Strategic Human Resource Management Literature Review

This assignment requires a comprehensive literature review of Strategic Human Resource Management (SHRM). Students need to delve into various aspects of SHRM, including high-commitment work systems, talent management, the employee-organization relationship, performance-based practices, and the influence of context on SHRM effectiveness. The review should analyze key theories, research findings, and their implications for organizations.

Running head: Strategic human resource management
Strategic human resource management

Strategic human resource management
The essay presents a brief overview of the strategic human resource management. It
explains the approaches and theories of the SHRM and it also describes the key issues of
strategic human resource management. It explains that how strategic human resource
management plays a significant role in every organization. The essay also explains the best fit
and best practice of SHRM.
1: The strategic human resource management includes the human resource elements such as
discipline, payroll, hiring and retention strategies. Strategic human resource management
provides support to achieve the organizational goals and objectives. It is the process and practice
of attracting, rewarding, developing retaining the workers to achieve the long term goals and
objectives of the association (Swailes, 2013). Strategic human resource department utilizes and
develops the opportunities and talents to make the other department more effective and stronger.
The organization cannot survive its business activities without effective strategic human resource
department. There are various approaches to strategic human resource management. These
approaches include the resource based strategy, high-performance management strategy, high
management involvement strategy, high commitment management strategy and achieving
strategy (Martin et al, 2016). The approaches to strategic human resource management are
discussed below.
The resource based approach developed by the Barney in 1991. The approach will
address the methods and techniques of increasing firm strategic potential and capabilities by the
development and growth of managers and other employees who can think and understand the
key strategic concerns and issues. This approach emphasizes the firm resources as the primary
determinants of competitive performance and advantage. It provides the fundamental direction
for a firm and this approach is the primary source of revenue and profit of the company. The
resource based approach includes the resource mobility and resource diversity. Resource
diversity refers to the different resources and competencies and the resource mobility means a
resource which is complex to obtain and acquire by competitors because it is inelastic in cost and
supply (Chipunza & Samuel, 2013).
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Strategic human resource management
High commitment management approach is the very important approach of SHRM and it
plays a significant role in human resource management. It enhances and encourages the mutual
commitment of people. This approach is based on the high level of trust and faith. It emphasizes
the human responsibility, autonomy, sovereignty, and empowerment of employees. The
approach focuses on the employees’ relationship and their commitments towards jobs. It focuses
on the recruitment and selection of the right people with excellent skills and knowledge for doing
the right job. The right and potential employees help to maintain the high level of trust in the
entire organization (Thunnissen, Boselie & Fruytier, 2013).
High involvement management is another approach of the strategic human resource
management. This approach provides opportunities to employees to take decisions about their
jobs and business. In this approach, top management involves the employees to participate in the
business activities of the organization. It improves and increases the efficiency and productivity
of employees. Through the involvement in management, employees learn many things from
managers and top management. Managers share knowledge and experience with employees
through the high involvement management approach (Cascio, 2015).
After the various researches, it has been found that resource based approach is the best and
effective approach to strategic human resource management. Therefore, this approach plays a
significant role in an organization. In this approach, the resources are sub categorized into
tangible and intangible resources and both the resources are essential for the functioning and
running of the organization. It is one of the best substantial approaches of strategic human
resource management. The firm utilizes and develops the resources to increase the productivity
and performance of employees. Through resource based theory, the company enables to produce
the innovative products and services as per the needs and requirements of the consumers. It will
help to increase and enhance the growth and profit of the organization. This approach evaluates
and measures the potential resources to provide more benefits to the company (Chen & Wang,
2014). A comparative approach between ‘best practice’ and ‘best fit’ is discussed below.
Best practice: The best practice model helps the company in performing HR activities. This helps
the company to reach to a higher level. This gives the various advantages to the company. The
activities performed by best practice model in HR are done professionally. This increases the
performance of the firm and gives better results. Best practice allows an individual to develop a
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Strategic human resource management
connection with the company’s HR department and the company itself. The company requires
worker with a higher commitment which is fulfilled by best practice model. Best practice models
are presented in a professional way as it shows the performance of the organization (Bakker,
2017).
Implications:
This is mainly as a result of conflicting views about what constitutes an ideal set of HR best
practices, whether or not they should be horizontally integrated into ‘bundles’ that fit the
organizational context and the contribution that these sets of HR practices can make to
organizational performance. It provides the fundamental direction for a firm and this approach is
the primary source of revenue and profit of the company.
Practical implications;
The impact of best practice models results great. It enhances the performance of the organization.
The work is such that it raises the attitude of the employees towards the firm. This model keeps
employees interested in the work. This keeps them regular at work. Work generated by the
employee is in a good amount which increases the productivity of the firm. The models have
quality and they are efficient for the organization. The feature is mainly used in strategic human
resource department. This is a key theme which is responsible for the development of the
organization. The main aim of such approach is to check the availability of the practices
performed by the firm. Using this practice one gets the chance to get close to the organization,
which gives good outputs. The results are profitable. This makes the role of human resource
important (Izvercian, Potra, & Ivascu, 2016)..
Against:
Best practice approach does not stand on its name. The work creates confusion among the
employees. This results in lack of decision making in strategic human resource department.
Best fit practice: The best-fit approach shows the relationship between human resource
management and strategic human resource management. It talks about the kind of work and
nature of work needed by the company. The HR practices are maintained. The approach is taken
keeping in mind the company’s requirements. Best fit practice follows the theme of serving the
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Strategic human resource management
needs of strategic human resource department. Best practice fit approach is beneficial and is
better than best practice approach. It is a dynamic approach for the accomplishment of
organizational goals and objectives
Implications:
It results in a close relationship with the firm. The strategies planned are advanced and respected
by the organization. The impact of the approach is shown when the company is rewarded. It
works on what company wants for the growth. The approach has to meet the organizational goals
to get accomplishment. This approach is based on the high level of trust and faith. It emphasizes
the human responsibility, autonomy, sovereignty, and empowerment of employees. The
approach focuses on the employees’ relationship and their commitments towards jobs.
Practical implications:
Best fit deals with the organizational activities. It follows the organizational rules and
procedures. The implications are set keeping in mind the requirements of strategic human
resource development. It focuses on those areas of the organization which generates profit. This
approach is seen in finance. Therefore, it will increase the quality, productivity, profits, growth,
and level of consumer service and shareholder value. The best-fit approach has a motivator
which motivates the employees. It helps them in developing the confidence to work. It works as
per the expectancy of people. It is believed that people will work better if they are rewarded
better. SHRM believes the same. If they reward the employees better they will work better
(Lengnick-Hall, Lengnick-Hall & Rigsbee, 2013).
Against:
Best fit approach limits the strategy. They work for multiple companies. It becomes difficult to
manage the work for each company. It becomes difficult to manage the new challenges that are
seen in strategic human resource department. It becomes difficult to show their links and
interconnections with each company (Beugelsdijk, 2008).
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Strategic human resource management
The main objective of ‘best fit’ and ‘best practice’ is to achieve high performance in the
association. Both the theories are essential in order to achieve organizational goals and
objectives. The ‘best practice’ is based on the universal and collective approach while ‘best fit’ is
based on the contingency approach. Both the approaches play a significant role in strategic
human resource management (Hamid, 2013).
2: SHRM requires the full attention of the authority. It is the main issue as every task requires
permission of the higher authority to access. SHRM is affecting the major part of the
organization. The strategies planned to meet good results, so the strategies are planned by SHRM
which take very much time to implement. Since strategic human resource management manages
all the requirements of the business hence it uses plenty amount of resources of the company
(Adil, 2015). The strategic human resource has a lower cost of production for training and
development of employees. Therefore, it is the major issue of SHRM. The training is done to
make them capable of handling the work effectively and efficiently. The reduction is done in
expenditure when there is a rapid growth in the number of employees. SHRM promotes the
employees the employees for their work and performance. Recruiting new staff is the major
problem for strategic human resource management staff. The selection of the best candidate is
quite tough for the HR employees as they have to go through each and every field of the
employees. They have to make sure whether the employees are familiar with the environment or
not. They look for those employees who are not only expert with technologies but also are social
friendly. They have to stand on the company’s expectations, which becomes challenging for the
management. One of the major challenges that SHRM has to face is retention. They have to keep
hold of the employees who are recruited. The working of employees includes part-time,
temporary working and work from home. Managing such staff in the company is a challenge as
they are not much involved in the functioning of the company. This makes the responsibility of
SHRM tougher as they have to make such employees aware about the company for long term
business (Gerhart & Fang, 2014).
The SHRM is also responsible for the training and development programs. They hire the
employees and train them for smooth functioning and face number of difficulties as a result.
They have to choose the kind of training that is needed to conduct, what objective needs to be
followed for the better results. Skilled workers are the key to the smooth functioning of the
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Strategic human resource management
organization. Therefore, HRM should manage on-site (within the workplace) as well as off-site
(outside the workplace) job training and development for the employees. The strategic human
resource management is also responsible for managing the profits and funding of the
organization. Therefore, many difficulties are faced by the SHRM for maintaining profits and
funding(Dimba & Obonyo, 2015). The unsatisfactory results can be dangerous for company’s
future growth. Health and safety are the other major concern of SHRM department. Management
has to look after each individual’s safety and health. They maintain a proper record of the
employees. Lack of proper information about the employees is an another issue of SHRM as
result the company has to bear great loss and complications. It also raises legal and long-term
issues. Discipline is the other important issue of SHRM. It is also responsible for keeping the
company within the disciplinarian actions. Lack of such actions affects the productivity of the
company. It also affects the growth and reputation of the firm (Paillé et al, 2014).
If the employees are not in the discipline they neglect the responsibilities. Therefore, they
are not being able to perform good work. This might results in the downfall of the company also.
Lack of discipline may result in misbehaving with other employees of the organization. This may
also lead to conflicts within the firm. It is also expected to meet the market demands. SHRM has
the major issue of expanding itself with the trend. They have to cope up with the advance
technologies that will help the company for its business (Paauwe, 2009). The influence of new
technologies creates either the company’s growth or its decrease in production. The proper
planning of technology is done keeping in mind the company requirements. It should make the
overall company profitable. The expanding of business by involving such technological trends
makes it difficult for strategic human resource management to perform (Kaufman, 2015).
3: Strategic Human Resource Management is one of the important parts of the company. SHRM
plays a significant role in all the types of firms have both large and small enterprises. It also
manages the behavior of the employees. It shows how they are treated, their security and
employment (Kooij & Van de Voorde, 2015).
Strategic human resource management can be understood on the grounds of political,
social and economic movements. It shows the relation between the difference in opinion of
managers and workers working in the company. SHRM attempts to optimise the management of
Human resources for the organization in the current time perspective (Kim & Wright, 2011). The
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Strategic human resource management
SHRM includes all the aspects such as recruitment, selection, training, placement, compensation
management (Milhem, Abushamsieh & Pérez Aróstegui,2014). On the other hand, the purpose of
SHRM is to achieve goals and objectives of the organization with requirements of human
resources for the future perspectives. Hence, an organization is using SHRM criteria is likely to
nurture Human Resources for the likely changes in technology based on the technology forecast
(Fernando, 2016).
The theory of strategic human resource management includes the process of recruitment
and retention. The theories that are applied to strategic human resource management allow the
firm to achieve the goal of recruitment and retention. Such theories are necessary and are made
in relation to SHRM (Cheng-Fei Tsai & Shih, 2013). It is mainly managed by HR managers. The
application of such theories makes recruiter and professionals of Human Resource Management
understand the human behavior. The strategies planned by the SHRM department are systematic
in behavior. This not only fulfills the theory of SHRM but also make the position of the company
in the market. SHRM follows the theory of recruitment and retention. This mainly needed by the
company to function. The strategies of the organization are most of the time successful as the
employees who plan it are highly trained and professionals (Duy et al, 2015).
Strategic human resource management is an important part in organization’s success. It
plays a major role in the success and performance of the organization. The employees are the
essential bodies of the organization. The SHRM practices are linked with the practices of the
organization. SHRM practices and firm performance are similar in the functioning. They both
seek for the production and financial stability. The human resource department also checks the
employee turnover. SHRM performs practices like staffing, training, inducements, welfares,
participation, and performance appraisal. These practices are completely linked with the
organizational performance measurements such as productivity, invention, and feedback
from customers (Singh & Rao, 2015). The functioning of strategic human resource management
is one of the activities that impact most critically on the performance of an organization. Poor
decisions affect the growth of the firm. Hence, SHRM allows proper decision making to achieve
the set goals (Kontoghiorghes, 2016). Therefore SHRM allows a clear indication to employees to
work in the areas of selection and recruitment. Strategic recruitment and selection also play an
important role in ensuring the worker performance and positive organizational outcomes
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Strategic human resource management
(Sekiguchi, 2013). The theories developed by the SHRM are very powerful and these theories
fulfill the need of the organization. SHRM is responsible for the overall development of the firm.
The theories of SHRM make easier for the organization to attain heights mainly through
recruitment and retention. These are the two important areas where Strategic Human Resource
Management imparts its theories (Cascio, 2015).
Now it is concluded that strategic human resource management plays a significant role in
every organization. Therefore, the company should use excellent SHRM policies and
approaches. If the company wants to achieve organizational goals and objectives then it should
focus on strategic human resource management. An organization cannot survive its business
without strong strategic human resource management (Kuvaas, B., 2008).
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