In the present times, companies are seeking to enhance their efficiency and productivity so that they can stay ahead of the competition and gain high profits. For this, it is important for organizations to pay attention to the most significant resource, which is their human resource. It is vital for organizations to make sure that they have an organized, efficient and skilled workforce that is capable of helping organizations achieve their objectives.
Human resource management (HRM) refers to the use of management principles to manage the employees of an organization. It includes the process of recruiting, developing, retaining and training the workforce so as to improve their efficiency. Strategic human resource management (SHRM) is an extension of HRM in that it ensures that the objectives of HRM are consistent with those of other departments and with the objectives of the organization on the whole. This article discusses HRM and SHRM in greater detail and explains the differences between the two.
Definitions and explanations
Human resource management
Human resource management (HRM) is a systematic and organized process of managing human resources. It is carried out with the goal of improving the performance of employees by increasing their productivity and efficiency. It considers the regulations, policies and systems of the organization while applying the managerial principles to deal with the workforce. HRM tries to ensure that human resources within the organization are used to the best of their abilities so as to achieve the desired organizational outcomes.
The activities involved in HRM are pertinent to human resources, such as hiring the best employees for a given job and offering them the required training and development, remuneration and benefits so that they achieve success in the organization.
There are several functions of a human resource manager, such as staffing, planning, supervising, assessing, managing relations and change, etc. Human resource managers also carry out performance appraisals and look after safety and health of their employees.
Strategic human resource management
Strategic human resource management (SHRM) has emerged only recently from the traditional field of HRM. In SHRM, HRM is aligned with the strategic objectives of the organization so as to make them more efficient and develop a culture within the organization that supports flexibility and innovation, through which a competitive edge is offered to the organization. An organization practicing SHRM considers the HR function to have a strategic role in the development and realization of the company’s strategies through different activities related to its human resources, like recruitment, training and benefits for employees.
The purpose of SHRM is to enable organizations to meet the requirements of their employees in the best possible way, while achieving the goals of the organization at the same time. The human resource department of companies practicing SHRM does not function independently, rather, it works alongside the rest of the departments of an organization so as to comprehend their objectives and then develop strategies that are consistent with these objectives. Hence, the human resource department seeks to achieve objectives that backs the goals of the organization as a whole.
Differences between HRM and SHRM
The main points of difference between human resource management and strategic human resource management are explained below:
HRM refers to management of all aspects of a business that are related to its employees, such as recruitment, training, salary and rewards. SHRM refers to the process in which an organization’s human resources practices are made consistent with the business strategy so as to attain the overall objectives of the organization.
2. Type of process
HRM is a reactive process, where the HR managers react to change. In this approach, the functions of HR are carried out as a response to the requirements of managers for recruitment to specific positions in the organization. SHRM is, however, a proactive process that seeks to bring about change from the start. It determines the operational requirements and expansion areas that require workforce, and establish comprehensive plans so as to fulfill the strategic objectives of the company.
HRM concentrates on the management of its employees and the internal issues it faces regarding its workforce. It lays stress on relationships with employees, making sure that its employees are motivated and that the relevant employment laws are adhered to by the organization. In contrast, SHRM concentrates on developing partnerships with internal as well as external parties.
4. Time span
Short-term objectives of the organization are accomplished in HRM, whereas SHRM concentrates on achieving the long-term strategic objectives of the organization.
5. Fundamental elements
In HRM, the capital and products are considered as the main elements, while in SHRM, the fundamental elements are individuals and their knowledge.
6. Degree of control
There is strict management of employees in HRM. On the other hand, there is lesser degree of control over the employees and the workforce regulations are less stringent in SHRM
HRM vs SHRM – tabular comparison
A tabular comparison of human resource management (HRM) and strategic human resource management (SHRM) is presented below:
|Application of management principles to manage employees of an organization
|Aligning human resources with the business strategy to achieve overall organizational objectives
|Type of process
|Reactive; change follower
|Proactive; change leader
|Employee relationships and the issues they face within the organization
|Internal and external relations
|Capital and products
|Employees and their knowledge
|Degree of control
|Stringent regulations for managing employees
|Lesser degree of control over the employees
Conclusion – human resource management vs strategic human resource management
To sum up, it is evident that human resource management differs significantly from strategic human resource management. SRHM is considered as a branch that has emerged from the traditional field of HRM. Previously, strategy was considered as an operational issue, and it was believed that there was a clear distinction between the employee-centered values of HR and the broader organizational values where business strategies were formulated. However, in the past two decades, it was acknowledged that HR practices had a closer relationship with strategy and the routine business functions of the organization as whole. This led to the development of SRHM that claims that there is an evident link between HR policies and actions and strategic goals of the organization.