Strategic HRM and Business Performance

Articles from CIPD:

Since the mid 1990s, CIPD and others have been generating evidence for the impact of people management practices on business performance. Much emphasis has been put on the importance of ‘fit’. In other words it is argued that HR strategies much fit both with each other and with other organisational strategies for maximum impact. The main areas of practice which all the researchers agreed have an impact on performance are around job design and skills development. However, CIPD work found that practices alone do not create business performance. They can create ‘human capital’ or a set of individuals who are highly skilled, highly motivated and have the opportunity to participate in organisational life by being given jobs to do. However, this will only feed through into higher levels of business performance if these individuals have positive management relationships with their superiors in a supportive environment with strong values. All these factors will promote ‘discretionary behaviour’, the willingness of the individual to perform above the minimum or give extra effort. It is this discretionary behaviour that makes the difference to organisational performance. The ‘people and performance model’ generated from CIPD-sponsored work at Bath University6 emphasised the importance of individual HR strategies which must fit with each other operating in a strategic framework which incorporates both people and business issues.

Strategic HRM, What is it?

A good article to share... I took it from CIPD.

What is strategic human resource management?

Strategic human resource management is a complex process which is constantly evolving and being studied and discussed by academics and commentators. Its definition and relationships with other aspects of business planning and strategy is not absolute and opinion varies between writers.
The definitions below are from the CIPD book Strategic HRM: the key to improved business performance1 within which there is comprehensive coverage of the various definitions and approaches to HRM, strategy and strategic HRM.
Strategic HRM can be regarded as a general approach to the strategic management of human resources in accordance with the intentions of the organisation on the future direction it wants to take.
It is concerned with longer-term people issues and macro-concerns about structure, quality, culture, values, commitment and matching resources to future need.

It has been defined as:

All those activities affecting the behaviour of individuals in their efforts to formulate and implement the strategic needs of business.2
The pattern of planned human resource deployments and activities intended to enable the forms to achieve its goals.3
Strategic HRM can encompass a number of HR strategies. There may be strategies to deliver fair and equitable reward, to improve performance or to streamline structure. However, in themselves these strategies are not strategic HRM.

Strategic HRM is the overall framework which determines the shape and delivery of the individual strategies.

Boxall and Purcell4 argue that strategic HRM is concerned with explaining how HRM influences organisational performance. They also point out that strategy is not the same as strategic plans. Strategic planning is the formal process that takes place, usually in larger organisations, defining how things will be done.
However strategy exists in all organisations even though it may not be written down and articulated. It defines the organisation’s behaviour and how it tries to cope with its environment.

Strategic HRM is based on HRM principles incorporating the concept of strategy. So if HRM is a coherent approach to the management of people, strategic HRM now implies that that is done on a planned way that integrates organisational goals with policies and action sequences.