Strategic Human Resource Management (SHRM) is a proactive approach to an organisation's workforce that is consistent with the organisation's long-term strategic objectives.

Traditional HRM focuses on transactional aspects of human resource management, such as payroll and reporting forms, which subsequently inform management choices about the HR process. SHRM differs from that approach in that it integrates HR services such as recruitment, training, and management with the broader goals of the company. Employees are viewed as strategic assets for the firm under SHRM, with a direct impact on how the organisation achieves its business objectives, such as market expansion, competitive leadership, or innovation into new market niches. This discussion will highlight the significance of SHRM by expanding on its various types, roles, and instances.

Types of Strategic Human Resource Management 

SHRM can be classified according to approaches and models, with typologies differing across scholars. The most common approaches are as follows:

1. High-performance Work Systems (HPWS): Focus on employee involvement, development of their skills, and motivation to increase productivity. It highlights practices of pay for performance and extensive skills training. This approach is commonly used to gain operational excellence.
   
   
2. High Commitment Management: Focus on employee loyalty and engagement through job security, career development, and good organisational fit. It lays emphasis on long-term retention of employees. It helps companies to build a dedicated workforce. 
   
   
3. High Involvement Management: It encourages employees to participate in decision-making processes that impact their work. It also highlights the importance of team-based structures, promotes open communication, and supports employee empowerment to foster innovation and accountability.
   
   
4. Universalistic Approach: This approach assumes that the use of certain "best practices", such as selective hiring, training, and performance appraisals, is linked to improving organisational performance. This is widely adopted in industries like retail and hospitality. 
   
   
5. Contingency Approach: It focuses on matching HR strategies to specific contexts of the organisation, such as the industry or business level or status of market conditions. It emphasises flexibility and responsiveness with HR practices to achieve the ever-changing nature and demands of the organisation.
   
   
6. Configurational Approach: This approach involves several HR practices into an internally consistent system that aligns with the organisation's strategies. It includes part of a cost leadership strategy, differentiation, and focus strategy. For example, to attract talented individuals, a brand can pursue differentiation by integrating exclusive training programmes, providing high compensation, and creating an impressive work culture.

Functions of Strategic Human Resource Management 

Strategic human resource management includes a number of functions that seek to connect human resource outcomes to strategic outcomes. These functions are interconnected and operate as a whole to achieve goals.

1. Strategic workforce management:  SHRM includes an analysis of future staffing requirements to gain desired business outcomes. This further includes anticipating gaps in workforce skills, planning recruitment issues, and preparing for technological or market shifts. For example, if a company intends to expand globally, it may plan to hire multilingual employees, or it can provide cross-cultural training to existing employees.
   
   
2. Talent Acquisition and Retention: Hiring talent that fits with their strategic objectives is crucial for any company. SHRM stresses hiring for cultural fit and potential, and not just for skills. They may also take steps to secure the employee's long-term retention by offering a competitive salary, opportunities for personal growth and development, and work-life balance. For example, offering stocks is a common retention strategy in startups.
   
   
3. Compensation and Benefits: SHRM creates a compensation system to motivate employee behaviour and link it with corporate aims. Organisations that value innovation, for example, may provide incentives for patent promotion and creative contributions. Organisations that prioritise cost-cutting measures, on the other hand, may relate staff incentives to efficiencies.
   
   
4. Change Management: SHRM supports organisational change management, such as a merger, restructuring, or technology adaptation. It prepares employees through communication, training, and support. For example, during a digital transformation process, HR may help facilitate a department training programme for all employees to improve their digital literacy.
   
   
5. Employee Engagement and Culture: Creating a culture of work that has the potential to support strategic goals is an important SHRM function. A part of this function is anchoring the right values into workplace culture, such as innovation, collaboration, and sustainability. HR practices to engage employees, such as recognition programmes or wellness benefits, serve to improve employee morale and productivity in today's workplace.
   
   
6. HR Analytics and Metrics:  Data-based decision-making has become an important part of SHRM. HR analytics effectively track metrics such as employee turnover, employee engagement, and training ROI (Return on Investment) to assess effectiveness. These metrics provide insight and analysis while assisting in improving HR strategies that directly support business objectives.

Examples of Strategic Human Resource Management 

SHRM is applied differently among organisations, reflecting its distinct strategies. Here are some examples illustrating its applications.

1. Google's People Analytics: Google uses data-driven HR techniques to find the finest personnel and enhance employee performance. Its "Project Oxygen" identifies critical management behaviours that can strengthen Google's management capabilities while connecting HR operations with Google's innovation strategy.
   
   
2. Southwest Airlines Employee-Centric Culture: Southwest employs SHRM practices to support its low-cost, customer-focused strategy, including selective recruiting methods that are consistent with Southwest's culture. The airline provides extensive training and a fun, team-oriented work culture to enhance employee and customer satisfaction.
   
   
3. Unilever Sustainable Talent Strategy: Unilever integrates sustainability into its people practices through SHRM practices. They provide training programmes and rewards to employees who contribute towards sustainability.
   
   
4. Amazon's performance management: To sustain performance levels and evaluate employees by Amazon's customer-obsessed and inventive culture, the company employs rigorous performance reviews and demands leadership principles, which aid in reaching greatness.
   
   
5. A Local Tech Startup: A tech startup can use the SHRM approach by adapting flexible work arrangements, defining performance deadlines, or providing equity-based compensation to attract innovative software developers.

Conclusion

SHRM is a transformative approach that aligns HR practices with organisational goals to achieve success. SHRM ensures that the workforce becomes a strategic asset to the organisation by utilising tactics such as high performance, high commitment, and contingency planning. Its functions create a cohesive system to support business objectives. In today's competitive business world, SHRM is not just an HR function but a critical driver of long-term success.