Critically assess whether strategic HRM leads to 'high performance Essay

Critically assess whether strategic HRM leads to 'high performance - Essay Example Hence to survive in such a globally competitive environment organizations emphasize on attaining a competitive edge. An aligned strategy with HRM is a source to successful competitive edge businesses can achieve that focuses more on company’s resources than its costs. This is the reason that the role of HRM has been under the limelight recently as it serves as a competitive advantage to the companies it also has to deal with the challenging changes (Armstrong 2011). Unlike personnel management human resource management is linked to strategic level planning of the organization and execution of those plans in order to improve the organization’s overall performance. Human Resource Management is related to company’s vision, philosophies, practices, and policies that are influencing the management of people in a company. Strategic HR means aligning HR function with the company's strategies and then formulates and implements those strategies accordingly with the help o f HR activities such as recruiting, selecting, training and rewarding personnel. (Armstrong 2011; Reilly 2012) There are few theoretical perspectives to the Strategic Human Resources Management. First approach is the Universalist approach .This approach refers to one best way of dealing human resource to improve business performance only. It is also known as the best practice human resource management. This approach states that there is only one way people can be managed in order to improve the performance of the organization. Regardless of differences amongst different organizations, differences like size of the organization, to which sector it belongs, all organizations can be managed in same way by identifying a set of best HRM practices, committing to them despite the practical difficulties and applying and implementing them. This approach also measures organizational success in terms of financial performance. Results from past experimentations reveals that this approach leads t o high performance and it is becoming common to group or combine HR practices in order to create more coherent explanations of the HRM-performance link. (Gooderham, Cranfield, Ringdal, 2008 pg 7) Second theory is the Configurational theory that proposes that the relationship between HRM and performance involves complex interactions between bundles of HRM activities and outcomes. Once these complementary practices are bundled they produce high performance results and outputs than individual HRM practices. Firms have realized that rather than altering individual policies, their combinations are a better determinant and should be altered and worked upon to achieve better productivity. (Gooderham, Cranfield, Ringdal, 2008) There is a drawback of this approach as this approach has this assumption that HRM bundles and combinations are ideal and will give the same effective result under all circumstances. Secondly both universalistic approach and cofigurational approach are closely related approaches and it is problematic to differentiate between these two approaches at times. Groups of HR practices combined additively may clearly be universalistic but the identification of a configurational approach is sometimes problematic. (Gooderham, Cranfield, Ringdal,2008) Second, approach is the Contingency approach. Contingency approach is to create a positive impact on businesses by aligning HR