Strategy, People and Performance: Aligning business strategy, human resource management and organization performance

Strategic Human Resource Management has become synonymous with describing the functional relationship between business strategy and human resource management. Wright and McMahan define SHRM as "the pattern of planned human resource deployments and activities intended to enable an organization to achieve its goals." It follows that strategy or more accurately, strategic choice determines the most appropriate approach to HRM. Traditionally, HR is often described as strategy neutral; having little impact on organization performance. In contrast, this research suggests the alignment of strategy and HRM should more appropriately be defined as strategy essential; directly related to organization performance. Building on Miles and Snow's model of strategic typologies to include a broader view of contingent influences on strategic choice, key HRM and employee relations typologies specific to firm performance, this research found significant support for internal consistency and the covariation of HR systems and performance. There was also support for the relationship among typologies including HRM systems, employee relations strategy and business strategy.