The Need for an Organisation's HR Function - Term Paper Example

HUMAN RESOURCE MANAGEMENT Contents Sr.# Topic Pg Introduction 2 2. Key Concepts 3 2 Strategic HR 3 2.2. External Environment 5 3. Analysis and Discussion 6 4. Conclusion 9 References 10 1. Introduction The dynamic and rapidly transforming global business environment of present times, has posed multifaceted challenges to corporate organizations in terms of reformed marketplaces, increased competition, revolutionary technological advancements as well as growing customer expectations. Also, such radical transformations are persistently increasing at a quickening rate, simultaneously pressurizing organizational workers and management teams to deliver enhanced and competitive performance in a quicker, smarter and cost effective manner. These turbulent times call for vibrant policies and practices on the part of the management team so as to facilitate the organizations to react swiftly and productively to such dynamic external environments. The strategic human resource management facilitates its organizational teams to deliver highly competitive and standardized performance under intricate business conditions that strives to convert challenges into opportunities by transforming anarchy into systematic strategies and strategy into productive action. Strategic human resource management has achieved immense significance and generated critical awareness in recent years amongst theorists and researchers, most remarkably in the fields of human resource management, organizational behavior and industrial relations. Apparently, heightened assimilation of human resource management and corporate strategies has placed a significant claim upon contemporary strategic human resource management in terms of management as well as the academic literature, and hence it is commonly recognized that the strategic employment and administration of human resources can pave way for accomplishment and stability of the firms. Certain authors and researchers have further claimed that that an organizations human resources help shape the foundation of its competitive advantage1. Thus, with this background, it can be safely established, that the need for an organizations HR function to be strategic in nature is in co-operation, and not in conflict, with its need to respond to the external environment. 2. Key Concepts 1.1. Strategic HRM Definitions2: Various definitions of Strategic Human Resource Management are offered by different authors. Some of such definitions are mentioned hereunder. Truss & Gratton, (1984) define strategic HRM as: “Strategic Human Resource Management is the linking of human resource management with strategic goals and objectives in order to improve business performance and develop organizational cultures that foster innovation and flexibility” Wright & McMohan, (1992): "Strategic Human Resource Management is the pattern of planned human resources action and deployments intended to enable the firm to achieve its goals" Schuler, (1992): "Strategic Human Resource Management is concerned with all those activities affecting the behavior of individuals in their effort to formulate and implement the strategic needs of the business" Strategic human resource management has been defined as the development of organizational culture that cultivates modernization and elasticity with the assistance of establishment of an association between human resources and strategic goals and objectives of the organizations so as to enhance the overall business performance. Strategic HR refers to the recognition of HR function as a strategic collaborator in the formulation of the organizations corporate strategies as well as in the realization of those strategies through HR activities such as employing, choosing, guiding, and gratifying its personnel. While strategic HR, on the other hand, recognizes HRs affiliation in the strategizing process, and refers to precise HR courses of action which the organizations proposes to follow for the attainment of its strategic objectives and goals. The fundamental actions of the strategic human resource manager transform the organization’s corporate strategies into effective HR concerns. In any given business setting, irrespective of its type or form i.e., commercial, practical, corporate unit or product line, a strategy subsists either overtly in the prescribed course or document or unreservedly through a collective agenda on priorities. Transforming the business strategies into HR practices plays a significant role in accelerating organizational development in numerous ways. Firstly, it helps organizations in adapting to change since the time period required from the outset to the ultimate implementation of a strategy is drastically reduced. Furthermore, it facilitates the organizations to satisfy customer requirements and solve their grievances in a better and faster manner, as the organization’s customer service strategies have been transformed into explicit corporate policies and practices. Finally, the business can accomplish enhanced financial performance through its more efficient implementation of strategy. In short, a strategic outlook of HRM that necessitates synchronized deliberation of both external i.e., business strategies and internal i.e., consistency, constraint leads to better performance of the firm. 1.1. External Environment A business does not function in an isolated environment and entails swift action and reaction strategies to respond to events occurring outside its premises. These events that occur outside the business are referred to as external factors or influences. These factors influence the key internal functions of the business and probably the goals of the business and its strategies. The chief feature that concerns the majority of businesses is the extent of competition – i.e., how severely other businesses struggle with the goods and services offered by the rival firms3. The other issues that may influence the business include: social – how customers, families and societies react and their attitudes for example, transformation in approach towards well being, or a larger number of pensioners in a population; Legal – the manner in which legislations in society influence the business. E.g. changes in employment laws on working hours etc; Economic – how the economy influences a business in terms of taxes, government payments, and global economic factors; Political – how transformations in administrative polices affect the business; Technological – the hurried pace of change in manufacture processes and product improvement affect a business; Ethical – what is regarded as morally right or wrong for a business to do4. 3. Analysis and Discussion Strategic human resource management improves efficiency and the effectiveness of organizations. Research suggests that when organizations utilize such workforce policies as in-house profession hierarchies, prescribed training arrangements, outcome oriented performance assessment, job security, employee participation, largely defined jobs, and performance oriented reimbursements, they are more likely to be able to accomplish their goals and objectives. The invasive effect of the present framework on organizations has aggravated a wide-ranging set of reactions. A critical problem for practitioners and researchers is the degree to which human resource involvements affect the economic performance of the organization. The case for the benefits of executing a strategic approach to people management has been made by numerous critics including Schuler and MacMillan (1984) and Lengnick - Hall (1988) whereby they have argued that a strategic approach to human resource management improves productivity, augments product value, reduces production costs and increases elasticity and improvement5. A firms pool of human capital can be controlled to offer a resource of competitive advantage6. Presuming multifariousness among organizations with respect to their human capital, competitive advantage is achievable if it assures that its human capital will attach significance to its production processes and that its pool of human capital is a distinctive resource, which is not only intricate to be imitated but also immensely tricky to replace. HRM practices constitute countless activities through which firms generate human capital that satisfies these conditions. Particularly, organizations may use technical HRM activities to choose high aptitude workforce, whose ability is exceptional and to educate employees so they have the inimitable proficiency needed to gain competitive advantage7. On account of the relationship between HRM and corporate strategy, two problem areas that have constantly been dealt with individually in theory and practice have now been united: industry oriented strategic corporate planning and resource oriented personnel planning. The profound prominence on the environment in strategic planning and the spotlight on product/ market arrangements as the exclusive prospective for success; strategic marketing, had long prohibited internal resources, such as human capability from being acknowledged as strategic potential for success8. The Nissan organization offers an opportunity to scrutinize a crucial success story in current times: the Japanese organization, and its application of strategic selection among other human resource management practices. Japanese companies in Britain have been involved in utilization of lean production methods which comprises of flexible working practices, collaborative working, multi selling and production based on just in time principles. Researchers, Garrahan and Stewart (1991) involved in investigating the Japanese sector in north east England proposed that examples of improvement in the labor process must be viewed within the social and political framework in which it takes place. According to them, there is a fundamental mutual association among the external and internal environment of existing changes in operational practices. The company is an outstanding illustration of how an organization tactically employ and familiarizes employees to enable them to match the Nissan Way. The staffing method essentially instigates in the community environment of the organization, where it indulges in external civilizing activities which portrays a reflection of the company which emphasizes its culture, for instance, its dedication to team functioning. The unrelenting accomplishment of Nissan signifies its winning HRM strategy9. At a broad level, HRM assessments in comprehensive perspectives entails two interrelated yet diverse legal concerns: First, the extent to which law consents to a definite strategy or practice to be implemented, a particular action established, or a particular alternative selected and secondly, the extent to which there exists a risk of attracting legal action or other unconstructive stakeholder response based on an alleged malfunction or failure to conform to the hard or soft laws. The term legal requirements refer to those guidelines, procedures, and other explicit behaviors which are either authorized or forbidden by the various sources of hard law. Examples of such legal requirements include laws governing occupational safety and health - which requires compliance with a variety of specific safety related practices federal labor laws - which propagates seniority based layoffs, and other employment related laws governing payment of minimum standard of wages / compensation to employees10. 4. Conclusion The global economy has off late become progressively dynamic and challenging. In order to retain their competitive positioning, organizations need to contain, construct and maintain resources which are precious, atypical, non - substitutable and inimitable. Retaining competitive edge in a dynamic global environment entails awareness of the necessity for application of strategic approach towards human resource management. Strategic HRM helps organizations in achieving the required tools which ensures sustainability in the wake of the tumultuous external environment. It facilitates development of a comprehensive understanding of critical elements of the external environment which influence the vital functioning of the organization. Strategic HR helps professionals gain a profound understanding of corporate issues in the external environment; comprehend and analyze their repercussions; and use them for achieving competitive advantage11. Clearly, the scope of HR is undergoing tremendous transformation and as the bar is persistently being raised there is a widening gap between managers and employees requirements from HR departments and the solutions offered. Such a rift between the HRM functions and the external environment may be effectively addressed through strategic HRM functions. References: Analoui, F., (2007). Strategic Human Resource Management, Cengage Learning, Pp. 32 - 33 Deb, T., (2006). Strategic Approach to Human Resource Management, Atlantic Publishers and Distributors, Pp. 47 Montana, P. J., Charnov, B. H., (2000). Management, Barrons Educational Series, Pp. 62 - 63 Business Environment (2005). Elearn Limited, Pergamon Flexible Learning, Elsevier, Pp. 75 - 76 Gratton, L., Hailey, V. H., Stiles, P., (1999). Strategic Human Resource Management: Corporate Rhetoric and Human Reality, Oxford University Press, Pp. 11 Barney, J., (1991). Firm Resources and Sustained Competitive Advantage, Journal of Managmement, 17, Pp. 99 - 120 Wright, P. M., McMahan, G. C., (1992). Theoretical Perspectives for Strategic Human Resource Management, Journal of Management, 18, Pp. 295 - 320 Pieper, R., (1990). Human Resource Management: An International Comparison, Walter de Gruyter, Pp. 36 Lundy, O., Cowling, A., (1996). Strategic Human Resource Management, Routledge, Pp. 378 Storey, P., Wright, P. M., Ulrich, D., (2009). The Routledge Companion to Strategic Human Resource Management, Taylor and Francis, Pp.73 Schuler, R. S., Jackson, S. E., (2007). Strategic Human Resource Management, Wiley Blackwell Publication, Pp. 217 Read More