The concept of Strategic Human Resource Management has replaced the traditional perception of human management. Even though the traditional theories of human management (Maslow's hierarchy of needs, ERG theory and Herzberg Two-Factor theory) are still used by most of the HR managers, the functions have changed to include the strategic planning.
Human Resource Management can build the organizational capacity and sustained competitive advantage. Organizations must be able to adapt to the changing environments and be ready to react to risks. Any organization that wants to remain successful must continually assess and formulate new strategies to meet the needs of its customers (both internal and external) in more effective ways (Marchington 2005). For example, if the organization is emphasizing the cost strategy, the changes in HRM activities will enable those strategies to become the major focus of organization. If particular, the multi-skilled employees and less expensive staff will help to meet the cost objectives. Without proper changes in HRM functions, organizational strategy might fail.
Not a single organization is able to avoid conflicts and risks on the market. The development and application of the HR strategies of dealing with conflict determine the way company will deal with the outside conflicts. There are three HR views on dealing with conflict: traditional (conflict is harmful and requires the firm approach for avoidance), behavioural (conflict should be expected and turned into benefit), and interactionist (conflict is inevitable and should be challenged). These three views represent the ways companies are dealing with conflicts within organization, in the workplace setting. However, the same views can be applied to strategic management as well. For example, there is always the threat of competitor being more successful in marketing and if the company is ready to face this challenge, it can be turned into the benefit.
Moreover, companies spend thousands of dollars to recruit talented employees and pay bug salaries to the individuals who contribute the company's success. At the age of globalization and increasing importance of skillful workforce, retaining employees is not an easy task and has become the part of the strategic planning. Employees, especially upper level, should be motivated not only to remain with the company, but also to improve their performance on continuous basis. As the research indicates, the Maslow's hierarchy of needs was not validated, but it does work in motivating employees (Purcell 2003). It is worth to note that the strategically important employees come into the company when the needs of the lower levels are already met and they seek for self-actualization mainly.
Motivation of employees, as it was already noted above, is the key factor in achieving the company's success. Herzberg's Two Factor Theory provides the insight on motivators and dissatisfiers. Herzberg assumed that motivators are under the control of individuals, while dissatisfiers are under the control of organization. However, this assumption does not seem to be workable. For example, if the HR Managers knows about the factors which satisfy the employees and motivate him to contribute more into the company, these factors could be stressed continually. Thus, motivators are un