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Strategic Human Resource Management: Types, Functions & More

10th May, 2024
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    Strategic Human Resource Management: Types, Functions & More

    With long-term planning, capacity building, talent acquisition, organizational design, and execution appraisal, strategic human resource management assists the HR department in maximizing the potential of its workers.

    Earlier strategic HR management used to be an administrative task. These days, HR managers are essential to ensuring the company has the ideal employees who can boost productivity and achieve goal fulfillment.

    It implies that HR practitioners must comprehend its aims and purposes. How they might effectively assist the company in achieving those objectives and what steps employees may take to accomplish that.

    This post will give you a deeper understanding of how to define strategic human resource management, its responsibilities, features, importance, etc. We will also be discussing what strategic human resources management entails and how a well-thought-out approach can benefit the company.

    What is Strategic HRM?

    Let us have a look at the definition of strategic human resource management. Strategic human resource management is the link between a company's workforce and its plans, goals, and ambitions. Strategic human resource management has the following objectives:

    1. First, make your organization's structure meet its goals.
    2. Boost operational efficiency.
    3. Enhance originality, adaptability, and strategic edge.

    HR must be a major strategic collaborator in formulating and executing corporate policies for implicit human resource management to succeed.

    Strategic HR is part of examining how human capital might directly influence a team's growth. To satisfy the demands of the long ambitions, Recruiters must take a strategic approach to employee development and retention.

    For several businesses, dealing with Dilemmas may be a challenge. Numerous various aspects of HR really can confound businesses and lead people to make poor decisions that delay operations for both their workers and their company.

    Strategic human resource management involves HR departments working with other organizational units to identify their aims and develop tactics that help both their and the company's core goals.

    The consequence was that the human resources department's objectives correspond with and serve to further the objectives of the whole company. Instead of being viewed as a requirement for compliance with the law or pay, strategic Leadership is recognized as a collaborator in organizational success.

    HR Strategy uses the skill and potential within the human resources division to strengthen and enhance the performance of many other divisions. Now that you have understood the strategic HRM meaning in depth let us look at its characteristics.

    What are the Characteristics of SHRM?

    So, we know the strategic HRM definition, but you might still be wondering what the roles are their characteristics, and so much more. So here we go!

    1. Tries to align human resource practices to intellect quality standards.
    2. Several HR initiatives are linked by an organizational framework so that they might assist one another.
    3. Efforts that connect human resource operations with commercial profits and excesses.
    4. The administration of human resources has been outsourced to lower-level employees.
    5. The ethical culture, overarching company strategic goals, and HR policies and practices are all explicitly connected.

    The above two methods highlight two elements in a workplace environment. First, a people-centered strategy's foundation is the conviction that human resources play a crucial role in long-term corporate success. By utilizing its workforce to the fullest, a firm may acquire a competitive edge by utilizing its knowledge and creativity to accomplish well-defined goals.

    Sufficient approaches are necessary to incorporate the business excess into individual competencies and effectiveness. In this situation, strategy plays a key role. The management, motivation, and deployment of employees, as well as the accessibility of abilities and expertise, would influence the company's vision. A successful alignment of the human resource department to proficiency and self-efficacy is thus required for the company's strategy implementation.

    Scope of Strategic Human Resource Management

    One of the most important and challenging resources to maintain in a company is its human capital. The goals for HRM include everything from assessing its workforce's requirements to managing and retaining that workforce. The sole meaning of strategic human resource management

    These goals put human resource management in charge of efficiently devising and putting numerous rules, processes, and programs into place.

    Strategic human resource management goes beyond simply managing or maximizing cognitive abilities. Additionally, it emphasizes handling the human and material resources among personnel. The complexity involved means that HRM's range of applications is expanding day in and day out.

    Preparation for human resources includes, but is not restricted to, recruiting, learning and advancement payment processing, incentives and accreditations, worker's rights, disciplinary procedures, court proceedings, etcetera. Put another way, it fosters positive working connections and establishes stability among corporate and personal objectives.

    The reach and breadth of HRM are enormous. Consequently, it is exceedingly challenging to explain it briefly. Nevertheless, we can characterize it into three headings:

    1. HRM in Manpower Planning: This is usually direct personnel management, which includes planning for the use of labor, recruiting, learning and advancement initiation and alignment, relocation, elevation, remuneration, layoffs and reductions, and job performance. The main goal in this situation would be to evaluate self-improvement, progress, and efficacy as they implicitly influence the innovation process.

    Additionally, it covers the performance assessment, the formation of skills, the payment of salary, bonuses, and accommodations, as well as transportation procedures and guidelines.

    2. Workforce Welfare and HRM: This specific place of HRM focuses on worksite facilities and business conditions. It encompasses various duties and offerings, including insurance, healthcare, economy, welfare benefits, and hospital assistance.

    Additionally covered are just the hiring of safety inspectors, improving the job atmosphere, removing potential dangers at the job, support from top-level management job protection, protecting industrial equipment, neatness, appropriate heating and air, hygiene, healthcare, sick pay, worker's compensation advantages, parental leave, disability benefits, and social security payments.

    3. Work Relations and HRM: It requires proper contact with labor or staff associations, resolving their complaints, including efficiently resolving conflicts to keep unity and tranquility in the company because it is a very touchy matter.

    Mastering labor relations, collective agreements, dispute resolution procedures, problem-solving via joint work, people's behavior and preserving professional relationships, union representation, and conflict resolution are all covered.

    The primary target is to defend employee interests by achieving the maximum degree of knowledge while minimizing any adverse consequences for the business. Economic sovereignty must be established, expanded, and promoted to serve the engrossment of both workers and management.

    Since HRM has such a broad focus, it is impossible to write about it briefly. Nonetheless, we categorize the topic into the 3 phases listed above for simplicity and to help others better comprehend it.

    Objectives of Strategic Human Resource Management

    To establish rules: Creating recommendations for managing human resources is SHRM's final goal.

    First, create appropriate HR regulations: The HR manager is expected to act in this case.

    • Determine the connections: Establish linkages between the distinct locations' responsibilities and tasks.
    • Remuneration schedule: to establish a fair and acceptable framework for employee remuneration.
    • Putting human resources to use: to determine an organization's overall requirements and how they will be used.
    • To assess current HRM procedures: Periodic checks of current employers and the viability of Hrm systems are required.
    • To formulate plans against upcoming difficulties: Businesses must have a few plans to stay competitive.
    • To establish appropriate assessment criteria: to establish a criterion and benchmark of performance analysis.
    • Choosing the kind: to decide which organogram is best for the company.
    • To determine objectives: to determine an organization's goals and objectives for its human resource department.

    1. Resource-based Strategy

    Resource-based theory can be difficult to understand because the word "assets" is employed throughout common English in various ways. This is critical to separate strategic resources from all other types of resources. For example, cash is a precious asset for most people.

    A person's home, as well as an automobile, are two examples of key resources.

    Conversely, while studying companies, ordinary resources like money or automobiles are not regarded as strategic resources. Resources like money and automobiles have been valued, but other businesses may easily obtain them. Therefore, a company cannot develop a long-term competitive advantage upon shared resources.

    High Commitment Management: High-performance management seeks to influence the company's overall performance through its employees in terms of growth, earnings, client satisfaction, and efficiency, including, eventually, its creation of more value for shareholders.

    2. Achieving Strategic Fit

    A strategic alignment between business strategy and human resource management plan aids worker retention and motivation, increasing organizational productivity and giving a company a competitive advantage.

    3. High Involvement Management

    5 characteristics are mentioned below.

    • Selective hiring.
    • Extensive Training.
    • Decision Power.
    • Information Sharing.
    • Incentive Compensation.

    4. High-Performance Management

    Even though no group is the same and there is no easy way to gauge a firm's effectiveness, there appears to be a consensus on what makes a successful group function.

    Rules and guidelines, authority and independence, dispute, collaboration, effectiveness, management, aptitude, abilities, behavioral ethics, compensation, and inspiration are all components of high-performing workplace teams.

    5. Manpower planning

    Manpower planning, often known as human resource planning, entails placing the correct amount and type of personnel in the appropriate locations at the appropriate times to carry out tasks for which they're qualified.

    Planning for human resources also involves specifics such as how and when you should hire new staff. In addition, the institution's objectives, future economic forecasts, and evolving technology developments are all considered during the overall process. With the appropriate workforce at their fingertips for economic development aids the group's readiness for the foreseeable.

    6. Train the employees on technology

    Employee usage is required for any new employee-facing technology to enable participation and industry learning, whether it be an eLearning system or another. If not, any tool—no matter how great—will rarely produce the desired outcomes or return on investment. It will accumulate electronic sludge.

    New technologies eventually depend on effective change strategy and operational flexibility.

    7. Employee motivation

    In the absence of any individuals or workers, organizations are not. It has been seen that when workers give the jobs their everything and are highly committed to them, a firm will expand over time. Therefore, every organization needs its workers' outstanding skills and persistent efforts to succeed.

    Improve industrial relations: Workers' rights refer to the interactions between employers and employees in organizational contexts. The study of employment law focuses on the interaction among managers and supervisors, especially members of unionized work teams.

    These relationships among companies, workers, and the state, as well as the organizations and groups that manage these relationships, are called industrial relations.

    Importance of Strategic Human Resource Management

    1. Increased job satisfaction

    An unmeasurable statistic known as employee satisfaction is described as a pleasant visceral outburst when performing your duties or being in the workplace. With employee satisfaction evaluations commonplace at most offices, prominent firms are increasingly attempting to quantify the similar experience.  

    It is critical to keep in mind that each experience works satisfaction differently. The elements that make one person comfortable about his employment might not apply to another worker at the same company within the same circumstances.

    2. Better work culture

    Work culture is often described as the overall impact on a workforce or corporate consumer that people should be managed, disciplinary procedures, worksite facilities, and organizational regulations. It may be quantified into a good or bad workplace culture.

    By informing CEOs of their decisions' influence on staff motivation and participation, as well as how crucial it is for the firm to comply with its principles, HR experts are accountable for bringing the management style to the forefront.

    3. Forecasting Future Human Needs

    Trying to keep track of the individuals whose workers may be retiring, departing, or being requested to leave enables you to prevent big pauses in your hiring needs.

    The Human resource will use this data to determine whether to quickly hire new employees or arrange to fill such gaps with qualified recruitment.  

    4. Improved customer satisfaction rates

    Personnel may learn about the company's wide range of offerings and review these with HR specialists in recruitment and training. They can also learn how to market the company's entire complement of items and services. Additionally, HR might offer metrics and incentives which promote cross-selling.

    Communication of Goals and Objectives: Communicating is a skill we utilize in cooperation to further our objectives. As a result, fostering open and rapid communication among team members is critical. But what constitutes interaction as the main objective is the act of conveying such concepts in such a way that they can retain their worth.

    Most firms have an HR department that plays an essential role. It performs crucial duties, including recruiting and keeping the best workers, abiding by labor regulations, regulating pay and benefits, and encouraging employee advancement fundamental to the efficient running of the business.

    HR professionals must have various skills to perform these crucial, diverse tasks. For example, professionals must, among many other things, be great problem solvers, adept at resolving conflict and diplomacy, and smart organizers.

    5. Efficient resource management

    An HR division that performs at its best may assist the company in doing the same. Efficiency entails achieving the finest results quickly and creatively and simplifying routine chores though you may focus more on difficult problems.

    You should promote free discussion and sharing of ideas among your colleagues. Offer them group rewards to encourage them to start opening up and collaborating and explain the idea of creativity to everyone. No doubt, having several perspectives increases innovation and productivity inside a firm.

    6. A proactive approach to managing employees

    Proactive HR researches the company and its objectives to spot prospective issues and develops procedures to prevent and handle problems early on. Strategic planning, statistics, and workforce management are frequently employed to develop an effective proactive HR.

    A few examples of a fair and competitive compensation structure, competitiveness, and management methods have been shown to influence workers. 

    7. Productivity boost  

    Employee team morale would increase when an environment of awareness, transparency, and cooperation is established. Both the quality and quantity of your workforce's output will increase if they are motivated and engaged.

    8. Selecting and Utilizing Motivational Tools 

    One of the most popular strategies for improving enthusiasm is job promotion, which exemplifies the reward system. Therefore, a manager must ensure that awards given to staff members possess personal, monetary, or intellectual worth. 

    Communicating, socializing, challenges, and some time off work is also great motivational tools.  

    9. Setting efficient people to achieve specific goals 

    Every productivity process starts with establishing objectives and ambitions, which lay the groundwork for good execution.

    The aims of HRM inside every department in an organization are just to:

    • Assist the achievement of strategic objectives by attracting and retaining competent personnel.
    • Fully utilize every individual's abilities and capabilities possible.
    • Ensure that workers get the required qualifications or are receiving them.

    Functions of Strategic Human Resource Management

    1. Employee Engagement

    Effective communication is among the most significant markers of quality of work life. The idea of employee engagement in human resources (HR) refers to how enthusiastic and committed an individual is to his profession.

    Committed workers are concerned about their job and the organization's success and believe their contributions matter. Employee engagement promotes long-term engagement, increased productivity, higher-caliber output, and organizational success.

    2. Introduce Best Practices

    Maintaining openness and being candid with employees regarding the company's successes and shortcomings is an essential HR strategy.

    Workers feel recognized, appreciated, and cherished in organizations that encourage public condemnation and conversation.

    3. Teach Tools and Techniques

    A collection of software programs called an HRMS, or strategic human resource management system, is used to interact with employees and associated processes across the hiring process.

    Some of the tools in hrm are- training, workshops, mentoring, simulations, on-the-job training, etc.

    4. Improve HR Effectiveness

    Worker satisfaction and motivation to participate in an organization's growth are fostered by effective Hr procedures.

    Learning, expertise, and capabilities may boost a company's market edge. Efficacious organizations are focusing on this beneficial impact of HR by ensuring that workers train, gain knowledge, and achieve better.

    Human resource management is critical in ensuring worker opportunities and increasing company efficiency and quality.

    5. Publish Research

    Human resource management research assesses HR practices and effectiveness. Mass surveillance, analysis, and conclusion-making are all steps in the structured, scholarly research process.

    The analysis could occasionally be cutting-edge, reliant on intricate designs and facts.

    Types of the Strategic Human Resources of Management

    An individual's approach to solving an institution's biggest problems has been outlined in the Human resource strategy. The said strategy enhances the significance of hiring, management consulting, remuneration, long-term planning, and business culture and requires HR input during policy creation.

    Types of strategic hrm are mentioned below: 

    1. Recruitment and Selection 
    2. Offering employee job 
    3. Learning and Development 
    4. Creating regulations that impact the whole company's working environment. 
    5. Compensation and Advantages 
    6. Resolving job difficulties of current workers. 

    Examples of Strategic Human Resource Management 

    Below are the three examples of human resource management-

    1st example  

    Culture plays an important role in the competitive advantage of Southwest Airlines. The firm's senior Leadership believes performance can be ascribed to the corporate personality; they feel that its personnel would do anything they could to meet the wish of the consumer. For them, the most crucial choice is choosing flight crew who are accountable for the entertaining reputation of the airline. The committee will interview candidates in an audition process. The candidates share their humiliating experiences with the committee and the other candidates. The few who perform well would go through psychometric screening.

    A strong employer brand that appreciates service quality equips involving employees with an enjoyable commuting atmosphere in addition to this selection procedure. Southwest Airlines has been the most commercially secure carrier in recent decades and the top airline with the fewest customer complaints, thanks to great selection management and organizational culture.

    United Airlines began to compete with Southwest Airlines after learning about its financial success from other airlines like Continental Airlines. Still, they could do nothing about it because they could not replicate southwest Airlines' customs. This indicates Southwest Airlines' hr departments add value, are uncommon, and are hard to duplicate. 

    2nd example 

    Tesco's recruitment and selection process involves the following: 

    1. Questioning unspoken rules. 
    2. Implementing core competencies across the board for all central office personnel. 
    3. Demonstrating the organization's commitment to reaching coordination.

    This demonstrates how closely tied to productivity monitoring Tesco's business metrics are. Tesco thinks every employee has the chance to understand how their unique personalities fit into the accomplishment and fundamental mission of the organization.

    3rd example  

    Upper executives of STARBUCKS understand the importance of people in expanding the industry. Starbucks treats individuals as "collaborators," regardless of their rank. The primary need for each worker is to complete a rigorous exercise program that includes the effort to promote a dedication to service quality and good communication skills. Employees receive comprehensive knowledge about the firm or coffee after they complete their training. 


    To sum up, to succeed, businesses must adapt to Strategic HRM. Adopting HRM with strategic objectives will assist in getting the ability to think creatively and obtain an improved company environment altogether. You can take up certification training to learn more about human resource management. 

    Before adopting a strategy, it is important to understand the organization's corporate objectives and the sector where it works. For example, it may not be ideal to establish an SHR component inside a commodities firm if you go for the most strategically sound option.  

    HR managers must constantly remember that developing and selecting human resource strategies directly affects the company's performance and advancement. Therefore, choosing a technique must be done from this perspective since it will significantly affect revenues and employment levels.

    A conference among staff and managers is crucial at certain points. Employees should be managed to the company's advantage, and managers should also assist employees in becoming more enthusiastic.  

    It is beneficial for a business to learn about working for an organization, as doing so could enable supervisors to take active steps and develop effective strategies. Thus, improved employer-employee interaction would be beneficial to most organizations. 

    In conclusion, as seen by the abovementioned cases, numerous companies have varied human resource strategies. However, the end goal is always the same. Hence, by connecting human resource managers to stated objectives, the primary purpose is to improve revenue and ideals. Here you have learned the details of What is strategic hr management and its different systems? Want to learn more? KnowledgeHut certification training has your back!

    Frequently Asked Questions (FAQs)

    1Why is strategic human resource management Important?

    Let us have a look at the importance of HRM in a nutshell:  

    1. They guarantee company success via expertise 
    2. They work to satisfy customer requirements successfully. 
    3. They are there to guarantee that concerns with personal growth are dealt with methodically. 
    4. Moreover, they are the ones who find, keep, and inspire employees. 
    5. Offers a crystal-clear marketing plan and future projections. 
    6. To guarantee great output. 
    7. To provide details on the core competencies and threats of the firm. 
    8. To cultivate and keep professionally talented individuals. 
    9. To provide actionable insights that could be helpful for the stages of policy planning. 
    10. Locating and evaluating potential dangers or possibilities from outside the firm might be very important. 

    One of the fundamental responsibilities of strategic human resource management is employee training. This type of process begins whenever a company is hiring and conducting interviews with job candidates. 

    2What are the features of SHRM?

    Efforts to connect human capital operations to commercial profits or excesses

    • The administration of human resources has been outsourced to lower-level employees.
    • The organizational environment, overarching company-specific priorities, and HR policies and practices are all connected.
    • Tries to align human resource management practices with competence-based quality standards
    • An organizational framework typically links various HR initiatives to assist one another.

    The above two methods highlight two elements in a workplace environment. One is the human element, which includes people's effectiveness in order, and thus the second is corporate excess. The foundation of such a people-centered strategy is the conviction that human resources play a crucial role in long-term corporate success. One such individual approach is founded on the idea that human resource management is essential to protracted business success.

    Appropriate techniques were necessary to incorporate the company's excess into individual competencies and achievements. In this situation, planning plays a key role. The management, motivation, and deployment of individuals, as well as the accessibility of knowledge and expertise, would influence corporate strategies. The corporation's market direction thus requires the successful alignment of human resources to proficiency and self-efficacy. 

    3What is a strategic human resource management process?

    The method of constructing and achieving programs that target specific and manage business challenges and support significant long-term company goals is known as strategic human resource management.

    The creation, execution, and assessment of strategies comprise three steps of the strategic planning process.  

    4What are the challenges of SHRM?

    The Five Biggest HR Strategic Challenges  

    • Analytics of data must be used to enhance HR-related choices. 
    • Create a future-oriented workforce plan. 
    • Boost the standard of organizational Leadership. 
    • Encourage creativity across the whole enterprise. 
    • Handle the shifting experience and ability requirements of the industry. 
    5What are the principles of strategic human resource management?

    The principles of strategic human resource management are as follows:  

    1. Taking appropriate action after analyzing key metrics-   

    Monitoring and evaluating the effectiveness of corrective measures is crucial for achieving corporate objectives. For example, HR managers may find process inefficiencies and fix them with the help of regular evaluations.  

    2. Predicting HR requirements-  

    When recruiting more workers to fill operational gaps, pricing forecasts must be done. Projection helps HR departments assess the effectiveness of Employment legislation and the degree to which workers' abilities are utilized. 

    3. Evaluating people management potential considering corporate objectives-  

    The HR leadership must have a broad perspective to understand how everyone's unique abilities may influence the company's development. Strategic Hr planning aims to find these individuals and place them in the appropriate positions. 


    Abhresh Sugandhi


    Abhresh is specialized as a corporate trainer, He has a decade of experience in technical training blended with virtual webinars and instructor-led session created courses, tutorials, and articles for organizations. He is also the founder of, which offers multiple services in technical training, project consulting, content development, etc.

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