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Strategic Planning Human Resource Management Commerce Essay

Paper Type: Free Essay Subject: Commerce
Wordcount: 3934 words Published: 1st Jan 2015

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Strategic human resource is a strategy or plan that carried out by organization to guides an organization in accomplishes its vision and mission. Through a strategic plan, the organizations can develop an effective human resource plans that will enable the organizations to make a management decisions especially something that will give a benefit to their employee and organization in the present and to support and guide the direction or flow of the organization. Human resource strategies are designed to ensure that organizations have the staff they need to meet customer demand. Lately, whether we realize it or not, the strategic human resource planning has been used widely in organizations.

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A discussions highlight several key term of strategic human resource that can affect the business in organization. There are characteristic of strategic human resource, planning process and the way of the organization implement their strategies. Usually, based on the strategic plan, it will guide the organization to be more competitive. Through this journal, it is explore about the strategic human resource management that has been practiced in organization for a small business. Other than that, it is also has been practices in staff training and development to ensure that the staff achieve their standard and perform better.


Human resources is a set of individuals who form a organization workforce, business or an economic sector. Other terms sometimes used to replace the term human resources as “workforce”, “talent”, “labor” or simply “people”. Human resource management is reflected in the professional disciplines and business functions of overseeing human resources of an organization. Different with human resource management, strategic human resource management pay attention to human resource activities with the long-term objectives. Strategic human resource management also focuses on issues of internal human resources. In addition, the strategic focus of human resource management is to manage and resolve the problems that effects people management programs in the long-term and often globally. Therefore, the ultimate goal of strategic human resources to improve productivity of workers by giving attention to the business barriers that occurs outside of human resources.

This journal focuses on Strategic Human Resources Planning. Human Resource Planning as a process of systematic review to determine human resources requirements to Make sure That the number of employees in line with the required skills. Human resource planning is a step in identifying human resource needs of the present and future of an organization to achieve the goal. HR Strategy will need to demonstrate that careful planning of people issues will make it significantly easier for organizations to achieve greater strategic and operational goals. Better strategic planning is needed to ensure that the organization obtain competitive opportunities from other organizations in the future.


The mainly purpose of this study is to examine whether strategic planning human resource management can support the achievement of business goals. This goals and objectives are attainable when the strategy aligned with organizational goals.

The next purpose is to develop and expand the workforce in organization and meet future demands.

Furthermore, strategic human resource also develops plans for the future and to make sure all employees meet company goals and expectations.

Besides that, provide individual member of staff with information relating to staff development and training opportunities, and their task.


What is Strategic Human Resource Management

According to Huselid and Jackson, strategic human resource management specifically develops, implemented and executed based on a deliberate linkage to a company’s strategy. Strategic human resource management also means that employees are strategic resources for example human capital that must be managed and leveraged in executing corporate strategy. The SHRM paradigm were predicated on the belief that specific human resource practices need to promote behaviors designed to deliver firm strategies and were focused on the relationship between employee behavior and company strategy (e.g. Snell 2001; Schuler and Jackson 1989; Fisher 1989). It also focuses on strategic context that influences on individual and later systems of technical human resource management practices. Managers were expected to employ the system of individual practices based on considerations of external threats and opportunities and internal resource capabilities, resources, and competencies their firm’s strategy, to elicit and reinforce the required behavior.

Besides that SHRM is align with traditional human resource management practices such as recruitment, selection, training and development and rewards to a company’s strategy. It also means place the policies and procedures that facilitate proficient strategy execution, using teams to leverage cross-functional knowledge and competencies, improve the knowledge management capabilities that facilitate the leveraging of best practices and effective also being efficient to capture the economy of scope opportunities, improve learning organizations that facilitate the constant adoption, utilization, ownership, and internal dissemination of best practices, and executing change management approaches that contribute to building and maintain the strategy supportive of corporate cultures. The researcher also said that the SHRM includes developmental performance feedback, management by objectives techniques, and balance scorecards; competence development maps and frameworks; open book management practices to reduce worker-manager status differential; cross-functional teams and project teams’ profit sharing, team based compensation, merit pay, and long term incentives; enterprise resource planning human resource management solutions; and enhanced involvement of the human resource function in crafting, implementing, and executing strategy and also structured interviews, bio-data, cognitive ability tests, and assessment center.

Next according to assumption by Arthur, fundamental to the strategic HRM perspective is that firm performance is influence by the set of HRM practice firms have in place. The expectation by external stakeholder relevant in shaping technical HRM activities include the government, which regulates a wide range of employment practice, and various professional organization (Baron , Jennings & Dobbin, 1998; Tolbert &Zucker, 1993). The expectations of these stakeholders tend to be similar for all firms, and they fell some pressure to conform. Key internal stakeholder like line managers and executive prefer high- quality technicalHRM activities (Tsui, 1987).The stakeholders are not yet likely to hold strength expectation or put pressure on organization to adopt these practice becausethe HRM activities are relatively recent innovations (cf.John, 1993; Wright & McMahan, 1992).

Characters of strategic human resource management

Emphasize the ability of value creation

The important path that organization must consider is a strategy that will be used based on their strategic resources. The organization must allocate their resources with effectively and then can decide the main objective. For organizations, the purpose to determine a strategic key of human resource is to identify employees that have a high achievement and have talents to compete with others.

Think highly about the value chain management

The key term of value chain management describe about strategic integration of the human resource with each function. The strategic human resource management will consider each function and try to create effective plans that can maximize the policies, procedure and also systems in the organization. Thus, the organization can implement the strategy and to use efficiency at the maximum level.

Emphasizes contributions to the organization’s strategy

The success of the strategic human resource can contribute to the organization growth. The strategy must be aligning with the organizational objectives. First of all, there must be a clear tasks and relevant that affect organizational efficiency. There are also basic functions and skills that will be combining to develop a strategic human resource. Therefore, the organization can perform the task with excellent and thus can accomplish the organization’s strategic objectives and at the same time can contribute to the growth of the organization.

Should be recognized

The approach taken to the management of human resources will be found that there is a mutually critical. For example, when the organization was changed and has redefined the role of the individual, indirectly it will affect to the way in which individual performance is managed, and the way in which the pay structure should be designed to reflect and support new ways of performing work. Specific human resource management initiatives will ensure that the sequence changes occur in the correct order and indirectly recognizes the need to understand “where you are now” in relation to each different area.

(Roy Massey, 1994)

(Taking a Strategic Approach to Human Resource Management – Roy Massey)

Approach to strategic human resource

Blending strategies is one of the approaches to achieve an organizational vision, mission and objectives. An appropriate element of human resource strategy is required in order to formulate and implement these strategies. A blended strategic approach combines face to face methods through computer activities between each employee. The trainer and also trainee will interact with each other from time to time to share their information or any ideas about development. By this strategy, they can meet thru their organization’s websites and discuss for any progression.

The strategic human resource planning process

Assess the current human resource capacity

The most important steps in organization based on strategic plan are to assess the current capacity of human resource. The employees will be identified their knowledge, skills, behavior and also abilities before perform a tasks. Thus, the management can describe each type of employee based on their capabilities while handle the tasks given. Therefore, the management can evaluate employee’s performance and from that they can find a right employee that must undergo a training program to enhance their abilities.

Forecasting human resource capacity

The second step based on the strategic plan is to forecast human resource requirements for the future. The management must forecast the demand and supply for the organization’s future. Forecasting can support the organizational goal and give the important information especially human resource capacity to management.

Gap analysis

The third step is to identify the gap between the organization present and in the future. This gap analysis will identify the number of staff will be employed in the future, the scope of the organization will be carried out, the skill and technology required and so on. It is important because through this strategic plan, management can improved or there are new practices to make the organization move forward, always up dated and achieve their strategic goal.

Developing human resource strategies

There are several strategies that the organization may take advantage in order to meet their goals in the future. The organization can do a training program to develop their employees. The management also can send their employee to take courses to become expert or certificates them. This training is to upgrade and enhance the employee’s skills and it will give advantage to the organization.

Strategic implementation

Future performance capabilities

HR must analyze the capabilities inherent in the organization to determine the core competencies that will be needed to implement the strategy in the future. The basis for the strategic contribution of HR is to close any gaps between actual competencies required of the future.

Values and culture

HR policies should be examined from the perspective of core values​​, to ensure that the value are accordance with the new strategy. To maintain stability in the middle of turbulent change, HR must play an important role in communicating the company’s core values ​​and operational changes to employees.

Learning and system thinking

Regeneration strategies must be combined with strategic HR learning program. Teamwork, communication, problem solving, statistical analysis processes, and continuous improvement are just some of the skills that must be learned and adapted to meet the new strategy.

Passion to improve

HR must help develop a healthy respect for the bridle view, so that they can be heard and discussed, especially when dealing and strengthen with the company weaknesses. HR must replace the hardcore, bureaucratic policy to friendly lines, flexible framework that does not damning line managers.

Partnerships and collaboration

HR can do a lot of action to help resolve the structural stress and cross-functional teams. HR will be a third-party collaborators allows others to become successful, productive partnerships that need to intensify the company’s ability to achieve new strategies.

Communication and commitment

HR has an actual cheerleading role to play in the follow-up to the strategic planning session. Given the role of HR neutral organization, it can and must be followed up to make sure that the commitment and passion for the new strategy to be experienced. HR can proceed the planning process across the organization so that everyone taking part in the continuous organic strategic planning process.

(Ivey business journal – strategic HR by Doug Treen)


Strategic Implementation practices in Small Business

According to O’Regan & Ghobadian ,the strategic planning is setting of long-term business goals, and the developing and implementing of formal plans to achieve these goals. From a comprehensive reviews of the small business,it suggest thatstrategic planning is generally more common in better performing enterprises (Hormozi, Sutton, McMinn, & Lucio, 2002; Lurie, 1987; Miller & Cardinal, 1994; Schwenk & Shrader, 1993). For example, small businesses that strategically plan ,compared to those that do not strategically plan are more likely to be those that get a higher sales growth, higher returns on assets, higher profit margins and higher employee growth (Berman, Gordon, & Sussman, 1997; Bracker, Keats, & Pearson, 1988; Carland & Carland, 2003; Gibson & Casser, 2005).

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Strategic planning involves the systematic setting of comprehensive business goals. In the present study, business ownership motivations were compared against four planning criteria that is the use of business plans (yes vs. no), the formality of business plans (written vs. unwritten/’in my head’), the timeframe of business plans (short-term only vs. long-term only vs. both short- and long- term), and the timely review of business plans (at least half yearly/yearly vs. less than once every two years).

Usually , small business operators engaged in strategic planning can be expected to:

Have a business plan,

Have a business plan that was written,

Have a business plan that covered both the short- and long- term periods; and,

Have a plan that was reviewed regularly.

Following Huselid, Jackson, and Schuler (1997), strategic human resource management (SHRM) can refer as a critical element in fostering operational efficiency and firm performance. The reseachers agrees that the characteristics of small and medium sized enterprises (SMEs) strategic human resource management practices determines how people managed their capabilities and on the effect side, is directly related to its value as a strategic partner. It contend that the factors affecting the quality of a SMEs of SHRM resource management capability include the industry and competitive condition of its partners and direct competition from other SMEs and businesses intention to provide value to a SMEs partners.

SHRM and Business Strategy Fit or Integration

SHRM existence increasingly enhance the value of to the organization. SHRM strategy refers to “moving pattern organization and management techniques or approaches used to achieve organizational objectives and to continue mission of the organization” (Inyang, 2004:20).

In an attempt to be successful or achieve a competitive advantage, organization must pick and follow a variety of approaches. Academic support as mentioned has consistently stressed the need for HRM to be strategic business partners. This means that the SHRM integrated with business strategy. Integration or fit refer to the SHRM involvement in the formulation and implementation of organizational strategy and SHRM alignment with the strategic needs of the organization (eg Buyens & De Vos 1999; Schuler & Jackson, 1999).

Human resource managers should join together with other senior managers in the organization during strategic decision-making process in order to become a strategic business partner. Membership at this level in the hierarchy of the organization offering the opportunity to SHRM to represent the concerns and influence the strategic direction of the business from the beginning of the decision making process.

SHRM and the Resource Based View (RBV) of the Firm

A firm that acquire and develop human resources can achieve a competitive advantage (Hamel & Prahalad (1989). Resources owned by the firm that helped it reach ongoing competitive advantages must be satisfy four requirements. Resources should be precious, rare, inimitable, and can not be replaced. If the firm uses resources that are not easily substituted or duplicated by other firms, the firm can take this opportunity to get a competitive edge not simultaneously pursued by other firms.

Among the most essential factors competitive advantages is the capability of to distinguish what the business provide to the customer than those provided by competitors.

Purcell et al (2003) maintain that such discrimination can be achieved by having the HR strategy, policies and practices that ensure that:

The firm has high quality employees from competitors.

Unique intellectual capital owned by organization are developed and nurtured.

Organizational learning is encouraged, and

Certain organizational values ​​and culture exist that ‘binding the organization together gives it focus.

The RBV of the firm is related to developing strategic capabilities, investing in sufficient organization workforce to increase value to the firm. RBV purpose “is to enhance the capacity of resources – reach strategic fit among resources and opportunities, and obtain added value from the efficient allocation of resources”.

Business strategy designed to reach objectives of the organization are not likely to succeed when HRM was not undergo the formulation and implementation of strategies. Organizations should provide a conducive environment for the integration of HRM with business strategy from HR to provide energy to drive the organization’s strategy. Wei (2006) stated that HR systems and practices are important in helping to accelerate the achievement of business strategy through people management.

Strategic human resource practices in staff training development

Firstly, by strategic planning, the organization can achieve their specific strategic business objectives. These planning implement an action with follow the procedure that related to the study and discuss to resolve the difficulties and any matters in the organization. Strategic planning can actively solve the conflicts such as culture conflicts through effective communication with each other members, full participation from the combination of organization and any department and get a high support from the members. Hence, staff training can achieve their training and accomplish business strategy goal for development.

Secondly, the strategy oriented training more concern about sharing and initiative, carries out the training transfer, creates conducive working environment that stand for lifelong training and enhances the training productivity. It different from traditional training because this training focuses on long term objective and guide the organization development. In organization, training transfer is about the transformation of the training results. It is a process where the staff training applied the knowledge, skills, and behavior into practical work.

Thirdly, implement the strategic training that focuses on core competitiveness of employees and organization. Give expand spaces to staff to develop their competitiveness and through training also they can increase their knowledge, skills and work achievement. Hence, the staffs understand the concept and can effectively adaptation the strategic goal of the organization. Thus, it can be consider that the success of strategic human resource can produce qualified excellent talents in the organization.


The success of the strategic human resource can contribute to the organization growth. The strategy must be aligning with the organizational objectives. There must be a clear tasks and relevant that affect organizational efficiency. It is also a basic functions and skills that will be combining to develop a strategic human resource. Therefore, the organization can perform the task with excellent and thus can accomplish the organization’s strategic objectives. Then, the strategic planning can refer as a broad managerial process of developing a vision, mission statement, goals and objectives that can be serve as influential guides to employees using the top bottom management approach (Warner, 2000).

Next, for small business ownership motivations are diverse and significantly influence how operators manage their businesses. As we can see, the operator is the business and accordingly, research into small business strategic planning needs to focus on the operator and his/her personal motivations and ambitions. The role SMEs can play in fostering the competitiveness of big businesses and the challenges they need to overcome have been well documented. Further insights on the factors that aid or inhibit successful partnering, can only be of strategic importance not only to SMEs but to their big business partners. However, powerful strategic partnership and alliances between small and medium sized enterprises (SMEs) and big businesses is critical to the ability of big business to build and maintain the sustainable competitive advantage.


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