Strategic Human Resource Management - Essay Example

? Strategic Human Resource Management College In the today’s organisational management, managers are using management approaches that link human resource policies with the strategic objectives of an organisation. The human resource manager is particularly mandated to offer the right direction in the organisation through recruitment of the right staff that share and work towards the organisational goals (Bratton & Gold, 2009). Strategic human resource management (SHRM) refers to a managerial process where the human resource manager comes up with policies and practices that have to link with the overall strategic objective in an organisation. Strategy has over the time replaced the use of planning to illustrate a well laid down pattern of making decisions and taking actions by the upper management in an organisation towards a specific goal. Therefore, SHRM is critical in determining the success of any business entity and in steering the entire material and human resource in the organisation towards the common goal. Strategic management is mainly determined by three factors in an organisation, which are the resources, environment and the management that has to control and allocate resources towards the success of an organisation. An organisation has to operate in an uncertain environment with external factors such as economic and socio-cultural factors affecting decisions and operations in the company. Consequently, strategic management requires that the HR manager defines measures to facilitate organisational performance through strategies address the prevailing socio-cultural and economic forces Economic and social-cultural factors have an active role in determining the effectiveness of a human resource strategy in an organisation. For instance, while politicians are responsible for making tax decisions and other decisions that lead to policy formulation in a country, such policies affects economic factors in the business environment. Moreover, exchange rates, income growth, unemployment, industrial classification and customer confidence in an organisation are all factors that are closely rated to political dynamics, which affects economic factors in an organisation (Thompson, 2002). In addition, these factors have an effect on social aspects, while social factors do impact on them as well. Social factors are responsible for determining the dynamics in a society and include demographics and the overall population dynamics, which comprise of factors such as education level, income distribution, age distribution, mobility, customer behavior and entrepreneurial dynamics (Thompson, 2002). Pollution, gender roles, fashion, harmful factors, lifestyle, among others are examples of socio-cultural factors that affect operations in an organisation (Pearce & Robinson, 2005). Moreover, the human resource manager has to put in place strategies to address the health services of the workers their social security in pensions, and has to consider work force mobility and work culture dynamics. These social-cultural factors translate to increased costs to the organisation, and the HR has to come up with strategies to ensure perform while at the same time cutting down costs. There are varying changes in the business operating environment that are caused by increasing forces of globalization, changes in demographics of the company’s workforce, intellectual capital and other changes that force an organisation to have a different approach in mangling human resources(Wright, 1998). A highly performing human resource approach that fails in establishing strategic integration lacks the competitive advantage for survival, and would gradually lose its ground in the current market (Kazmi & Ahmed, 2001). In order to have operational excellence, research has shown that human resource managers have to align with the business strategic goals. Considering that a business is affected by external environmental factors such as economic and social-cultural factors, an effective HR manager has to put in place strategies to address and align with the changes that are not in control of the organisation (Pearce & Robinson, 2005). This is the main reason behind establishment of strategy –focused SHRM, an approach that requires HR management to be a strategy by itself, and to develop elaborate strategic linkages in the organisation (Kazmi & Ahmed, 2001). SHRM is an evidence based managing approach, which involves making decision based on available factors and what is actually certainly known to be true instead of acting on belief, causal benchmarks, when they hope for what has been done in the past, or what seems good, but not what is based on facts; this makes them to fail in realizing their goals (Pfeffer, 2006). Evidence based management entails being commuted to hearing the truth on the ground, getting the actual data and outlining measures to act on that data. For instance, DaVita US based company that deals in Kidney dialysis services has put in place serious strategies that align with social-cultural dynamics of its employees to ensure they perform better, while at the same time providing a superb environment in which to operate changing. DaVita employees similar to today’s more outspoken and liberal employee are free to ask any difficult questions regarding the operations of the company including their pay when a senior executive attends a training meeting or visits facility. Unlike other cases where such managers will doge such difficult questions or pretend to know more, managers at DaVita do not make it up when they do not know the answer, but they do admit of not knowing and promise to reply later (Pfeffer, 2006). Moreover, employees are free to email or call anyone even the CEO, with the senior manager taking such calls seriously towards finding a lasting solution to a problem. In other words, the CEO does not threaten employees, bit listens to their opinions and recommendations attentively. This is a strategy to ensure continuous improvement within the organisation and creating the spirit of team-working, which leads to employee confidence and employee participation in decision making. Such a culture is in accordance with the changing employee demands, where today’s employee needs to be actively involved in the company’s affairs in to owning decisions made by the management. The result is that employees are in a better place to implement such decisions and in owning the entire process from decision making to production. This strategic approach in employee-management relation leads to improved performance in organisations, and amounts to operational excellence (Mello, 2001). In other words, the current employee requires innovative strategies that have a difference from the conventional organisation, with such quality strategies facilitating workers to be smart in their approach. The HRM has to put in place strategies such as encouraging and facilitating effective communication at all levels and giving space for employees to be part of decision making to achieve this goal (Krishnan & Singh, 2004). Moreover, evidence based management in HRM requires the manager to treat the organisation as an unfinished prototype that runs experiments towards its completion (Pfeffer, 2006). For instance, Harrah’s Entertainment Casino managed by a former Harvard Business School graduate, Gary Loveman has put strategic measures to require that before an employee performs a task, they have to run an experiment first (Pfeffer, 2006). The requirement to undertake research and create new knowledge in this company fulfils the increasing social demands from employees on the need to attain one’s potentials. This leads to increased employee satisfaction in addition to an innovative culture in the company, which leads to competitiveness of the firm. In IBM for example, employees are supposed to dress in any ‘formal casual,’ away from the strict code of dressing where employees have to wear uniforms and suits (Davidson, 2011). The current breed of employee has tastes and preferences in dressing and IBM has gone an extra mile in allowing their employees to wear their preferred casual clothes, though they have to be formal. In other words, the strategic plan in IBM and DaVita is to attract the right type of employees, motivate them to perform to their capacities by encouraging innovations, the right to make errors in learning and creating a highly supportive climate that supports such performance; these are the basic functions of SHRM (Singh, 2003). On the other hand, the operations of HR managers are greatly affected by the economic conditions in a country. In a research by the Ipsos MORI political monitor, a UK based group, HR managers reported to perceive a short term economic improvement in UK and globally as having a long term positive effect on their organisation’s financial prospects (Myler & Murphy, 2009). Over 70% of HR respondents reported a long term improvement in their organisations based on short term economic improvement in the country. The survey indicated that the HR operations were greatly susceptible to economic changes, with more than 75% of managers reporting that such economic conditions greatly affected the HR directly (Myler & Murphy, 2009). Consequently, most managers indicated they considered freezing or largely reducing their annual budgets when the country’s economic conditions were not favourable to the organisation. The areas most affected include recruitment of new staff, training and development, external training programs, HR systems and hiring of external consultants, all which have a huge cost to the company (Myler & Murphy, 2009). With an uncertain economic performance, the company looks up to the HR to improve organisational performance by strategizing how they would insulate the firm from suffering any losses, and how they would promote growth amidst tough operating conditions. Consequently, the report indicates that most managers identified leadership and management development, employee engagement, communication and improving management performance as the most critical areas to concentrate on in such uncertain economic conditions. For instance, IBM has extemporary HR strategies that help the company in cutting costs while at the same time performing to greater heights. Instead of employing high skilled workforce in each of its acquired companies, IBM undertakes global teaming, mass movement of employees and work-based endeavors. In this approach, some of the company’s highly skilled staff is moved from one acquired company to the other over short durations of time to contribute their intensive skills to a particular project and then back (Davidson, 2011). This saves the company a huge budget that would be required to employ, recruit and train new workforce as well as maintain them in the company’s payroll. Moreover, IBM’s centre for advanced Learning based in Vancouver, Canada has been a strategic centre that the company uses to impart quality skills to its staff while saving huge budgets, instead of trainers and the company’s avatars spending too much time moving from country to country meeting staff, IBM capitalises on live-chatting, which greatly reduces costs (Davidson, 2011). IBM holds virtual board meetings and conferences where the organisation can link all its affiliate companies and facilitate its talented team of experts to connect, mingle and exchange ideas across regions. The only way that SHRM can be used to make a difference is by determining the company’s efficiency, effectiveness, financial viability and relevance in the market today (Caliskan, 2010). IBM in all their operations have put in place measures that facilitate the company to meet each and every aspect as indicated above, with the results being improved business performance and excellent cost cutting strategies amidst highly uncertain economic conditions. IBM has set a benchmark in that companies do not need to have a large pool professionals allocated to each of their companies globally. IBM can use the existing staff to perform beyond global benchmarks, while at the same time using virtual platforms to connect its entire workforce thereby escaping the increasing travel costs and saving time. This saves the company from the pain of retrenching some staff in difficult economic times and unending recruitment and training costs, making it possible for human resource managers to be a critical resource in achieving organisational competence. Strategic human resource management invokes the need to match people to the strategic needs of the company both on the short and long terms. It involves a long-term approach in that organisations predict their future by putting in place the right measures today. The HR manager has to undertake a detailed study on the opportunities, threats, strengths and weaknesses of an organisation and come up with strategies that would ensure the firm’s competiveness by setting benchmarks in various operational fronts. In the quest to achieve this, a HR manager has to deal with uncertainty in the operating environment mostly due to economic and social-cultural changes. While the manager has to formulate strategies that ensure the right skills to deliver on its objectives, they have also to ensure the company operates within the required budgets in the recruitment, training and development of skills. In the process, the manager has to formulate strategies that retain profitability in the organisation despite economic uncertainty while promoting an environment that attracts the best skills and retains them. It is only in putting in place the right strategies in line with prevailing economic and socio-cultural dynamics that such a manager will facilitate performance and competiveness of the firm towards achieving organisational goals. References Bratton, J. & Gold, J. 2009. Strategic human resource management. Mahwah, NJ: Lawrence Erlbaum Caliskan, E.N. 2010. “The Impact of Strategic Human Resource Management on Organizational Performance.” Journal of Naval Science and Engineering, 6(2) 100-116 Davidson, N.C. 2011.How IBM Is Changing Its HR Game. Harvard Business Review.[online] http://blogs.hbr.org/cs/2011/08/how_ibm_is_changing_its_hr_gam.html [Accessed 31 Aug. 2013] Kazmi, A. & Ahmad, F. 2001. “Differing approaches to strategic human resource management.” Journal of Management Research, 1 (3): 133-140. Mello, J.A. 2001. Strategic Human Resource Management. Cincinnati: South Western. Meyler, P & Murphy, S. 2009. The impact of the economic recession on HR. Ipsos MORI. [online] http://www.ipsos-mori.com/DownloadPublication/1381_loyalty-erm-talent2-the-impact-of-the-economic-recession-on-HR.pdf [Accessed 31 Aug. 2013] Pearce, J. & Robinson, R. 2005. Strategic Management, 9th Edition, New York: McGraw- Hill Publication. Pfeffer, J. 2006. A Matter of fact. CIPD. [online] http://www.cipd.co.uk/pm/peoplemanagement/b/weblog/archive/2013/01/29/amatteroffact-2006-09.aspx [Accessed 31 Aug. 2013] Singh, K. 2003. “Strategic HR orientation and firm performance in India.” International Journal of Human Resource Management, 14 (4): 530-543. Thompson, J. 2002. Strategic Management, 4th Edition, London : Thompson. Wright, P.M. 1998. “Introduction: Strategic human resource management research in the 21st century.” Human Resource Management Review, 8 (3): 187-152. Read More