Strategic Human Resource Management

“One of the best guides on strategic human resources. The book makes HR easy to understand and touches on most important aspects such as how to motivate employees”
Kristoph De Beers, HR Director at Manpower Recruitment

“Beneficial for not only HR professionals but every employee in a company. Lessons in this book will make any professional climb up the corporate ladders faster”
Janet Sunderland, CEO at Hardie publishing






Foreword and Introduction to SHRM



HRM is seen as a development that originated from traditional Personnel Management. The terms ‘Human Resource Management’ (HRM) and ‘Human Resources’ (HR) have largely replaced the term ‘Personnel Management’ as a description of the processes involved in managing people in organizations.

The modern view of human resource management first gained prominence in 1981 with its introduction on the prestigious MBA course at Harvard Business School. These ideas spread to other countries in the 80s and 90s. The question of whether or not there is a real difference between 'Personnel Management' and HRM is rather theoretical. Is there a substantive difference in philosophy, theory or practice? What are the motives of practitioners in adopting
(or resisting) the change of label?


Some academics and HR practitioners assert that there is no difference between ‘Human Resources’ and ‘Personnel Management’ and that the two terms can be used interchangeably, with no difference in meaning. However, when a difference between Personnel Management and Human Resources is recognized, ‘Human Resources’ is described as much broader in scope than ‘Personnel Management’. In specific:

Personnel Management is defined as more administrative in nature, deals with payroll, employment law, and handles related tasks. It can include administrative tasks that are both traditional and routine. It is often described as reactive, providing a response to demands and problems and as such is typically the sole responsibility of an organization’s personnel department.

HRM, on the other hand, means a more holistic approach to management of people - that is, employing people, developing their skills, utilizing, maintaining and compensating their services in line with the job and organizational requirements. There is greater emphasis on strategic issues and on the way in which the human resource contributes to the achievement of
corporate objectives.

Human Resource Management is responsible for managing a workforce as one of the primary resources that contributes to the success of an organization. HRM is therefore proactive, as it involves the continuous development of functions and policies for the purposes of improving a company’s workforce. Unlike Personnel departments all managers are often involved, and a main goal is to have line managers with the skills necessary to handle personnel-related tasks.

A key claim of Strategic Human Resource Management (SHRM) is that it makes a significant contribution to a firm’s competitive advantage, whether it is through a value-added approach, through best-practice HR policies and practices, or as a cost reduction approach. An understanding of the business context and particularly of the ‘strategy making’ process therefore, is considered significant to developing an understanding of strategic approach to human resources.

Strategy is considered as a dynamic, creative and, evolving process which is not always a rational, classical activity. When trying to define the word ‘strategy’ we may use words such as: plan, vision, mission, aims, objectives, targets, stakeholders, etc. Intended strategies may not be always realised for many reasons, including unforeseen changes in the external/internal environment such as: interest rises/falls, stock market rises/falls, product failures or changes in behaviour of direct competitors.