The effect of SHRM on achieving higher levels of success in business
Definitions of strategic human resources management ?
(Source:Armstrong,2006)
Strategic human resource management (SHRM) is a process that
entails the use of overarching approaches to the development of HR strategies
that are integrated vertically with the company plan and horizontally with one
another. These strategies define goals and plans for overall organisational
considerations like organisational productivity as well as more specific
aspects of people management like resourcing, learning and development, reward,
and employee relations(Armstrong, 2006, 30).
Strategic human resource management is a process that assists the human resources department in maximizing the potential of its personnel by utilizing strategic planning, talent management, leadership development, organisational design, and performance management (HR University,2023).
According to
Armstrong, CIPD, and HR University definitions, it represented the same
argumentation. SHRM was the most essential method for improving productivity
and achieving long-term organizational goals and strategies by hiring,
managing, developing, and rewarding employees.
The Resource-Based View (RBV) ?
The resource-based view of the organisation (RBV) is a paradigm shift in SHRM thinking that focuses on the organization's internal resources rather than analyzing performance in terms of the external environment. Advocates of RBV in SHRM help us comprehend the circumstances that lead to human resources becoming a scarce, valuable, organisation-specific, difficult-to-imitate resource, or key ‘strategic assets' (Wisdom,2020).
RBV is a strategy for gaining long-term competitive edge. This line of thought developed in the 1980s and 1990s as a result of writings by Birger Wernerfelt, Prahalad and Hamel, Barney J, and others. According to proponents of RBV, it is simpler and more viable to capitalize on external chances by redeploying existing resources. This strategy contrasts with learning new skills or developing new capabilities for each new chance. According to the RBV model, resources play an essential role in helping organisations achieve better levels of success (Mithun,2023).
There are two types of resources:
- Tangible - Tangible assets are physical things (Land, buildings, machinery, equipment and capital)
- Intangible - Intangible assets are brand reputation, trademarks,
intellectual property, etc
An example of RBV approaches in a business setting:
The competition between Apple Inc. and Samsung Electronics is a great instance of RBV of strategy. The two businesses are in the same sector and are subject to the same external market factors. However, due to resource differences, the businesses accomplish varying organizational success. In the tablet and smartphone industries, Apple competitors with Samsung. The products made by Apple are more expensive, which results in greater profit margins. Yet since Samsung does not have the same brand image as Apple, it cannot implement the identical strategy. Samsung is not capable (yet) of creating user-friendly products in the same way that Apple is (Mithun,2023).
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| (Source: Gizbot,2020) |
Strategic Resourcing:
Strategic Resourcing Examples From Top Companies:
- Google
(Source: Google,2020)
Google's strategic approach to human resources is based on feedback and employee data. Project Oxygen is an ongoing study into management practices that identifies and measures key management behaviors and helps nurture them. Google discovered eight common behaviors exhibited by the top-performing managers and trained the rest in them, resulting in an overall improvement in people management and team metrics such as turnover, satisfaction, and performance over time. This is no accident that Google employees are some of the most productive in the world (Finn,2023).
- CISCO
(Source: CISCO,2021)
- HILTON
Hilton is consistently recognized as one of the best global companies to work for due to their highly strategic approach to managing their company culture. They use two methods of quantitative analysis to maintain their culture: the balanced scorecard and the team member survey. The balanced scorecard tracks KPIs such as revenue maximization, customer loyalty, employee satisfaction, skills training, and diversity. The team member survey measures factors such as morale, leadership effectiveness, pride, and development. By carefully managing culture in such a way, Hilton employees at all levels are highly engaged and motivated to contribute to the company's mission (Finn,2023).
(Source: Hilton,1998)
I believe that by writing this article, I was able to share my thoughts about the importance and impact of SHRM theory, as well as demonstrate how this SHRM theory can be applied in top businesses around the globe. Thank you very much for reading, and please continue to visit my site.
REFERENCES
Armstrong, M. (2006) Strategic human resource management. 3rd edition [online] London: Michael Armstrong. Available from http://www.mim.ac.mw/books/Armstrong%27s%20Strategic%20Human%20Resource%20Management.pdf [Accessed 4 April 2023].
Chartered Institute of Personnel and Development (2022) Strategic human resource management. [online] UK: CIPD. Available from https://www.cipd.co.uk/knowledge/strategy/hr/strategic-hrm-factsheet#gref [Accessed 4 April 2023].
Finn, B. (2023) 3 Examples Of Strategic Human Resource Management From Top Companies. [pre-print] Submitted to people managing people. strategic-human-resource-management. Available from https://peoplemanagingpeople.com/articles/strategic-human-resource-management/ [Accessed 4 April 2023].
HR University (2023) What is Strategic human resource management. [online] Available from https://hr.university/shrm/strategic-human-resource-management/ [Accessed 4 April 2023].
Mithun, S. (2023) RBV–What Is A Resource-Based View Of Strategy?.[online] Germany: thinkinsights. Available from https://thinkinsights.net/strategy/rbv-strategy/[Accessed 4 April 2023].
The resource-based view (RBV) has a number of potential drawbacks that should be taken into account, including its overemphasis on tangible resources, limited focus on internal resources, limited perspective that may overlook broader concerns, difficulty in identifying and replicating valuable resources, and lack of consideration for dynamic capabilities. While making strategic decisions, it's critical to be aware of these constraints and take a wider variety of variables into account.
ReplyDeleteThank You Manoj, The empirical study of the resource-based view (RBV) and evaluates the advantages and limits of RBV as the "best" strategy direction in designing the strategy of a company. A clear and focused strategic aim mobilizes a business to achieve its objective. Organizations would be able to achieve sustainable competitive advantage (SCA) by employing the RBV and Porter's industry analysis (IA) to analyze their internal and external environments, respectively.
DeleteThe two critical assumptions of RBV are that resources must also be heterogeneous and immobile. having heterogeneous and immobile resources is critical in achieving competitive advantage
ReplyDeleteThanks Asanka ! The significance of RBV can be understood via a knowledge of the relationships between resources, capabilities, competitive advantage, and economic rent. The RBV recognized characteristics of "advantage-creating" resources such as value, scarcity, imitability, and Organisation. (Clulow et al, 2007; Barney, 1991).
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ReplyDeleteAccording to Bacall,P. and Purcell ,J. (2000) , Strategic human resource management (SHRM) implies a concern with the ways in which HRM is critical to organizational effectiveness. This straightforward assertion is examined in theory and through research evidence to reveal high levels of complexity in relation to how, when and why the interconnection between HRM and organizational outcomes is achieved. The two dominant normative models of ‘best fit’ and ‘best practice’ are considered. The paper concludes that the HR strategies of firms are heavily shaped by contextual contingencies, including national, sectoral and organizational factors. However, such a conclusion does not invalidate all ‘best‐practice’ thinking.Although constrained in certain ways, underpinning principles of labour management still have relevance to practice as essential attributes of a firm's ability to compete in its chosen markets. The paper then considers the resource‐based view (RBV) of the firm and asks whether this provides a better basis for the development of theory in SHRM and in understanding the contribution of HRM to the achievement of sustained competitive advantage. While limits to the utility of RBV in respect of SHRM theory are identified, important implications for research are signalled. Trends in the RBV literature are pushing all those interested in strategy towards studies of intellectual capital, learning processes and organizational adaptability.
Researchers in HRM could, if they wished, play a central role in these developments because questions of how to attract, motivate and develop workers with critical and scarce abilities, and develop effective processes of work organisation, must be fundamental to any model of knowledge‐based competition. Greater progress will be made when organizations are studied in a much more interdisciplinary or systemic way.
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Thank You Ridma. Incorporating strategic human resource management into overall business strategy not only helps in the creation of a productive environment, but it additionally helps in additional important factors such as staff retention. If the human resources department is successful in developing an efficient strategy, the organization benefits. Take your time developing a human resource management strategy. Having the correct strategy in place results in a simplified, easy-to-follow approach. Good luck !
DeleteThis article shows diverse SHRM efforts nicely . Strategic human resource management ( SHRM ) involves a future-oriented process of developing and implementing HR programs that address and solve business problems .SHRM is important because it helps businesses achieve their goals. By aligning HR programs and policies with the company's business strategy, SHRM can help businesses improve employee performance, develop the workforce and create a positive work environment. Strategic human resource management is the foundation of a strong business because, when properly applied, it ensures that the company as a whole is working together to reach its goals. This gives the business a greater chance to succeed.
ReplyDeleteThank you for your comment on the importance of strategic human resource management (SHRM) in achieving business goals. As you noted, SHRM involves developing and implementing HR programs that are aligned with the company's overall strategy, and can improve employee performance, workforce development, and the work environment.
DeleteIndeed, the literature on SHRM highlights the importance of strategic alignment between HR and organizational objectives. For example, Schuler and Jackson (1987) proposed a framework for SHRM that emphasizes the need to integrate HR practices with business strategy, and to align HR goals with broader organizational objectives. This approach can help ensure that HR programs and policies support the company's mission and vision, and contribute to its overall success.
Moreover, research suggests that effective SHRM can lead to improved organizational performance. For instance, a meta-analysis by Boselie et al. (2005) found that SHRM practices such as employee involvement, training and development, and performance management were positively related to measures of firm performance, including productivity, profitability, and customer satisfaction.
In conclusion, your comment highlights the key role that SHRM plays in helping organizations achieve their goals, and aligning HR practices with broader business strategy. The literature provides further evidence of the importance of strategic alignment and effective HR practices in improving organizational performance.
Hi detailed article. Improving the company morale and developing methods to ensure high-performance standards to resolve conflicts among employees and ensuring a company stays especially within its own budget. That's why many reasons for, why SHRM is important for business success.
ReplyDeleteThank you for reading and engaging with the article on the importance of strategic human resource management (SHRM) for business success. I'm glad you found the article informative and valuable.
DeleteYou have highlighted some of the key reasons why SHRM is critical to improving company morale, developing high-performance standards, resolving conflicts among employees, and ensuring the company stays within its own budget. These are all important aspects of organizational success that require a strategic and systematic approach to human resource management.
By aligning HR policies and practices with business goals and objectives, organizations can optimize their workforce and achieve better outcomes. SHRM can help organizations attract, retain, and develop talent, while also fostering a positive workplace culture that promotes employee engagement, motivation, and productivity.
I completely agree that SHRM (Strategic Human Resource Management) is a crucial aspect of achieving higher levels of success in business. Companies that prioritize their employees and invest in their development and well-being have been found to have higher retention rates and greater employee satisfaction, which can ultimately lead to better business outcomes (Society for Human Resource Management, 2021). By implementing SHRM practices such as performance management, succession planning, and training and development, businesses can enhance their productivity and profitability. It's encouraging to see more and more organizations recognizing the significance of SHRM and incorporating it into their strategic plans.
ReplyDeleteThank you for your insightful comment on the importance of Strategic Human Resource Management (SHRM) in business success. While it is true that investing in employees through SHRM practices can lead to better business outcomes, it's important to consider the potential challenges and limitations of these practices.
DeleteOne of the main challenges of implementing SHRM is the potential cost involved. Training and development programs, for example, can be expensive and may require significant resources. Moreover, the return on investment (ROI) of these programs may not be immediately apparent, making it difficult for organisations to justify the expense. This challenge is highlighted in a study by Gubman (1996), which found that while SHRM practices can enhance organisational effectiveness, they may not always have a direct impact on the bottom line.
Another limitation of SHRM is that it may not be suitable for all types of businesses. For example, small businesses with limited resources may struggle to implement SHRM practices due to their cost and complexity. Moreover, SHRM practices may not be effective in highly competitive industries where turnover rates are high and employee loyalty is low. This limitation is echoed in a study by Huselid (1995), which found that SHRM practices may have a limited impact in industries with low barriers to entry.
In your article, Strategic resources planning is very interesting sub topic. It is the actual of allocating and utilising resources called people, machiney, Toshiba and rooms etc.. in order otoscope full fill project objectives. And resources can be anything your company utilises to get tasks done. You can mention in your article about resource planning strategies.
ReplyDeleteThank you for your feedback on strategic resource planning and its importance in achieving project objectives. Resource planning strategies play a crucial role in ensuring that the right resources are allocated to the right tasks at the right time.
DeleteOne such strategy is capacity planning, which involves estimating the future demand for resources and ensuring that there are enough resources available to meet that demand. According to Greasley (2007), capacity planning is important for effective resource management and involves analysing historical data and trends, as well as considering future projects and initiatives.
The article provides an insightful discussion of the impact of Strategic Human Resource Management (SHRM) on the attainment of long-term business objectives. The author highlights that SHRM is a critical process that involves the use of overarching approaches to develop HR strategies that integrate with the company plan, define goals and plans for overall organizational considerations. I agree with the author's argument that SHRM is the most essential method for improving productivity and achieving long-term organizational goals and strategies by hiring, managing, developing, and rewarding employees. According to Armstrong, CIPD, and HR University, definitions of SHRM represented the same argumentation. Moreover, the article discusses the Resource-Based View (RBV) paradigm, which focuses on the organization's internal resources to gain long-term competitive advantage. This view is critical as resources play a fundamental role in helping organizations achieve better levels of success. As Wisdom (2020) notes, RBV helps us understand the circumstances that lead to human resources becoming a scarce, valuable, organization-specific, difficult-to-imitate resource, or key ‘strategic assets.' Therefore, SHRM and RBV are two critical processes that should be integrated to achieve better levels of business success.
ReplyDeleteResource Management (SHRM) on the attainment of long-term business objectives. Your perspective on the importance of SHRM and RBV aligns with existing literature on the subject.
DeleteIndeed, as Armstrong, CIPD, and HR University suggest, SHRM is a critical process that involves overarching approaches to align HR strategies with overall organisational goals and plans. The RBV paradigm emphasizes the importance of internal resources, including human resources, in gaining a competitive advantage over the long term.
As you note, integrating SHRM and RBV can be instrumental in achieving business success, and this view is supported by Wisdom's (2020) argument that human resources can be key 'strategic assets.' The literature, therefore, supports your assertion that SHRM and RBV should be integrated to achieve better levels of business success.
Thank you for your insightful comment on the article, and your contribution to the ongoing discussion on the role of SHRM in achieving long-term business objectives.