Human resources are an integral part of any organization which if carefully used can contribute significantly to a sustainable competitive advantage. According to Phanwattana, (2017), strategic human resource management (SHRM) has been a subject under study for many years and has been identified as a critical topic due to its impact on the performance of an organization. Ever since the call by James Walker on the directors of HR to consider the firm’s business strategies in the development of human resource plans in 1980, the literature that has come thereafter has lauded his thinking. The emergence of globalization, for instance, is one of the issues that have substantially changed the HR landscape. The rise of competition in the corporate world as a result of globalization has caused human resource management to take a more profound role of a more strategic approach in the organization’s management of HR as pointed out by Mugaj (2016).
As opposed to the position taken by early HRM as a result of the rising need for changes brought about by the increase in the number of companies resulting from globalization, SHRM emphasizes on the inclusion of the human resource practices with the strategies of the business. For an effective integration to be achieved, however, HRM activities ranging from recruitment, selection, employee training, and development should as well be integrated either horizontally or vertically with the strategic objectives of the organization. The strategic human resource management practices and the competitive advantage of a firm determine the effectiveness of the business and its success in general (Alim, 2017) . As a result of the globalization of economy which has led to a global competition, the SHRM has emerged as a way of optimizing cost and increasing the shortage of skills within the organization. The need for highly skilled workforce led to the management of human resources to be recognized as a high priority area if businesses are to achieve their goals altogether (Anitha, 2016) . This points out that the functions of the effective strategic human resource practices offer a competitive advantage and improved performance since it is vital in aligning the functions of human resource to the goals of the business.
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As opposed to the traditional management of personnel where the personnel functions of recruitment, selection, training, and development are performed without integration with the general objectives of the organization, the strategic HRM leverages on the importance of the incorporating human resource practices with the main business objectives. The main areas that SHRM stresses on are the quality, customer service, involvement of the employees, the flexibility of the workforce and teamwork encouragement. As pointed out by Anitha, & Begum (2016), fully committed workforce gives their best and is satisfied with their jobs. This shows the importance of integrating strategy into the goals of the organization most of which are laid in the foundation of hard work, productivity, and cooperation. In comparison with the other two types of resources available in any organization which includes financial resources and technological resources, humans within an organization are the most difficult to manage and interestingly is the most important of the three.
As stated by Phanwattana, (2017), the literature of the work that has been done by various scholars points out the changes that have occurred in organizations that have altered how they compete. Among the fundamental changes that have taken place is the shift from testing human resource practices individually to testing the human resource systems as a whole. The main reason behind this is due to the synergy that the two arms of HR must operate with. The workforce in an organization is not only required to interact with single practice but with all human resource practices. It is, therefore, correct to say that strategic human resource management is a more effective use of organization’s human resources and their alignment with the company plans. For many years that have gone, people have been known just as an integral part of an organization. However, their influence in sustaining the business has caused the philosophies that have been in place regarding human resources and their influence to the success of the business to undergo significant changes altogether due to the new view that employees are an important arm of business.
A business strategy of an organization is shaped by taking into account the dynamic nature of the environment in which one operates. Given this, human resource practices have to adopt the strategies of change in its roles to enhance business performance and create a sustainable competitive edge. Since there is no universal model for SHRM, every organization have a different approach to a structure which can be modified to accommodate the needs of the business (Kaufman, 2011) . Additionally, the universal model of SHRM allows them to adjust it to achieve optimal levels of performance. The modifications however differ from one organization to the other since each operates under a different environment. As opposed to the traditional methods of HR which are focused on having employees without considering how they will impact how organizations meet their goals, recruitment as advocated by Alim & Al- Bahiri (2017) should be aimed at filling the available gaps in an organization with relevant workers. Moreover, recruitment should be able to bring skills and experiences which are not available from within the organizations.
Effective recruitment and employee selection made possible by identification of the business strategies are the most critical aspects that provide success to the organization. Similarly, the human resource departments have been facing criticisms for employee training and development strategies which are not in tandem with business priorities. This has been found to be a significant cause of failure in the implementation of organizations’ vision due to its lack of integration primarily between the human resource plans and strategic business planning. Based on Porters argument of 1985, the concept of competitive strategy is the primary concept that is used in SHRM to realize the goals of an organization. Many scholars agree that the heart of any SHRM study in any business is to attain a competitive edge over its competitors and increase expansion apart from remaining relevant in the business. The most critical strategies according to Chow et al. (2008) that needs to be given a closer look and integrated with the human resource practices include cost leadership strategy, differentiation strategy and innovation strategy.
The critical challenge both theoretically and empirically in SHRM literature in the past has always been the linkage between human resource management and the organizational performance in particular. Scholars in this realm point out that for an organization to realize its competitive part, human resource outcome must be considered as one of the aspects that directly impact the performance of the organization. As a result of this, the linkage between HRM and the performance of the business as well as the relationship between the HR outcomes and the HRM ought to be studied. The literature that exploits the link between these elements is however scarce as held by Wright and McMahan (2011). Although this is the case, it is no doubt that most organizations have decided to invest in employee programs to increase performance by emphasizing on areas such as training, development, and education in terms of scholarship. Employee attitude has been found to be the major factor that has a direct influence in areas such as performance and employee retention. Therefore, concentrating on maintaining a positive employee attitude is among the key areas that will lead to the attainment of goals.
Effectively and efficiently managing human resources within the firm and leveraging on the existing human capital in the current competitive landscape helps achieve a considerable success not only within the organization but also in the marketplace. On the contrary, failure to properly manage the resources as a result of lack of adequate planning or due to the poor implementation may result to reduced productivity and dwindling profits and in some instances a poor reputation altogether. Although this aspect has proven to be among the most essential elements of an organization, many managers often overlook HR planning primarily in the early stages of the creation of a firm. Consequently, increased performance is required in such times for the company to be able to sustain itself in the new terrain. Although the challenges in terms of budget is understandable, there is no excuse whatsoever to failure to align the human resource strategy to the overall goals of the business if success is to be realized. This is the only way in which an organization is going to realize its Return on Investment (ROI). As argued by Riasi, (2017), it is a fact that HR strategy begins when a firm is a single person. Whether a written plan of human resource is there or not, there must be an HR strategy which delineates the compensation plans, working hours and employee development plans. Similarly, how business functions are to be done are equally important to the operations of the firm and should be there in the overall HR plans.
One of the ways that many businesses choose to stay upbeat in the future of business is through various differentiation strategies. Some of these strategies include choosing to compete by offering lowest market prices in the market. However, doing so should begin by ensuring that the costs of operation are as low as possible so that profits can be maximized. For this strategy to be achieved, however, human capital can be derived from a pool of independent employees or offshore workers so that HR expenses can be minimized. This when combined with other methods help reduce the operational costs hence the goal of differentiation can be achieved easily. Although many organizations have received a fair share of criticisms due to the use of offshore workers, they have managed to gain a competitive edge while on the other hand achieving tremendous profits (Riasi, 2015) .
Product differentiation is also another critical strategy used by businesses to remain relevant in the business. Although different ideas can provide the necessary advantage in the highly competitive market, differentiating a product or a service create the biggest profits and sustains the business. Such game plans can come from anywhere, but the most significant source of innovation to any organization comes from its human resources (Wright P. M., 2011) . These can be from partners, members of the advisory board, and other full-time or part-time employees within the firm. Giving employees time at a particular instance to learn leads to success in projects which sustains growth and increases competitiveness. Workers with advanced skills allow the company to offer superior products which can be charged a premium while on the other hand increasing the number of customers that purchase such products. This is the case for the companies which are competing based on the quality of their products mainly the luxury products and services.
While the cost of recruiting such employees and training them might be high, the cost of such factors can be passed to the customer in terms of premium pricing (Kaufman, 2011) . This is also the case with operational effectiveness. Skilled employees that are capable of finding ways to reduce costs in their internal operations are capable of increasing margins of operations. Moreover, experienced employees are likely to build a strong internal culture marked with a high employee morale and engagement which in return increases productivity and profits in general.
Organizations that adopt cost reduction strategies which require the employees to work harder are not effective in their services as those that adopt quality enhancement that require employees to work smarter rather than harder (Chow, 2008) . On the other hand, organizations adopting strategies of innovation which require employees to do their job differently are capable of providing improved results altogether. From this, it is clear that strategic human resource management and planning, in general, is the key to the competitive advantage that many organizations are now leveraging on to remain competitive in today’s market (Wright P. M., 2011) . Alignment of the HRM with the overall business strategy has an effect on the organizational performance and is the only source of success.
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