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Strategic HRM's Impact on Firm Performance

This paper examines how strategic human resource management can influence firm performance through various perspectives. Rapid changes in the environment, competition, customer demands, and globalization require firms to gain sustained competitive advantages through their human capital. Effective strategic human resource management systematically organizes individual HR measures to directly influence employee attitudes and behaviors in a way that helps the business achieve its competitive strategy and operational goals. The paper develops a framework explaining the relationship between strategic HR management, competitive strategies, and firm performance.

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7 views1 page

Strategic HRM's Impact on Firm Performance

This paper examines how strategic human resource management can influence firm performance through various perspectives. Rapid changes in the environment, competition, customer demands, and globalization require firms to gain sustained competitive advantages through their human capital. Effective strategic human resource management systematically organizes individual HR measures to directly influence employee attitudes and behaviors in a way that helps the business achieve its competitive strategy and operational goals. The paper develops a framework explaining the relationship between strategic HR management, competitive strategies, and firm performance.

Uploaded by

kirija
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

This paper examines the extent to which strategic human resource management influences firm

performance from various critical perspectives. Rapid environmental changes, competition to provide
innovative products and services, changing customer and investor demands and globalization have
become the standard backdrop for firms. Sustained competitive advantage could be generated from a
firms human capital by designing strategic human resource management to diagnose a firms strategic
needs which is required to implement a competitive strategy and achieve operational goals. Effective
human resource management strategy systematically organizes all individual human resource
management measures to directly influence employee attitude and behavior in a way that leads business
to achieve its competitive strategy. Finally, this article develops a conceptual framework that explains the
relationship between strategic human resource management, competitive strategies and firm
performance. Key Words: Strategic human resource management, Firm performance, Competitive
strategy
1. Introduction
Organizations today have increasingly become aware of the importance of strategic human resource
management (SHRM).This awareness in a system is a critical dimension in the performance of
organizations (Rees, 2006). The real life experiences substantiate the assumption that no matter how
sophisticated and modern the business activities of the organization may become, it will be extremely
difficult to sustain its growth and effectiveness unless there are strategies that complement its
operations. Business competitiveness is a recurring theme examined by academicians, consultants and
practitioners. The frequent and uncertain changes, greater competition between firms, the need for
continuous innovations, quality enhancement and cost reduction force companies to face the challenge
of improving their competitiveness and consequently their performance. This realization has propelled
SHRM as a major field of study and the renewed interest has facilitated the development of newer
approaches in managing organizations and human resource (HR), (Wright, 2005).

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