The field of managing people in organisations has changed over the past 25 years.

These changes represent two main transformations (Schuler & Jackson 2007). The role of human resource (HR) in strategic management 1. The first transformation is from personnel management to human resource management. It implies the recognition that employees who bring the traits into the organisation - representing the human resources - are the most valued assets in organisations. Their individually and collectively performance have an impact on achieving the objectives of the organisation (Armstrong & Baron 2002). Furthermore they can be managed systematically through coordination of personnel policies and practices. Thus the coordination of HR practices and the alignment to one another may lead to higher company performance and be sources of sustained competitive advantage. The resource-based view (RBV) of strategy emphasises the value of the complex connections between the companies human resources and other resources e.g. financial, legal, informational etc. A main part of any organisations strengths and weaknesses derives from the talent of the people employed and the quality of their working relationships (Boxall & Purcell 2011). In other words, if appropriate HR policies and processes are developed and implemented effectively, then HR will have a significant impact on organisations performance. But two key questions are to pose regarding this resourced based view: what is it that can be valuable about HR and how might a firm develop and defend these sources of value First the most value resources are to identify and to protect. HRM delivers added value through the strategic development of the organizations rare, hard to imitate and hard to substitute human resources (Armstrong 2009). For example an individual can be valuable because of its tacit knowledge which is non-verbalized. It cannot be isolated from its context of origin to be applied or used while explicit knowledge is specified verbally or written. Furthermore individual human capital takes place in a social context in form of team-based learning, high level of trust between management and staff as well as between co-employees (Boxall & Purcell 2011) Guest (1997) illustrates the relationship between HRM and performance. It suggests that the main strategic aim of any business is higher financial outcomes. HRM practices like selection, training, rewards and job design may improve the outcomes of commitment, quality, motivation, involvement, etc. of employees for better financial performance. However this outcomes are still rather messy ill-defined concepts (Bratton & Gold 2007) and mutual interference are not considered.

Alignment of strategies for managing people with business strategy

2. The second transformation is based on the acknowledgment that human resource policies and practices have not only to be coordinated with each other; in fact they require to be aligned with the needs and aims of the organization. Assumed that these needs and aims are expressed in the strategies of the firm, this transformation of human resource management is known as strategic human resource management (SHRM) (Schuler & Jackson 2007). Therefore HRM can be more effective and efficient if the organisational human resources are managed with HR policies, programs and practices which deliver the right quantity of people with the appropriate skills, abilities, knowledge and experience as well as the necessary level of motivation to the organization (Bratton & Gold 2007). In addition the processes and people can be managed in order to support the business strategy and create an integrated approach to manage the different HR functions. Therefore the enhancement is on horizontal integration within the various human resource interventions and on vertical alignment, namely between the business strategy and the human resource strategy (Bratton et al 1999). For the alignment of HR with the strategy, the first requirement is an appropriate Organisation, so that it can play a role in the strategic planning of the company (Righeimer & Maverick Energy). There is where HR professionals and line managers play an important role. Line manager action is often responsible for the difference between promised HR policies and their implementation. HR specialists have to focus on strategic - a longer view of HR resources is needed- rather than operational issues and on strengthening the relationship between the employee and his manager in order to achieve a more positive management approach to employee performance (Boxall & Purcell 2011). As mentioned above HR needs the right people to realise a strategic initiative. This can be achieved trough the HR functions, namely planning, recruitment and selection, performance management and appraisal, HR development and reward management (Bratton & Gold 2007). Numerous routine administrative tasks can be automatised or out-sourced so that HR employees can focus on more strategic applications. Furthermore vertical alignment as well as efficiency and sustainable progress can be achieved by admitting the HR manager an active role in the strategic decision making and policy definition. The measurement from a cost/benefit analysis will support the identification as a valuable contributor (Righeimer &Maverick Energy). However Purcell and Hutchinson (2007) identify a gap between what is officially required in the HR policy and what line managers in fact perform due to of lack of skills and interest on taking more day-to-day HR activities (Torrington et al 2011).

Bibliography

Armstrong, M (2009): Armstrongs handbook of human resource management practice, 11th Edition, Kogan Page Publishers. Armstrong, M. and Baron, A. (2002): Strategic HRM: The key to improved business performance, CIPD, London. Boxall P. and Purcell J. (2011): Strategy and human resource management, Third Edition, Palgrave Macmillan, Hampshire. Bratton, J and Gold, J. (2007): Human resource management, Theory and practice, 4th Edition, London Macmillan Press. Gratton, L. et al. (1999): Strategic human resource management: Corporate rhetoric and human reality. Oxford, UK: Oxford University Press. Righeimer, J.P. and Maverick Energy: Aligning Human Resources & Strategic Plans, Maverick Energy. Nemli C., E. (2010): The impact of Strategic human resource management on organizational performance, Journal of Naval Science and Engineering 2010, Vol. 6, No.2, pp. 100-116. Schuler, Randall S., Jackson, Susan E., (2007): Strategic human resource management, Second Edition, Blackwell Publishing, USA