To achieve success, human resources, along with other business units, must perform various functions from providing basic operations to strategic planning. It is essential to balance strategic and tactical actions for HR managers to get consistent results. HR professionals are expected to understand the internal and external environment in which the organization operates. By understanding the value of these conditions, professionals can make HR solutions that contribute to business development. Therefore, HR becomes a strategic partner in the business environment for an organization. The present paper will discuss strategic human resource management, its causes and outcomes, trends in HR, and legislation of the sphere.
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One might say that it is necessary to address strategic business problems in such areas as the development of new products and services, improving quality, customer satisfaction, and the company’s position in the market. The department of human resources can help the organization to manage these processes and reach the right level of productivity. Strategic human resources management (SHRM) has different definitions; one of them states that SHRM is “proactive management of the employees of a company or organization” (“Strategic human resource management”, n.d., para. 1).
It is worth noting that SHRM presents a relationship between human resources and the company’s aims and objectives (Uysal, 2019). Strategic HR managers act as partners of other business units rather than providing legal compliance or financial compensation.
There are several activities of HR that should be established to solve the strategic problems of the enterprise. They include assigning HR managers in business development groups, consulting specialists in the field of design of new products and services, and analyzing the impact of strategic labor management on innovation processes (“Practicing strategic human resources,” 2015). Moreover, HR managers can be involved in the formation and development of the strategy commitment culture in the company that may help to support high standards and encourage staff to think long-term.
Ultimately, the development of objectives and key performance indicators (KPIs) should cause the evolvement of SHRM. The necessity to connect people development programs to business outcomes implies the inevitability of establishing strategic human resources practices (Sawyer, 2019). To address the interaction between human resources and the organization’s aims, HR managers work together with other departments to develop comprehensive strategies based on set objectives.
Therefore, strategic HR affects employees from different divisions that are connected by common goals. A proper HR strategy can transform people in the organization by enhancing work culture, improving job satisfaction, boosting productivity, or managing resources efficiently (Sawyer, 2019). Additionally, it can also influence product innovation, increase in sales and customer base, and help the business to be more competitive.
Various studies investigated the relationships between strategic HR and business outcomes. One research that examined the interaction between SHRM and organizational commitment claimed that strategic HR activities, including formal training, performance appraisals related to the company’s KPIs, and other variables, led to an increase in employee trust (Adresi & Darun, 2017). The authors of the study state that SHRM compatibility with the business goal is essential when there is a need to improve employees’ commitment.
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Another research that explored the dependence of organizational growth on strategic HR showed that there is a significant interrelation between SHRM and a company’s development. Scientists of this research claim that to encourage a company’s growth, managers should put emphasis on SHRM practices, such as planning, training, and promotions (Eneh & Awara, 2016). Thus, it is crucial to tie strategic HR to the current and future market situation to sustain competitive positions and strengthen an organization’s performance.
There are various laws and legislative documents that control the employment rules that HR professionals must be aware of and apply them every time. Specific regulations regarding strategic human resources management may vary from country and company. Strategic HR must efficiently organize employees’ work according to laws to avoid penalties and damages to the company’s reputation (Davis & Cornovali, 2019).
For instance, HR managers should review the employment standards of a state, such as the Workplace Democracy Act that exists in the US, to ensure that the organization’s objectives and HR strategy are compliant with the legislation (Wilkie, 2018). It is essential to consider regulations on wages, labor unions, immigration process when establishing strategic HR measures because authorities closely oversee workplace laws and policies (Wilkie, 2018). Therefore, HR processes should integrate legal acts with the leading company’s strategy to avoid negative consequences that may arise due to law violations.
One of the aims of strategic HR that are mentioned by researchers is to focus on people-based sets of tasks to create business results, such as performance evaluation and managers training that highlight employee-centric approach (Peacock, 2019). It is stated that to develop a pipeline of senior managers, strengthen engagement and analyze complex processes, strategic HR emphasizes culture, values, leadership, and performance that are mostly soft things related to people (Haak, 2020). Some researchers claim that organizations have gone through a stage of production-driven business to a more human-centric strategy.
In addition, they state that strategic HR policies are now focused on the development of career-oriented employees to sustain dynamic shifts happening in the market (Thoman & Lloyd, 2018). Thus, it can be assumed that nowadays, strategic HR considers the necessity to be more human-centric.
Consultants also note that people-centric attitude in strategic HR will influence organizations in the future decade (Ingham, 2019). Digital workspace that is currently created by various companies has driven the trend towards enhancing the technological flow of communication and creating design thinking strategies to predict how employees will behave in different situations (Ingham, 2019). It can also be noted that emerging changes and future trends will define how professionals will implement strategic HR. Employee experience is mentioned as one of the three critical initiatives for HR leaders defined by Gartner in 2019 (Totah, 2019).
The evolvement of the gig economy and other requirements of workers, such as remote working and task planning, are suggested to be crucial factors that will help to develop a people-oriented environment and unite employees (Totah, 2019). Therefore, agility, digital transformation, and artificial intelligence may encourage strategic human resources managers to anticipate future opportunities and apply them to balance social- and organization-centric approaches.
In conclusion, strategic human resources management, when applied correctly, may boost the organization’s revenues, growth, efficiency, and productivity of employees as well as maintain or reduce relative labor costs. It is crucial for HR professionals to define changes in work with the staff to help the company achieve its strategic goals. Thus, strategic human resources management should only be created as a part of the leading strategy of an organization based on experience and future trends to achieve successful results.
Adresi, A. A., & Darun, M. R. (2017). Determining relationship between strategic human resource management practices and organizational commitment. International Journal of Engineering Business Management, 9, p. 1-9. Web.
Davis, R., & Carnovali, M. (2019). The HR function’s compliance role. Web.
Eneh, S. I., & Awara, N. F. (2016). Strategic human resource management practices and organizational growth: A theoretical perspective. Global Journal of Social Sciences, 15, p. 27-37. Web.
Haak, T. (2019). 12 HR trends for 2020. Web.
Ingham, J. (2019). HR strategy in the 2020s: transitioning to a people-centric approach in the decade ahead. Web.
Peacock, M., Stewart, E., & Belcourt, M. (2019). Understanding human resources management: A Canadian perspective. Toronto: Canada. Nelson College Indigenous.
Practising strategic human resources. (2015). Web.
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Sawyer, K. (2019). 7 steps to strategic human resource management. Web.
Strategic human resource management (n.d.). Web.
Totah, Z. (2019). HR trends in 2020: The future of human resource management. Web.
Thoman, D., & Lloyd, R. (2018). A review of the literature on human resource development: Leveraging hr as strategic partner in the high performance organization. Journal of International & Interdisciplinary Business Research, 5, p. 147-160. Web.
Uysal, G. (2019). 3rd Definition of Strategic Human Resource Management: HR Systems Approach. ASOS Congress, 6, 1-6. Web.
Wilkie, D. (2018). Workplace may be new battleground for 2019-20 Congress. Web.