Human resource management, known as HRM, is a key part of keeping a business alive and successful. After all, every business involves people, and making sure those people are doing their best work is what keeps the company moving forward.
HRM strategies are the plans a company uses to make sure the business culture and employee skill sets are capable of bettering the company through its people.
To understand HRM strategies, it’s important to first take a look at the functions an HR department is expected to oversee and perform. There are anywhere from five to seven commonly defined activities that fall within the HRM umbrella. These are key functions that can be managed in a number of different ways depending on resources, strategy and priority.
- Structure and Job Design: HR helps to define the company’s personnel structure, including headcounts and department definitions, to ensure the workforce can meet the company’s objectives. It’s also responsible for defining job details and descriptions as well as department specifications.
- Employee Recruitment and Selection: HR is responsible for strategic recruitment and selection of the best candidates for the company’s open positions as well as working with management to define requirements and expectations for these positions to ensure quality hires.
- Employee Training and Development: HR is also responsible for ensuring employees get the training they need to perform their jobs as well as skill development as employees move forward in their career paths.
- Compensation and Benefits: The HR department should ensure the salary and benefits packages are competitive in the market in order to hire and retain top-quality talent. They’re also responsible for managing payroll, attendance and vacation, benefits and employee queries.
- Performance Management: HR oversees the performance management evaluation process, making sure employees are evaluated fairly and consistently, managing job expectations and overseeing promotions and rewards.
- Employee and Labor Relations: If unionized, HR is the touch point between the union and the company and is responsible for keeping relations positive. HR is also responsible for the resolution of employee issues such as harassment, discrimination or employee complaints.
- Policy Formation: HR is responsible for the policy documents that apply to all employees, such as noncompete clauses, electronic device policies, proprietary information management and legal and business practices.
To complete these core functions, the HR department requires a strategy that aligns its activities with the business’s strategic goals. There are two main types of HRM strategies that companies create and adhere to. The overarching strategies of HRM include the broader, more general mission statements that set the scene and provide guidelines for management and the general corporate culture.
For example, company statements like “We want GSK to be a place where the best people do their best work” (GlaxoSmithKline) or the following mission statement from Buffalo State University embody an overarching strategy for HRM:
“We aspire to build partnerships with management at all levels of the organization to create a campus culture that values all employees. This culture encourages and rewards exceptional performance and continuous improvement, fosters teamwork, and supports balanced attention to work and personal life issues. We provide valued services in a cost-effective manner to support a vibrant professional environment that fosters respect for both diverse perspectives and a service orientation.”
The second type of HR strategies are specific strategies, which focus on detailed approaches to the seven functions HRM involves and what the company intends to do within each of these areas to ensure future success. For example, specific directives on how the company intends to obtain and retain top talent, how to ensure continuous improvement or how to create a thriving company culture would all fall into this category.
The overarching and specific strategies work together in tandem, providing an overall vision as well as more focused systems and designs to help align the whole business while providing clear-cut instructions on how these goals can be achieved. Having both and making sure they work together is the most effective way of setting out strategic expectations for HRM.
When it comes to the planning of human resource management, you should understand the difference between the functions of strategic HRM and traditional HRM. Strategic HRM is a new term used to describe HR departments paying much more attention to strategic implementation of policies and plans to benefit the company not only in the short term but the long term as well. These differ from traditional HR department strategies by focusing on what specific things the company needs from personnel to be not just successful but exceptional in the future.
Historically, while HRM departments exist in most major corporations, the organization was not designed for strategic HRM. The role of these departments was to manage and address issues on a day-to-day basis, focusing on the short-term needs of personnel with regard to training, employee satisfaction and performance management.
In these setups, executive management was mostly responsible for overall strategic direction, and HR acted as support. This made HRM reactive to employee concerns and issues rather than proactive. This resulted in employee pools and company culture that was good but not great.
In today’s marketplace, strategic HRM looks to make HR proactive. Involving HRM from the very beginning helps a business to keep its focus on its people, whether it be recruitment of potential candidates or the first draft of new policy.
Allowing HR to be more strategic in hiring, onboarding, training and performance management can result in more effective, more motivated employees who have a place within a company’s culture and feel more empowered and engaged. The positive effect that well-motivated employees can have on a business’s output and bottom line has been well documented.
While this may seem like an obvious improvement, many companies don’t yet have the manpower to fully implement strategic HRM. If HR employees are overwhelmed by day-to-day issues, they won’t always have the time or chance to consider long-term ramifications and work for strategic decisions rather than simpler, easier ones. Companies that want to implement strategic HRM need to commit by dedicating the resources to development and implementation of these policies.
While every business no matter how small needs a way to deal with hiring, employee development, conflict resolution and compensation, HRM strategies do not need to be overwhelmingly complex for every business. A company with few employees and an overall strategy of sustaining business rather than aggressive growth will be fine with a very simple HR strategic approach.
For larger companies looking to break out of somewhat stagnant growth, it may be beneficial to look at internal HRM and see whether a more strategic approach might be enough to change corporate culture and employee performance. When companies don’t have the resources or opportunity to focus on longer-term goals, employee motivation can suffer, and turnover can increase – things that will only load more work on the HR department. Consider more strategic hiring and development to potentially increase quality output from a department.
Human resource management is an integral part of modern business, and its effect on business performance has been underestimated. As many companies begin to refocus their executive strategies on their employees, it makes sense to bring HRM forward to a new level of importance. For companies looking to make the most of their personnel, an effective and thorough HRM strategy can be the difference between average performance and exceptional success.