Relationship between Human Resource and Business Strategy - Essay Example

Relationship between Human Resource and Business Strategy

Executive summary

Human resource is a term used to refer to functional areas that involve aspects such as recruitment, staffing, compensation as well benefits. Human resource has since developed and continues to move from collective demographics and ways of practitioners’ entry to a profession to the roles served by the same Human resource professionals. It has undergone development to include the value brought to the organizations. The human resource offers much in record keeping, payroll, and employee benefits’ administration. An organization focuses on business strategy through talent management and leadership development activities that are among core responsibilities of human resource activities (Armstrong & Armstrong, 2012).

Human resource functions and departments are typically brought together by some factors that are made available in the firm. Companies thus should determine critical areas to organizational strategy, the essential functions and how to best develop and assign human resource staff to the various functions. Factors that contribute to decisions about human resource roles include but not limited to staff size, control of human resource professionals over the functional areas assigned to them as well as the degree to which human resource receive mentoring on strategic contributions to the firm, including organizational leaders in non-human resource functions. Therefore, the understanding of human resource adds to the overall view of the human resource professionals’ career progression expectations and the mentoring involvement with the human resource professionals (Armstrong & Armstrong, 2012).

Introduction

Competition is a significant aspect in guiding firms when they lay down their strategies leading to a modification of industrial economy to the knowledge economy. The research analysts are acutely aware of the goodness and weaknesses of competitiveness and as such try to resolve these predicaments through placing focus on strategic human resource management practices. The human resource role is well developed and fully recognized as its significance is mostly increasing. The perception that traditional aspects of human resource call for development is the concept of “strategy of human resources.”

The interaction between perceived sufficiency of human resource management practices, the idea of a person fitting in an organization and the person meeting in a team has never been scrutinized. Presently, there is the perception that perceived sufficiency of human resource management contributes to actual and perceived person-organization fit and perceived person-job. The view also opines that anxiety plays a role in the positive interaction between perceived sufficiency of human resource management practices and the person fit for a job as well as the professional being fit to be in an organization. It is thus essential that human resource elements be evaluated in contemporary firms (DeCenzo & Robbins, 2011).

The changing environmental conditions as well as the new sort of predicaments emerging and complex understanding of management organization is a significant source of competitive advantage. Management has become an integral part of man and as such the human resource elements should be of concern since they are important in organizations and the management of strategic decisions required in an organization. All people related to the organization should be brought together and work together with their surroundings.

Factors that affect Human Resource in Realization of Benefits

In the present world, the human resource professionals are in a position where they should take on strategic responsibilities to ensure an achievement of the firm’s strategic plan goals. An excellent human resource professional is required to develop sound working skill based on different business aspects such as on how to positively affect the growth of business as well as increasing productivity. The human resource managers should also have the personal knowledge of constructing organizational capabilities. The same can be attained through a collaborative effort with the financial managers of the firm.

From research, there are conclusive reports that the human resource department and the finance department in a strong work better when they are united than when the two arms of the organization work in isolation. For instance, if a manager wants to downsize, he or she can approach the finance department and together they can make deliberations and arrive at a concrete and joint plan that they present to the senior management for action(Mondy, Noe & Gowan, 2013).

There is evidence that an organization whose finance department work with the human resource department yield good results for the company. For example, Delta Airline has been successful since they collaborated very well in providing for favorable incentives to the 16,000 workers who were targeted for downsizing. It doesn't matter how an organization’s reserve finance is, the success of the team will majorly be premised on sufficient activity. Low effectiveness of the human resource implies that the organization lags on attaining the targets set for the future levels of income.

The views of the organization’s employees also affect its activities. The performance of the workers is chiefly dependent on whether they are or are not satisfied with the activities of the organization. The salaries for employees, the way of communication between the employees as well as with the top management, the social welfare, the working environment also affects the way an organization will thrive in the conditions and determine whether it will gain or lose. Therefore, it is the work of the human resource department to fulfill the proper conditions for the success of the firm and also for the realization of high profits. They can do the fulfillment of the worker’s wants by making the necessary steps to obtain a proper motivation plan for the employees. In instances where the employees are motivated, they get linked to their work and increase their productivity, and they ultimately become success thus increasing returns for the firm (Mondy, Noe & Gowan, 2013).

The human resource approach recognizes the significance of employees for the purpose of achieving its set objectives. The employees’ cooperative efforts enable a company to achieve its goals through offering support to them. The proper use of the workers is an appropriate tool for gaining employee cooperation for the success of a corporate’s targets.

The function of the human resource management is to ensure high contributions of employees in organizations. The input may include the inclusion of new concepts, success as well as working in a manner that is productive. The human resource role provides assistance in the Human resource management functions to the line employees, or it can involve the people working to produce products. The role of the human resource managers is to assist the employees to meet the goals and objectives of the organization (DeCenzo & Robbins, 2011)

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Human Resource and the Strategic Partner

Many human resource functions are now playing a strategic role in the guidance of the succession of the management, enterprise incentives as well as retaining knowledge within the firm. The functions, however, are supposed to make improvements and transform the decisions and influences of the organization. There is the need for the companies to retain a pool of people with talent, capture skill from the present workers and also contract out transactions to ensure the human resource function remains important.

The corporate human resource function is responsible for the setting of the strategic tone and to facilitate the implementation of specialized knowledge. A beneficial tension occurs between the policies commands that are determined by the organization corporate human resource and the various needs of the business units. However, the best human resource professionals can attain a healthy form of balance because of the understanding of the modern and present human resource activities, the firm strategy as well as the business goals. For instance, the leadership and the human resource at Texas Instrument participated in the strategic initiative directed at decreasing the costs of turnover and the low motivation level arising from expansion and contraction that is attached to the business cycle through the use of external workers for the provision of a more flexible workforce.

In this case, the strategic partnership that was created here between the executive leadership and HR was not an organic outcome but an achieved function which mostly arises when some need or business impetus warrants the firm to make the deliberate action in the view of satisfying the need. For the Human Resource function to form an adequate strategic partner in any firm, the HR managers should have the knowledge of the fact that the business to outsource and that the work of HR starts with the firm being outsourced and not the HR.

The Link between Effectiveness of a Company and Human Resource Management

The evaluations of the effectiveness of a firm and the employees should not be premised on the financial measures, for instance, profits. For some years, human resources elements have been secondary to the actions. In the modern world of business, the firm leaders are in agreement that returns only do not hold the vigor and the loyalties of the workers in the company. An organization is created when the human resource management practices of the past are not able to fit in the current management needs. Therefore, the existing businesses need to look for long-term solutions to outweigh the challenges of business integration to the needs of the people. The human resource management practices should be able to facilitate the effectiveness and the performance of an organization through the attraction, retention of employees with skills and by identifying abilities that anchor the mission and the objectives of the organization (Mathis & Jackson, 2013).

The test of the effectiveness of an organization thus relies on how an organization inculcates the applicable attitudes and behaviors in their employees in addition to their implementation. In the modern world of business, the human resource departments are expected to cause a firm’s performance. Most companies have developed the notion that the success of the strategic management process is largely based on the degree to which the HR function is included in the daily transactions of the business. In most times, where the HR function does not perform to its best, the employees will often neglect work or rather seek for alternatives. Some may withdraw their services through absenteeism and turnover. This move may threaten the organization’s success and impact on its survival as well.

It is significant that firms embrace human resource management practices make use of their workers in the best way possible. An organization requires adopting particular policies and roles for diverse strategies. Thus, for a firm to be effective, the company’s policies that are put in place should be in line with the strategy of the enterprise. According to research, human resource management practices can quickly contribute to competitive advantage in as much as they strengthen the skills, traits, and attitudes that cause low returns and encourage differentiation. The concept of human resource practices in the contribution of an organization’s competitive advantage usually experiences and overlap with the idea of efficacy as the human resource strategy for efficient performance.

Conclusion

Companies are undergoing drastic overhauls to restructure their human resource management function to ensure proper administration of the resources. The changes include but not limited to increased deployment of information technology systems as well as the globalization of the economy. There is an agreement that effective human capital is an integral part of a firm’s success in the business undertakings and that the HR function’s role is to focus on strategic planning. A good HRM gives the workers an opportunity to efficiently and productively contribute to the general course of a firm and also aids in the achievement of a company’s set of goals and objectives. In the standard setting of a firm, the integral part of the company is the workforce provided by the employees (Dessler, 2010)