The Role of Strategic Human Resource Management in the Organization - Coursework Example

Critically discuss to what extent and how a Strategic HRM approach can help to create value and competitive advantage in an organisation This paper talks about Human Resource Management being a very prominent part of any organization. It then formulates arguments pertaining to Strategic Management of Human Resources. This includes strategies, long-term benefits, functions and goals, development, models and evaluation of this very important resource. It also highlights how today’s resource management is different from yesteryear’s. Introduction: Every company has many resources. From physical goods, to inventory, capital to human resource, all constitute towards being part of a certain unit of any company. Human resource planning and management hence is one such component that can involve various strategies to achieve any organization’s main aim. Human resource management is all about recruiting the right kind of people, placing them in their correct seats, providing them with the training they require, and developing them constantly to the benefit of the organization. (Stoner, Freeman & Gilbert Jr., 1998) Human Resource Management, what is it? Human Resource Management, is hence that function of any organization that serves to achieve the basic purpose of hiring, management of, directing, leading, people who are working in that organization. For this purpose, simply put can we say that there are Human Resource Managers. The question, that arises now is so what do these managers do? They are in charge of handling all those things that are part of the management of human resources. This includes, hiring, compensation, performance monitoring, safety, health, motivating employees, leading, administering, developing, and training etc. (Heathfield, n.d.) More broadly put, there are hence many strategies and methods that are adopted by many organizations throughout the whole world, that aim to make the best use of their very important resource called human resource. These are aimed at making sure that the organization benefits from it and gains profitability by putting this important resource to use. These strategies are: Acquisition Maintenance Exploitation Development Disposal We can easily say that under the management of human resources or the workforce, many other strategic plans are made and implemented. It is however, of immense importance that this planning and management is done within the boundaries of the aims and goals of the organization. (Bruce R. Jewell, 2000). HR Previously: Human labour and workplace have always been a prominent part of any workplace, for any organization. However, what’s important and interesting is the way it changed through the years. Even though we can say that this resource has always been there and what or who can change the functioning of this, there still have been quite a few changes that have occurred through the years. Previously, there was no such thing as “human resource management” and all it was, was basic human labour working for an organization to meet its goals etc. There was no separate division assigned for the management of this. There were hence no human resource managers, and no human resource planning as such. It was all about meeting an organization’s needs. So, whenever there would be a need to hire more employees, the organization would do it. There were no concept planning resources for the workforce, evaluating etc. Large companies would just have a Personnel Department to meet their needs. This department would only manager the workers’ salaries, their hiring and firing. Hence, we can surely say that this HRM is a concept of the new world. (McNamara, n.d.) HR Today: Today, in the more developed and fast-paced world, along with various other changes, we see around us a new concept called Human Resource Management. And around 20- 30 years back this new concept brought with itself new ideas to manage the workforce. This came with a replacement to the old Personnel Department, that being the Human Resource Department. Now hiring and firing, and making sure that the workers get paid is not the only task of this department. Rather, more is done. It’s all about managing them in the true sense. Now, it’s all about training people, to making them be a part of the organization by giving them such learning experiences that they can practically apply in the organization they are working for. This obviously, provided the organizations a customised approach to human resource development and suited better to the needs of the organization. And eventually, also achieve the basic aim of the organization, that being profit maximisation in a much better way. The entire workforce, as per various studies conducted to find out the benefits of this change, has been performing at better and improved capability levels, and more fruitful results can be seen. (McNamara, n.d.) Strategic Human Resource Management, what is it? Strategic human resource management is the process of correlating the basic human resource management with the strategic or long term goals of an organization. (Strategic Human Resource Management, n.d.) Strategic human resource management like any other profit maximizing technique is also linked to competitive edge that a company or an organization gets through improving its overall performance, since it’s already been established that all comes under this umbrella of human resources. (Brewster, 2005) In any organization, there are many resources. And whenever, the talk of these being put into the long-term context is concerned, and then it becomes evident that these things are there to help the company reap out long term profits. The three traditional poles of any long term or strategic business plan are: Resources Senior management Business environment Whenever, these three are combined to chalk out a long term plan for the company, we say that strategic goals are being kept into mind. In this “resources” section of the strategic plan, we say that there exists, Strategic human resource management. (Strategic Human Resource Management, n.d.) Functions of Strategic Human Resource Management: There are many duties that are part of the list of any strategic human resource manager. These duties or functions are, as above mentioned: Human resource planning Recruitment Selection Socialization Training and Development Performance appraisals Promotions, Compensation, Transfers, Demotions, Rotations etc It must be noted here that all these functions have to be inline with an organization’s long-term, strategic goals to come under the broad heading of strategic human resource management. Hence, every time a business develops a 10 year plan for the company or suggests long-term policies that involve human resource in any way, we can put that under strategic human resource management and development. For instance, training an organization’s workforce by making it more technology literate is making it more adapt to new practices and methods of working. Here, the company is developing its workforce keeping a long term view in mind; hence this can be called strategic HRM. (Stoner, Freeman & Gilbert Jr., 1998). Strategic Human Resource Management and Today’s World: The importance of Strategic human resource management is increasing day by day. This is because more and more companies and organizations now look at this extremely important resource as a way to gain even more competitive advantages out of the business environments that they function in. This hence, proves itself to be a motivating and encouraging factor, to develop and formulate new frameworks that put more focus to the strategic role of the Human Resource function that is taken on by the Human Resource Department in the organizations of today. Models of Strategic Human Resource Management: There have been many models that give different thoughts and concepts to this one term we call Strategic HRM. Some say, it is an outcome. By this they mean that Strategic Human Resource Management (SHRM) is designed to achieve competitive edge over an organization’s competitors. Others take on the view of it being a process. By this, it means SHRM is all about linking Human Resource activities to the company’s or the organization’s business strategies. Another thought comes through by Bamberger and Meshoulam of SHRM being a process through which organizations look for a link between human, intellectual, technological and social capital of an organization, which it needs to meet its strategic goals. Yet another thought is by Ulrich, as he says that HR strategy is basically a result. This thought is of SHRM being the mission, foresight and precedent of an organization. (Strategic Human Resource Management, n.d.) The Concept of Integration and Strategic Human Resource Management: This basically states that SHRM should be in line with a business’ strategic goals and the kind of environment it operates in. this environment of course being so competitive, complexes the situation quite a bit. Hence, it is important that integration and the concept of incorporation are employed to catch up with the fast paced changes in today’s world. There are three aspects to this thought, these being: Linking HR policies and procedures to SHRM that the organization has. Adoption of the significance of Human Resource by line managers and people who come in direct contact with this very important resource. Assimilation of the labour force into the company so that they develop a feeling of belonging and attachment which eventually leads to dedication and obligation to this organization. Developing interest in the strategic goals of the organization, by making individual goals meet business goals. (Strategic Human Resource Management, n.d.) Formulation of Strategic HR strategies: This section talks about how and what policies and strategies are developed when dealing with Human Resources. This requires intense calculations, not just numerically for example calculating the number of staff members. Strategic planning and management requires certain guidelines and concepts that need to be kept into mind when talking about the management of the workforce. This is a complex task, since it all has to be defined within the boundaries of human resource management with respect to the wide, long term goals of the organization. These important pointers are: Equity: when equity is concerned, it is all about treatment of employees in a fair and just manner, so that no bad feelings or bias is created. Consideration: whenever goals are being formulated strategically, it is all about ensuring that the worker’s individual needs are met. Giving respect, showing care, looking after the employees is a good way to make sure that a manager is showing courtesy and consideration to his/her workforce Working conditions: health and safety of each worker is a very important aspect of management. This is so that the workers do not feel de-motivated or unsafe to work in conditions they feel not right to work in. Dedication and Motivation: an important part of Strategic HR Management is making sure that the workers are motivated and satisfied. When they are motivated to work, only then will they be able to make the best use of their abilities and capabilities. New and better productivity levels can be reached through this, and these can obviously be worked towards the advantage of the organization that looks after its employees and takes care of their motivation levels. (Forming HR Strategies, 2007). Evaluating Human Resources: HR outcomes: There are various criteria that are there to evaluate or judge how to compensate workers for instance. One such way is that of “The Four C’s”. Harvard researchers have proposed this method and this proves important to the future strategic development of the entire workforce too. These Four Cs are: 1. Competence: this way suggests a measure to evaluate what is the proficiency level of each worker. How much can he do, or is capable of doing, and to what levels of productivity. Performance appraisals are hence a part of this category. 2. Commitment: surveys can be conducted to find out how motivated employees are and how well do they believe that they are part of the organization they work for. This is another way of saying that the assessment of each worker’s dedication to what he does is an important criterion. 3. Congruence: this deals with how well does an employee or a worker gel in the organization’s environment, constituting the organization’s policies and regulations etc. Is there trust and sincerity involved in the way an employee functions in an organization or not. 4. Cost Effectiveness: what is the turnover rate of that employee? What is his salary? How many paid leaves did/does he get? How much compensation is there reserved for him? What is the basic salary structure, absenteeism rate etc. (Stoner, Freeman & Gilbert Jr., 1998) Having talked about HR outcomes, let’s move onto the long-term consequences of these. Long- term consequences: This basically involves three basic things and is a part of each worker in the organization. These are: individual well- being (personal development) organizational effectiveness and organization’s well-being (organization’s development) Society’s well- being (societal development and nurturing) (Stoner, Freeman, Gilbert Jr., 1998). Works Cited 1. James Stoner, R. Edward Freeman, Daniel Gilbert Jr. (1998). Management. Prentice- Hall of India, pp 376. 2. Forming HR Strategies. (2007). [Internet]. Available from: http://www.hrmguide.co.uk/hrm/chap6/ch6-links2.htm [Accessed 14, August, 2008]. 3. James Stoner, R. Edward Freeman, Daniel Gilbert Jr. (1998). Management. Prentice- Hall of India, pp 401 – 402. 4. Strategic Human Resource Management. (n.d.) [Internet]. Available from: http://www.palgrave.com/business/brattonandgold/docs/bgcha02.pdf [Accessed 14, August, 2008]. 5. Chris Brewster. (January, 2005). [Internet]. Management Revue Publication. Available from: http://www.allbusiness.com/human-resources/1049771-1.html [Accessed 14, August, 2008]. 6. Susan M. Heathfield. (n.d.). [Internet]. What is Human Resource Management? Available from: http://humanresources.about.com/od/glossaryh/f/hr_management.htm [Accessed 14, August, 2008]. 7. Carter McNamara. (n.d.). [Internet]. Human Resources Management. Available from: http://www.managementhelp.org/hr_mgmnt/hr_mgmnt.htm#anchor722373 [Accessed 14, August, 2008]. 8. Bruce R. Jewell. (2000). An Integrated Approach to Business Studies. Pearson Education Limited, pp. 502. Read More