HRM and Its Role in Business Strategy

Home Articles HRM and Its Role in Business Strategy

Every organization has some objectives which it wants to achieve in a period. The companies then lay plans so that they can achieve those objectives. The working methods which translate into meeting the set targets to compete and excel in the industry area business strategy. Generating revenues and optimizing the financial outcomes is also a goal which organizations long for. When the firms have a clear plan, and they implement it accurately then they grow in their business and also acquire a competitive position in their field. A well-executed business strategy leads the organizations to desirable and robust performance in the financial aspects as well. When a company does not achieve the set targets, then they require changing the course of doing work.

To achieve any goal, organizations need people and to manage the functions related to people working in the firm they need Human Resource Management. HRM is the process which helps the businesses to bring people together so that they can work interdependently and achieve the strategic targets of the companies. These days the companies have exact and highly functional HRM process. The reason behind this is the role it plays in achieving the organizational objectives. The HR strategy is the heart of all business strategy because it entails how the talents, knowledge and skills of the human capital are used so that it transfers in the desired output.

If a business wants to sustain itself for longer times, then it is mandatory that it pays close attention to its people and their working in the same direction to accomplish a shared goal. HR manager must provide a work environment where the employers like to work. HR practices are concerned with the creating a balance between the individual goals of the employees and the overall objectives of the firm. Earlier the HR managers used to be considered as the recruiters and payroll executives, but the scenario has changed a lot now, and hence the HR managers have a say in the strategic decisions also. In successful organizations, HRM has got new roles and responsibilities and orientations. To know about them, you can read the article “New Orientations of HRM for Enhanced Organizational Productivity”.


The HRM is directly linked to all the process which are carried out in the particular department or the entire company itself. The HRM practices have a significant role to play in the strategic decision and here are the processes where it can impact the functioning:

  • The recruitment process has become very selective and rigorous. The aptitude tests are conducted by the companies now so that they can know whether the applicant has the desired in-depth knowledge about his/her field.
  • Now companies are also paying attention to keep written record of all the duties which are mandatory to perform a task. The KRAs are defined in such a way that they automatically lead the process outcome to achieve the strategic goal finally.
  • The training and development have also become an active and regular practice in many organizations. The training methods are also highly exclusive and designed precisely according to the targets which the organization has set for itself. The employees are trained in every required skill and competency so that they can complete the tasks and projects by using the new methods and techniques.
  • The companies now pay their employees according to the level of their performance. This is called a performance-based compensation system.
  • There are many organizations where the employees have a share in the profit. This is a type of reward system which makes the employees motivated to give their best because they share the ownership of the business no matter how small the share may be.
  • These days the HRM has to tailor-made the benefit plans after understanding the individual needs of motivation.
  • The HRM has become the catalyst in bringing the required change in the business process and culture so that the firm can keep the pace with changing trends of the world.
  • Managing performance is also a significant role which HRM has to play to enhance the efficiency of operations. Identifying the discrepancies in the performance of the workers and providing them with the training to fill those gaps and perform with all their efforts is also a responsibility of the Human Resource management system.
  • HRM makes it sure that every decision whether big or mall should be taken to achieve the big goal of the company. All the processes should ultimately lead the firm to the accomplishments of its objectives.

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