Strategic HRM - What Is The Meaning Of Strategic HRM And Its Importance | HRMantra HR Software
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Strategic HRM: What is Strategic Human Resource Management (SHRM)
Before knowing more about SHRM, let''s learn what Strategic Human Resource Management really is. SHRM is the way of managing human resources in an organization by aligning all the HR practices and policies with the major goals of the company.
It''s mainly used to improve the overall performance of the organization and outstand your competition.
Table of Content
What is the Importance of Strategic Human Resource Management
It helps in the overall improvement of the organization. Besides that, here are some of the major reasons why Strategic Human Resource Management is important:
- It helps in aligning HR practices with organizational goals.
- It allows businesses to attract and retain top talent and gain a competitive advantage.
- It improves the overall efficiency of the organization.
- It enables organizations to adapt to new changes as they happen within an organization.
- It focuses on hiring and retaining the right kind of talent which would be able to congregate to the criteria of your strategic development.
- It is cost-effective since it helps optimize your workforce use and reduces turnover costs.
- It helps in assessing and managing the risk related to human capital like compliance, workplace safety, and employee relations.
- It encourages you to measure the metrics and check your analytics to check your growth and progress.
What is the Objective of SHRM
The major goal of Strategic Human Resources is an alignment of all your HR practice to overall goals and objectives of the organization in order to enhance your company''s performance and, subsequently, gain success and outperform competition.
The contribution of HR will thus impinge directly on the success of the organization and business growth.
What is the Scope of SHRM?
The primary objective of SHRM is that the HR practices must accord top priority to the goals of the organization, in order to achieve greater success. Apart from that, the alignment is also associated with overall business strategy, acquisition and retention of talent, performance management, development of employees, diversity and inclusion, employee engagement, management of change, and the use of HR metrics and analytics.
Difference Between SHRM and HRM
| Category | HRM | SHRM |
|---|---|---|
| Scope | The activities revolve around routine activities of recruitment, training, performance management, and employee relations. | Traditional activities such as these go with the important role of the line in alignment of the HR practices toward the organizational goals for better success. |
| Objective | The objective is to manage personnel and admin tasks principally to ensure compliance with policies. | The objective in SHRM is to relate the human resource practices to the general organizational goals and objectives to contribute directly to the business success. |
| Time Horizon | A short-term approach dealing more with immediate concerns. | A long-term approach considering how the HR practices can contribute to the overall organizational growth and success. |
| Approach | More traditional, admin functions involved. | More strategic and forward-looking approach involved. |
| Integration with Business Strategy | Not necessarily consistent with business strategy. | Always aligned HR practices with business growth. |
| Employee Involvement | Generally limited to routine job tasks and compliance-related activities. | More involved in the process of employee involvement for strategic decision-making. |
What are the Seven Steps of Strategic Management Process
- Establish the mission, vision, and values.
- External analysis.
- Internal analysis.
- Strategy Formulation.
- Strategy Implementation.
- Strategy Evaluation.
- Performance evaluation. Abiding and altering based on the metrics and analytical data.
What is the Five Steps Model of Strategic HRM
- Step one is to do an environmental analysis which identifies opportunities and threats that may affect your business.
- Step two is the analysis of your organization for its strengths and weaknesses.
- In the third step, you formulate the HR strategy based on your findings from the first two steps.
- Then, you implement that strategy.
- The final step would be to evaluate and monitor the success of your SHRM.
What are the Five Ps of Strategic HRM
- Policy Formulation: It means the act of devising HR policies and practices which will set the HR practices in synchronization with the organizational goals. These policies may be related to recruitment, training, performance management, compensation, or employee relations.
- Processes: It involves executing the HR practices intended for aligning organizational goals.
- Programs: It constitutes all the HR practices and activities you initiate to affect the growth of the company directly.
- Performance: It is related to measuring and valuing the performance of the initiatives you have taken so far.
- Processes of People Development: It indicates how imperative the development and nourishment of human capital in an organization is.
