Strategic HRM and competency mapping

Strategic human resource management (SHRM) means designing HR systems so they directly serve the organisation's strategy, rather than running HR as a set of isolated activities. If the strategy is low-cost leadership, HR must deliver efficient staffing, tight training and productivity-linked pay; if the strategy is innovation, HR must deliver creative hiring, tolerance for failure and learning rewards. The test of SHRM is fit: vertical fit (HR strategy matches business strategy) and horizontal fit (HR practices reinforce each other). Worked example: a firm pursuing quality leadership that pays only piece-rate bonuses has a misfit — the pay system rewards speed, not quality, and the strategy fails at the HR level.