Maximize the ROI of your employees: HRM vs strategic HR management
Publié le 17 May 2023

Maximize the ROI of your employees: HRM vs strategic HR management

Today, companies face ever-increasing challenges in attracting and retaining talent, improving business performance and dealing with new regulations.
The main objective of HRM is to help companies maximize the performance and well-being of their staff in order to achieve business objectives.
Strategic human resource management aims to align business objectives with human resource management objectives. To do this, he uses planning and decision-making techniques.

Le passage d’une GRH traditionnelle à un management stratégique des RH peut permettre à une entreprise d’améliorer les performances du personnel en les impliquant dans la définition des objectifs.
En somme, un management stratégique des Ressources Humaines permet de maximiser l’investissement en personnel en obtenant un retour sur investissement maximal.

For a better understanding of the issues, we suggest that you read our article: What is strategic management?

Definition and concept of HRM

Definition and concept of HRM - Reactive Executive

The concept of HRM:
As seen previously, human resources management designates all the activities and strategies aimed at managing the employees of a company. It includes functions such as:

  • research and recruitment,
  • training and development,
  • Compensation,
  • staff relations,
  • performance management,
  • HR policies

The goal of human resource management is to maximize employee performance and satisfaction while aligning HR strategies with business objectives.

The 6 key stages of traditional Human Resources management:

  1. Recruitment and selection: definition of staffing needs and search for qualified candidates.
  2. Training and development: development of skills and knowledge of employees.
  3. Compensation administration: establishment of payroll and benefits.
  4. Managing staff relations: resolving conflicts and improving relations between employees.
  5. Performance Appraisal: Assessing employee performance and identifying their strengths and opportunities for improvement.
  6. HR policies: development and implementation of HR policies to support employees as well as the business.

Transition from HRM to strategic HR management

Le monde du travail évolue constamment et les entreprises doivent s’adapter pour rester compétitives. C’est pourquoi de plus en plus d’entreprises se tournent vers le management stratégique des Ressources Humaines, qui diffère de la Gestion des Ressources Humaines (GRH) traditionnelle. Dans cette partie, nous allons explorer les différences entre la GRH et le management stratégique, ainsi que les avantages qu’une transition vers cette approche peut offrir aux entreprises.

A) The differences between HRM and strategic HR management:

Unlike strategic HR management, HRM focuses on operational functions such as recruitment and training. Strategic HR management, on the other hand , aims to align HR strategies with long-term business objectives .

HRM is oriented towards the management of employees and the strategic management of human resources focuses more particularly on the creation of values for the company by using employees as a means.
Moreover, it uses data analytics to make long-term decisions whereas HRM focuses on short-term data and information.

Finally, human resource management focuses on internal relationships, while strategic human resource management involves working closely with other business functions to maximize the impact of HR strategies.

B) The advantages of a transition to strategic HR management:

It is increasingly important for companies to turn to a strategic management of Human Resources. A transition to a strategic management of HR can offer many advantages for companies:

  • L’amélioration de la performance de l’entreprise : en alignant les objectifs de l’entreprise avec les objectifs de l’équipe RH, le management stratégique des RH peut aider à améliorer la performance globale de l’entreprise.
  • Attracting and Retaining Top Talent: By implementing effective talent management programs, companies can ensure that they attract the most skilled and successful talent and incentivize them to stay with the company.
  • Strengthen company culture: By ensuring that HR policies are consistent with company values and culture, companies will strengthen team cohesion by improving employee motivation.
  • Help leaders make informed decisions on HR matters: By providing reliable information and data on human resources, strategic HR management can help leaders understand the needs and expectations of their staff.

Tools used in strategic HR management

Tools used in strategic HR management L Reactive Executive

The strategic management of Human Resources (HR) is a key process for companies wishing to optimize the performance of their staff and their company. To succeed in this area, it is important to use the right levers and the right tools.

A) Analysis of skills needs

Skills needs analysis allows companies to assess the skills and performance of their staff to identify strengths and opportunities for development. Through this analysis process, companies will be able to develop strategies for the succession and management of key talent.

B) Talent management planning

Companies can use performance management systems to assess the performance of their staff and to set clear performance goals for employees. Performance management systems can also allow companies to track employee progress and provide performance feedback.

C) Development of career development programs

Companies can use talent development programs to improve the skills and performance of their staff. Programs can include training, seminars, and personal development opportunities.

Mistakes to avoid when implementing these strategies

When setting up an HR strategy, there are a few mistakes to avoid:

  • Underestimating the importance of leadership,
  • Ignore employees,
  • Implementing strategies without having a clear understanding of the company’s objectives,
  • Not considering available resources,
  • Avoid involving employees in the process,
  • Not measuring results
  • Rely on kit solutions.

By avoiding these mistakes, companies can maximize the likelihood of success when implementing effective HR strategies aligned with business goals.

Human resource management and strategic human resource management are key concepts for companies wishing to maximize their performance and competitiveness.
All HRM activities aim to support employees to ensure their satisfaction, commitment and contribution to the company.
Strategic HR management, on the other hand, focuses on the strategic use of human resources to support business objectives.
Employees are the most important asset of companies, effective management is essential to improve the performance of employees and the company as a whole.

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