Many organisations are becoming progressively aware of the significance of strategic human resource management (SHRM). The recognition of SHRM is a critical factor in the performance of organisations (Edwards and Rees, 2006). Furthermore, Wright (2005) argues that this awareness has driven SHRM as a key field of study, which in turn has accelerated the development of newer tactics in the management of organisations and human resources (HR).
Armstrong (2009), states that SHRM highlights the need for the HR strategies to be devised within the context of the objectives of the organisation and to be able to adapt to the ever-changing nature of an organisation’s peripheral environment. This approach involves understanding and adaptation by HR practitioners to guarantee an appropriate relationship between HR strategies and plans. Therefore, the general themes of SHRM are a combination of the organisational goals, the functions of HRM, and how responsive practitioners are to external factors.
Although there is no fixed definition of SHRM, it can be summed up as being concerned with the decision aspect of human resources, as well as the conformation and performance of human resources, and the efficiency of these decisions given various business strategies and competitive situations where their link with strategic management is substantial.
Within the domain of SHRM, there are several different theories relating to the types of practices used in different organisations. Firstly, the concept of “hard” and “soft” approaches to HRM are used regularly when analysing different organisations’ strategies. Beardwell and Claydon (2007) explain that the “hard” approach is associated with cost minimisation. For example, it recognises minimal training, low wages, close supervision, and low levels of production such as downsizing. However, Legge (2005) identifies that the “hard” approach may well contain some components of the “soft” approach and vice versa. This means that most organisations will contain a balance of both “hard” and “soft” approaches, rather than just one or the other.
Linking to “hard” and “soft” HRM is another key theory in the domain of SHRM, rhetoric versus reality. Legge (2005) introduced the concept of rhetoric versus reality. She suggested that the rhetoric behind the SHRM of many organisations is usually predominantly “soft” HRM, whereas in reality, it is a mixture of “hard” and “soft” HRM. If the rhetoric used by an organisation matches the reality, then SHRM should increase business performance (Wright, 2005).
According to Armstrong and Baron (2004), the abilities, skills and experiences of individuals, united with their ability to organise these in the interests of the organisation, are acknowledged as making a substantial influence on an organisation’s success, as well as establishing a key source of competitive advantage. The key practices of SHRM, for example, training and development, employee laws and relations, resourcing, and...