Human resource management is known as the management process which is linked with human resource events. HRM mainly focus on the activities such as knowledge, abilities and motivation of the individuals working in the organization. From years human resource management is associated with the emotional as well as physical associations of human with the business operations (Hecklau et al., 2016). Human resource management considered humans as important asset of the organization and objective is to develop social and economic opportunities for the individuals. But due to innovation in technology, business environment is continuously changing and it has become very tough for companies to remain sustainable in present business marketplace for long time. At present, under the influence of innovative technology every organization is moving towards number game which has forced the entire department to convert their traditional approach in to strategic approach (Ardito & Petruzzelli, 2017). Success of every business is complete dependent on efficiency and effectiveness of the individual which are working in the enterprise. Current a new trend has been seen in the organization in which they have developed a separate section in every department related to human resource activities, it may be job rotation, allocation right place to right person, create separate frame work for every individual related to their job roles and responsibilities (Boon et al., 2018). But still, these activities are not enough to match the character of strategic HRM which has expand their roles beyond recruiting, training and compensation plan formation.
As per the study it has been found that activities related to human resources are continuously facing challenges related to their position in the organization. In the past it has been seen that budget available for human resource activities such as training, rewards and staffing was enough. But at present organizations are continuously facing issues related to finances which has impacted the overall budget of HRM. This challenge has formed base for strategic HRM completely dedicated to the functions which can provide support to current business strategies (Sánchez, Marin & Morales, 2015). Major supports of Strategic HRM are that it offers an opportunity to the organization to demonstrate their value in the business market in which they are operating. Strategic HRM was established in 1984, when few scholars explored the connection among human resource and strategy of business. From past 25 years human resource management has seen rapid change in their role and responsibility towards the progress and expansion related to the company. There are mainly two type of transformation related to human resource management. One is transformation from stream of personnel management to stream of HRM (Gutierrez-Gutierrez et al., 2018). Another is transformation of stream of human resource management to strategic HRM. First transformation is mainly linked with aids which has recognized individuals as most essential asset of the organization and must be handled systematically while second transformation is mainly focused on knowledge building and use of technology. These transformation is focused on the fact that beyond human activities such as policies and practices there are some essential requirement of present organization which must be fulfilled. These need are often known as strategies of the organization which helps them to remain sustainable in present business environment in which competition is very high.
As per the study, it has been found that in past role of HR was just to compliance rules and spend hours in finding the right match for the organization. But currently management of organizations is very focused towards the results in the form of numbers. Now, HR executive is tracking every step related to the business operation associated with every department in order to understand the gap between reality and expectation (Madison et al., 2018). This helps them to strategize the further plan of filling this gap in the form of training and development program in which they are trying to align the organization goal with the development skills of the employees. In many cases, it has been seen that companies are outsourcing their HR service from outside which has increased the risk related to company as well as for company HR executives. The concept of strategic HRM is mainly founded on fact that enterprise can remain competitive only if they are able to effectively link their human resource activities such as guidelines and activities related to special requirement of the enterprise (van Esch, Wei & Chiang, 2018). These requirement may be behaviour, culture, motivation and other competencies which offers drive to the organization in the business market on both domestic as well as global level. In simple language strategic HRM is recognized by way of formation of networks or links between all the strategies of the business with human resource activities in order to bring efficiency in the business operations. Strategy human resource is essential for linking discipline, approach and individuals of the enterprise in command to foster the key purposes of the present business environment which is based on integrated management approach (Kim & Ployhart, 2018). Integrated management approach includes training, staffing and other human resource activities which offered life line to the business strategies.
Strategic HRM has helped the organization to develop a personal relation with its employees in common to comprehend challenges faced by them while working in the organization. This close business operation has helped the organization to develop a healthy relation with the employees which has decreased the employee turnover rate. This issue was one of the biggest issues for every organization because organization spends lot of money and effort to train new employee and that trained employee leaves the organization it creates two type of risks for the organization (McClean & Collins, 2019). One is loss of money and efforts spend by the organization and another risk is that this trained employee will become part of the rival group and will increase their competition value. Business environment force has also applicable to human resource management department of the organization. In this dynamic business world, human resource management has to adopted innovative approach which has helped them to bring efficiency in business operations. Due to heavy competition, role of line manager has grown very specifically in order to generate active platform which is essential to maintain balance between business operation and line manager. In this situation, human resource management has changed their approach to develop a close partnership of HR executive with the line managers which helps them to take effective business decision related the business operations.
Due to dynamic change in the business environment, various organizations are facing instable market situations. In this situation, one of the best option for the present organization to main their position in the market is to keep on improving (Garavan, McCarthy & Carbery, 2019). At present, organizations have understood the true potential of strategic HRM in its business operation in order to gain necessary competitive advantage over other organization which are operating with in the same business environment. Currently every organization has focused their interest towards measuring approach just as workforce score card just to understand the improved performance of the employee and the value which they have added to the organization. This new approach is growing rapidly in every business market by linking human resource management with overall performance of the organizations. The relationship between human resource activities and organization strategies are continuously explored by many researches in order to find out the most effective approach which can help the organization to improve their current performance (Amberg & McGaughey, 2019). It has been explored that strategic HRM has positive impact on overall performance of the organization because it offers them the platform by which management can actually measure their performance in the form of numbers so that essential steps can be taken towards improvement. In addition, it is explored that the organization which are working on traditional human resource practices are continuously losing their financial control which has directly impacted their growth and development in the market.
The main reason for their financial failure is that they are not able to align their organization strategy with their human resources activities which has generated huge gap in their overall performance. In fact they are not able to provide the measurement feedback to their individuals to improve their performance by offering them clarity related to their role and responsibilities in the organization (Kendrick et al., 2019). Strategic HRM offers organization to implement their strategy in workplace in effective manner because it has been seen that various strategies failed due to right implementation. In this situation, Strategic HRM creates a foundation by encouraging the employee for change by connecting their future growth with the key objective of the organization. In addition it also offer the organization an effective mode of communication which helps in elimination the possibility of conflicts and misunderstanding in the employees related to the new change. SHRM also helps the organization to maintain a positive work environment in the organization by connecting every employee with each other in the form of emotions, motivation, growth and development. This strategy helps in offering a fair change of promotion in which promotion is based on skills and performance rather than year of experience and closeness with the executives.
Amberg, J. J., & McGaughey, S. L. (2019). Strategic HRM and inertia in the corporate entrepreneurship of a multinational enterprise. The International Journal of Human Resource Management, 30(5), 759-793.
Ardito, L., & Petruzzelli, A. M. (2017). Breadth of external knowledge sourcing and product innovation: the moderating role of strategic human resource practices. European Management Journal, 35(2), 261-272.
Boon, C., Eckardt, R., Lepak, D. P., & Boselie, P. (2018). Integrating strategic human capital and strategic HRM. The International Journal of Human Resource Management, 29(1), 34-67.
Garavan, T. N., McCarthy, A., & Carbery, R. (2019). An Ecosystems Perspective on International Human Resource Development: A Meta-Synthesis of the Literature. Human Resource Development Review, 18(2), 248-288.
Gutierrez-Gutierrez, L. J., Barrales-Molina, V., & Kaynak, H. (2018). The role of human resource-related quality management practices in new product development: A dynamic capability perspective. International Journal of Operations & Production Management, 38(1), 43-66.
Hecklau, F., Galeitzke, M., Flachs, S., & Kohl, H. (2016). Holistic approach for human resource management in Industry 4.0. Procedia Cirp, 54, 1-6.
Kendrick, M. I., Bartram, T., Cavanagh, J., & Burgess, J. (2019). Role of strategic HRM in crisis management in Australian greenfield hospital sites: a crisis management theory perspective. Australian Health Review, 43(2), 157-164.
Kim, Y., & Ployhart, R. E. (2018). The strategic value of selection practices: antecedents and consequences of firm-level selection practice usage. Academy of Management Journal, 61(1), 46-66.
Madison, K., Daspit, J. J., Turner, K., & Kellermanns, F. W. (2018). Family firm human resource practices: Investigating the effects of professionalization and bifurcation bias on performance. Journal of Business Research, 84, 327-336.
McClean, E., & Collins, C. J. (2019). Expanding the concept of fit in strategic HRM: An examination of the relationship between human resource practices and charismatic leadership on organizational outcomes. Human Resource Management, 58(2), 187-202.
Sánchez, A. A., Marín, G. S., & Morales, A. M. (2015). The mediating effect of strategic human resource practices on knowledge management and firm performance. Revista Europea de Dirección y Economía de la Empresa, 24(3), 138-148.
van Esch, E., Wei, L. Q., & Chiang, F. F. (2018). High-performance human resource practices and firm performance: The mediating role of employees’ competencies and the moderating role of climate for creativity. The International Journal of Human Resource Management, 29(10), 1683-1708.