The concept of Strategic Human Resource Management was first initiated in 1984 but has since blossomed. Senior management teams have become strategic in their thinking when it comes to employee-related issues and how they affect a firm’s long term business success. They are realizing that strategic integration between business and human resource strategies is critical to an organization’s goals.
What is Strategic Human Resource Management?
Strategic Human Resource management It is the pre-emptive management of employees that offers benefits for both the employee and employer. It focuses on the long term integration of HR strategies with the company’s goals. Understanding the following 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 edge over others. It should maximize employee performance through policies and systems to help the company’s strategic goals. The company wants to gain success through its people.
This is the way HR supports their company’s business goals and outcomes. HR is no longer just administrative. Now, it uses learned principals and methods to integrate within the full company strategy, meshing with company policies and goals for long term gain and stability.
So, what is strategic human capital management?
It’s an HR approach that is people-centered. You treat employees as capital themselves, as a good investment. HR uses its processes to manage the care of the human capital resource.
3 Strategic Human Resource Examples from Top Companies
Many companies are 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, being innovative in helping the company stay ahead of the competition. HR is the most helpful partner when it comes to aligning a business strategy for success. So, which companies have the best HR practices? Who offers HR strategy examples – what makes a successful HR strategy?
Three top companies that offer solid Strategic Human Resource Management:
Mountainview, CA, USA –This company is well known for its innovation and strength when it comes to Strategic HRM. They know their people are what makes them great. The company boasts tons of employee perks and amazing facilities. This includes a seven-acre sports complex, multiple wellness centers, roller hockey rinks, horseshoe pits, and subsidized massages for all.
Google understands that if employees have the right incentives and are given optimal positions, the company gets 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 have happy employees that are productive for the company.
Uxbridge, West London – Cadbury knows what it’s doing when it comes to HR. They believe not only in the importance of their employees but their families, too, putting their people above all else. This is reflected by their success as the second-largest confectioner in the world. Cadbury was founded in 1824 and created a worker village along with R&D factories. The village is perfect in offering staff and their families a place to not only work but to live. Their people are their main priority and they have built a positive work atmosphere that allows for life and work balance. They support their employees to the fullest and in return, they have a loyal and dedicated workforce. HR has integrated its policies and plans perfectly with the company’s strategic plans. They go hand in hand to meet the company’s long term goals.
Tokyo, Japan –Nissan is another top company that’s a great example of 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 the workers to constantly improve on how things are done. Each employee is hired based on their drive and talent and then encouraged to improve their skills further to be better than the rest. 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. This approach has had great success for Nissan. It puts the workers first while closely integrating both HR and the company goals so all have great success.
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
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.
There are always ways of doing HR better. Even the top companies are constantly re-evaluating and optimizing their strategic HRM. Using a community such as People Managing People can be part of that reflective process for your company’s HR to explore how to best build company culture, engage employees, and consider talent.
This applies to top-notch companies as well! The ever-changing HR field can be fine-tuned with extra tips and tricks. If you are part of the HR industry, sign up for our newsletter for helpful tips and tricks from other people in the industry. The HR community at People Managing People is a great guide through the areas of recruiting, retaining, and developing staff. You can never know too much learning from others who have had success helps you be the best you can be when it comes to strategic human resource management.
Get our printable one-on-one meeting template, guide and example questions.
Sign up to our weekly newsletter and receive a FREE copy of our Guide Start Guide To One-on-One Best Practices.