Strategic human resource management approaches and practices

Strategic Human Resource Management

In a context of increasing importance of human resource management, the academic and practitioners' communities come to place more emphasis on the strategic management of labor force. Within the specialized literature, there are numerous different approaches to the topic. At the level of definitions, these vary across literary sources, but the differences revolve primarily around terminologies, whereas the essence is commonly the same. In this order of ideas then, a relevant definition is the one offered by Michael Armstrong, as revealed below:

"Strategic HRM is an approach to making decisions on the intentions and plans of the organization concerning the employment relationship and its recruitment, training, development, performance management, reward and employee relations policies and practices. […an] essential component of the organization's corporate or business strategy [,] strategic HRM is concerned with the relationship between human resource management and strategic management of the firm" (Armstrong, 2000).

Strategic human resource management (SHRM) is often perceived as similar to human resource management (HRM), yet specialists identify clear distinctions between the two and establish SHRM as an independent field. In this order of ideas, some notable differences between the two concepts refer to the following:

HRM has a hard approach by perceiving the people as tools of production, whereas SHRM has a soft approach and sees people as the most valuable organizational assets

HRM sets and focuses on goals at the level of human resource management, whereas the SHRM goals are business level

HRM is reactive and follows the trend of the market, whereas SHRM is proactive and sets the trend

HRM sets out to develop the competencies of the labor force, whereas SHRM sets out to improve the overall competencies of the firm

HRM operates at relatively low levels of the organization, whereas SHRM operates at executive levels

HRM does not strive to -- nor needs to -- understand the organizational dimension, whereas this is imperative for SHRM

HRM focuses on the management of people, whereas SHRM focuses on the generation of competitive advantages through the management of the labor force (Pravin).

Aside from the features which differentiate it from human resource management, strategic HRM is also noteworthy in terms of the basic traits which characterize it. In this order of ideas, Michael Armstrong and Angela Baron (2002) identify three specific features, namely the organizational level, the focus and the framework. In terms of the organizational level, it is noteworthy that SHRM is implemented at the wider organizational setting, since all of its goals, policies and resources reflect the business strategy of the economic agent. Then, it terms of the focus of strategic human resource management, this reflects the commitment of SHRM to use the people in a manner in which this generates advantages for the overall company.

"Strategies are business-driven and focus on organizational effectiveness; in this perspective people are thus viewed primarily as resources to be managed toward the achievement of strategic business goals" (Armstrong and Baron, 2002).