A Good Structure and Management Strategies in the Organizational Processes - Research Paper Example

Introduction Human Resources management is an important part of a contemporary organization’s functioning. A company’s operations greatly depend on HR since they are the basis for actual company’s existence among all the other available resources, such as financial, technological, informational, and other assets. Consequently, managing human resources is to be as important as managing, for example, the finances of an organization since all the components of organizational structure and operation are equally important on the way toward company’s growth and development. However, it has also been suggested that: “In times of business uncertainty strategies for managing Human Resources are pointless as they are bound to be changed.” Indeed, in the constantly changing and relatively unstable market environment change is inevitable. Therefore, in order to be successful, an organization has to embrace it (Waring & Glendon 1998, p.127). At the same time strategic management is also an inevitable part of company operations since it provides an organization with some guidance and directions to follow. So, in the given paper we’ll take a closer look at the meaning and purpose of managing human resources strategically. We’ll analyze the core concept of strategic HR management, as well as evaluate the value and benefits of managing human resources strategically. Besides, to have some space for comparison, we will analyze the costs and/or benefits of having no strategic plans for human resources. In order to do it a look will be taken at the latest research studies on the topic. As a result I tend to find out whether it makes a point for an organization to develop and follow certain strategic management practices in relation to human resources considering the fact that they are to be constantly changing. Meaning and purpose of managing human resources strategically Leopold, Harris and Watson (2004) define Strategic Managing of Human Resources as a mean of implementing corporate business strategy through HR. That means that HR managers and specialists are to work with a purpose of implementing strategic decisions taken by upper management on practice using the capabilities and potential of people working in an organization in order to improve the overall company’s performance (Bratton & Gold, 2001). They are to do it by means of negotiation, argument, and conflict resolution tools. The writers outline that managing HR strategically is vitally important for achieving organizational excellence in the long run. In addition, it is stated that HR management is, and should, be interconnected with the general management practices of an organization. The U.S. Office of Personnel Management defines Strategic Managing of Human Resources, also referred as ‘Alignment’, as integrating HR decisions with organizational mission and goals - the decisions taken about the results an organization is to achieve (U.S. Office of Personnel Management, 1999). The research conducted by U.S. Office of Personnel Management reports that this can be achieved by means of interconnecting HR management principles and practices with company’s overall planning process, so that HR activities would support the mission goals. In any case, strategic planning is an important part of organization’s operations since it allows a company to define its current market position, as well as analyze its potential and determine the most significant short- and long-term goals (McNamara, 2003). And, since any plans and goals cannot be achieved and implemented without people, HR is exactly the mean of introducing and implementing the policies and strategies agreed by the upper management. So, exactly HR is a vital part of the process of achieving the defined goals. Besides, since strategic managing and planning are to help an organization to define where it’s heading to, SHRM (strategic human resources management) is as important because it is to provide the basis and foundation for implementing the general company’s plans. So, to sum it up, it can be stated that SHRM is a tool for improving business performance of an organization (Armstrong & Baron, 2002) by means of matching company structure, culture, values, and activities that affect employees’ performance and behavior to the strategic business goals and needs (Schuler, 1992). Therefore, strategic HR management is to prepare a foundation for successful implementation of company’s tasks. It should also be mentioned that though specific strategies are an integral part of HR management, they do not form the SHRM system itself. On the contrary – such strategies are just the tools for implementing an overall framework of the defined strategic decisions. Furthermore, the choice and application of any individual strategies is conditioned by the SHRM framework (Nankervis, Campton & Baird, 2005). So, in addition to the traditional administrative role, the HR department is also, to some extent, responsible for employees’ performance and satisfaction; consequently, for company’s performance (HR Focus News Briefs 2006, p.8). Besides, a research conducted by PricewaterhouseCoopers (2004) states that HR, being a strategic partner to company’s management, should also deal with managing change and developing leadership since these factors greatly influence organizational performance. Value and benefits of managing human resources strategically Since an organization cannot function without proper performance of its employees, the most important benefits SHRM can bring on board are attracting and hiring qualified employees, improving people’s performance, performing leadership function, and guiding behavior and attitudes, as well as organizational change. By successfully performing these functions HR adds value to an organization. As for the strategic aspect of managing HR, its purpose is similar to that of the purpose of general strategic planning and management in the organization: to define and allocate available resources in such a way that they provide a company with a competitive advantage (Mazen & El-Kayaly). In his article “Chart Your Course to Strategically Align Business and Technology” Patric Durbin (2006) names strategic planning and, consequently, business strategy as one of the key aspects of organizational excellence. It helps an organization to clarify and arrange its goals and strategies for them to correspond with resources and objectives. According to Durbin, the first thing to be determined by any organization is the strategy of its further business operations. The defined strategy will, in its turn, become a basis for all the further strategic solutions and actions. So, the first thing a company has to implement is the strategic planning which involves defining the company’s mission and objectives, which are goals to achieve, and major methods and ways of achieving the desired goals – strategies. Objections, thus, would act as a basis for all the decisions and changes in company’s strategy and course in all the circumstances. Hence, even though the resources might be limited, they should be focused on increasing of their value through the qualitative approach, which means that each member of the process should be committed to one goal – a qualitative product. A charted organizational course which includes goals, benefits, time-frame, cost, and risk will provide an organization and all its members with a clear understanding of what is required of them, how they can do it, and what will be the result of the activity. Hence, the initially set goals will be achieved through good planning and communication, and HR is then the structure to implement the strategic plan. In addition, strategic planning allows HR to forecast and plan its further needs (Mazen & El-Kayaly). Besides, according to McNamara (2003), strategic HR planning is not only to set the goals and objectives, but to also effectively communicate them to the employees. Another task is ensuring the most effective use and allocation of company resources by focusing them on the key priorities. Importance of SHRM Though theoretically, as it was outlined above, strategic HR management should improve organizational performance, it appears to be difficult to accurately define the influence of SHRM on organizational excellence. Wright and Huggerty (2005, p.164) describe a research which tried to define the influence between SHRM practices on company’s performance. The results showed that SHRM does influence profitability. However, there was no reliable data proving the correlation to productivity and people performance. However, such results are claimed to have been caused by imperfect research methods – measurement of results is the greatest problem when dealing with analyzing the SHRM’s relation to employees’ performance. So, though it is difficult to define and measure the direct relation of HR on organizational excellence, it can be concluded that if HR is not a strategic partner of the organization, its functions will include only legal compliance and hiring new employees. In such a situation, however, organizational goals will not be considered in HR performing its functions. Consequently, an organization will lack an additional tool for improving its performance, though, according to Harrington (2005, pp.107-114), an organization must excel in all its parts, as well as in their integration and productive cooperation. Besides, according to Erven (2003), organization is the most effective when its business decisions are integrated with, and supported by SHRM. Role of SHRM in changing business environment Furthermore, in the current changing and rapidly developing business environment change is inevitable, and, consequently, a company must get used to it by changing its internal structures and processes correspondingly. Besides, a growing and developing company must be constantly improving in order to stay in line with the competition. All the improvements to be applied to the company involve some changes and, consequently risks. Archibald (2004, p.115) states that effective managing means managing changes in the first place. Furthermore, changes, being a driver of organizational development, can be either avoided or accepted. Both options involve managing risks. So, here arises the question of how should any change be managed. Probably a better question would be that about how the risks related to change should be managed and dealt with. Any change entailed by company’s growth and development always brings certain risks because change involves aspects that are completely new to a company. Hence, not only the change is to be managed, but also risks. According to Cristensen and Overdorf (2000, p.66), there are three ways a company can use to cope risk and, accordingly, with change that may be caused by it. They are: creation of new organizational structure within corporate boundaries in which new process can be developed; spinning out an independent organization from the existing gone and developing new processed and values within it required to solve the problem; acquiring a different organization, the processes and values of which closely match to the requirements of the new company culture, structure, or project. Ideally, outline Cristensen & Overdorf (2000, pp. 67-76) and organization should create a team structure and organizational processes that would best correspond to the process and resources required by each particular project. Surely, none of these options can be performed without a direct participation of HR. Besides, company’s management, guided by SHR, should use certain management and leadership strategies. First of all the primary goals a company is to achieve should be identified. They, in their turn, are to be supported by specific vision to support them. Afterwards a strategic plan for introducing and promoting such goals and vision within the organization should be developed and implemented by human resources. The result of such SHRM is creating a common vision for all the employees, which should be the standard to guide their behavior and performance. In order to achieve such a result the HR should ensure that all the employees understand and accept the strategic decisions taken by management. Furthermore, the successful implementation of the strategic plan would lead to employees’ accepting changes as positive and those leading toward their personal growth, development and success within the organization. Consequently, SHRM is responsible for shaping people’s positive perceptions of innovations, which are to grow into common visions and corporate culture afterwards. The common vision, as a part of organizational culture, is to help SHRM in shaping the organization which is desired by its employees (Webb, 2001). Previously companies were more focused on simply meeting the needs of their clients, while paying little attention to the internal processes. This, however, has changed with time, and nowadays organizations clearly realize the importance of aligning their strategic resources to the business needs in the most productive manner. Therefore, the role of employees and, consequently, HR, has become much greater. As a result, HR gained an opportunity to influence an organization strategically. Besides, according to Stone (1998), now HRM is an integral part of company’s operations. SHRM takes part in taking managerial decisions, and plays the most important role in introducing and implementing them. So, being strategically focused, HRM should not only be a strategic partner of company’s management, but also a structure that brings in innovations, manages changes, and influences the everyday operations of the company. While the task of strategic planning itself is to develop certain strategies and steps for their implementation, HR is the one to implement them. Therefore, SHRM should be an integral part of the decision-making process of an organization in order to be fully aware of the current goals to be reached. This provides SHRM with the tools for translating such goals into action plans and further implementing them through company’s HR policies and practices. Besides, SHRM is to ensure that the concerns and ideas of HR are being paid attention to, and taken into consideration when taking any decisions related to people. Besides, clearly outlined goals and directions to follow provide HR with an opportunity to develop employees’ skills in the right direction. SHRM is to educate and develop employees so that they clearly understand and accept company’s culture and values. This, in its turn will result in their accepting changes faster and easier, actively participating in company’s operations, and bringing new ideas that may lead to positive and productive changes and innovations. The successful implementation of SHRM’s goals can be ensured by recognizing the need for change in time, and the earlier the better (Legge, 1998). The strategic role of HRM here would be analyzing the current situation, defining a solution, outlining the steps to follow, and, finally, introducing and implementing the innovation. All this, however, should be closely integrated with the general organizational strategic planning since SHRM is one of its parts. In addition, HR should devote time to individual work with employees in order to ensure a successful implementation of the strategic plans to be executed. It should also be taken into consideration that not only educational work should take place, but also employees’ feedbacks should be gathered and analyzed in order to have data upon which a potentially required correction of the plan’s implementation procedure can be based. One more tool to be used by SHRM is performance appraisals. They are to reflect upon past performance of an employee, as well as influence and improve the future behavior. Conclusion In any organization which is growing and developing change and innovation are inevitable parts of the operations. Consequently, managing such an organization always requires managing change and risk associated with it. Therefore, no matter what a good structure and management strategies a company may have at the moment, they are to be continually developing and changing. Important, however, is that management strategies are effectively used and applied to organizational processes. Similarly, HR strategies, even though they are also to be changed in the process of organizational development, are the key factor in creating company’s culture, structure, and values for it to fit in the new business environment. The absence of definite plans and strategies would mean the absence of any common vision, values, culture, and, consequently, goal to move towards. As a result, a company would not make any progress. Therefore, SHRM plays the most important role as a framework which will introduce and implement the innovations in the organization. So, HR strategies are never pointless since they are the bridge to the new stages of organization development and, afterwards, evolution correspondingly. References Archibald, R.D., 2004. Managing High-Technology Programs and Projects, 3rd edition, New York: John Wiley&Sons Inc. Armstrong, M. & Baron, A., 2002. Strategic HRM: the key to improved business performance. Developing practice. 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