However you define the activities of management, and whatever the organisational processes are, an essential part of the process of management is that proper attention be given to the Human Resource function. The human element provides a major part in the overall success of the organisation. Therefore there must be an effective human resource function. In the past, most organisations viewed Human Resource Management (HRM) as an element function, that is an activity that is supportive of the task functions and does not normally have any accountability for the performance of a specific end task. Because of the emphasis on analysis and precision there is a tendency for strategists to concentrate on economic data and ignore the way in which human elements and values can influence the implementation of a strategy. 'Economic analysis of strategy fails to recognise the complex role which people play in the evolution of strategy - strategy is also a product of what people want an organisation to do or what they feel the organisation should be like.?(1).
Understanding the strategic potential of HRM is a relatively recent phenomenon. Strategic HRM attempts to bring HRM to the boardroom. It requires personnel policies and practices to be integrated so that they make a coherent whole, and also that this whole is integrated with the business or organisational strategy.
Strategic HRM has evolved through three main stages. Up until the mid 1960?s HRM comprised mainly a file maintenance stage with most emphasis on selection, recruitment, screening and orientation of the new employee. They also looked after employee-related data and organised the Christmas party.
The second stage, government accountability developed with the arrival of the Civil Rights Act and evolved with subsequent laws. To avoid costly legal battles, the HRM function gained in stature and importance.
The third stage in HRM development which began in the late 1970?s and early 1980?s was the realisation that effective HRM could give an organisation competitive advantage. Within this stage HRM is viewed as important for both strategy formulation and implementation. For example 3M?s noted scientists enable the company to pursue a differentiation strategy based on innovative products. At the competitive stage, then, human resources are considered explicitly in conjunction with
strategic management, particularly through the mechanism of human resource planning (2).
Human Resource Strategies currently focus around quality, customer orientation, flexibility, commitment, involvement, leadership, team working and continuous learning
(3). These themes of integration and a central philosophy of people management have been drawn out by a number of writers , for example Handy et al (1989) and Hendry and Pettigrew (1986). As early as 1983 Baird et al went one step beyond this and argued that there can be no organisational strategy without the inclusion of human resources. Firms...