Chapter 1 The strategic role of human resources management
The strategic role of human resources management
Human Resources Management (HRM): The management of people in organizations to drive
successful organizational performance and achievement of the organization’s strategic goals.
Human capital: The knowledge, education, training, skills, and expertise of an organization’s
- Their job is to ensure that the organization finds and hires the best individuals available,
develops their talent, creates a productive work environment, and continually builds and
monitors these human assets. They have the primary responsibility for managing the
workforce that drives organizational performance and achievement of the organization’s
Human resource management responsibilities
Human resource management responsibilities and activities fall into two categories.
The first is the tradition operational (administrative) category, where HP professionals hire and
maintain employees and then manage employee separations. This role requires HR staff to be
administrative experts and employee champions.
The second is the more recent strategic category, where HR is focused on ensuring that the
organization is staffed with the most effective human capital to achieve its strategic goals. This
role requires HR staff to be strategic partners and change agents.
HR services include: analyzing jobs, planning future workforce requirement, selecting
employees, orienting and training employees, managing compensation and reward plans,
and communicating with employees (including counseling and disciplining).
- In recent years, there has been a trend to outsourcing much of the operational HR
activities, so that HR staff in the organization can focus on strategic HRM.
Strategy: the company’s plan for how it will balance its internal strengths and weaknesses
with external opportunities and threats in order to maintain a competitive advantage.
Role in Formulating strategy
Environmental scanning: identifying and analyzing external opportunities and threats
that may be crucial to the organization’s success.
Role in executing strategy:
- Strategy execution is typically the area where HR makes the biggest strategic contribution.
For example, HR professionals are heavily involved in the execution of downsizing and
restructuring strategies through establishing training and retraining programs, arranging for
outplacement services, instituting pay-for-performance plans, and helping to redesign jobs.
- HR specialists are expected to be change agents who lead the organization and its employees
through organizational change.
Environmental influences on HRM
External environmental influences:
Five major environmental influences on HRM will be discussed: economic conditions, labour
market issues, government, technology, and globalization.
Productivity: the ratio of an organization’s outputs (goods and services) to its inputs (people, capital, energy, and materials).
Primary sector: agriculture, fishing and trapping, forestry, and mining.
Secondary sector: manufacturing and construction.
Tertiary or service sector: public administration, personal and business services, finance,
trade, public utilities, and transportation/communications.
- since all jobs in the service sector involve the provision of service by employees to
individual customers, effectively managing and motivating human resources in critical.
Increasing workforce diversity
Traditionalists/silent generation: individuals born before 1946.
Baby Boomers: individuals born between 1946 and 1964.
Sandwich generation: individuals with responsibility