How do you define strategic human resource management?

Let me answer by stating that to fully understand strategic HR, you need to know the definition of tactical HR. Tactical HR supplies companies with the basic administrative practices that allow a company to operate efficiently, such as policies, recruiting, compensation, benefits, compliance and discipline.

Strategic HR takes it to the next level by guiding companies on how to engage its workforce to drive results and build its high-performance culture. It also creates a compelling employment brand that helps to attract top talent. Put another way, Strategic HR focuses the company’s talent on winning in the marketplace! For HR to truly be strategic, a company’s attraction, selection, development, performance and rewards strategies and practices need to be aligned with the company’s business strategy and objectives. Strategic HR practices also need to translate the business strategy into action, engage employees at all levels to drive results and be transparent so everyone uses them every day to run the business. Strategic HR practices can result in a competitive advantage for the company in the marketplace, profitable revenue, innovation and strategic alignment.

The following are the essential human resources strategies needed to achieve the business objectives of any high-growth company in today’s volatile economic environment.

• An attraction and selection strategy that delivers the right talent at the right time and acts as a starting place for effective employee engagement
• A development strategy and system that grows the technical, core and leadership competencies that accelerate the company’s performance
• An integrated performance and rewards strategy that engages and motivates employees to deliver results and offers employees what they need to excel in their work

As an example let me detail the differences between tactical and strategic human resources by function. As you will see, tactical HR is administrative and fundamental to running a company and strategic HR is action orientated and creates a competitive advantage in the marketplace through people.

1. Function: Employee Relations
Tactical HR: Policies and records, compliance and discipline, company events and community relations, complaint resolution…
Strategic HR: Engaging employees to drive business results, recognizing teams and individuals strategically, seeing employees as an investment…

2. Function: Attraction & Selection
Tactical HR: Recruiting and hiring, testing and background checks, college relations, temporary staffing….
Strategic HR: Creating a compelling employment brand, workforce planning focused on talent needs, delveloping talent pipelines…

3. Function: Development
Tactical HR: Basic skills training, new hire orientation, values and competencies….
Strategic HR: People strategies that drive results, succession planning and onboarding, creating career and development plans….

4. Function: Performance & Rewards
Tactical HR: Performance management, compensation administration and surveys, job descriptions, executive compensation, benefit administration ….
Strategic HR: Assigning goals and metrics aligned to the business strategy, rewarding employees for business results, measuring the results of delpoying people, rewarding employees for their value, executive compensation tied to business results and shareholder value….

Hope this helps.

Donna,

I think of management as the discipline of “getting done what needs to get done.” This involves understanding where you are, where you need to go, a plan of action, the acquisition and allocation of resources to execute your plan, and monitoring and adjusting as needed. I like to think of strategy as the discipline of “deciding what to do and what not to do.” Strategic choices, both explicit and implicit, affect where you decide to go, they shape your plan of action, and impact what resources you acquire and how you allocate them.

For example, Apple’s recent decision to create the iPad was a strategy decision about what to do, or in this case what to make. After Apple executives decided this strategy was one they wanted to invest in someone had to ‘manage’ the development of the product, someone had to ‘manage’ the product launch, and now someone will ‘manage’ ongoing product enhancements, marketing, sales, distribution, support, etc. Many strategy decisions will be made along the way.

With these two definitions (if we can call them that) in mind, I suggest we think of human resource management as the discipline of “getting done what needs to get done with regards to people.” In other words, acquiring, integrating, motivating, developing, organizing, and retaining workers. Therefore, strategic human resource management would represent the “organizational decisions about what to do and what not to do when acquiring, integrating, motivating, developing, organizing, and retaining human resources.”

For example, a common compensation and benefits strategy used in HR is to match your competitors compensation and benefits. This is usually facilitated by some form of a benchmark or salary and benefits surveys. Some people may think this does not represent strategy, or that it is not strategic, but what they fail to realize is this is an implicit decision NOT to differentiate employment offers in terms of the compensation and benefits offered. The result of this action means the organization must find other decision criteria used by prospective employees on which to differentiate their employment offers or they risk being seen as similar to everyone else.

Strategic human resource management, implicit or explicit, is very important to the workplace. As evidence I offer a few statistics. Labor costs are typically one of the top three operating expenses for most organizations and can represent anywhere from 30-50 percent of overall operating expense, yet neither does HR have “strategist” on staff nor is HR consulting a large industry. Marketing and technology account for a much smaller portion of operating expense, yet both disciplines typically have their own “strategists” on staff (actual head count) and both disciplines have parallel consulting industries that dwarf the size of HR consulting. How does this prove the importance of strategic human resource management? If we are to believe that differentiation is driven by the various operating expenditures an organization chooses to make, then a large portion of any organization’s differentiation is driven by what it chooses to do or what not to do when spending on human resources. In other words, if your HR strategy is to be similar to your competitors then 30-50 percent of your organization’s operating expense does nothing to drive competitive advantages.

I hope this helps answer your questions.

CorDell Larkin
www.linkedin.com/in/cordelllarkin
http://executivesguide-humancapital.com
http://twitter.com/cordellco

Strategic human resources designates the practice of human resources as a key function of the business objectives. It refers to aligning the full range of people practices-- sourcing, staffing, onboarding, deploying, etc -- with the overall objectives and vision of the business. While HR still has accountability for compliance and program development, it has a seat at the table to tactically and strategically be sure human capital is managed in the best way necessary to achieve short term metrics and long term results. As a consultant, I find that HR is in general becoming more strategic, and CEO's and CFO's are increasingly recognizing that they need HR at the table with them.

Realizing that employees are the greatest asset to most organizations is the basis for strategic human resource management. What is the most effective and efficient way to attract, motivate and retain employees to complete the goals and mission of the company. HR management needs to focus on creative ways to recognize employees (i.e., benefits, career path, compensation, flexibilities, etc...) to develop the morale/culture that the business customers will experience. The end result of customer satisfaction is why this is so important.

BenefitMall is very fortunate to have brilliant Executive and HR leadership that values our employees and their families. The end result is being the nations largest employer in our market space.

Strategic Human Resources is leveraging the day to day tactical duties to make lasting, impactful, and metric-bound changes or improvements. It also is the embodiment of providing expert consultative advice and recommendations to help senior executive leaders operate in a legally and ethically compliant fashion.

The word Strategic seems to be very overused these days. Within HR, there are a lot of things we do that are critical to the business but I wouldn’t classify them as “Strategic”: Benefits, Compensation, Employee Relations, Compliance, Recruitment, and most Training.

When it come to defining whether something is strategic or not, it truly has to connect with developing and deploying practices that deliver significant value to the business. Those who are Strategic HR Professionals are a key business partner to the executive team. They don't "ask" to be in the meetings, they are "requested" to be there. They are part of the annual business planning process and are involved in decisions that not only impact internal associates and cost structures but also go-to-market strategies.

Our HR Managers and OD team are truly Strategic business partners. They leverage much of the data available to them (turnover, comp trending, associate survey results, talent market data, development programs, and performance management information) to ensure business leaders are making smart, conscious business decisions that will impact the organization in the short run and long term.

Hi Donna,
Strategic Human Resource refers to being a business partner and helping the organization achieve its business goals. The Human Resources professional is using his skills, knowledge and abilities, to put together programs that attract and retain your talent. The Human Resources function is either a business partner that the senior staff relies on or a necessary evil, to keep the company out of trouble.

I also find the range of answers interesting.

Ranging from "getting the job done" to "crafting a culture"

I guess there's no need to elaborate on that observation further. We most definitely do have some serious problems, and are in a confounded mess these days.

1. Define Strategic Human Resources Management

Strategic HRM is a visionary approach that revolves around designing and executing an organizational internal consistent policies,practices & programs for the fulfillment of its goals,objectives and mission.In common parlance,it is associated with MBA,i.e. (individualized)Mind-(organizational)Business-Alignment.
Importance- It's associated with organizational vision and alignment of vision w.r.t. business.
Since,Strategic HR covers entire gamut of Organizational business(including thinking process),so we can't encircle role of this within a department.

Strategic HR is concerned with long-term people issues and macro-concerns relating to organizational structure, capability, effectiveness, efficiency, culture, values, commitment and matching resources to future organizational needs.

Strategic HR management is defined as a practice concerned with long-term people issues and macro-concerns relating to organizational design and effectiveness, human resources capability needs and development and building a culture of high performance across the organization. In our company we have four strategic themes:

1. Resourcing talents - key focus in manpower planning, attraction, retention, management and deployment of capability and talent management.
2. strenthening leadership and deepening individual professionalism - leadership capability, individual competence and professionalism
3. Improving individual and organizational performance - focus on performance management, building high commitment behaviours
4. Effectiveness and efficiency of HR governance, processes and systems

is improving the communication between the thinkers and the doers in order to work towards the same goals and objectives set in the organisations strategy through using the HR department which will increase the employees loyalty thus an increase in performance and productivity. which helps in increase staff morale and developing a learning organisation in order to adapt a change quicker and smoother.

For too long the HR department has been seen as a money pit, they are not revenue generators. I call bologna. I advise 4500 businesses in Canada on HR subjects and this has quickly become a hot topic. We are seeing HR finally get the seat they deserve at the executive table. With HR metrics becoming a highly sought after skill to prove cost of turnover, cost of hire, cost of benefits, cost of meetings etc. This allows for the definition of Strategic Human Resource Management. Finally HR is part of the big picture when the company set it's corporate strategy for the year.

We have developed tools and templates and calculators for this exact purpose. They have been downloaded thousands of times from www.hrdownloads.com now and I would have to say this is more proof than necessary that this is highly important to the workplace.

If anyone wants to see examples of such strategies and tools contact me.

Steve Boyle
1-877-438-9763 ext 228
sboyle@hrdownloads.com

Strategic Human Resource Management is the process of Retaining, Developing, and Attracting the Talent an organization must deploy to achieve its' mission, vision, brand promise and objectives. It starts with a precise understanding of the needs, wants, and expectations of the external stakeholder, continues with a commitment by every employee to live up to the brand promise of the organization and comes full circle through the measurement of stakeholder satisfaction. What HR Staff members do to enable this continuous process should be considered strategic, with all other activities falling into the category of operational or tactical initiatives. One of the the most effective measurement tools that HR can use to determine it's success as a Strategic Business Partner is benchmarking.