Strategic Human Resource Management

Strategic Human Resource Management

Strategic human resource management is the process of linking the human resource function with the strategic objectives of the organization in order to improve performance.

Strategic management

The word ‘strategy’, deriving from the Greek noun strategus, meaning ‘commander in chief’, was first used in the English language in 1656. The development and usage of the word suggests that it is composed of stratos (army) and agein (to lead). In a management context, the word ‘strategy’ has now replaced the more traditional term – ‘long-term planning’ – to denote a specific pattern of decisions and actions undertaken by the upper echelon of the organization in order to accomplish performance goals. Wheelen and Hunger (1995, p. 3) define strategic management as ‘that set of managerial decisions and actions that determines the long-run performance of a corporation’. Hill and Jones (2001, p. 4) take a similar view when they define strategy as ‘an action a company takes to attain superior performance’. Strategic management is considered to be a continuous activity that requires a constant adjustment of three major interdependent poles: the values of senior management, the environment, and the resources available.

Model of strategic management

In the descriptive and prescriptive management texts, strategic management appears as a cycle in which several activities follow and feed upon one another. The strategic management process is typically broken down into five steps:

1. Mission and goals

2. Environmental analysis

3. Strategic formulation

4. Strategy implementation

5. Strategy evaluation.

1. Mission and goals

At the corporate level, the strategic management process includes activities that range from appraising the organization’s current mission and goals to strategic evaluation. The first step in the strategic management model begins with senior managers evaluating their position in relation to the organization’s current mission and goals. The mission describes the organization’s values and aspirations; it is the organization’s raison d’être and indicates the direction in which senior management is going. Goals are the desired ends sought through the actual operating procedures of the organization and typically describe short-term measurable outcomes.

2. Environmental analysis

Environmental analysis looks at the internal organizational strengths and weaknesses and the external environment for opportunities and threats. The factors that are most important to the organization’s future are referred to as strategic factors and can be summarized by the acronym SWOT – Strengths, Weaknesses, Opportunities and Threats.

3. Strategic formulation

Strategic formulation involves senior managers evaluating the interaction between strategic factors and making strategic choices that guide managers to meet the organization’s goals. Some strategies are formulated at the corporate, business and specific functional levels.