The concept of Strategic Human Resource Management was first initiated in 1984 but has since blossomed.
Today, people in strategic planning are focused heavily on employee-related issues and how they affect an organization’s long term business success. They are realizing that strategic integration between business and human resource strategies is critical to an organization’s goals.
HR managers and organizational leaders want to know how to leverage their most valuable asset: their people.
I looked at some of the top companies and summarized how their strategic human resource management has had an impact on the company’s business strategy and has in fact become their main competitive advantage over other companies.
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.
Above anything else, it’s an HR approach that is people-centric.
You treat employees as capital themselves, as a good investment. HR uses its processes 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, while supporting the growth of a healthy 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 uses management practices methods to integrate within the full company strategy, meshing with company policies and goals for long term sustainability and support of great organizational culture.
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, 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 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 offered 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.
This company has been known to 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 organization’s strategy. 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.
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 should be featured among these strategic human resource management examples, and why?