Strategic Human Resource Management

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Strategic Human Resource Management

1. Introduction

In the late decade of 1980, the organisations realized the significance of their employees as a capital asset or human resources; and by adopting and implementing a set of HRM practices (such as recruiting, training and developing people etc.) aimed to succeed a sustainable competitive advantage based on a business strategic view by making the employees’ involvement the main key point of the new human resource management into the business process; and by establishing the organizational culture that they are part of the organization (Kaufman 2001: 506). During this period, the HRM is transformed into a Strategic HRM approach in order to sustain in these modern business challenges. Although, the new concept of HRM, as a strategic approach may not differ significantly than the traditional personnel management (Legge 1995), Storey (1989) identifies that strategic HRM is a dimension of the model of personnel management which focuses on organization as a whole, which emphasized on strategic integration, employee commitment and flexibility. The responsibility for human resource is often decentralized to line management. As proposed by Wright (1998), the fundamental of human resource is that employees are regarded as valuable resources and strategic HRM aims to manage these human resources through a set of HR policies or practices to support the overall strategic plan of the organization.

Nowadays, as the economy has moved more to an outsourcing shared service and information economy, the competition for people with high qualifications and knowledge into the organizations has become more intense (Ha 2006). Although, the recruitment and the retention may be one of the most pressing challenges which organizations face today, successful companies are these which are able to engage and retain employees with high professional skills. In order for that to happen, companies must be able to combine completely what the employee wants with what the company on the same side wish to offer (Aghazadesh 2003: 202). According to Taylor (2007), “It’s a business objective, rather than an individual one, geared towards one thing: ensuring that an organisation is able to do what it sets out to do in the present and in the future plans, respectively. And this assumes that capability is based on an organisation’s sole source of value and competitive advantage in a developed economy: its people (Taylor 2007)”.

In other words, organizations which are engaged in talent management face human resources as their strategic and sustainable competitive advantage. They recognize their personnel as the soul of their business. In addition, they adopt a set of practices and innovative technologies which are designed to develop, deploy and connect employees with professional skills and knowledge in order to achieve business priorities which represent the performance at an individual level (performance management) and as a consequence of that, the business performance (Deloitte 2007).

Despite of the fact that HRM has taken several shapes, could be defined from the literature as a ‘soft’ and ‘hard’ approach. The ‘hard’ approach of HRM focuses on the business performance by giving a slight emphasis on employees’ needs. Moreover, the ‘Michigan Model supports this version of HRM model by focusing on the organization’s profitability and welfare through a strategic point view (Radcliffe 2005). However, the ‘soft’ approach of HRM known as ‘Harvard model’ emphasizes on the importance of high commitment, involvement, training of its employees and open-mind leadership (Bratton and Gold 2003). Although these two versions of HRM are completely different, Edgar (2003) supports that the organizations are possible to take into account elements of both models in their HRM practices. This is owed to the fact that roughly in all cases, the overall business objective is the performance improvement of each organization,...
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