The management of human resources in organizations has evolved from reactive to proactive. This is called strategic human resource management. It specifically involves a proactive approach to the management of human resources in line with the overarching strategic objectives of a particular organization. Furthermore, unlike traditional HR management, which is reactive and focuses more on day-to-day employee management and administrative requirements, strategic HR management integrates and aligns HR policies with organizational mission, vision, and objectives.
Key Applications of Strategic Human Resource Management: With Key Examples From Notable Organizations
It is important to highlight the fact that the core principle of strategic HR management has a wide range of applications aimed at meeting specific organizational goals and across various areas of an organization. Take note of the following:
1. Talent Acquisition and Retention
One of the main applications of strategic HR management is talent acquisition and retention. It is used in developing and implementing recruitment strategies, compensation packages, and retention strategies to attract and retain top and high-performing talents from a competitive labor market. It is worth mentioning that effective acquisition and retention strategies can be a defining source of competitive advantage for an organization.
Several tech companies have employed strategic HR management in acquiring and retaining top talents across the world. Nvidia and OpenAI have provided their employees not only with high salaries but also with above-and-beyond compensation packages that include a stock option. This has made a lot of their computer scientists and engineers millionaires following the increasing demand for artificial intelligence hardware and systems.
2. Organizational Development
This approach to HR management is also central to organizational development. It can help in culture development in which the HR function focuses on creating a work environment aligned with the values and goals of the organization. It also has a critical role in the change management process following restructuring or mergers and acquisitions. The approach is also used in creating an organizational structure that is both effective and efficient.
Companies like Google and Meta Platforms have demonstrated the use of strategic human resource management not only in acquiring and retaining talents but also in creating a culture of innovation. These companies implement a bottom-up approach to management in which employees are tasked to allot their work time in pursuing personal projects. This has been effective in introducing new products or specific product features and driving innovation.
3. Effective Performance Management
Another application of strategic HR management is in developing and implementing effective performance management. This can include aligning individual goals with the collective goals of an organization, using data analytics to measure and improve individual performance, developing customized plans for training and development, determining effective incentives tied to individual performance, and fostering a high-performance culture.
Google uses its Objectives and Key Results framework to align individual and group objectives with company-wide goals. Adobe and General Electric replaced traditional annual performance reviews with a check-in system that centers on providing continuous feedback and discussions between individuals and managers. IBM has rolled out personalized development programs that tie the career growth of an individual to company strategy.
4. Corporate Social Responsibility
A proactive approach to human resource management can also guide HR policies with the corporate social responsibility initiatives of an organization. For example, to ensure compliance with labor laws, the HR department has a specific unit that oversees the creation and implementation of policies and systems aimed at preventing legal issues. The same department can also have a team dedicated to improving the well-being and welfare of employees.
The Global Diversity and Inclusion Program of Microsoft fosters inclusion by focusing on hiring and promoting underrepresented groups. Starbucks trains a specific set of employees on ethical sourcing practices to align them with its Coffee and Farmer Equity Practices. Johnson & Johnson has a global HR program that anticipates legal changes in different countries. Toyota has integrated workplace safety regulations into its Toyota Production System.