To achieve the objectives of the stakeholders and employer, human resource management functions to improve employee performance.
To achieve the objectives of the stakeholders and employer, human resource management functions to improve employee performance. It entails the creation and maintenance of projects thought to inspire and motivate employees to produce excellent work.
Strategic Human Resource Management (SHRM)
Strategic human resource management, or SHRM, is the process of creating policies to enhance employee productivity while taking into account the present state of the market, including collective bargaining and legal requirements (2014). This essay addresses the idea of strategic human resource management, focusing on recent developments and scholarly work in the field.
Two essential resources in SHRM
Two essential resources are used in SHRM: human capital and company policies (Walsh et al., 2010). The decision-making process includes research as well.
Increased competitiveness and efficiency
Strategic human resource management has led to increased competitiveness hence increase firms' efficiency (Burma, 2014). Becker & Huselid argue that unlike HR, SHRM focuses on an organization's performance rather than individual performance (2006).
The evolution of SHRM
SHRM used to focus on the firm's composition and position in the market; it did not involve a resource-based view (Walsh et al., 2010). Firms were required to choose from a set of competitive strategies with predetermined outcomes and limited HR architecture which discouraged innovation (Becker & Huselid, 2006).
Synthesis of Findings
Research involves identifying an organization's strengths and weaknesses and how they influence its performance (Walsh et al, 2010).
Its competitiveness is then measured by designing a resource-based view in terms of cash inflows and outflows; it is said to have a high competitive strength when the cost of using a resource is lower than the benefits it brings forth. HR managers are faced with the challenge of converting various aspects of human capital into the firm's ability to generate income.
This brings forth the development and upholding of various HR initiatives such as recruiting workers, training and appraisal, and employee benefits program. The qualifications of the workers determine the type of training program to be conducted, their remuneration, and their performance determines the type of employee benefit package to be rewarded.
These HR initiatives are tested for their effectiveness through the return on investment. Positive results encourage the firm to carry on and come up with new and cheaper methods to boost employee productivity.
The organization's infrastructure and practices are also designed to provide a suitable working environment for workers; this is achieved through a series of procedures enabling the firm's capability to increase (Walsh et al., 2010).
The ability of HR managers to implement competitive strategies
The ability of HR managers to implement competitive strategies is a resource ( Becker & Huselid, 2006). This implies that organizations may have exemplary workforce and policies but they are futile if the management cannot design and implement a suitable strategy to increase employee productivity. SHRM now considers the knowledge and skills of managers rather than its former overdependence on human capital and policies.
SHRM also focuses on the firm's capability to determine the competitive strategies adopted (Becker & Huselid, 2006). An organization's ability to implement a given strategy also depends on its capabilities, practices, and resource endowments; they form an "important common ground" (Ray & Muhanna, 2004).
These capabilities are the essence of strategy, for instance, at McDonald's, its timely order delivery system, "first-mover advantage," and differentiated food stuffs provide a competitive advantage for the company; it is very difficult for their competitors to mimic hence this competitive strategy is formed as a result of the organization's capabilities.
HR outcomes were determined by the competitive strategies adopted by firms, these competitive strategies were equally determined by the type of HR architecture; the competitive strategies and the appropriate HR architecture were outlined for firms limiting the HR architectures to be adopted by firms (Becker & Huselid, 2006).
Organizations were required to choose one HR architecture and its consequent strategy which had a predetermined intermediate outcome, for instance, the innovation strategy had outlined benefits such as increased sales due to product differentiation and availability of a variety of products in the market.
Today organizations can use a mix of competitive strategies provided their HR architecture allows it. Organizations can also design their HR architecture to fit the competitive strategies to be adopted; they are not pinned down on one HR architecture like before. This has also encouraged contingency in SHRM which consequentially promotes innovations in firms and outstanding results when this risk-taking behavior proves to be of importance to the firm's wellbeing in the market.
Most innovations are discovered through research enabling consumers to get effective and efficient services as a result of a highly competitive and diverse market.
Conclusion
SHRM has evolved from constantly relying on strategies such as cost differentiation and market positioning to incorporating resources in its decision-making process. Managers are faced with the challenge of determining how best they can convert the organization's capabilities and resources into profits.
SHRM also involves the ability of managers to design and implement effective competitive strategies rather than their usual indulgence in formulating policies and HR initiatives. This ensures that the top management is highly skilled and qualified for their significant positions in the firm.
It is also based on the notion that highly qualified employers employ and retain highly qualified workers. HR architectures are more flexible and diverse; organizations can design their HR systems to meet the strategies they seek to adopt, and their outcomes are now contingent unlike before where they were known.
References
Becker, B. E. & Huselid, M. A. (2006). Strategic Human Resources Management: Where Do We Go From Here? Journal of Management, 32 (6), 898-925.
Burma, Z. A. (2014). Human Resource Management and Its Importance for Today’s Organizations. International Journal of Education and Social Science, 1 (2), 85-94.
Ray, G. B.& Muhanna, W. A. (2004). Capabilities, Business Processes and Competitive Advantage: Choosing the Depend Variable in Empirical Tests of the Resource-Based View. Strategic Management Journal, 25, 23-37.
Walsh, K., Sturman, M. C. & Longstreet, J. (2010). Key Issues in Strategic Human Resources. Cornell University, School of Hospitality.
