Globalization has made the business environment dynamic and competitive, and so management has to rethink how human resources need to be organized and managed. Human resource functions therefore have to play a more strategic role. The use of strategic roles in human resource management began and increased in the early 1960’s. From the late 1960s to the early 1990s, there was a concentric trend in human resource management and business strategy. In the twenty-first century such concentration has become inevitable and some new words have been added to it;
Such as- knowledge, networks, knowledge based organizations and virtual organizations etc. And when strategic analysis is combined with human resource management, it emphasizes how to contribute to the effectiveness of the organization.
Focuses on the relationship between strategic human resource management, organization’s human resource management and strategic management. It goes beyond the functional role of human resource management and emphasizes that the strategic aspects of human resource management of the organization work with professionalism. Strategic human resource management deals with performance and institutional efficiency, and more. As such, it changes the structure and culture of the organization, balances the organization’s current and future assets, develops capabilities, builds job relationships, and changes management as needed. Since organization plans are implemented with people and human resources provide comparative advantage to the organization, human resources and strategies need to be integrated with the institutional or business plan.
Fombrun, Tichy and Devana first introduced the concept of strategic human resource management in 1984. These researchers emphasize the strategic fit between human resource management and organizational strategies.
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