represents in fact an organization's general plan to achieve its goals through the people it has.
Therefore, SHRM can be seen as the complex process of dealing with long-term HR issues as components of organizational strategic management. Consequently, wide-ranging concerns regarding structures, quality, culture, values, commitment, development of HR and their performance, as being the inputs leading to the desired output: the accomplishment of organizational goals. (Jain, 2005)
SHRM has two important perspectives:
HRM as an integral part of the organizational strategy "which is chiefly about ensuring that the organization has the skilled, committed and well-motivated workforce it needs to achieve its business objectives. It can be achieved by linking HR strategies to basic competitive strategies" (Armstrong, 2000).
HRM as a strategy in itself, traducing in its preoccupation in developing employees in order to be able to face the challenges of this rapidly changing environment. (Jain, 2005).
To a high degree, the strategic framework of an organization can be simplified and applied to the field of HRM. The strategy of HRM can be developed depending on industry specificity, allowing HRM specialists to identify the specific training needs, and then create and implement customized training courses and programs. It can in fact be a must to develop the HRM development strategy based on the strategic framework of the organization, as it will place the HR within a specific strategy context, ensuring in this way a fully integrated role inside the organization, being able more easily to identify skill gaps and consequently provide the needed training and development programs and opportunities, that will enable staff to undertake adequately the formulation and implementation of organizational strategy. (Trim, 2003)
Challenges and benefits of global Human Resource Management
In the world we are living today, national differences are factors that complicate the process of transference of HRM practices across country boundaries, practice that has become lately a key strategy in the case of multinational companies in order to help them achieve competitive advantages in the global markets.
The most analyzed approach has been the one of the multinational companies from developed countries, consisting in the diffusion of HRM best practices. Nevertheless, it seems that multinationals from the countries registering rapid development, such as India and China, seem to have adopted another approach: the maintenance of host country's management practices, as a manner of acquiring the advanced skills that will enable the multinational to more efficiently compete on the international markets where it is present. (Human Resources Management, 2004)
This has been the case of Chinese multinationals operating in the United Kingdom. These subsidiaries have been adopting UK HR management practices to an extensive level. In this way, they were not only adapting to United Kingdom's cultural environment and regulatory constraints, but they were also using this experience as a way of transferring and disseminating British management expertise and best practices back to China and in the other international subsidiaries. Nevertheless, the ties with the mother company continued always to be strong, and therefore, some Chinese practices of management and especially in decision-making processes and softer areas of HRM, like remuneration and recruitment, continuing to be applied (Zhang, 2003)
Companies operating in developing countries can also obtain financial benefits through the strategic alignment their HR policies and practices. As defined by Singh, "strategic HR orientation is defined as the alignment of HR planning, selection, performance evaluation, compensation, development and staffing practices with the business strategies of the organization."
In his paper, offering a study over 19 Indian companies in manufacturing and services branches, Singh showed that strategically HR oriented companies tended to significantly outperform companies that proved a lower emphasis, as they were making a better use of the sustainable low-cost advantage.
Another series of advantages that can be obtained from globalization of HR practices, is expressed by cost savings, consistency, as well as a more efficient administrative service. As sustained by Horan and Vernon, these benefits can be achieved by implementing shared service operation at multi-country level.
These positive results appear as they assure the free up or HR resources for other type of activities that have the possibility to maximize the actual returns on human capital investment, which is one success factor of critical importance. These type of shared service centers tend to be useful especially in large organizations, geographically dispersed, that present various lines of business. Some of the factors and challenges that can affect the efficient implementation of shared service centers can be: cultural differences, language differences, demographic issues, infrastructure, labor costs, investments, programs and processes consistency, availability of expertise, as well as the regulatory framework. (Horan and Vernon, 2003)
HRM and Technology
As usual, in front of new and unknown technologies, there exists a certain amount of resistance. This has also proven to be also the case of HR professionals, which have experienced the fear of being replaced once new programs facilitating the HR activities appeared. Nevertheless, it should not be forgotten that HR activities are, more and more everyday, increasing their strategic role and importance within the companies.
The fact that HR professional must be highly multifunctional and efficient, in their task of the most valuable assets of their companies - the employees - is the everyday reality of today's business world.
What HR professionals should consider when it comes to technologic advances, is that these new techniques and programs will actually help them in being for efficient, reducing costs and time spent on administrative tasks. These tasks are indeed important, but they are very time consuming and have a low aggregated value to bring to the company, leading to the classical perception of the HR as a cost center within companies, and not as a direct contributor to organizational success and revenue, as is lacking a quantitative nature and most of the time it is directly tied to quantifiable returns. And yet again, all these administrative tasks are most of the time distracting the attention from important, strategic responsibilities. As an example of this situation, a study referring to the year 2005, shows that HR professionals have reported spending only 23% of their agenda in being "a strategic business partner," as commented by Edward E. Lawler III, USC professor. (Brooks, 2006)…