Wright and McMahan (1994) define strategic HRM as the pattern of planned Human Resource deployments and activities intended to enable the organisation to achieve its goals. A HR function should impact the success of an organisation; a policy must remain current and suitable to both the internal and external environment. Ulrich and Lake (1990) affirm, HRM systems can be the source of organisational capabilities that allow organisations to learn and capitalise on new opportunities.
A combination of HRM and business strategy, contribute to effective management of human resources, improvement in organisational performance and the success of a business (Schuler and Jackson, 2007). Organisations should acknowledge that HR is important to its overall success. HR therefore, need the right people to carry out a strategic plan by defining skills and by leading an organisations culture, rather than be led in order to contribute their value.
HRM objectives should support the organisations goals, though profitability, business reputation, ethics and principles. HRM strategies maintain programmes for improving organisational effectiveness in areas of knowledge management, talent management and by creating a great place to work. This is the big idea as portrayed by Purcell et al (2003), consisting of a clear vision and a set of integrated values. In particular, HR strategies are concerned with the development of continuous improvement and customer relations policies.
Bontis et al (1999) defines human capital as The human factor in the organisation; the combined intelligence, skills and expertise that give the organisation its distinctive character. These elements are capable of learning, changing, innovating and driving, which if motivated can be seen as the main assets of an organisation. HRM ensure that the organisation has the right staff and gain the HR they need, this involving designing organisational structures and identifying the right staff. HRM compete in the job market to ensure that only the best and talented employees are recruited in order to assist in meeting and exceeding the organisations goals and objectives.
HRMs purpose is to ensure that success is achieved through its people, to retain and expand the customer profile whilst increasing and maximising profit. Organisations need HRM who know the business, can influence the culture, and make positive change, within an organisation (Ulrich, 1997). Line managers have a partnership with HR, so a full analysis of the external environment can be assessed. It is likely that where employee involvement practises are pursued, line management are aware of corporate strategy, including mission statement and values.
Line managers are able to analyse the make-up of their own department, although they need help from the HR with regards to the organisation
(John Leopold 2002)
HRM should ensure employees are focused on understanding customer needs and expectations of the organisation, if employees are aware of this, then are all aiming for the same goal and objectives of the business. This can be effective through clear communication. Understanding and communicating well with employees and managers is an important skill for HRM which, can only be leant by spending time and understanding the language of the employees and by using the language that managers understand.
Succession planning, in ensuring that the organisations workforce is capable of meeting future staffing needs. This achieved through HRM and line managers working together in assessing current workforce skills and qualifications enabling the best course of action for HR activities. Succession planning identifies employees who show promise and aptitude and then providing them with the training and development they need for progressing into higher positions within the organisation. Employee engagement should be improved though HRM. This could be though raising employee enthusiasm and creating excitement about employee contributions. Employee disengagement may result in low productivity, poor performance and even workplace conflict. By HRM supporting employee engagement through employee views and opinions and providing competitive compensation could impact the companys business reputation and may reflect strong business principles.