strategic human resource management is the
integration of human resource management and
strategic management process.
In other words we can say that it is the
alignment of Human Resource Management with the
Objectives of SHRM: -
Assess how well human resources management is
linked to agency mission accomplishment.
Explore the role played by the HR staff in agency
Determine how the HR service providers work with
line managers to carry out agency strategic goals.
Identify best practices aligning HRM with the agency
strategic plan and goals.
1.) Resource – Based View of the Firm
2.) Behavioral Perspective
3.) Cybernetic Systems
4.) Agency / Transaction Cost Theory
Resource – Based View of the Firm
Defines Competitive Advantage as “ When a firm
is implementing a value creating strategy not
simultaneously being implemented by any current
or potential competitors ”
Firm Resource Heterogeneity
Firm Resource Immobility
Sustained Competitive Advantage exists only after
efforts to replicate that advantage have ceased
Add positive value
Unique or Rare
Non - Substitutable
Non substitutable HR
This theory demonstrates that Strategies are not
universally implementable , but are contingent on
having the human resource base necessary to
implement them .
Focus on Employee Behavior as the mediator
between Strategy and Firm performance .
Assumes that the purpose of various Employment
practices is to elicit and control Employee
Attitudes & Behaviors.
INNOVATION as STRATEGY
High Degree of Innovative Behaviour
Long – Term Focus
High Level of Co-operative Behaviour
Moderate Degree of Concern for Quality
Moderate Concern for Quantity
Greater Degree of Risk Taking
COST REDUCTION STRATEGY
Short - Term Focus
High concern for Quantity
Moderate Concern for Quality
Low Risk Taking
This theory is tested to Demonstrate
Different Strategies are associated with different
levels of Firm Performance
Relationship between Strategies and Firm
Performance is either mediated or moderated by
HRM practices and Employee role Behaviors.
Open Systems Model
Inputs are Competencies ( Skills , Abilities) of
Throughput Process is Behavior of Employees
in the Organization .
Outputs consist of Performance ( Productivity )
and Affective Outcomes ( Job Satisfaction )
Agency / Transaction Cost Theory
Transaction costs are the costs associated with
negotiating , monitoring , evaluating , and
enforcing exchanges between parties .
Agency costs are the costs associated with
establishing efficient contracts between parties
Bureaucratic costs refer to the transaction costs
associated with managing human resources in a
hierarchy ( when Authority Relationship exists )
This theory is popular for Diversification ,
Internalization , Restructuring .
Non Strategic Models of HRM
Non strategic means determinants of HRM practices
that are not the result of rational strategic decision
making process, but rather derive from institutional
and political forces in the firm.
Resource dependence Model :It focus predominantly on
power relationship within and among organization. It
assumes that all organization depend on flow of valuable
resources into the organization in order to continue
Its implications are numerous:
i) It change the focus from viewing SHRM in mechanistic
terms where all HRM practices are rationally determined
and are perfectly supportive of organizational strategies.
ii) It demonstrates the potential for the HRM function to
increase its role as a stategic partner in the firm.
It is viewed as the social process by which individuals
come to accept a shared definition of social reality –
conceptions whose validity is seen as independent of
the actor’s own view or actions but is taken for granted
as defining the way things are to be done.
i. It can be imposed coercively .
ii. It can be authorized through an organization
voluntarily seeking approval of a superordinate
iii. It can be induced through outside agents providing
rewards to organization that conform with the
wishes of the agent.
iv) It can be acquired through one organizational
modeling its practices based on practices of other
organization as a means of appearing legitimate or up
v) Imprinting pocess whereby the practices adopted at
the beginning of the organization’s history remain
embedded in the organization.