HRM assumes strategic importance when there is a need for employee commitment to strategic goals concerning efficiency, quality and innovation. A key policy goal underpinning HRM practice is to "maximize organizational integration" (Guest, 1988), where strategic integration refers to "the ability of the organization to integrate HRM issues into its strategic plans" (Guest, 1989). This paper is meant to contribute to the debate by understanding the genesis, concept, approaches and models of SHRM. The paper takes an analytical approach where emphasis is put on the various models of SHRM and its applicability.
American firms in the early 1980s had to face stiff competition from foreign companies, who began to export their products to the USA at lower prices than American companies could offer. The cost advantage stemmed from lower labour costs and made it nearly impossible for American companies to survive. They had to look for more efficient and effective ways to use the resources available to them and stay afloat. The ensuing effort gave rise to the concept of Strategic Human Resource Management (SHRM). ...
It covers macro-organizational concerns relating to structure and culture, organizational effectiveness and performance, matching resources to future business requirements, and the management of change (Hales, 1994).
According to Miller (1989), "SHRM encompasses those decisions and actions which concern the management of employees at all levels in the business and which redirect towards creating and sustaining competitive advantage." Wright and Snell (1991) have suggested that in a business, SHRM deals with "those HR activities used to support the firm's competitive strategy."
Another way of looking at SHRM is "the pattern of HR deployments and activities intended to enable an organization to achieve its goals" (Wright and McMahan, 1992). Truss and Gratton (1994) define SHRM as "the linking of HRM with strategic goals and objectives in order to improve business performance and develop organizational cultures that foster innovation and flexibility."
Ghoshal and Bartlett (1997) see SHRM as a radical new approach to organization, management and employee relations and indeed to the relationship between firms and their host societies and to each other. They advocate a strategy towards HR in which employees are developed and made employable and this keeps the employer honest.
Differences between Business Strategy and SHRM
Business strategy is commonly understood as the long term planning by a firm to link its external environment with the internal capabilities so that a unique position can be attained in the market and firm's value can be improved. Business strategies can be formulated in line with any of the internal factors of an organisation that best utilises its external opportunities. Unlike conventional