MODULE 6: Strategic HRM

MODULE 6: Strategic HRM

Strategic Human Resource Management (SHRM)

Strategic Human Resource Management (SHRM) is an approach to managing
human resources within an organization that aligns HR practices and policies with
the overall strategic objectives of the organization. It involves integrating HR
strategies and initiatives with the organization's business strategy to achieve a
competitive advantage.
In traditional HRM, the focus is primarily on administrative tasks such as
recruitment, training, and compensation. However, SHRM takes a broader
perspective by considering human resources as a valuable asset and a source of
competitive advantage for the organization.
The key idea behind strategic HRM is that the effective management of people
can contribute significantly to the achievement of organizational goals. It
recognizes that employees' skills, knowledge, and abilities are critical for
organizational success and that HR practices should be designed to attract,
develop, and retain talented individuals.
Strategic HRM involves a proactive and long-term approach to HR planning,
which takes into account the future needs of the organization. It requires HR
professionals to have a deep understanding of the organization's goals and
strategies and to develop HR initiatives that support those goals.
Some of the key components of strategic HRM include:
• Strategic planning: Aligning HR strategies and initiatives with the overall
organizational strategy.
• Talent acquisition and retention: Attracting and retaining high-quality
employees who can contribute to the organization's success.
• Training and development: Providing employees with the necessary skills
and knowledge to perform their roles effectively and meet future
challenges.
• Performance management: Implementing performance appraisal systems
and processes to evaluate and improve employee performance.

Mohammed Natiq R
Asst. Prof. DBIMSCA
MODULE 6: Strategic HRM

• Compensation and rewards: Designing compensation and reward systems

that motivate and incentivize employees to achieve organizational
objectives.
• Employee engagement and satisfaction: Creating a positive work
environment that fosters employee engagement and satisfaction.
• Change management: Supporting organizational change initiatives and
managing the impact of change on employees.

Characteristics of Strategic Human Resource Management (SHRM):

• Alignment with organizational goals: SHRM involves aligning HR
strategies and initiatives with the overall strategic goals and objectives of
the organization. It ensures that HR practices directly contribute to the
achievement of organizational success.
• Long-term perspective: SHRM takes a long-term view of HR planning and
development. It considers the future needs of the organization and focuses
on building a sustainable workforce to meet those needs.
• Proactive approach: SHRM emphasizes proactive decision-making rather
than reactive responses. HR professionals anticipate future challenges and
develop strategies to address them in advance.
• Integration with business strategy: SHRM integrates HR practices with the
organization's business strategy. It recognizes that human resources are a
valuable asset and seeks to leverage them to gain a competitive advantage.
• Focus on talent management: SHRM places significant emphasis on
attracting, developing, and retaining talented individuals. It recognizes the
importance of human capital in achieving organizational goals.
• Continuous improvement: SHRM involves an ongoing process of
evaluating and improving HR practices. It encourages organizations to
adapt and evolve their HR strategies to remain competitive in a changing
business environment.

Mohammed Natiq R
Asst. Prof. DBIMSCA
MODULE 6: Strategic HRM

Scope of Strategic Human Resource Management (SHRM):

• HR Planning: SHRM includes strategic workforce planning to ensure that
the organization has the right people with the right skills at the right time.
It involves forecasting future HR needs, identifying gaps, and developing
strategies to address them.
• Recruitment and Selection: SHRM focuses on attracting and selecting the
best talent for the organization. It involves developing recruitment
strategies, implementing effective selection processes, and ensuring a
diverse and inclusive workforce.
• Training and Development: SHRM emphasizes the continuous
development of employees to enhance their skills, knowledge, and
competencies. It involves identifying training needs, designing and
delivering training programs, and providing opportunities for career
growth.
• Performance Management: SHRM includes the design and implementation
of performance appraisal systems to assess employee performance and
provide feedback. It aims to align individual performance with
organizational goals and identify areas for improvement.
• Compensation and Benefits: SHRM involves developing compensation
and benefits strategies that align with the organization's goals and market
competitiveness. It includes designing reward systems that motivate and
incentivize employees.
• Employee Relations: SHRM focuses on creating a positive work
environment and maintaining healthy employee relations. It involves
fostering employee engagement, handling conflicts, and promoting a
culture of trust and collaboration.
• Change Management: SHRM plays a crucial role in managing
organizational change. It involves supporting employees through
transitions, communicating change initiatives effectively, and minimizing
resistance to change.
• HR Metrics and Analytics: SHRM emphasizes the use of HR metrics and
analytics to measure the effectiveness of HR strategies and initiatives. It
involves analyzing data to make informed decisions and drive continuous
improvement in HR practices.

Mohammed Natiq R
Asst. Prof. DBIMSCA
MODULE 6: Strategic HRM

SHRM Vs HRM
BASIS FOR HRM SHRM
COMPARISON
Meaning Human resource SHRM is a managerial
management (HRM) implies function which implies
the governance of manpower framing of HR strategies in
of the organization in a such a way to direct employees
thorough and structured efforts towards the goals of
manner. organization.
Nature Reactive Proactive
Responsibility lies Staff specialist Line manager
with
Approach Fragmented Integrated
Scope Concerned with employee Concerned with internal and
relations external relations
Time horizon Short term Long term
Basic factor Capital and products People and knowledge
Change Follows change Initiates change
Accountability Cost centre Investment centre
Control Stringent control over It exhibits leniency.
employees

Barriers to Strategic HRM

Implementing Strategic Human Resource Management (SHRM) can face several
barriers and challenges within organizations. These barriers can hinder the
successful adoption and integration of SHRM practices. Here are some common
barriers to strategic HRM:
• Resistance to Change: One of the primary barriers is resistance to change
among employees and key stakeholders. SHRM often involves significant
shifts in HR practices, roles, and responsibilities, which can be met with
resistance from employees who are accustomed to traditional HR
approaches.
• Lack of Top Management Support: Strategic HRM requires strong support
and commitment from top management to be successful. If senior leaders
do not fully endorse or prioritize SHRM initiatives, it can impede the
allocation of resources, hinder decision-making, and limit the integration
of HR with overall business strategy.

Mohammed Natiq R
Asst. Prof. DBIMSCA
MODULE 6: Strategic HRM

• Limited HR Influence: In some organizations, HR may not have a seat at

the decision-making table or may be viewed primarily as an administrative
function. When HR lacks influence and involvement in strategic
discussions, it becomes challenging to integrate HR practices with broader
organizational goals.
• Siloed Functional Departments: When HR functions operate in silos,
without effective communication and collaboration with other
departments, it hinders the alignment of HR practices with the overall
strategic objectives of the organization. Siloed departments can result in
fragmented HR initiatives and impede the strategic integration of HRM.
• Lack of HR Expertise and Skills: Strategic HRM requires HR professionals
to possess strategic thinking, business acumen, and analytical skills beyond
traditional HR competencies. A lack of such expertise and skills within the
HR function can pose a barrier to effectively implementing SHRM
practices.
• Inadequate HR Systems and Technology: Outdated or insufficient HR
systems and technology can hinder the efficient implementation of
strategic HRM. Without appropriate HR information systems, analytics
tools, and technology infrastructure, it becomes challenging to gather and
analyze data for informed decision-making and strategic planning.
• Short-Term Focus and Pressure: Organizations with a short-term focus,
driven primarily by immediate financial results, may struggle to allocate
resources and invest in long-term HR strategies. The pressure for
immediate results can impede the adoption of strategic HRM practices that
require a longer-term perspective.
• Lack of Metrics and Evaluation: Without clear metrics and evaluation
mechanisms in place, it becomes difficult to measure the impact and
effectiveness of strategic HRM initiatives. The absence of data-driven
insights can hinder the ability to assess the progress, make improvements,
and demonstrate the value of SHRM to key stakeholders.

Mohammed Natiq R
Asst. Prof. DBIMSCA
MODULE 6: Strategic HRM

Linking HR Strategy with Business Strategy

Linking HR strategy with business strategy is crucial for organizations to ensure
that their human resources are aligned with and support the achievement of
overall business goals. Here are some steps to effectively link HR strategy with
business strategy:
• Understand the Business Strategy: Start by gaining a deep understanding
of the organization's business strategy, objectives, and key priorities. This
includes understanding the competitive landscape, industry trends, and
future challenges the organization may face. This knowledge will provide
the foundation for aligning HR strategy with the broader business context.
• Identify HR Implications: Analyze how the organization's business
strategy impacts its human resources. Identify the specific HR capabilities,
skills, and competencies required to execute the business strategy
successfully. Determine how HR practices, policies, and initiatives need to
be aligned and adapted to support the business goals.
• Strategic Workforce Planning: Conduct strategic workforce planning to
determine the current and future workforce needs of the organization.
Assess the supply and demand of talent, identify critical roles and skill
gaps, and develop strategies to attract, develop, and retain the right talent.
Consider factors such as succession planning, talent development
programs, and workforce diversity and inclusion.
• Develop HR Objectives and Initiatives: Based on the insights from
business strategy and strategic workforce planning, define clear HR
objectives and initiatives that align with the organization's goals. These
may include initiatives related to talent acquisition, employee
development, performance management, compensation and rewards,
employee engagement, and change management. Ensure that these HR
objectives and initiatives directly contribute to the achievement of the
organization's strategic objectives.
• Collaborate with Business Leaders: Engage in regular communication and
collaboration with business leaders to ensure that HR strategy is integrated
into the overall business planning process. Work closely with key
stakeholders to understand their needs and expectations, and align HR
initiatives with their strategic priorities. Seek their input and involvement
in the design and implementation of HR programs.

Mohammed Natiq R
Asst. Prof. DBIMSCA
MODULE 6: Strategic HRM

• Measurement and Evaluation: Establish metrics and measurement

mechanisms to track the impact and effectiveness of HR initiatives in
supporting business goals. Identify key performance indicators (KPIs) that
are aligned with the organization's strategic objectives and regularly
monitor progress. Use data and analytics to evaluate the success of HR
interventions and make data-driven decisions for continuous improvement.
• Continuous Alignment and Adaptation: Recognize that business strategies
and priorities may change over time, requiring HR strategies to be
continuously aligned and adapted. Stay updated with the evolving business
environment and proactively adjust HR practices to ensure ongoing
alignment with business goals.

Mohammed Natiq R
Asst. Prof. DBIMSCA