I look at three top-performing companies and summarize how their strategic approach to human resource management has become one of their main competitive advantages.
What Is Strategic Human Resource Management?
Strategic human resource management is the long-term integration of HR strategies with organizational goals.
HR is invited into the board room and helps to develop company-wide policies and initiatives.
You treat employees as customers of the business, as a worthwhile investment, and HR uses its strategic position to manage the employee experience.
Understanding the following terms will help you grasp the concept of strategic human resource management.
HRM (Human Resource Management)
This is a strategic approach to the successful management of people in business so the company has a competitive advantage over others.
Great HR programs maximize employee performance and competencies through policies and tools to help the company’s strategic goals.
This is the way the HR department proactively supports the company’s business goals and outcomes.
The HR function is no longer just administrative. Now, it integrates fully within the company strategy, policies, and goals for long-term sustainability and support of great organizational culture.
3 Strategic Human Resource Examples From Top Companies
Today, too few companies are truly dedicated to improving their HR practices for better business performance. As we’ve touched upon, it requires letting HR out of its silo and away from purely administrative operations.
Here are three top companies that demonstrate exemplary strategic human resource management.
Google being Google, it’s no surprise that their approach to HR broke away from tradition.
In 2006, co-founders Sergey Brin and Larry Page decided to take an empirical approach to HR founded on feedback and employee data. A manifestation of this is Project Oxygen, an ongoing study into management practices that identifies and measures key management behaviors and helps nurture them.
It all gets quite technical, but essentially Google hired some smart people to undertake in-depth statistical analysis into what their employees consider to be good managers. They discovered eight common behaviors exhibited by the top-performing managers and then trained the rest in them.
As a result, Google saw an overall improvement in people management and team metrics such as turnover, satisfaction, and performance over time.
So there you go, collecting data from your employees and using it to improve the employee experience does work. It’s no accident that Google employees are some of the most productive in the world.
True to their industry, CISCO developed their own HRM technology to guide strategy and better serve the needs of the business.
The CISCO Talent Cloud is essentially an internal CRM that gives managers transparency into the skills and experiences of the company’s 70,000+ employees. Further, it gives employees themselves the tools and insights they need to take the initiative and advance their careers (sounds like an internal LinkedIn!).
This approach allows managers to put together the best team needed to complete a particular project, and employees the opportunity to learn by working on a project that helps them meet a particular goal.
Senior managers can also access real-time intelligence on team performance, how they produce results, execute priorities, and levels of engagement.
Cisco calls this a ‘one-size-fits-one’ employee experience and it seems to be working. CISCO is ranked number one in Fortune’s Best 100 Companies To Work For and is able to attract top talent to help meet business goals.
Hilton Worldwide Holdings
Anyone who’s stayed at a Hilton Hotel will likely have enjoyed the experience. Of course, their standards are no fluke and require a large and diverse workforce to maintain. Hilton is regularly recognized as one of the best global companies to work for—quite a feat for a service industry company.
The secret to Hilton’s success, on both fronts, is in no small part down to a highly strategic approach to managing their company culture. Culture is important because it represents how people work together in the day-to-day and on projects.
Knowing this, Hilton’s approach was to introduce a method of quantitative analysis to maintaining its culture. One is ‘the balanced scorecard’ and the other is ‘the team member survey’.
The balanced scorecard seeks to closely intertwine corporate vision, strategy, and goals with team member performance. It constantly tracks KPIs such as revenue maximization, customer loyalty, employee satisfaction, skills training, and diversity.
Employees and teams are able to see how their roles and performance impacts the company, and discoveries and best practices are regularly shared across the company (this is a highly simplified version, you can read more here).
The team member survey compliments the balanced scorecard. It’s conducted globally once a year and measures factors such as morale, leadership effectiveness, pride, and development. You can easily gather the purpose and efficacy of this!
By carefully managing culture in such a way, Hilton employees at all levels are highly engaged and motivated to contribute to the company’s mission. Something to ponder as you take five in one of the lobbies!
There are always new and better ways of doing HR—new tools, methodologies, and ways of thinking.
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