Human resource management: an analysis of strategic approach

AuthorYusuf Akan; Cem Isik

Yusuf Akan. Department of Economics, Ataturk University Erzurum, Turkey; (email:

Cem Isik. Institute of Social Science, Ataturk University Erzurum, Turkey, (email:

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1. Introduction

People are an organization’s most important asset that is very strategic instrument for a company’s market competition. We now define 'human advantage' as being competitive strategy and systems-based view of the value of human resource which makes towards adding value to customers, towards managing cost, through accelerating operational and management processes, and in challenging the status quo through innovation and change. For about the past decade or so, the mantra of Human Resource has been “be a strategic business partner.”

The importance of involving HR in development, planning, and implementation of competency-based strategies has been well-communicated. (Beatty & Schneier 1997; Ulrich 1997).

Strategic HRM, a global human capital management consultancy, partners with organizational leaders in human resource management transformation, leadership development, organizational development, and change management. The mission of HRM is to enable organizations assess, address, and alleviate human capital related conditions inhibiting organizational growth, high performance, and achieving competitive advantage in their markets. Wright and McMahan (1992) noted that strategic HRM is primarily focused on ‘‘the pattern of planned HR deployments and activities’’ that are intended to help organizations to achieve their objectives.

Strategic HRM represents a new generation of organizational consulting firm. A consultancy composed of seasoned consultant-practioners recognized as thought leaders and skilled practioners. They are organizational change agents respected for delivering data-driven feedback and action recommendations.

There is a rapidly growing literature on the interaction between strategic HRM apply and companies’s performance, with many analysts drawing policy conclusions on the basis of HRM application that involve only a HRM and an economic variable.

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2. Literature Review

Strategic human resource management research has mostly gravitated towards financial measures of performance in order to assess the effectiveness of human resource management initiatives. At a basic level, strategic HRM research has tended to gravitate toward measures of financial- or market-based organizational performance as its dependent variable (Becker & Huselid, 1998; Rogers & Wright, 1998).

While traditional HRM research has generally focused on individual level outcomes such as job performance (e.g. Wright & Boswell, 2002), job satisfaction (e.g. Seibert, Silver, & Randolph, 2004), and motivation (e.g. Bloom, 1999), strategic HRM research has focused on unit or firm level outcomes related to labor productivity (Huselid, 1995; Koch & McGrath, 1996; MacDuffie, 1995)scrap rate (Arthur, 1994), sales growth (Batt, 2002; Guthrie, 2001), return on assets (ROA) and return on investment (ROI) (Delery & Doty, 1996), and market-based performance (Huselid, 1995). These aggregate level outcomes can further be differentiated by department level, plant (site) level, business unit level, and firm (corporate) level performance measures (Rogers & Wright, 1998; Colakoglu, Lepak, Hong 2006).

3. Strategic HRM vs HRM

Basic stages of HRM are

  1. Design and implement orientation session(s) for all employees.

  2. Develop and disseminate a code of ethics.

  3. Provide detailed job descriptions to professional staff.

  4. Establish a staffing plan.

  5. Diversify skills.

  6. Utilize a mix of mechanisms to get the staff you need.

  7. Hire some entry level professionals.

  8. Emphasize training.

  9. Simplify the organizational structure.

  10. Get internal procedures and policies in place early.

Fig. 1. Theoretical model linking training to organizational-level outcomes


(Source: Tharenou, Saks and Moore, (2007)).

Guest’s model of human resource management is very useful in that it defines the modern lexicon of human resource management. Gone are the references to the functional areas of personnel management described earlier. Human resource management clearly encompasses these older regulatory hangovers, but goes much further in embracing the management of change, job design, socialization and appraisal as the key levers to achieve organizational success. Guest’s model also sets the agenda for what human resource management is trying to achieve – integration with the business strategy of the organization, employee commitment, flexibility and quality. These are still very much the aims of human resource management. Taking commitment as a major element of human resource management Storey (1995) came up with one of the best original definitions of human resource management: Human resource management is a distinctivePage 320 approach to employment management which seeks to achieve competitive advantage through the strategic deployment of a highly committed and capable workforce using an array of cultural, structural and personnel techniques.

Fig. 2. Guest’s normative model of human resource management


(Source: adapted from Guest (1987))

Strategic human resource management (SHRM) has received a great...

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