Over the last quarter century, Human Resource (HRM) management has superseded the earlier and largely paternalistic, Personnel (PM) management. Much debate has centred on whether HR is merely a progression of the earlier PM with its concentration of recruitment, training, pay, and welfare at work. With the advent of employment and health & safety legislation in the 1970’s and 1980’s, much of the justification for PM was now enshrined in law. HRM focused more on business needs with a spotlight on the contribution of people resources to competitiveness and general improvement of business performance.
HRM was quickly elevated to a more senior management status given its need to be closely aligned to the overall business strategy if it were to contribute directly to the overall success and profitability of the organisation. Additionally, HRM sought to align the employees’ interests closely with those of their employer. With its emanation from the USA, HRM has to an extent diluted the role of trade unions as the insurers of employee interests. This definition of HRM, championed by Guest, was characterised by a “hard-soft” continuum that distinguished between a resource-based benign management perspective and a more rigid perspective where HR policy is closely aligned to business strategy and budgetary goals of the business. Similarly, a “tight-loose” scale was used to characterise the progression from the older reactive PM practice to the newer proactive people management approach underpinned by a strong theoretical base.
CIPD, the professional body for over 5,000 HR people in Ireland, define HR strategy as,
“an approach to the management of human resources that provides a strategic framework to support long-term business goals and outcomes. The approach is concerned with longer-term people issues and macro-concerns about structure, quality, culture, values, commitment and matching resources to future need.”
HRM strategy unlike earlier PM is clearly focused on competitiveness and business needs. Indeed, some writers describe its importance in terms of human resource assets being the primary source of competitive advantage and value creation that cannot be easily imitated by competitors.
While business strategy is concerned with policy decisions affecting the whole organisation in the long-term, P. Gunnigal et al describe HR strategy as “incorporating an organisation’s basic philosophy, overall approach and long-term objectives in managing human resources.” In turn, this forms the basis for the subsequent development of more explicit HR policies and procedures.
However, as the CIPD highlights, the HR strategy and the organisation’s overall business strategy must be mutually informative, i.e. how people are lead, motivated and deployed, and the availability of knowledge and skills, will help shape the business strategy. While the HR strategy must be forward-looking, yet it must balance the needs of today’s operating climate with longer...