Strategic Human Resource Management

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1. BACKGROUND/SCENARIO

1.1 INTRODUCTION ON STRATEGIC HUMAN RESOURCE MANAGEMENT

Human Resource Management refers to the policies, practices and systems that influence employees’ behavior, attitudes and performance (Noe, Hollenbeck, Gerhart & Wright, 2012).
People are considered as the most valuable resources of a firm or organization. In order for a firm to succeed and survive in the market, the firm needs the right personnel, at right place and time. The new generations of workers are seen as the ones with lesser loyalty to their companies and have more expectations for autonomy, self-development and greater involvement in company decision making. The importance of human capital had been accelerated by the increasing emphasis on knowledge-based competitiveness in the current turbulent environment. Careful management of the workers who has been considered as valuable resource calls for a strategic focus on human resource management (HRM) in the firm. In today’s competitive market, we hear and see that many organizations are engaging into strategic planning to survive and prosper. Besides that in human resource and management circles, we can hear a lot about Strategic Human Resource Management. But what exactly is Strategic Human Resource Management (SHRM), what are its key features and what is the difference between Strategic Human Resource Management and traditional human resource management?

Strategic Human Resource Management can be thought of as “the pattern of planned human resource deployments and activities intended to enable an organization to achieve its goals” (Noe, Hollenbeck, Gerhart & Wright, 2012). In other words, SHRM can also be said as the linking of human resources with strategic goals and objectives which improves business performance and develop organizational culture that foster innovation, flexibility and competitive advantage. Through SHRM, an organization accepts and involves the human resource functions in the formulation and implementation of the organization’s strategies through human resource activities such as recruiting, selecting, training and rewarding.

1.2 INTRODUCTION ON THE RESEARCH

1.2.1 PURPOSE OF RESEARCH

This research was done to investigate the relationship between strategic human resource management practices and organizational performance, which then looks at the implications of the findings for both managers and practitioners. The research was done in Singapore and it links to HRM practices and organizational performance in Singapore.

1.2.2 OBJECTIVE OF THE RESEARCH

The prime objective of this study was to determine the relationship between strategic HRM and firm performance. Besides that, the study was also used to see how each strategic HRM variables and bundle of the strategic HRM variables together affect firm’s performance.

1.2.3 HYPOTHESES

The following specific hypotheses were tested:
1. Extensive training is positively related to firm performance (financial and HR) 2. Selective staffing is positively related to firm performance. 3. Empowerment is positively related to firm performance. 4. Performance appraisal is positively related to firm performance. 5. Broad job design is positively related to firm performance. 6. Performance-based pay is positively related to firm performance. 7. A bundle of strategic HRM variables are positively related to firm performance.

2. EMPIRICAL PAST STUDIES ON SHRM

The emergence of studies related to strategic HRM was seen since two decades ago. In the 1990’s, the researches were attracted to the concept of bundling of human resource practices and had conducted numerous studies on it.

Ferris, Russ, Albanese and Martocchio had conducted a study on 2,236 firms from the United States construction industry to examine on how effective management of human resources can contribute to positive organizational performance. In their study, they have identified the...
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