Strategic Human Resource Management: Key Practices and Systems

Introduction to Strategic HRM

There is a great need for managers to develop a highly strategic approach to human resource management. This encompasses supporting the general mission of the organization, the organizational culture embraced for personnel and consumers, and the individual needs of managers themselves.

Strategic human resource management (SHRM) is defined as the practice of articulating HR strategies and execution procedures that are aligned with and underpin the organization's business approach. SHRM requires the development of a wide-ranging set of managerial undertakings and responsibilities linked to growing and sustaining a competent workforce. This workforce, in turn, contributes to organizational efficacy as defined by the organization's strategic aims and objectives (Fottler and Fried, 2016). The main purpose of an organization outlines its basic intention for existence. For example, the purpose of a hospital may be to provide high-quality medical care to the inhabitants of a particular service region. The mission of an organization is shaped by the board of directors and senior managers, and it stipulates how the organization aims to manage itself to most successfully accomplish its goals (Fottler and Fried, 2016).

Reward Systems

There are four elements that must be integrated to support the overall mission of the organization, the culture espoused for employees and consumers, and the needs of managers. First, reward systems are multidimensional, consisting of both financial and nonfinancial elements. They play a significant role as tools that help shape organizational behavior for individuals and groups by increasing intrinsic and extrinsic motivation. Nonfinancial components can encompass aspects such as flexible working hours, job design, and attendance at courses or seminars. Nevertheless, reward systems can only function and be considered impartial if there is high transparency and consistency within these systems (Noe et al., 2007).

Rewards should be allocated at the team level because individuals tend to concentrate more on team objectives rather than individual goals. Reward systems should be enforced to reinforce knowledge sharing. When employees perceive a personal benefit, there is a greater likelihood of knowledge sharing. Furthermore, when more knowledge is shared both within and across teams involved in preceding and advanced stages of the production cycle, mistakes during ramp-up phases can be prevented. One approach to appraisal that supports this is the 360-degree performance evaluation (Heine et al., 2016).

An effective reward system should be connected with the performance development system, which emphasizes performance-based pay and offers sufficient learning opportunities alongside a healthy work environment. When this type of system is implemented, it leads to greater employee retention and higher organizational profits (Jain, 2014). A well-organized reward system can have a valuable influence on performance in numerous ways, including instilling a sense of ownership among employees, enabling a long-term emphasis on continuous improvement, reducing operating expenses, and promoting teamwork. It also reduces employee dissatisfaction and increases employee interest in the financial performance of the company (Jain, 2014). Marx et al. (2015) emphasize having a reward system designed to focus on product innovation, noting that strategies founded on innovation and new product development have been progressively utilized by organizations to deliver more value to their customers and to enhance competitiveness.

Employee Development

Second, there is a need for an appropriate employee development system. The efficacy of team performance depends on the effective achievement of various developmental phases. Teams experience different stages of development, including forming, storming, norming, performing, and adjourning. This model can be applied to enhance performance. For instance, creating team-building events can facilitate the norming stage, where employees form relationships. A constructive relationship among team members is valuable for effectively managing conflicts. In addition, a workshop for lessons learned can be established prior to team separation and can be undertaken when celebrating the successful accomplishment of a task (Heine et al., 2016).

An employee development system is beneficial for personnel by making them more adaptable and therefore more eligible for promotion, augmenting their self-confidence, and adding greater focus to their work. As managers, we benefit from employee development because it cultivates a workforce that is more flexible and knowledgeable. For organizations to remain competitive, it is necessary to help employees adapt to the swift pace of change in the contemporary environment. A development system augments self-esteem and motivation and enhances employee retention, efficiency, and service quality. As employees become more competent, work delegation becomes easier, allowing managers to devote more time to important strategic tasks (McConnell, 2014).

Conclusion

To develop a highly strategic approach to human resources management, various practices must be incorporated and assimilated, including reward systems, recruitment and selection processes, appraisal systems, and employee development systems. Reward systems play a vital role for both individuals and groups within the organization with regard to enhancing intrinsic and extrinsic motivation (Fottler, 2016). Team-based rewards rather than individually focused rewards promote knowledge sharing within and across teams and are associated with better performance outcomes.

Employees should be selected on an individual basis to account for their specific proficiencies; however, such selection should also ensure appropriate fit at the team and organizational levels. Systematic selection of personnel is indicative of better performance (Heine et al., 2016). Third, an employee development system is recommended because it makes personnel more adaptable and therefore more eligible for promotion, augments their self-confidence, and adds greater focus to their work. Together, these four integrated elements form a comprehensive strategic HR framework that supports the organization's mission, fosters an ethical culture, and addresses the needs of managers and employees alike.

References

Fottler, M. D., & Fried, B. (2016). Strategic Human Resources Management. Association of University Programs in Health Administration.

Fottler, M. D. (2016). Strategic Human Resources Management. EBSCOHost.

Heine, I., Beaujean, P., & Schmitt, R. (2016). Improving production ramp-up through human resource methods. American Society for Quality, Inc.

Heine, I., Beaujean, P., & Schmitt, R. (2016). Conceptual framework for analyzing the fit between organizational strategy and culture. Procedia CIRP, 51, 79–84.

Jain, M. (2014). Performance management: Linking rewards to performance. Journal of Social Welfare and Management, 6(1).

Marx, R., & Soares, J. P. F. (2015, August). Organizational context variables to be considered in the design of rewards system oriented to product innovation. In 2015 Portland International Conference on Management of Engineering and Technology (PICMET) (pp. 1641–1656). IEEE.

McConnell, C. R. (2014). Umiker's Management Skills for the New Health Care Supervisor. Burlington: Jones & Bartlett Learning.

Noe, R. A., Hollenbeck, J. R., Gerhart, B., & Wright, P. M. (2007). Fundamentals of Human Resource Management. Boston: McGraw-Hill Irwin.

Taylor, S. (2011). Assess pros and cons of 360-degree performance appraisal. Society for Human Resource Management.

Werner, S. (2008). Managing Human Resources in North America: Current Issues and Perspectives. New York: Routledge.