Linkage
between Human Resource Management and the Strategic Management
Process
The
strategic choice really consists of answering questions about
competition, that is, how the firm will compete to achieve its
missions and goals. These decisions consist of addressing the issues
of where to compete, how to compete, and with what to compete.
There
are four levels of integration that exist between the HRM function
and the strategic management function: administrative linkage,
one-way linkage, two-way linkage and integrative linkage.
Administrative
Linkage
In
administrative linkage (the lowest level of integration), the HRM
function's attention is focused on day-to day activities. The HRM
executive has no time or opportunity to take a strategic outlook
toward HRM issues. The company's strategic business planning function
exists without any input from the HRM department. Thus, in this level
of integration, the HRM department is completely divorced from any
component of the strategic management process in both strategy
formulation and strategy implementation. The department simply
engages in administrative work unrelated to the company's core
business needs.
One-
Way Linkage
In
on-way linkage, the firm's strategic business planning function
develops the strategic plan and then informs the HRM function of the
plan. Many believe this level of integration constitutes strategic
HRM- that is; the role of the HRM function is to design systems
and/or programs that implement the strategic plan. Although one-way
linkage does recognize the importance of human resources in
implementing the strategic plan, it precludes the company from
considering human resources issues while formulating the strategic
plan. This level of integration often leads to strategic plans that
the company cannot successfully implement.
Two-Way
Linkage
Two-way
linkage allows for consideration of human resource issues during the
strategy formulation process. The integration occurs in three
sequential steps. First, the strategic planning team informs the HRM
function of the various strategies the company is considering. Then
HRM executives analyze the human resource implications of the various
strategies, presenting the results of this analysis to the strategic
planning team. Finally, after the strategic decision has been made,
the strategic plan is passed on to the HRM executive, who develops
programs to implement it. The strategic planning function and the HRM
function are interdependent in two-way linkage.
Integrative
Linkage
Integrative
linkage is dynamic and multifaceted, based on continuing rather than
sequential interaction. In most cases the HRM executive is an
integral member of the senior management team. Rather than an
iterative process of information exchange, companies with integrative
linkage have their HRM functions built right into the strategy
formulation and integration processes. Thus, in strategic HRM, the
HRM function is involved in both strategy formulation and strategy
implementation. The HRM executive gives strategic planners
information about the company's human resource capabilities, and
these capabilities are usually a direct function of the HRM
practices. The information about human resource capabilities helps
top managers choose the best strategy because they can consider how
well each strategic alternative would be implemented. Once the
strategic choice has been determined, the role of the HRM changes to
the development and alignment of HRM practices that will give the
company employees having the necessary skills to implement the
strategy. In addition, HRM practices must be designed to elicit
actions from employees in the company.
