Today, those in senior management positions are focusing heavily on employee-related issues and how they affect an organization’s long-term business success. They are realizing that alignment between business goals and human resource strategies can result in better organizational performance.
HR managers and organizational leaders want to know how to attract and leverage their most valuable asset: people.
I look at some top-performing companies and summarize how their strategic human resource management has impacted their business strategy and 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 capital themselves, as a worthwhile investment, and HR uses its strategic position to manage the care of the human capital resource.
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 systems to help the company’s strategic goals. The company gains success through its people and by nurturing a collaborative company culture.
This is the way the HR department supports their 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
Few companies are truly dedicated to improving their HR practices for better business performance. Companies with the best HR practices use a successful human resource management strategy that includes recruiting top employees, incentive programs for staff, understanding and dealing with organizational issues, and being innovative in helping the company stay ahead of the competition.
So, which companies have the best HR practices?
Here are three top companies that demonstrate exemplary strategic human resource management.
Mountainview, CA, USA –Google is well known for its innovation and strength when it comes to developing staff. They know their people are what makes them great, and this is at the forefront of their overall business strategy.
Google’s human resource department understands employee retention. They know that if employees have the right incentives and are given the opportunity to develop, the company wins and retains top talent.
Knowing that HR can make or break a company means that senior management ensures it is tightly integrated, so it not only protects its employees as a high-end investment but does everything possible to make sure they are happy employees.
True to their industry, CISCO developed their own HR 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 with their careers (sounds like an internal LinkedIn!).
This approach allows managers to put together the right team they need 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.
They call this a ‘one-size-fits-one’ 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.
Tokyo, Japan –Nissan is another top company that demonstrates effective HR.
The company has blended the manufacturing techniques of the Japanese with the productivity of the British. This is called Kaizen and it allows workers a lot of space to work on improving how things are done. Employees are hired based on their drive and talent and then encouraged to improve their skills further and even compete to devise the best innovations.
At Nissan, there are no hidden salaries and the workers are well paid. Leaders build their own teams that they see as the best for what they are assigned to do, with the idea that this practice supports higher employee engagement and productivity.
This approach has had great success for Nissan. It puts the workers first while closely integrating both HR needs and the company goals.
Key Takeaways From Top HR Strategy Examples
Looking at these three top companies that are implementing strategic human resource management is important as they all have a similar focus.
Understand your people
Understanding that employees are crucial to overall success is a priority in these companies. They understand their employees are their biggest asset and build this into the human resource plan as part of the overall strategic management process.
Good compensation pays off
HR policies at these companies ensure that people are well paid for their time and talent with wages, lodging, education, and family support. Compensation packages are part of the human resource planning process to hire and retain employees who are at the top of their fields.
Strategic integration matters
HR is strategically integrated with the company’s goals and business plan. Whether the company uses strategic management software or does it in an old school way, their strategy has to be integrated within HR.
More Strategic Human Resource Management Examples?
There are always ways of doing HR better. Even the top companies are constantly re-evaluating and optimizing their strategic HRM.
Which companies do you think implement effective strategic human resource management? Share your ideas in the comments below.
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