Impact of Competitive Advantage on Strategic Human Resource Management - Research Paper Example

Impact of Competitive Advantage on Strategic Human Resource Management: How it differs from Conventional Human Resource Management Aim The aim of this research is to understand the resultant competitive edge to a company through applying Strategic Human Resource Management (SHRM) and how it is better or different approach than Human Resource Management (HRM), conventionally known as Personnel Management. Objective There are three main objectives of conducting this research. 1. To examine the proactive approach of Strategic Human Resource Management (SHRM). 2. To analyze how conventional HRM is more related to transactional activities. 3. To investigate the benefits of Strategic Human Resource Management (SHRM) to a company over Human Resource Management (HRM). Research Questions 1. Is there any association between the competitive edge of the company and its Strategic Human Resource Management? Yes, there is significant association between competitive edge of a company and its Strategic Human Resource Management. 2. Is there any association between Strategic Human Resource Management (SHRM) and conventional Human Resource Management (HRM)? Yes, there is significant association between Strategic Human Resource Management (SHRM) and conventional Human Resource Management (HRM). 3. Is there any association between the financial growth of a company and its Strategic Human Resource Management (SHRM)? Yes, there is a strong relationship between the financial growth of a company and its Strategic Human Resource Management (SHRM) Hypothesis H1: There is significant association between competitive edge of a company and its Strategic Human Resource Management. H2: There is a significant association between Strategic Human Resource Management (SHRM) and conventional Human Resource Management (HRM). H3: There is a strong relationship between the financial growth of a company and its Strategic Human Resource Management (SHRM). Introduction The purpose of this research is to investigate the effectiveness of Strategic Human Resource Management (SHRM) and to establish a relationship between the competitive edge of a company and its Strategic Human Resource Management (SHRM) practices. In this research, the discussion pertaining to the emergence of Strategic Human Resource Management (SHRM) from the approach of conventional Human Resource Management (HRM) will be provided. According to Armstrong (2006,) human resource is linked with strategic goals to improve the over performance of business and to develop such an organizational culture that fosters flexibility, innovation, as well as competitive advantage. For a company, SHRM refers to viewing functions of HR and accepting those functions as a strategic partner of the company that involves in implementation and formation of business strategies through activities like Training, Recruitment and Selection, Performance Appraisal etc. Currently, HRM is considered as nothing more than an administrative duty. In modern era, the responsibilities of HR Manager are higher than ever before. Due to Globalization, it must be ensured that human resource department is handled effectively and smartly. Globalization has causes a diversified workforce where people come from varying background. Globalization also causes technological changes, changes in the context of business, concern of business from moving to profit-oriented to growth-oriented and many others (Devana, Fombrumm, & Tichy, 1981; Wrightt, 1998). In modern era, in order to make a business grow, companies need to achieve a competitive edge and not only look into the transactional activities and administrative aspect of the job, but also formulate those strategies that align with the goals of business. In case the company does not adopt these tactics, then it will lose its relevance sooner or later. According to Huselid and Becker, (1997) companies that align organizational goals with human resource management system, a considerable change in financial position is observed. Literature Review SHRM is considered as more extensive approach than conventional HRM because it links the activities of an organization with its goals (Singh, 2003). The performance appraisal system involves a strong reward plan. Rewards not only help employees to achieve outstanding performance but also increase the efficiency of the organization. It works a motivating force for remaining competent and giving best performance. In order to hire and retain valuable employees, companies must ensure a strong reward plan. A good reward plan motivates employees and improves the organizational culture (Lawler 1984). HR strategies are formulated not only for long term but also for short term purpose. HR performs a vital role in formulating short term goals. However, the true challenge for HR is to form long term strategies to attain business goals. For this purpose, an HR department is required to make adequate policies and coherent decisions regarding training, recruitment, career development, career paths, reward systems etc. (Lundberg 1985). Formulation of strategy will require HR to take a vigilant look on the factors such as leadership style, prevalent culture, mission and vision, history or organization, technological investments, financial position, rules and regulations, laws and union, as well as current conditions of the company. The predicted environment condition and the growth in relevant industry largely influence the business conditions. How well current strategies cope up with current business condition can determine the effectiveness of future business strategies. In order to gain competitive advantage through HR, varying competencies need to be added in order to enhance the level from the role of current administrator. HR needs to have competencies other than handling payrolls, grievance handling, recruitment, medical claims and insurance etc. However, there are some obstacles than block the proactive role of HR. They include: Lack of HR professional’s ability to study and understand the market. Risk aversive HR professionals. Low level of confidence in implementing creative approach. Only with the help of line managers can HR implement SHRM (Ulrich, 1998). Sharing of responsibility between line managers and HR can help to engage in a strategic role. Therefore, HR should work closely with line managers also because line managers are in direct link with employees and are better exposed to the difficulties faced by employees. Hence, better solutions for those difficulties can be brought. It will also allow substantial time to HR for concentrating on its strategic role. Ethical Consideration Interactions with participants will take place after prior approval and appointment of the managers of respective companies. The information that will be gathered from them through questionnaires will not be on the basis of coercion. The purpose of the research will be explained to each of the respondents in order to make them reply comfortably. Moreover, they will be given surety that the information provided by them will remain private and highly confidential. The consent of the respondents will be taken before publishing the final results. The data acquired from respondents will be saved in form of a soft copy and in a separate folder that will be accessed by group members only. Research Methodology For this study, quantitative methods will be employed since collection of in depth information is required in order to compare different aspects of the company over the period of time. Questionnaires will be constructed that would be presented to Managers and CEOs for collecting and organizing the data. The acquired data will then be analyzed in order to determine the effectiveness of SHRM for achieving competitive advantage. Data Collection Sampling Vigilant choice is required for selecting the sample since wrong choice may lead to inaccurate results providing. Sample should include data from variety of industries including medium sized organization where there are proper HR departments. The method of simple random sampling will be selected from population of 500 companies. Special emphasis will be given to companies that have shifted their HR practices from conventional HRM to SHRM. Sample Size The sample size chosen for this study is 25 organizations having at least 100 employees. These organizations will be selected from different industries. Since the sample size will be heterogeneous, the effectiveness of SHRM over conventional HRM can be determined more accurately. Data Analysis Once the data is acquired through questionnaires, it will be analyzed in order to investigate the effectiveness of SHRM as well as its contribution towards achieving competitive advantage. Assistance from appropriate statistical tool may be utilized if required in order to define the relationship between competitive advantage of an organization and SHRM. The human resource strategy and corporate strategy will be analyzed and conclusion will be drawn on the basis of the results of the research conducted. Conclusion Conclusion will be provided in order to call attention to the future. Conclusion will include a quick synopsis of the discussion and results. A brief description of results will be given involving summing up the main ideas. Research will be concluded by addressing the predicted outcomes of the study. The results acquired from analysis will either prove or disprove the hypotheses mentioned earlier in this paper. Those results will then be compared with similar results of the studies conducted previously. A brief explanation will be provided regarding how this research contributes to literature, discussions and debates as well as fill gaps in existing research. Research Plan Activity Number of Days Selecting Sample 5 days Selecting size of sample 5 days Constructing questionnaires 10 days Meeting Managers 20 days Analyzing data 10 days Storing and interpreting data 10 days Preparing final report 10 days Total 70 days References Armstrong, Michael, 2006. 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