The importance of strategic human resource management
As globalization takes place, rapid development and increasingly competitive market have become the immediate challenges for organizations. Surrounded by such environment, organizations should create business strategies to survive the challenges and sustain the competitive advantage. Beside developing on new products, new processes and expanding business to larger market, the investment on the biggest potential that most organizations recognize, human resource, has received more and more attentions. Nowadays, the most valuable resource in a organization is suggested to be the human resource. Human capital, the knowledge, experience and skills that individuals possessed are pivotal for the successful performance of the federal government’s missions (J.L. Perry, 1993). Similarly, other types of organizations have no exception, also treasure the values that individuals bring to the companies. Thus, the management of human resource is closely related to the success of organizational performances. in fact, as argued by many management scholars, human resource management is currently an important, perhaps the most important factor that determines the effectiveness of organization (Devanna, Fombrun, and Tichy, 1984; Schuler,1990). Strategic human resource management (SHRM), as a term first given from the USA, is of more interest recently. It is defined as the pattern through planning human resource deployments and activities such to enable an organization to achieve its goals (J.L. Perry, 1993). SHRM creates a link between the overall strategic business objectives and the human resource strategy and implementation (E. N. Caliskan, 2010). Thus, it is important to understand that how the organization manages its human resource and link to its business strategies have a significant impact on the improved organization’s performance.
Impact of human resource management 人力资源管理的影响
In order to explain the importance of SHRM to the success of organizational performance, the impact that human resource management has on the organizations should be examined first. There has been growing number of studies that indicated a positive relationship between human resource management and organizational performance (E.N. Caliskan, 2010). A research reported by Arthur in 1990 (M. Armstrong, 2006) gave data from 30 US strip mills used to assess how high-commitment strategy or a control strategy influenced labour efficiency and scrap rate. The results showed that firms with a high-commitment strategy was higher in both productivity and quality as comparing to those with a control strategy. In 1995, Huselid (M. Armstrong, 2006) did an analysis of the responses of 968 US firms regarding the use of high performance work practices, the development of synergies between them and alignment of these practices with the competitive strategy. The results showed that the impact of employee motivation is significant on productivity, and the impact of employee skills, motivation and organizational structures is also significant on the financial performance. Later Patterson et al. in 1997 (M. Armstrong, 2006) did a research to examine the link between business performance and organization culture as well as the use of some human resource practices. The results showed that human resource practices gave explanations to significant variations in profitability and productivity. Two of the practices were particularly important: (1) the acquisition and development of employee skills (2) job design which includes flexibility, responsibility, variety and the use of formal teams. The workplace employee relations survey conducted in 1998 also suggested a strong association existed between HRM and employee attitudes as well as workplace performance through the sample survey of 2000 workplaces and views of 28000 employees (E.N. Caliskan, 2010). Purcell et al. in 2003 (M. Armstrong, 2006) did a longitudinal study of 12 companies to establish the impacts of people management on organizational performance. As indicated, the most successful companies all had a clear vision and a set of integrated values such as embedded, enduring, collective, measured and managed. It was clearly evidenced that positive attitudes towards HR policies and practices, levels of satisfaction, motivation and commitment influenced operational performance.
From the research results, we can easily conclude that effective HR practices have positive impacts on the overall performance of organizations. For suitable HR policies and processes to be applied, the firm’s performance will be substantial and sustainable. Regardless of what type of industry the organization is aiming at, the ultimate strategic goal of the chief is to maximize wealth of the shareholders. Financial performance depends largely on operational performance. This can be accounted as a function of its people, process and technology. Effective combination of such function requires people in the organization to be competent enough with adequate knowledge, skill and abilities. Such requirement is closed linked to certain HRM practices such as hiring selection, training of staff, work environment and performance assessment. These practices may enhance the competence of employees, thus improve the performance of organizations.
Impact of Strategic human resource management 战略人力资源管理的影响
The strategic base of HR practices has a great impact on improved performance. Firstly, in the strategy of hiring employees, HRM tends to attract, develop and retain high-quality people. By matching employees to the strategic and operational needs of the company, can improve the working efficiency. In addition, the talent management also has effective measures. Winning ‘war for talent’ is achieved by making sure that both present and future needs of talented and well-motivated people required by the organization are met. Baring in mind the most important strategy which is to create happiness within the workplace and make the organization a great place to work. This can inspire people to be more innovative and energetic in their work. As the employees’ happiness increases, their performance also improves, thus enhance the overall organizational performance. The job design, as mentioned in the past research, plays an important role in productivity. It is necessary to provide employees with stimulating and interesting work and give them autonomy and flexibility to complete their jobs. This can enhance job satisfaction of the employees, thus encourage higher performance and productivity (E.N. Caliskan, 2010). Training and initiating a learning culture within the organization can develop the level of competence of the workforce. Encouraging discretionary learning when individuals actively seek to acquire knowledge and skills that match with the objectives of the organizations. By creating a learning atmosphere in the workplace, employees would be more motivated and more competent to face the fast-paced and global challenges. From the case of Snowden, we noticed the importance of building cooperation trust among the employees. Adopting the strategy of increasing motivation, commitment and role engagement to encourage people to identify themselves with the core values of the organizations and to make them willingly contribute to achieve organizational goals. Last but not least, for high-performance management, a positive performance culture should be built to deliver the desired values from the shareholders. For more contribution made, the people should be awarded, in order to encourage him to keep it up and also motivate other employees to devote themselves strive for better performance.
As we discuss on how various HR strategies can be implemented to collaborate with business strategies to achieve higher performance of organizations, it is not hard to conclude that SHRM is the driver to improve organizational performance. Human resource, as a source of sustained competitive advantage, is worth being invested to increase the potential of an organization. So long as the people in the organizations are improved in both performance and attitude, the ultimate goal of the shareholder is approachable. The present linkage has given HR managers a clue on how to adopt various strategies onto HRM. These strategies do not only improve the human resource performance, most importantly, also directly affect the overall performance of the organization, thus, determine if or not the organization can achieve its goals.