The Impact of Strategic Human Resource Management on Organizational Performance

Introduction and Purpose of the Paper 

Organizations are increasingly investing in vibrant human resource management techniques to remain competitive especially in this era of increased global competition. In essence, the human resource departments are making use of several strategic human resource management (SHRM) strategies to remain sustainable. Some of the strategies that human resource departments use to achieve their objectives are employee training and development, reward management, employee relations and resourcing among others. In line with this, much literature has been availed to create a connection between strategic human resource management and the achievement of organizational objectives. Moreover, the available literature focuses on helping the human resource managers understand which SHRM strategies can work and which will not help a company achieve its objectives. The literature findings are effective and credible since they are a result of both qualitative and quantitative studies in various organizations. A synthesis of the research findings will establish how organizations can remain competitive by investing in their employees who are significant in the achievement of organizational goals. 

General Findings of the Research 

Strategic Human Resource Management concept 

The concept of strategic human resource management, which can be considered a new discipline in human resource management, is a result of an integration of human resource management and strategic management. In essence, strategic human resource management (SHRM) strategies are conscious efforts by the human resource managers to ensure that they get the best employees through strategic recruitment. Moreover, SHRM strategies are about maintaining these employees by providing them with the best working conditions so that they can be productive to help the organizations achieve their goals. According to Sherafati and Mohammadi (2014), HRMs must be committed and capable of picking only those employees who will, in turn, help the organization obtain and maintain a competitive advantage. As it is, the human resource team has the ability to add value to the employees so that they can, in turn, add value to the organization. However, an organization can have employees with strategic value if it realizes that human resource has the same importance as the employees (Luftim, 2014). This realization is aimed at equipping the human resource management teams with prerequisite resources to help shape the employees to become more effective. 

Organizational Performance 

Organizations are guided by their set organizational objectives to establish whether they are successful or not. In essence, different organizations make use of varied strategies to achieve their objectives , but at the center of it, all are the role played by human resource managers. As it is, strategic human resource management plays a crucial role in enhancing organizational performance. The human resource management team does this by being strategic in how they design the organizational goals and how they match tasks with the right employees (Vui-Lee, 2015). Moreover, the HRM, being aware of the increased global competition, continually improve, develop, and empower their employees so that they can deal with evolving business models. Furthermore, the HRM understands very well that there is a need to integrate human resource management with the overall organizational strategy to enhance performance (Mitchell, 2013). This kind of integration involves the main stakeholders who are the top management, the human resource teams, as well as employees. A well thought out integration ensures that the best elements from the human resource management efforts work towards enriching the overall organizational strategy. 

Strategic human resource management aims at influencing the employees’ attitude and behavior. Employees with the right attitude and behavior are a key ingredient to a company that is keen on gaining a competitive advantage. However, employees cannot have the right attitude and behavior without the initiatives of the human resource department, which sets the pace for the employees. The employees must feel respected if they are to become productive and reliable. (Luftim, 2014). The human resource department must then make use of several strategic human resource management strategies to help the employees function at their optimum to enhance organizational performance. As it is, human resource managers must continually insist on enhancing performance management, which in turn is used as a measure for organizational performance management. According to Adresi and Darun (2017), performance management is about creating a culture which helps individuals and teams to become responsible for the continual skills and business processes improvement. Human resource managers, being aware of these responsibilities must then set targets for the employees as well as facilitate the employees to meet the set targets. 

Strategic human resource management is a complex concept as it has to take into consideration the need to enhance organizational performance. In essence, more organizations realize that organizational performance can only be increased through the adoption of efficient human resource policies. These policies have to do with the ways of enhancing performance by tapping on the employee potentialities but still taking time and resources to build up these employees (Adresi and Darun, 2017). More so, the policies are about motivating the employees so that they offer their skills and competencies in order to achieve the organization’s objectives. In essence, organizations are much aware that strategic human resource management policies not only improve on employees’ productivity but also enhance financial performance and quality of tasks (Mitchell, 2013). As it is, many organizations, which are keen on enhancing performance, are spending huge chunks of funds to come up with effective strategic human resource management policies (Adil, 2015). By using the right and tested strategies, organizations are assured of having a vibrant workforce, which is focused on achieving organizational goals. 

In adopting strategic human resource management strategies organizations usually, have the employees’ interests at heart. In essence, organizations are keen on enhancing the employee–organization connection, which is, in fact, a social exchange relationship. This social exchange relation is all about empowering the employee to enhance their psychological attributes and feelings to enhance their effectiveness. According to Adil (2015), employees must not perceive any risk when working in a particular organization as this would affect the trust they have in the organization. 

On the contrary, an organization should endeavor to invest in employees who are able to give back to the organization instead of only gaining from the organization. However, the organization must understand that it should create a good working environment for the employees if it is to get their trust. As a result, the employees are likely to become more committed to their work once they feel that the organization cares about their happiness. As it is, several social exchange models have been advanced to help human resource teams to tap into the employees’ skills and capabilities. Some of these models include expectation-met, organizational support, organizational justice, and retrospective models (Vui-Lee, 2015). Consequently, social exchange models are useful tools to help organizations by engaging their employees efficiently to improve their perceptions towards their organizations. 

Organizations are increasingly becoming innovative in the way they fuse human resource management practices with other significant business practices. According to Vui-Lee (2015), organizations may integrate efficient business strategies with low cost and differentiation to enhance performance management. More so, the human resource teams are keen on establishing SHRM strategies that focus on employee outcomes including turnover intention, organizational commitment, job satisfaction, and employee involvement (Mitchell, 2013). In essence, strategic human resource management creates a connection between business strategy and employee outcomes. Moreover, it is crucial for organizations to invest in differentiation strategies to ensure that there are several aspects of the job environment. In this case, employees are helped to work in areas where they can apply their skills in a much more specialized manner to enhance performance. 

Synthesis of the Findings 

Strategic human resource management plays a crucial role in helping an organization enhance its financial performance. According to Luftim (2014), organizations, apart from hoping to maintain a competitive advantage, are usually after financial gains from its activities. Essentially, high‐performance human resource practices are in a position to enhance the relationship between performance and the human resource strategic role (Mitchell, 2013). From this proposition, it is clear to assume that a human resource professional is a strategic partner who is in charge of the legitimacy of human resource initiatives. More so, the human resource professional plays a crucial role in resource facilitation, which helps in implementing the strategic human resource management strategies. However, for this to happen, there has to be a tradeoff between operational and strategic focus for the human resource professionals. Moreover, there is a need to devolve line management functions so that they are part of the human resource management role. 

In conclusion, human resource management is increasingly adopting strategic human resource management strategies to enhance productivity and maintain a competitive advantage. The concept of strategic human resource management is an infusion of strategic planning and human resource management. As it is, organizations must find ways of tapping into their employees so that they can get maximum benefits from such an engagement. Strategic human resource management focuses on helping the employee to work at their optimum levels by continually building on their skills and capabilities. More so, it is about motivating the employees through effective compensation models to create an efficient social exchange between employees and organizations. This social exchange ensures that both the employee and the organization benefit from one another through the adoption of various strategies. Interestingly research into strategic human resource management establishes that it is significant to focus on ways of building the human resource professionals as they are at the center of SHRM. 

References  

Adil, M. S. (2015). Strategic human resource management practices and competitive priorities of the manufacturing performance in Karachi. Global Journal of Flexible Systems Management, 16 (1), 37–61. 

Adresi, A. A., & Darun, M. R. (2017). Determining the relationship between strategic human resource management practices and organizational commitment. International Journal of Engineering Business Management, 9 (23), 184797901773166. 

Luftim, C. (2014). The impact of strategic human resource management on organizational performance. Economia. Seria Management , 17(2), 373-383. 

Mitchell, R. (2013). The effect of strategic human resource management on organizational performance: The mediating role of high‐performance human resource practices. Human Resource Management, 52 (6), 899-921. 

Sherafati, M. & Mohammadi, R. (2014). The impact of strategic human resource management on organizational performance . Indian Journal of Scientific Research, 57 (1), 172-178. 

Vui-Yee, K. (2015). The impact of strategic human resource management on employee outcomes in private and public limited companies in Malaysia. Journal of Human Values, 21(2), 75-86.