HR Strategy Essay Example | Topics and Well Written Essays - 750 words

HR Strategy - Essay Example In this paper, I will be analysing the internal and external fits approach to HR strategy. Strategic human resources management (SHRM) takes a strategic approach to organisational human resource management. SHRM concerns itself with the design and implementation of internal policy practices that consistently enhance the human capital’s ability to contribute to the bigger organisational goals (Wei, 2006). The strategic aims of HR revolve around cost containment and management of business risks. To achieve this, the HR function attempts to recruit highly talented, able and willing employees and managing these human resources optimally. The most critical asset for any organisation is therefore its human capital; productivity and profitability greatly depend on the motivation and desire people to perform as well as the support they get from managements. Strategically, HR strives to attain and manage two kinds of fits i.e. internal and external fit. On the perspective of external fit, the HR function’s systems, structures and management practices should be consistent with the particular firm’s stage in development. Organisational needs change with growth; having an understanding of just how the organisation is changing with growth makes it easier to understand the necessary human resource adjustments. From the approach of internal fit, the structure, systems and HRM practices need to be synergistic i.e. the HR function must put in place structures and systems that support and complement one another while contributing to organisational objectives. The HR function must therefore ensure its strategy enables the organisation to perform, attain competitive edge and ultimately make profits (Lloyd and Ilan, 1998). According to Pfeffer (1998) effective people management can tremendously enhance organisational performance both financially, socially and economically. He describes seven organisational characteristics consistent in most if not all firms