Strategic human resource management (SHRM) seeks to create alignment between human resource management (HRM) practices and business strategy (strategy fit); linking HR strategies, policies, and practices within the functional units of the HR department (intra-functional fit); maintaining the status of the HRM department within corporate strategic plan (HR-roles-position fit); and alignment of HRM functions with all other departments (cross-functional fit). This study investigates the effects of SHRM on organizational performance. Data was collected from 314 employees in tertiary educational institutions in Ghana. A conceptual model was developed and a set of hypotheses were proposed. The results found that cross-functional fit has a significant effect on both financial and operational performance. However, the results found no significant effect of strategy fit, role-position fit, and intra-functional fit on financial and operational performance. Therefore, tertiary educational institutions should develop cross-functional fit to improve their financial and operational performance.
TopIntroduction
Strategic human resource management (SHRM) aligns human resource practices with the organization’s strategic goals (Jermsittiparsert et al., 2021) and performance outcomes (Akhtar et.al., 2022), leading to the realization of sustainable competitive advantage (Singh et al., 2019). HRM aims at directing, fostering, and linking the employees’ intellectual capital, emotional, social, and cognitive capabilities with the strategic needs of the organization (Greer, Lusch & Hitts, 2017). SHRM can be classified under four major topics: Strategy fit, intra-functional fit, HR-roles-position fit, and cross-functional fit (Ahmad & Raja, 2021). Strategy fit relates to the alignment between HRM practices and business strategy, including the involvement of HR in business strategy formulation and information sharing between HR managers and top executives (Hadziahmetovic & Dinc, 2020). The intra-functional fit represents the alignment of HR strategies, HR policies, and practices within the functional units of the HR department (Kale & Shimpi, 2020). The HR-roles- position fit is the status and position of the HRM department within corporate strategic issues (Ahmad & Raja, 2021). Also, the cross-functional fit refers to the alignment of HRM functions with all other departments and functional areas, including the integration of HR functions with other functional areas of the organization and fostering a free flow of information among HR and all other departments (Ludwikowska, 2021).
Managing human capital is a major focus area of SHRM (Greer, Lusch & Hitts, 2017). It is an organization’s portfolio of knowledge, skills, and abilities (Jermsittiparsert et al., 2021). As a strategic tool, SHRM contains key elements for implementing an organization’s strategies (Covarrubias, Thill & Domnanovich, 2017). Consequently, SHRM encourages innovation (Anca-Ioana, 2013) and improves organizational performance (Flood et al., 2016). Organizational performance is an effective and efficient means by which organizations manage resources to create sustainability (Ludwikowska, 2021). Successful implementation of SHRM can lead to the operational and financial performance of the organization. However, research suggests that the lack or inadequate implementation of the SHRM strategy may adversely affect organizational performance (Akhtar et.al., 2022).
Problem Statement
Currently, research is focusing on establishing relationships between SHRM and employee commitment (Kumah, 2022) and between SHRM and organizational performance outcomes (Riaz & Mahmood, 2017). Recent studies focus on employee-oriented human resource policy, strategic human resource management, and organizational performance (Ludwikowska, 2021), employee retention and firm performance (Kumar & Reddy, 2019), recruitment, selection, and organizational performance (Jashari & Kutllovci, 2020). However, these studies are conducted in the manufacturing and financial sectors (Al-Taweel, 2021; Zhai, Zhu, & Zhang, 2022), paying little attention to SHRM practices in educational institutions. Meanwhile, educational institutions are expected to meet stringent requirements of recruiting and retaining qualified faculty and staff, maintaining a high quality of teaching and research, and providing a suitable learning environment and infrastructure to meet their strategic goals and performance outcomes (NAB, 2017). With quality higher education, individuals acquire knowledge and skills which enable them to become “healthier, secure better jobs, earn more, and have a greater voice in their affairs” (World Bank, 2011, p. 2). It is, therefore, expected that by employing SHRM practices, tertiary educational institutions will meet their strategic goals.