Human resource functions must be more strategic

The human resource manager’s job has grown broader and more strategic over time. In the earliest forms, “personal” first took over hiring and firing from supervisors, ran the payroll department, and administered benefit plans. As technology in areas like testing and interviewing began to emerge, the personnel; department began to play an expanded role in employee selection, training, and promotion. The emergence of union legislation in the 1930s added “protecting the firm in its interaction with unions” to the personnel department’s responsibilities. Then new equal, employment legislation created the potential for discrimination related law suits and penalties, personnel’s advice and oversight became even more indispensable. Today, globalization, technological, and nature of work trends mean that human resource managers have taken on several new responsibilities. Employers now expect their human resource functions to be more strategic.

The HRM function in India has evolved over time. While the traditional welfare and labor relations focused function existed, after independence in 1947, the trade union activity intensified and labor laws were introduced. Initially, the personnel departments were involved more in welfare activities, labor compliance, and maintaining industrial peace. Later, the focus in many parts of India was on confronting the aggressive unions. The focus on human resource development (HRD) emerged during 1985–1995, after Indian Institute of Management Ahmedabad professors popularized the HRD concept in the Indian industry. With the development of the knowledge industry and the resulting high demand for people, the HR function started to take a strategic focus.

Several years ago, Wisconsin based Signicast Corp.’s president, Terry Lutz, and his board decided to build a new, computerized plant. Signicast produces metal parts from a casting process. The basic process is ancient, although Signicast has improved it dramatically. To compete, the firm needed the new, automated plant. Mr Lutz and his team understood that “in the real world”, new automation technology requires a new kind of employee. They knew the computerized plant was useless without employees who could work in teams, manager their own work and run the plant’s computerized equipment. Lutz and his management team relied on Signicast’s human resource management unit to select, train, and organize the tech-friendly people the new plant required. By formulating and executing the hiring and other personnel practices Signicast needed to make a success, the human resources team was supporting Signicast’s new strategy. It was thus engaging in strategic human resource management.

What is Strategic planning?

Strategic plan: A strategic plan is the company’s plan for how it will match its internal strengths and weaknesses with external opportunities and threats in order to maintain a competitive advantage.

Strategy: The Company’s long term plan for how it will balance its internal strengths and weaknesses with its external opportunities and threats to maintain a competitive advantage

Strategic human resource management: Strategic HRM means formulating and executing human resources policies and practices that produce the employee competencies and behaviors the company needs to achieve its strategic aims.

Strategic human resource management is part of strategic planning. A strategic plan is company’s plan for how it will match its internal strengths and weaknesses with external opportunities and threats in order to maintain a competitive advantage. The essence of strategic planning is to ask. Where are we now as a business, where do we want to be, and how should we get there? The manager then formulates specific (human resources and other) strategies to take the company from where it is now to where he or she wants it to be. A strategy is a course of action. Signicast’s strategies included closing the old plant and replacing it with a new, highly automated one.