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Strategic Management in HR

Strategic HR management involves formulating and executing Human Resource policies and practices that would induce the employee competency and behaviour that is needed by the company to achieve its desired goals or strategic aims. Management formulates a strategic plan and measurable strategic goals or aims. These plans and aims employ certain workforce requirements, in terms of the employees skills and behaviours required to achieve the firms strategic aims. Given these requirements, human resource management formulates HR strategies to produce the desired workforce skills, competencies and behaviours.

Management in organisations and businesses use several tools to translate the companies broad strategic goals into human resource management policies and activities. Three important tools include the strategy map, the HR scorecard and the digital dashboard.

• Strategy Map

The strategy map provides an overview of how each department’s performance contributes to achieving the companies overall strategic goals. It helps the manager in the organisation to understand the role his or her department plays in helping to execute the company’s strategic plan.

• The HR Scorecard

Many employers quantify and computerise the strategy map’s activities and the HR scorecard helps them to do so. Contrary to its name, the HR scorecard is not a scorecard, instead it refers to a process for assigning financial and non financial goals or metrics to the human resource management related chain of activities required for achieving the companies strategic aims. In fact, managers use special scorecard software to facilitate this and this computerised scorecard software helps the organisation quantify relationships between the HR activities, the resulting employee behaviours as well as the resulting firm wide strategic outcomes and performances.

• Digital Dashboards

It presents the organisation’s management with graphs and charts, showing a computerised picture on the company/ organisation’s overall metrics from the HR scorecard process. It gives the management time to take corrective actions.

Having mentioned HR metrics, it is important that one understand what is meant by it. HR metrics involves all measurable activities of Human Resource management. Metrics can be of many types that are used by management of organisations and companies such as HR-to-employee ratio etc.

Measuring what is being is a process that includes steps like translating its strategic plan into workforce requirements, in terms of measurable workforce competencies and behaviours. Given the workforce requirements, supportive HR strategies are then formulated along with practices with the intention of producing these competencies. Then the measures are picked by the management by which the performance is gauged on whether the new policies are producing the required employee competencies or not.

Benchmarking in Action

Measuring how one is doing (for instance in terms of employee turnover, or employee productivity) is rarely useful by itself and usually for a thorough analysis, organisations usually want to know how they are doing in relation to something.That something may be historical company figures such as accidents rate, or benchmarking could be resorted to.. Benchmarking essentially means comparing their own practices with that of high-performing companies/ organisations in order to understand what they do that makes them better.

Strategic Human Resource Management provides a customised benchmarking service that enables employers to compare their own HR-related metric results with those of other companies by providing benchmark figures for many industries. These include construction and mining, educational services, finance , manufacturing and others. The employer can also request the comparable (benchmark) figures not just by industry, but broken down by employer size, company revenue, and geographic region.

Strategy and Strategy-Based Metrics

Benchmarking (comparing one firm’s HR metrics with others) only provides one way to look at their own company’s human resource management system is performing. It may not show the extent to which their firm’s HR practices are helping their company to achieve its strategic goals and only might show how their human resource management system’s performance compares to the competition.

Data mining is actually an asset that can be used for such efforts to sift through huge amounts of employee data in order to identify correlations that employers then use to improve their employee selection and other practices.

Data mining is the set of activities used to find new, hidden, or unexpected patterns in

data. Data mining systems use tools like statistical analysis to sift through data looking for relationships. Department stores often use data mining too.

Thanks to data mining, the management can discover patterns that can be used to make predictions and identify bottlenecks ahead of time. Questions such as which products is the customer most likely to buy or which customers make most returns are most likely to be answered.

Now that it is known what strategic management is along with its application in HR, it should help paint a clearer picture of how important it is in today’s world to combine this strategic management with the appropriate technology and tools in order to maintain an edge over the competition.


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