Strategic Human Resource Approach

Discuss the Resource Based Approach to strategic HRM as a better alternative and its managerial implications in terms of HR actions.

Introduction

The key to any successful firm or an organization is its resources. Resources are always scarce and need to be used efficiently and sustainably to maintain a competitive advantage over other firms. Human Resource is one of the most valuable resources of a firm or an organization and knowing how to manage human resources is critical for survival of organizations and firms (Armstrong, 2008). Human Resource management is crucial in efficiently allocating human resources for maximum efficiency to achieve organizational goals. Wright et al (2011) argues, “In times of plenty, firms easily justify expenditures

Armstrong (2008) defined SHRM as an approach defining how the organization’s goals would be achieved through people by means of HR strategies and integrated HR policies and practices. HR practices leads to choice of strategic plans for development of overall HR strategies and implementation of strategy while changing employees ' behaviour (Armstrong, 2008). Therefore, Strategic Human Resource Management (SHRM) is widely gaining popularity and has become a requisite for organizations that aim to sustain in the modern times. Three widespread theories/approaches of SHRM will be discussed and compared in this study; The Best Practice Approach, The Contingency Approach and the Resource Based View/Approach. These theories have incited a lot of debates to justify their positions as the better alternative to the

What constitutes the so called ‘universal’ HR practices and will they be applicable when applied to different organizations with differing internal and external orientation? If there is one ‘best practice/fit’ why do smart organizations often do dumb things? These questions remain unanswered and these theories are challenged. When challenged with cross-cultural and different organizational structures, the Best Practice and Best Fit approaches have success but limited within the context of what employees need to do and the determination needed (Hughes, 2002). Furthermore, critics argue saying “HRM cannot rely only on business strategy but must cover a range of operational performance of people now and in future” (Mishra, 2015)*. He further adds that it is difficult to model all internal factors (vertical and horizontal integration) and the requirement is an HR system that is best for its purpose not the universal (Mishra,