The Strategic Contributions of the Human Resource Function

Abstract

Human resource management has been a relative late comer to the arena of strategic management. Consideration of the strategic con tributions of human resource management to organisational functioning and performance requires a qualitatively different approach from that accorded traditional perspectives of personnel management. This article identifies the basic features of a strategic approach to human resource management. The strategic contributions of the human resource function to organisations are examined at both the corporate and business levels. It is argued that at both levels issues arising from the management of people are central to the formulation and implementation of strategy. Formulation is concerned primarily with the choice of a strategy that aligns the organisation's resources and competencies with the opportunities and constraints that characterise its chosen environment. The implications for the human resource function of this search for alignment are explored. Reasons are advanced as to why workforce issues are now considered more central to the formulation of strategy in many organisations. Implementa tion of a strategy is concerned with identifying and creating tight fitting configurations in organisation design and human resource policies and practices that ensure that the strategy is translated into action. A framework is developed to demonstrate how human resource policies and practices can be aligned to an organisation's strategy, structure, culture and work force characteristics. Two generic strategies, low cost production and in novating differentiation, are analysed in detail to illustrate the concept of internal fit between the personnel function and related aspects of organi sation design.