Aspects of the Human Resource Strategy - Case Study Example

HRM and Firm’s Performance AFFILIATION: Introduction Almost all the organisations have realisedthe fact that they can compete effectively in the business world by investing in their most valuable resources i.e. employees. The only source of competitive edge is the people of the businesses as it cannot be replicated by the competitors. It is vital for the firms to align their Human Resource Management (HRM) practices with their strategic objectives. Even the policies have to balance each other so that the company’s strategy is supported and goals are successfully attained. It is crucial that a firm’s HR department employs the best resources for the development of the employees’ skills, knowledge and competencies.1 As managers need to be guided about implementing the most effective techniques for motivating the employees, the scholars of the field have developed various models. For instance, the Harvard model provides a framework in the form of a strategic map for assisting the managers in developing their relationships with the employees and even takes account of the soft aspects of the HRM.2 The main idea behind this model is to ignite employee loyalty so that the person is willing to remain in the firm for long period. Likewise, the Michigan model is developed for nourishing the hard side of HRM. According to this concept, people have to be managed just like other sources so that they can be exploited completely in cost effective manner. The main areas covered in this concept are employee appraisal, selection, rewards and development for enhancing the firm’s performance.3 Even the guest comparative model is an effective tool which is utilised by majority of the experts which lays the basic foundation for strategic HRM. It is developed on the premise that a range of integrated practices of HRM will lead to the robust performance at both individual and organisational levels.4 It supports the notion that innovation, cost reduction, focus on quality and differentiation will generate practices such as enhanced training, fruitful rewards, effective job design, compelling recruitment and selection procedures and employee involvement resulting in excellent quality outcomes such as flexibility and commitment. Moreover, the firm’s performance will get enhanced leading to innovation and low employee turnover. As a result, the organisations will be able to flourish successfully in their respective industries. All companies are addressing the key challenges associated with developing a motivated and loyal workforce so that they can survive for a long duration and compete proficiently with the rivals in the industry. Importance of HRM in today’s organisations According to Storey (1989), the complete philosophy of HRM is built on the assumption of the managers in relation to the core nature of human beings i.e. employees which is “the organisation’s people are responsible for making a difference and HR is the crucial asset of a firm. The capital and technology can be easily acquired by the rivals but human capital is the main source of sustainable competitive edge and people have to utilise their full potentials to make valuable contribution in the firm’s enhanced performance.”5 In simpler terms, the main logic of HRM is that human resource also known as employees is the basic source of competitive edge. Hence, the purpose of HRM is to give the best treatment to employee by providing them certain degree of autonomy and provide them ample opportunities for polishing their skills and capabilities. When employees are given an optimistic and supportive work culture, they are motivated to boost their efforts and even attain certain level of desired citizenship behaviour such as getting more involved, satisfied, loyal and committed which is translated into improvised operational performance. A virtual representation of HRM and its role in company’s performance is shown below6: Strategic HRM and firm’s performance It has been stated by various scholars that HRM practices allow the creation of procedures required for building up of the employee’s capabilities and knowledge within the organisation for the promotion of unique and valuable competencies required for its competitiveness. The latest trend in the market is of strategic HRM which makes sure that the employees’ activities and tasks are aligned with the business strategy so that the company’s performance is improvised.7 Moreover, strategic HRM is the modern paradigm for managing HR within the firm which is of the viewpoint that every organisation has to understand the importance of quality, integrated and competent human capital. Even HR is the main driving force for aligning all the functions of an organisation which will collectively contribute in its long survival in the market. The basic purpose of strategic HRM is to attain strategic fit so that HR strategies are vertically integrated with the business’s strategy and it should be an integral element of the entire framework.8 Moreover, SHRM has to support horizontal integration so that differentiating aspects of the HR strategy are properly aligned and are supportive towards the organisation’s objectives. It is even proved that the strategic decisions are made in such a way that they have long-term and significant on the behaviour and effectiveness of the organisation as it makes sure that a firm has a committed, skilled, proficient and highly motivated pool of employees for achieving an edge for unlimited time period.9 Also, Strategic HRM assists an organisation in efficiently handling the environmental challenges as it takes account of a range of anticipatory moves of the rivals. It even benefits the company as it effectively promotes a culture of initiative taking, manager involvement, employee engagement and transparent means of communication.10 It is believed that Strategic HRM enhances a firm’s performance as it supports cohesion at structural level, creates synergy which is employee-generated and gives a strong vision to the employees.11 In various studies conducted by the scholars, it was found that Strategic HRM definitely makes worthwhile contribution in the organisation’s performance which ultimately is evident in its increasing level of profitability and robust growth. When the performance of companies were compared which employed either traditional or modern HRM practices, it was found that the organisations with strategic HRM tools were able to excel in the field and even prosper productively with excellence.12 Hence, the scholars have provided ample information about the range of techniques and models which can be employed by the firms for managing the employees efficiently. It is even recommended that the companies continuously upgrade their HRM practices so that they have the modern procedures within their businesses. Moreover, the developments in the field will continue as the human capital needs keep on developing at a fast pace. In addition to the latest concepts, it is imperative for the firms to first analyse their own requirements from HRM so that they can develop an effective and productive Strategic HRM strategy. Conclusion Indeed, it is clear that Strategic HRM is vital part of every company and it needs to be aligned with the firm’s strategy. The benefits associated with this concept will be evident in the long-run when the firm will be able to successfully develop a committed and motivated workforce. It is mandatory for the organisation to take account of both internal and external factors so that it can compete effectively and attain a competitive edge on the basis of a well-integrated and loyal workforce. Additionally, the company will be increasing the shareholder value which will be evident in the form of satisfied customer base and competent workforce. Although Strategic HRM is a continuous endeavour but its benefits will be reaped for considerable time period. Moreover, the firm’s performance will keep on enhancing at a consistent level in its market. References Armstrong, M.A., A Handbook of Human Resources Management, 11th ed., London, Kogan Page, 2009. Caliskan, E.N., ‘The impact of strategic human resource management on organizational performance’, Journal of Naval Science and Engineering, vol. 6, no. 2, 2010, pp. 100-116. Chow, I.H-S., Teo, S.T.T., and Chew, I.K-H., ‘HRM systems and firm performance: The mediation role of strategic orientation’, Asia Pacific Journal of Management, vol. 30, no. 1, 2013, pp. 53-72. Ho, H., ‘Theorizing HRM and (Firm) performance relationship from the Human nature perspective’, International Journal of Arts and Science, vol. 3, no. 7, 2010, pp. 327-341. Katou, A., ‘Test of a casual Human Resource Management-Performance Linkage Model: Evidence from the Greek manufacturing sector’, International Journal of Business Science and Applied Management, vol. 6, no. 1, 2011, pp. 16-29. Long, C.S., Kowang, T.O., Muthuveloo, R., and Ping, T.A., ‘A review on the relationship between HRM practices and firm’s performance’, Australian Journal of Basic and Applied Sciences, vol. 7, no. 2, 2013, pp. 312-316. Minavand, H., and Lorkojouri, Z., ‘The linkage between strategic human resource management, innovation and firm performance’, IOSR Journal of Management and Business, vol. 11, no. 2, 2013, pp. 85-90. Ngo, Hang-Yue, Lau, Chung-Ming, and Foley, S., ‘Strategic Human Resource Management, firm performance and employee relations climate in China’, Human Resource Management, vol. 47, no. 1, Spring 2008, pp. 73-90. Waiganjo, M.E.W., Mukulu, P.E., and Kahiri, J., ‘Relationship between Strategic Human Resource Management and firm performance of Kenya’s corporate organizations’, International Journal of Humanities and Social Science, vol. 2, no. 10, 2012, pp. 63-70. Read More