HRM3704 Contemporary Issues in Human Resource Management
Study Unit 4 - The Strategic role of Human Resource Management
Introduction
Strategic role of Human Resource Management (SHRM)
A number of benefits can be derived from this process, including:
• Contributing to the goal accomplishment and survival of the company
• Supporting and successfully implementing given corporate and business strategies of the company
• Creating and maintaining a competitive advantage for the company
• Improving the responsiveness and innovation potential of the company
• Increasing the number of feasible strategic options available to the company
• Participating in strategic planning and influencing the strategic direction of the company.
• Improving cooperation between the HRM department and line managers
FOCUS TRADITIONAL HR STRATEGIC HR
View of organisation • Micro • Macro
• Narrow skill application • Broad skill application
Critical skills • Organisation • Strategic
• Administration • Planning
• Compliance • Diagnostic
• Transactional • Analytical (metrics)
• Tactical • Consultative
View of employees • Headcount • Contributors
• Cost-based • Asset-based
• Exploitable resource • Critical resource
Planning outlook • Short-term • Long-term
• Low-risk • High-risk
• Traditional: utilises tried-and-true • Experimental: tries novel
approaches approaches
HR systems and practices • Routine, traditional • Adaptive, innovative
• Reactive • Anticipatory, proactive
• Responds to stated needs • Recognises unstated needs
Education and training • Traditional HRM generalists and • Business acumen
specialists • Comprehensive HRM body of
• Other specialties knowledge
• Organisational development
The basic principles of SHRM
Tsui: The concept of strategic human resource management tends to focus on organisation-wide human resource
concerns and addresses issues that are related to the firm's business. It is particularly useful for designing specific
human resource programmes, policies, systems or management practices at the organisational or business level.
SHRM is a proactive approach; its implementation requires a strategic management process. This means that the
HRM function must be restructured to accommodate SHRM. SHRM is about being able to predict future
opportunities and to use them to organisational advantage. The SHRM presence in an organisation means that the
organisation must organise itself and operate in three levels, that is, strategic, operational and functional.
Two major issues or aspects need to be in place within the organisation before the SHRM process can function
successfully:
• Presence of a strategic management process
• Restructuring of the HRM function itself
HR systems must be well established before HR can take on the HR strategy. For the HR function to operate at the
strategic level, it needs to reorganize the HR administrative function into three distinct levels:
• strategic,
Page 1 of 10
Summary by L Petzer
, HRM3704 Contemporary Issues in Human Resource Management
• operation
• functional
At the strategic level, HR professionals are involved in corporate HR planning. Casio identified four features of this
role:
• Senior HR professionals meet regularly with their counterparts in line management to formulate and review
broad HR strategies.
• Senior HR professionals participate fully in all top-level sessions on business strategy - permits early
evaluation of proposals in terms of their feasibility and desirability from a HR perspective.
• HR professionals at all levels work closely with line managers on an ongoing basis to assure that all
components of the business strategy are implemented adequately
• The HRM function itself is managed strategically: it has its own departmental strategy that identifies
priorities, directs the allocation of resources, and guides the work of various specialists.
HR-business strategy human systems
System Purpose - to ensure: Sample indicator
Communication system Employees have understood Install a simple system that requires
instructions and objectives feedback, from a random sample of
recipients of any communication, to check
understanding
Employee development system Employee develop their value All employees should be able to articulate
potential the value objectives of their own
development
Employee engagement system Employees are fully engaged Engagement survey, but one that includes
specific questions on connections with
value
Knowledge (intellectual capital) Ideas are captured and used A systematic way of collecting and
management system effectively assessing all ideas for value
Learning system The individual and the organisation Double-loop feedback systems are in
learn what they need to know place
Performance management All employees are performing to the Regular appraisal of not just individual
system best of their ability performance but how they contribute to
the value chain
Reward and recognition system Maximum individual contribution is Incidents where conscious efforts are
continuously sought and encouraged made to acknowledge extraordinary
performance
Talent identification system All relevant talents are used Formal assessment based on building
effectively track record data
At the operational level, the HR team develops action plans to meet present labour needs, and at the functional level
it carries out the many activities which ensure that employees are in the right place at the right time and cost.
Once the new HR structure has been finalised, it is important that it establishes proper communication links with line
management. Relationship can be enhanced by having regular meetings with line managers, circulating relevant HR
reports to them, and establishing a computerised HR system that allows access by all stakeholders. Besides a
communication system, developing other human systems that should be regarded as the absolute minimum
necessary for a true HR-business strategy must also receive attention (above table).
The design of an HR strategy
While a wide variety of issues are addressed in such strategies, at a minimum they include four components:
• Mission statement or a set of prioritised goals for the function and their major subfunctions.
• A proposed organisation structure.
Page 2 of 10
Summary by L Petzer
Study Unit 4 - The Strategic role of Human Resource Management
Introduction
Strategic role of Human Resource Management (SHRM)
A number of benefits can be derived from this process, including:
• Contributing to the goal accomplishment and survival of the company
• Supporting and successfully implementing given corporate and business strategies of the company
• Creating and maintaining a competitive advantage for the company
• Improving the responsiveness and innovation potential of the company
• Increasing the number of feasible strategic options available to the company
• Participating in strategic planning and influencing the strategic direction of the company.
• Improving cooperation between the HRM department and line managers
FOCUS TRADITIONAL HR STRATEGIC HR
View of organisation • Micro • Macro
• Narrow skill application • Broad skill application
Critical skills • Organisation • Strategic
• Administration • Planning
• Compliance • Diagnostic
• Transactional • Analytical (metrics)
• Tactical • Consultative
View of employees • Headcount • Contributors
• Cost-based • Asset-based
• Exploitable resource • Critical resource
Planning outlook • Short-term • Long-term
• Low-risk • High-risk
• Traditional: utilises tried-and-true • Experimental: tries novel
approaches approaches
HR systems and practices • Routine, traditional • Adaptive, innovative
• Reactive • Anticipatory, proactive
• Responds to stated needs • Recognises unstated needs
Education and training • Traditional HRM generalists and • Business acumen
specialists • Comprehensive HRM body of
• Other specialties knowledge
• Organisational development
The basic principles of SHRM
Tsui: The concept of strategic human resource management tends to focus on organisation-wide human resource
concerns and addresses issues that are related to the firm's business. It is particularly useful for designing specific
human resource programmes, policies, systems or management practices at the organisational or business level.
SHRM is a proactive approach; its implementation requires a strategic management process. This means that the
HRM function must be restructured to accommodate SHRM. SHRM is about being able to predict future
opportunities and to use them to organisational advantage. The SHRM presence in an organisation means that the
organisation must organise itself and operate in three levels, that is, strategic, operational and functional.
Two major issues or aspects need to be in place within the organisation before the SHRM process can function
successfully:
• Presence of a strategic management process
• Restructuring of the HRM function itself
HR systems must be well established before HR can take on the HR strategy. For the HR function to operate at the
strategic level, it needs to reorganize the HR administrative function into three distinct levels:
• strategic,
Page 1 of 10
Summary by L Petzer
, HRM3704 Contemporary Issues in Human Resource Management
• operation
• functional
At the strategic level, HR professionals are involved in corporate HR planning. Casio identified four features of this
role:
• Senior HR professionals meet regularly with their counterparts in line management to formulate and review
broad HR strategies.
• Senior HR professionals participate fully in all top-level sessions on business strategy - permits early
evaluation of proposals in terms of their feasibility and desirability from a HR perspective.
• HR professionals at all levels work closely with line managers on an ongoing basis to assure that all
components of the business strategy are implemented adequately
• The HRM function itself is managed strategically: it has its own departmental strategy that identifies
priorities, directs the allocation of resources, and guides the work of various specialists.
HR-business strategy human systems
System Purpose - to ensure: Sample indicator
Communication system Employees have understood Install a simple system that requires
instructions and objectives feedback, from a random sample of
recipients of any communication, to check
understanding
Employee development system Employee develop their value All employees should be able to articulate
potential the value objectives of their own
development
Employee engagement system Employees are fully engaged Engagement survey, but one that includes
specific questions on connections with
value
Knowledge (intellectual capital) Ideas are captured and used A systematic way of collecting and
management system effectively assessing all ideas for value
Learning system The individual and the organisation Double-loop feedback systems are in
learn what they need to know place
Performance management All employees are performing to the Regular appraisal of not just individual
system best of their ability performance but how they contribute to
the value chain
Reward and recognition system Maximum individual contribution is Incidents where conscious efforts are
continuously sought and encouraged made to acknowledge extraordinary
performance
Talent identification system All relevant talents are used Formal assessment based on building
effectively track record data
At the operational level, the HR team develops action plans to meet present labour needs, and at the functional level
it carries out the many activities which ensure that employees are in the right place at the right time and cost.
Once the new HR structure has been finalised, it is important that it establishes proper communication links with line
management. Relationship can be enhanced by having regular meetings with line managers, circulating relevant HR
reports to them, and establishing a computerised HR system that allows access by all stakeholders. Besides a
communication system, developing other human systems that should be regarded as the absolute minimum
necessary for a true HR-business strategy must also receive attention (above table).
The design of an HR strategy
While a wide variety of issues are addressed in such strategies, at a minimum they include four components:
• Mission statement or a set of prioritised goals for the function and their major subfunctions.
• A proposed organisation structure.
Page 2 of 10
Summary by L Petzer
