Wright and McMahan (1994) define strategic HRM as “the pattern of planned Human Resource deployments and activities intended to enable the organisation to achieve its goals.” A HR function should impact the success of an organisation; a policy must remain current and suitable to both the internal and external environment. Ulrich and Lake (1990) affirm, ‘HRM systems can be the source of organisational capabilities that allow organisations to learn and capitalise on new opportunities.’
A combination of HRM and business strategy, contribute to effective management of human resources, improvement in organisational performance and the success of a business (Schuler and Jackson, 2007). Organisations should acknowledge that HR is important to its overall success. HR therefore, need the right people to carry out a strategic plan by defining skills and by leading an organisation’s culture, rather than be led in order to contribute their value.
HRM objectives should support the organisations goals, though profitability, business reputation, ethics and principles. HRM strategies maintain programmes for improving organisational effectiveness in areas of knowledge management, talent management and by creating ‘a great place to work’. This is the ‘big idea’ as portrayed by Purcell et al (2003), consisting of a ‘clear vision and a set of integrated values’. In particular, HR strategies are concerned with the development of continuous improvement and customer relations policies.
Bontis et al (1999) defines human capital as ‘The human factor in the organisation; the combined intelligence, skills and expertise that give the organisation its distinctive character’. These elements are capable of learning, changing, innovating and driving, which if motivated can be...