Strategic HRM and Contemporary Trends

• Strategic HRM involves formulating and executing HR policies and practices that cultivate employee competencies and behaviors.
• These competencies and behaviors are necessary to meet the company's strategic aims.

Contemporary Trends in HRM

• Several contemporary trends hold significance for human resources.
• Health crises, especially the COVID-19 pandemic, are a trend.
• The COVID-19 pandemic harmed various economic sectors and disrupted organizational operations in the first half of 2020.
• Organizations adapted with flexible structures and employee protection measures.
• HRM strategic challenges during the pandemic included redesigning operations and regrouping business units.
• Also, challenges included changing organizational structure, efficient decision-making, safe work environments, and remote work.
• Other challenges were employee stress management, redundancies, reduced salaries, and flexible work hours.
• Technological change and the dominance of Industry 4.0 is another trend.
• The German government introduced the term Industry 4.0 in 2011 via the "High Technology Strategy."
• Industry 4.0, an abbreviation for the Fourth Industrial Revolution, emphasizes connectivity.
• It integrates intelligent digital technologies into manufacturing and industrial processes.
• Strategic challenges for HRM due to Industry 4.0 include e-HRM dominance and increased HR efficiency.
• Also, reducing administrative burdens, facilitating HR planning, and adapting organizational design are challenges.
• Furthermore, the use of AI, automating recruitment, evaluating performance through Big Data are challenges.
• Industry 4.0 affects cafeteria-benefit plans and flexible rewards.
• Economic Change and the Knowledge Economy is another trend.
• The knowledge economy values information (quality, quantity, accessibility or intellectual capital) over production.
• HRM faces challenges from the knowledge economy's development, including slowed economic growth.
• Also, there are challenges from COVID-19, increased unemployment, changing economic structures and employment forms.
• The impact of the knowledge economy has challenges for meeting stakeholder needs and increasing product quality.
• Demographic Change and Increasing Immigration is a trend.
• Demographic shifts are more evident in developed countries in the 21st century.
• Diversification is rising within the working-age population, promoting equal employment.
• HRM strategic challenges from these demographic shifts include prolonged seniority and equal pay.
• Additionally, challenges include balancing work and life, tackling unemployment, and flexible arrangements.
• Change in Legislation and New Employment Forms is a trend.
• A significant challenge is complying with strict legal regulations governing employer-employee relations.
• Legislative changes target groups often facing vilification.
• HRM faces new employment challenges, including flexible work, employing people with disabilities and national minorities.
• Challenges also include preferences for war veterans, remote work, and zero tolerance towards vilification.
• Social Change and Society 5.0 is a trend.
• In 2016, Japan introduced Society 5.0, driven by technological innovation, with "The 5th Science and Technology Basic Plan".
• Society 5.0 envisions a super-smart society, profoundly changing people's habits, with realization expected in the 21st century.
• Society 5.0's HRM challenges include i-HRM (intelligent HRM) emergence and cognitive computing (AI) inclusion.
• Also, talent management development, continuous organizational and IT skill development are HRM challenges.
• Additionally, full digitalization and attentiveness to employee feelings are challenges for HRM.

Summarizing Strategic Challenges

• There are six strategic challenges for human resource management.
• These challenges have influenced changes in the HR role, giving it new significance.
• New roles in HR are an increasingly important research area.

Changing Nature of HRM

• According to Noe, Hollenback, Gerhart, and Wright, employees are becoming more energetic.
• Employees become more energetic in tasks they supervise and improve.
• Organizational structures are becoming flatter.
• People are participating directly in decision-making.
• Improvements are recognized and rewarded, emphasizing a team approach to problem-solving.

Theoretical Approaches to Strategic HRM

• Universalist: Asserts one best way to manage human resources.
• HRM involves transforming traditional practices into a limited set of "correct" procedures and policies.
• Strategic Best-Fit: Implies that HRM involves matching specific HR practices to the overall organizational strategy.
• Resource-Based: Suggests HRM drives organizational success by enhancing organizational capabilities.
• This involves acquiring, developing, utilizing, and retaining highly competent employees.
• Configuration: Recommends HRM configuration show external fit and match the business strategy and internal fit.
• HRM practices, or bundles, improve organizational performance when appropriately configured.
• Certain bundles suit specific industries or business conditions, while others serve different contexts.