Strategic HRM

The history of human resources management in corporates is well known. Starting out in an administrative role with focus on welfare and legal matters, the function moved on to more important activities such as organizational develoment and training & development. However, there has been a feeling for a long time that HR is still transactional in nature and needs to get involved with the stark realities of business so that HR activities can be dovetailed to business requirements.

The urgency for this was felt all the more with the advent of technology by which data related matters could be done better, faster and cheaper by outsourced agencies . In order to be relevant, the focus of HR had to change from the transactional to the strategic & transformational - being able to contribute to the business strategy of the company. In the meanwhile, the complexities of operations with rapidly changing work conventions required HR leaders to focus on playing a major role in enhancing workplace productivity to help the businesses gain an edge in the market. The seeds for a Strategic Human Resources Management (SHRM) were being sown.

While the broad statement of strategies set a direction, they also provide specific, measurable, obtainable, set of plans developed with deliberation and involvement of the organization's stakeholders. When a company adopts strategic HR, as is the case with the production or marketing strategy, the HR strategy is understood and owned  by the whole company and not just by the function or department. HR works in tandem with other departments in realizing its goals. The HR strategy thus developed with the buy in and active participation of other functions (Integrated HR management), results in the HR department becoming a key enabler of business growth rather than just a service provider.

The 2006 book "Roadmap to Strategic HR" written by Ralph Christensen gives a good picure about the 'what' and 'how' of adopting strategic HR in a company. As the author has a solid 25 years of experience working in corporates including in the role of VP-HR in three major companies in three different industries, his thoughts come through as practical without a lot of jargons associated with the work of academicians.

Strategic human resources efforts might include (1) Dialoguing with executive team for re-examining the clarity and appropriateness of business strategy (2) Aligning company wide reward syatems for ensuring fulfillment of customer needs (3) Reassessing and projecting talent needs on the basis of the latest business strategies (4) Redesigning work processes to eliminate aspects that don’t add value (5) Developing training solutions for building organizational capabilities in line with business strategy (6) Redesigning cultural aspects in line with customer desires for speed, creativity, quality, service levels, other improvements.

As the concept is recent in origin, a lot of effort is necessary to prepare the organization both the line managers and members of HR function themselves as to the need and advantages of having HR as a business partner rather than a service provider. The belief and confidence of CEO is vital in this regard. Ralph Christensen has suggested focusing on five HR processes that more or less covers that entire gamut of the HR role. They are workforce planning and staffing ( current and future needs in line with business strategy), learning and development (continual upgrading of existing talent), organization development (examining processes and systems for aligning with business strategy), Performance management ( to ensure desired outcomes) and employee relations (support employees to meet individual needs & the organization needs).

In order to successfully implement strategic HRM, the Director/VP/ Head HR should lead the process to interpret the business strategy into a robust human resources strategy for the company. He/she should have direct access to the CEO and must be able to contribute to the development and implementation of company's business strategy like any other business head of the organization. Therefore, it is most essential that this postion reports to the CEO. A big challenge that still exists is the need to develop measurement systems for tracking the progress of the human resources work, comparable to the systems used to track other business issues.   

This post is a part of #BlogchatterA2Z 2023