Strategic Human Resource

Strategic Human Resource

Contents

1. Introduction 1

2. The role of SHRM in organisations and its contribution to organisational performance 1

3. Importance of strategic HR planning (HRP) and the difficulties experienced 3

4. Benefits and challenges of performance management from strategic perspective 5

5. SHRM challenges facing companies today 7

6. Conclusion 9

Reference List 11

1. Introduction

Human capital is one of the most fundamental inimitable resources in organisations which enhance sustainable competitive advantage. However, the key ways to nurture and develop effective workforce, have remained among the key challenges facing human resource management today. Reinforced by the highly turbulent business environment and the rapidly advancing globalisation, it has become increasingly necessary for firms to adopt strategic initiatives in the way they manage their human resources. As a result, the concept of strategic human resource management (SHRM) has evolved. According to Story (2001), SHRM can be defined as “a distinctive approach to employment management which seeks to achieve competitive advantage through strategic deployment of highly committed workforce” (p. 6). Basically, SHRM involve proactive management of people within an organisation in order to enhance the achievement of the strategic goals of the organisation through holistic planning.

With drastic changes in industrial relations, and the intensifying competition over the past few years, it has emerged that traditional psychological contracts (both formal and informal) that previously existed between employees and their employers is not sufficient for sustainable productivity (Lussier & Hendson, 2013); and thus the need to establish more strategic and holistic ways to achieve employee commitment has become necessary. Since employee commitment is a key predictor of high workforce performance and low employee turnover (Lengnick-Hall et al, 2009), SHRM approach in employee...