Human resource management (HRM) is a crucial aspect of any organization. The effective management of human resources can lead to improved organizational performance, enhanced employee engagement, and increased productivity. Human resource management is a complex field, and one of the key components is the development and implementation of strategies. In this article, we will discuss the levels of strategy in HR management.
What is Strategy?
Before we delve into the levels of strategy in HR management, it is essential to define what strategy is. Strategy is a long-term plan of action designed to achieve a specific goal or set of objectives. In the context of HRM, strategy refers to the development and implementation of plans and policies to manage the organization’s workforce effectively.
Levels of Strategy in HR Management
There are three levels of strategy in HR management: corporate, business, and functional.
- Corporate Strategy
Corporate strategy is the highest level of strategy in an organization. It is concerned with the overall direction and purpose of the organization. The corporate strategy defines the organization’s mission, vision, and values and sets the tone for the rest of the strategies. In HR management, the corporate strategy will define the overall approach to managing the workforce. It will define the culture of the organization, the management style, and the overall approach to human resource development.
The corporate strategy will have a significant impact on HR policies and practices. For example, if the organization’s corporate strategy is focused on innovation, the HR policies may be designed to attract and retain highly skilled employees who are innovative and creative.
- Business Strategy
Business strategy is the level of strategy concerned with the development and implementation of plans to achieve the organization’s business objectives. The business strategy will define how the organization plans to compete in its industry and what it needs to do to achieve its goals. In HR management, the business strategy will determine how the workforce will be managed to support the business objectives.
For example, if the organization’s business strategy is to expand into new markets, the HR policies may be designed to attract and retain employees with international experience and language skills. The business strategy will also determine the organizational structure and the roles and responsibilities of the employees.
- Functional Strategy
Functional strategy is the level of strategy concerned with the development and implementation of plans to achieve specific functional objectives. In HR management, the functional strategy will define the specific HR objectives and the actions needed to achieve them. The functional strategy will focus on specific HR functions such as recruitment, training and development, compensation and benefits, and employee relations.
For example, if the HR objective is to improve employee engagement, the functional strategy may include initiatives such as employee surveys, training programs, and recognition programs. The functional strategy will also define the key performance indicators (KPIs) that will be used to measure the success of the HR function.
The Integration of Strategies
The three levels of strategy in HR management are interrelated and interdependent. The corporate strategy sets the overall direction for the organization, and the business strategy is designed to achieve the corporate objectives. The functional strategy is then developed to support the business objectives and achieve the HR goals.
The integration of strategies is essential for the effective management of human resources. For example, if the organization’s corporate strategy is focused on innovation, the business strategy may be to develop new products and services. The functional strategy would then be to recruit and retain employees with the necessary skills and experience to support the development of new products and services.
The effective management of human resources is essential for organizational success. The development and implementation of strategies are a critical aspect of HR management. The three levels of strategy in HRM, corporate, business, and functional, are interdependent and interrelated. The corporate strategy sets the overall direction for the organization, the business strategy is designed to achieve the corporate objectives, and the functional strategy
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