How the theory of Strategic Human Resource Management can assist Essay

How the theory of Strategic Human Resource Management can assist organisations in achieving and sustaining competitive advantage - Essay Example The paper tells that the increasing complexities and difficulties of management gave rise to the concept of managing at the strategic level. Managing at the strategic level is concerned with the long-term positioning of the organization. With the changes in the work environment, the private sector started recognizing that apart from financial and technological capital, human capital can also provide the competitive advantage. This led to innovation in HR practices or strategic human resources management. Delery and Doty defined strategic HRM practices as those that are â€Å"theoretically or empirically related to overall organizational performance†. Strategic Human Resources Management (SHRM) is about linking people with the organization – integrating HRM strategies into corporate strategies. In other words, SHRM aims to align or integrate decisions about people with the results that the organization aims to achieve. This is done because it is believed that integrating business strategy with HRM can lead to effective management of human resources and thereby enhanced organizational performance. The primary role of HR in the past has been compliance with laws, rules, and regulation. If the HR departments have a future-orientation and if the HR strategies operate as an integral part of the overall business plan, firms can achieve competitive advantage, according to Budhwar and Aryee. SHRM strategies can be used for knowledge creation, storage, and dissemination in organizations. HR practices influence an organization’s social climate which in turn leads to knowledge exchange and better organizational performance. Many researchers and scholars have contributed to strategic HRM with their own models and processes. For instance, Storey developed a model that demonstrates a shift from traditional personnel management to HRM. This model comprises of four key aspects – a constellation of beliefs and assumptions, strategic thrust informing d ecisions about people management, the involvement of line managers and shaping of employment relationship through commitment rather than forceful compliance. According to Storey, since the model has the linkage between employment policies and corporate plan, it can lead to competitive advantage. This model also identifies that strategic approach to HRM can be developed by bringing about changes in various elements of HRM functions such as recruitment and selection, training and development, and the conditions of employment. He suggested changes such as nurturing the workforce rather than monitoring them and management action should be based on the business need rather than following set procedures. Devolution to line managers has been proposed by many scholars as a core aspect of SHRM. SHRM has led to redefining the roles of the top management. Certain functions and issues are too complex for the top management to handle and devolvement of HRM to the line managers can lead to the fa ster response.