Strategic HRM: can be defined as the linking of human resources with strategic goals and objectives in order to improve business performance and develop organizational culture that brings up innovation, flexibility and competitive advantage. Strategic HRM involves setting employment standards and policies. Moreover it is not any particular human resource strategy but it is a framework for shaping and developing many people management strategy. (Sarah Glimore and Steve Williams, 2009) It is the pattern of planned HR operations and activities intended to help an organisation to achieve its goals. In an organisation SHRM plays an important role of a strategic associate in HR functions for the implementation of the company's strategies through HR activities such as recruiting, selecting, performance management, job analysis job design, pay structure, training and rewarding personnel. It focuses on human resource functions with long-term objectives. (De Cieri Kramar, 2008).
Importance of Strategic Human Resource Management:
Strategic HRM plays a very important role in today's business world. It helps the organisation to strategically manage human resources in a manner that works to the overall benefit of the business. It is important for organisation’s survival and sustainability and also helps in improving performance. It facilitates in identifying the key human resource areas where strategies can be implemented in the long run to improve the overall employee motivation and productivity. Strategic human resource management is also about assessing the company's internal strengths and weaknesses. It is very important to identify the strength and weaknesses of the company’s human resource because it helps in determining future performance of the company. Strategic HRM policies and practices motivate people through their thoughts and feelings to engage in behaviour that helps the organisation achieve its overall strategic goals, which helps in finding way to shape the behaviours, norms, values, attitudes and perspectives of employees in a way which benefits both employee and the organisation (Wright, P.M.,Dunford, B.B. & Snell, S.A, 2001). The effective Strategic HRM involves understanding of both the internal and external operational requirements of business and social and behavioural requirements of the business. It facilitates effective management of staffing, maintenance and turnover through selection of employees that fits both strategy and culture of the organisation. It helps in cost-effective utilization of employees through investment in human capital, thus help in increasing productivity and staff loyalty and lowering turnover and absenteeism. Moreover it improves customer satisfaction and support by keeping tighter focus on customer needs, emerging markets and quality. Business strategies are set to achieve a firm's vision, mission and objectives, and different environment, vision, mission, and objectives require different types of strategies. In order to formulate and implement these strategies, appropriate type of strategic HRM is required. It provides an effective response by regulating the HRM system according to the strategic requirements. By considering human resource as a strategic resource it can be used to create and sustain a competitive edge for organisations. (Kazmi, Azhar; Ahmad, Faruq., 2001)
Recently several studies have been conducted in China to investigate that the relation of strategic HRM with firm’s performance including financial performance, operational performance, and employee relations climate, and the results revealed a positive relationship between SHRM and firm performance. Apart from financial and operational performance, a good employee relations climate is also viewed as another important aspect of organizational effectiveness. It...