From this article you will learn:
- What is strategic human resource management?
- Why is strategic human resource management important?
- Benefits of strategic human resource management
- Three types of strategic human resource management methods
- Four methods of strategic human resources management
- Method 2. Creating a high level of commitment.
- Five stages of strategic human resources management
- Template for a strategic human resource management plan
- 4 Features of a Successful Strategic Human Resources ManagerProblem-Solving Skills
- Three tips for successful strategic human resource management
What is strategic human resource management?
Strategic human resource management is a part of the strategic management system of an entire company.
Strategic human resource management is a way to achieve competitive advantage by developing long-term strategies that align with organizational goals.
In other words, the strategic human resource management makes it possible to form a competitive workforce that considers the ongoing and upcoming changes in both the internal and external environments.
Strategic human resource management can be divided into two complementary parts:
- Human resource management strategy analysis and planning.
- Management of strategic human resource issues in the present.
The task of the human resources managers in the strategic human resource management is to develop principles and initiatives for the whole company, taking into account the characteristics of the workforce.
Successful strategic human resource management results in the employer getting the most out of their skills and abilities and employees getting the most material and psychological satisfaction from their work.
Why is strategic human resource management important?
The goal of any business is to make a profit. Strategic human resource management helps achieve that goal through effective team management.
Benefits of strategic human resource management
A competent strategic human resource management will allow you to:
- Increase employee satisfaction.
- Increase employee productivity and efficiency.
- Improve the corporate culture of the company.
- Innovate and keep up with the times.
- Increase customer satisfaction.
- Increase company profit.
Three types of strategic human resource management methods
Human resource management methods are divided into administrative-organizational, economic, and socio-psychological.
Organizational-administrative methods of strategic human resource management include instructions and penalties.
The economic methods of strategic human resource management include bonus payments to employees.
Social-psychological methods of strategic human resource management include creating comfortable corporate culture, working conditions, praise, awards, and titles.
Four methods of strategic human resources management
Method 1. Building resource capacity.
Human resources managers need to analyze the financial and non-financial resources of the company and its capabilities in the marketplace.
The method’s purpose is to develop and incorporate innovations into the company.
Method 2. Creating a high level of commitment.
The higher the engagement of employees in achieving the company’s goals, the higher the company’s efficiency.
The method’s goal is to inspire employees to work hard and help them gain job satisfaction.
Method 3. High-performance level formation.
The human resources manager needs to increase productivity through the practical application of human potential. His task is to competently identify the strengths and weaknesses of employees, form a strong team, and reward structure for excellent performance.
The goal of the method is to increase the added value of each employee.
Method 4. Best Practice Method.
The method is based on the fact that there is a «best practice concept» of strategic human resource management. Its application is guaranteed to bring results.
The method aims to identify an effective strategic human resource management method and put it into practice.
Five stages of strategic human resources management
To build an effective human resource management plan, strategic human resource managers should answer four questions:
- Where are we now?
- Where do we want to be?
- How do we get there?
- How will we know the effectiveness of the strategy?
We have prepared a 5-step human resource management plan that will lead your company to success:
Step 1: Analyze the external and internal environment of the company.
The best way to thoroughly analyze the company and the market is to use the SSWOT analysis method.
The SWOT analysis allows you to identify the company’s strengths, weaknesses, opportunities, and threats.
Develop human resource management strategies based on strengths and weaknesses.
Example of developing a strategy based on a SWOT analysis:
- Company weakness: low communication between departments.
- Environmental threat: decrease of gross income.
- Human recource strategy: rewarding employees for active communication between the company’s departments.
Step 2. Define the company’s mission, strategic goals, and priorities.
When forming a company’s mission, you should take into account:
- The company’s purpose in the market.
- Philosophy and culture of the company.
- Material achievements of the company.
- The benefit of the company to the society.
Step 3: Formulate and select strategies to achieve the goals.
Use the strategic human resource management methods described above.
The strategic human resource management should focus on creating opportunities identified in the business strategy.
Step 4: Effectively implement strategies and execute the strategic plan.
Agree on all of the HRMS tools you use.
Example: Employee evaluation criteria should be consistent with the requirements for hiring candidates and consistent with the company’s mission.
This set of practices is called a bundle. The use of bundles creates a comprehensive effect and helps achieve the goals of the business plan.
Step 5: Evaluate and monitor the implementation of the strategy, and adjust the areas of focus and HRM practices that you have used.
Template for a strategic human resource management plan
4 Features of a Successful Strategic Human Resources Manager
Strategic human resources managers must spot the company’s weaknesses and problems faced by its employees and help solve those problems.
Feature 1. Discretion.
Strategic human resource managers must consider many different factors when choosing a strategic human resource management method.
Feature 2. Communication.
The ability to listen, to build warm, trusting relationships with employees and company stakeholders is the key to successful strategic human resource management for any strategic human resource manager.
Feature 3. Teamwork Skills.
Strategic human resource managers must make sure that all departments in the company work cohesively and do not conflict with each other.
Three tips for successful strategic human resource management
Tip 1. Pay attention to financial data.
To get funding for human resource management strategies, the human resource manager must provide financial metrics for their performance.
Financial data will help track the company’s progress in implementing the strategic human resource management .
Tip 2. Pay attention to other tasks of a strategic human resource manager.
The human resource manager performs six essential functions.
Please don’t get stuck solely on developing an human recource strategy: put more effort into its successful implementation.
Tip 3. Use a «from the outside in» approach.
There are two main categories of stakeholders to be managed by the sales manager in strategic human resource management : external and internal.
Strategic human resource management methods must be aligned with the company’s business plan and with all stakeholders.
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