Roles in SHRM: Top Management, Front-line Management, HR

HR practices to business strategy and one another

This issue of fitting HR practices to business strategy is becoming increasingly important and relevant HR issues for HR staff and line managers.

HR fit involves making sure HR activities make sense and help the organization achieve its goals and objectives.

The three aspects of HR fit are:

• Vertical fit

This aspect of vertical fit concerns the coincidence between HR practices and overall business strategy.

• Horizontal fit

This relates to the extent to which HR activities are mutually consistent. Consistency ensures that HR practices reinforce one another.

• External fit

The third aspect concerns how well HR activities match the demands of the external environment. Ensuring these aspects of fit requires HR practice choices. The challenge is to develop internally consistent configurations of HR practice choices that help to implement the firm’s strategy and enhance its competitiveness.

There is a need for strategic flexibility along with a strategic fit for the long-term competitive advantage of the firm.

The fit is defined as a temporary state in an organization, whereas flexibility is defined as the firm’s ability to meet the demands of the dynamic environment.

The two types of flexibility identified are:

Resource Flexibility

Resource flexibility is the extent to which a firm can apply its resources to a variety of purposes. It also involves the cost, difficulty, and time needed to switch resources from one use to another.

Coordination flexibility

Coordination flexibility concerns the extent to which an organization has decision­making and other systems that allow it to move resources quickly from one use to another.

The following four components of SHRM:

1. It focuses on an organization’s human resources (people) as the primary source of competitive advantage of the organization.
2. The activities highlight the HR programs, policies, and practices as the means through which the people of the organization can be deployed to gain competitive advantage.
3. The pattern and plan imply that there is a fit between HR strategy and the organization’s business strategy (vertical fit) and between all of the HR activities (horizontal fit).
4. The people, practices, and planned patterns are all purposeful, that is, directed towards the achievement of the goals of the organization.

Transforming HR Staff

There exists a significant difference in the skills needed by HR staff in the traditional and strategic orientations to HRM. In traditional HRM staff had to be specialized in certain functional areas like interviewing, recruitment and training.

The strategic HRM role played by HR professionals is “change management”, involving strategic planning, team building and having a global perspective.

Most HR units will face a significant transformation to manage human resources with a new strategic view.

Transforming the Organizational Structure

In transforming the HR structure from traditional to SHRM, it is common for the organizational unit to restructure.

The major issue in designing a new strategic HRM unit is to determine whether to centralize or decentralize HR function. The relevant structure for the HR function depends on the nature of the firm’s business, the size of the firm and the firm’s overall business strategy.

In some organizations, a centralized structure for the HR unit would be appropriate and in some highly decentralized HRM may be necessary.

Regardless of which particular structure has used the key element in the successful transformation from traditional HR function to SHRM is to find a structure that meets the pressing needs of business strategy and allows the HR unit to provide services designed to help the firm achieve strategic objectives.

Enhancing administrative efficiency

Dave Ulrich (1996) suggested that one of the key roles of HR staff is to be “administrative experts”.

As administrative experts, HR staff members must take an active role in engineering, administrative and other processes within the firm and find ways to share services more effectively throughout the organization. The objective is to increase HR service efficiency and save money.

Several processes are needed to enhance the administrative expertise of HR units. The first focuses on:

• Improving administrative efficiency by targeting current processes for improvement, by examining the gaps between the “as is” process and what the system “needs to be.”
• Administrative efficiency can also be enhanced by the development of centralized HR services that are shared throughout an organization.
• The ultimate process involves HR staff to rethink how they create value to the firm in terms of value perceived by the customers rather than perceived by the provider of the program.
• Integrating HR into the strategic planning process

The strategic integration of HR requires the strategic planning process and the involvement of HR managers in that process. The development of a strategic plan involves top management, with the help of outside consultants, to go through and analyze the current and future condition of the organization.

To achieve full integration, HR managers should not only have the ability to influence the development and selection of information used in decision making but should also have the ability to influence decision making.