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Strategic HRM - Essay Example

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Strategic HRM is defined as "human resources ,management issues ,functions and policies and practices that result from the strategic activities of the multinational enterprise and the impact it has on the international concerns and goals of that organization…
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STRATEGIC HRM ORDER NO:102109 Strategic HRM is defined as "human resources ,management issues ,functions and policies and practices that result from the strategic activities of the multinational enterprise and the impact it has on the international concerns and goals of that organization. Strategic thinking is based on rational decision-making ,taking into account the competitive and financial pressures on modeling the present situation and the resources available to it, including its people. Personnel management was essentially reactive whereas HRM exemplified by HR strategy is proactive and takes a longer perspective. HRM is about the competitive advantage to be gained from making the most of an organisation's human resources. But ,it is obvious that there are constraints of availability of suitable people which is heavily dependent on environmental variables like the effects of world and national economic conditions for business growth , the effect of inflation on the perceived value of wages ,traditions of local business culture and a particular nature of national employment markets. These variables have a 'macro' effect on the utilization of human resources. Identifying the relationship between HRM and strategy is simpler in theory than in practise. Organisations may take a variety of approaches towards HR and strategy ,ranging from those which give no consideration whatsoever to human resources to some where HR becomes the driving force. The significant issue in HR strategy is that of integration with overall business strategy. The idea is to emphasize the need for human resource practitioners to achieve an understanding of how business strategies are formed. They should adopt a wider point of view and an understanding of key business issues such as :Corporate intentions for growth or retrenchment , methods of increasing competitiveness ,a perceived need for a more positive performance culture and other cultural consequences such as commitment ,mutuality ,devolution ,team working etc. Human resource is but one of the resources of the firm. HR strategies may focus on redundancies and sacking employees during recession which invariably damages or destroys a caring corporate image. HR strategies can be aimed at improving an organisation's competitiveness by increasing its 'knowledge base' or competence. The theory that complementarities advocates that HR policies which are consistent and mutually supportive deliver results. US forms have bundled Hr practices in a formal way for some time believing that improvements in one area enhances other HR practices as well. There are two main types of change: Turnaround change: This is financially driven to ensure corporate survival by cutting unprofitable products and services. It involves the redesign of organizational structures , disposal of non-core activities and large scale redundancies. Behavioural transformation :This is seen through changing behavior patterns throughout the company. Restructuring is the most common form or organizational change. Unfortunately , employees are a secondary consideration of change in free market organizations. Often the principal role of people managers is to sort out the resulting mess and smooth ruffled feathers. Strategic management has its basis in rational thinking. .Strategy and planning provide a framework for human resource requirements over a defined period but traditional personnel managers have been accused of having difficulties in understanding and implementing strategy. Human resource strategists tend to focus on numbers and also attitudes ,behavior and commitment in line with harder matching models of HRM but their implementation is problematic. People managers are involved in dealing with the consequences of re-organisation ,including closure and redundancies .In a more positive way ,they are concerned with growth and strategic alliances. Some of the problems they face include relocation ,changing roles and retraining for new skills. More difficult issues come from attempts at cultural change or behavioural transformations. These are notoriously expensive and unsuccessful but are sometimes inevitable and can hold the key to future success. Inspite of HRM being such an important aspect of organizational success , there are more than enough instances of ineffective use of HRM. Organizations that do not put their emphasis on attracting and retaining talents may find themselves in dire consequences, as their competitors may be outplaying them in the strategic employment of their human resources. The future success of any organizations relies on the ability to manage a diverse body of talent that can bring innovative ideas, perspectives and views to their work. This challenge can be turned into a strategic organizational asset if an organization is able to capitalize on this melting pot of diverse talents. This is especially true for multinational companies (MNCs) who have operations on a global scale and employ people of different countries, ethical and cultural backgrounds. Without an HR manager to think globally and act locally, business opportunities can't be responded to rapidly and creatively. Local managers in a MNC organization won't be able further their abilities to motivate a group of professional that are highly qualified but culturally diverse. Ineffective workplace diversity management is evident when HRM is undervalued leading to the problem of pigeonholing employees, placing them in a different silo based on their diversity profile. Without an overall and complete use of HRM , an organization's members would find it difficult to air their opinions and learn how to resolve conflicts. Organizing the pool of diverse talents strategically for the organization and enabling it to attain new markets and other organizational goals in order to harness the full potential of the workplace talent pool is virtually impossible without HRM. Regular organizational assessments on issues like pay, benefits, work environment, management and promotional opportunities to assess the progress over the long term , a point needing proper use of HRM, would be a dangerous area to neglect. Ineffective managerial control due to lack of proper HRM can lead to a breakdown of communication of the right information at the right time Successful organizations are becoming more adaptable, resilient, quick to change directions, and customer-centered all because of HRM. Ignoring this vital aspect would mean a huge setback to an organisation's potential for domination in the global arena.
Sources:
Alan Price - published by Thomas Learning ( 2nd Edition , 2004) Human Resource Management in a Business Context
Edith Howle , Gary l.Neilson and David J. Ortiz ( Strategy & Business site), Creating Temporary Organisations for Lasting Change
Dr.Alvin Chan "The Challenges of Human Resource Management" , www.zeromillion.com/business/hrm.html Read More
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