The Human Resource Management Has a Strategic Implication - Research Paper Example

Human Resource Management - Assess the Extent to which Human Resource Management can be Considered Strategic Introduction Human resource department has appeared on the organizational chart in many firms in the recent past only. However there are still many organizations that consider it to be a waste of financial resources and valuable time. They believe that human minds and ways of thinking are too complex to be tackled by a group of people and thus they assert that the human resource department is only meant to improve the image of the company. Moreover they have the satisfaction that they have managed so many years without having an official human resource management department and thus have the feeling that they can carry on similarly so what is the use of increasing the expenditure figure in the profit and loss account? (Handy 1993) However, before we move on to the debate as to whether human resource management is strategic or not, let us first clear as to what exactly human resource management is and what are the various responsibilities of an HR department of a respected firm. The Human Resource Management Entity Human resource is the human capital of an organization or the employees and personnel and the integrated management of this resource in a way that it increases the efficiency and effectiveness of an organization is referred to as the human resource management. It is repeatedly heard that the human element is the most valuable asset of an organization and this was the basic factor that was considered when many organizations opted for setting up this department (Lewis 1994). Many people believe that a human resource department is only concerned with hiring and firing individuals, initially that was the case, however things have changed now and a broader series of responsibilities now come under the domain of the human resource department. Before we move on to highlighting the role of the HR department in the strategic management of an organization, it is very important that we fully understand the scope of work within a human resource department. We will discuss each responsibility and its strategic significance one by one and thus it will be easier to understand various dimensions in which the HR department contributes towards the strategic well-being of a company (Barr 2000). Appointing The first and the most well known responsibility that comes under the umbrella of the human resource management department is hiring or acquiring people. This may sound very simple but is not as such since it needs to be applied and thus it includes a series of steps within it. It involves realizing that there is a vacancy and assessing what type of skills and qualifications will be required to carry out that particular job. Once this is done, the next step involves spreading the word around that an eligible person is required. Some HR departments carry out the job themselves while others recruit head hunters (Shenkar 2004). Once this is done, then screening through resumes, taking interviews, conducting tests, documenting the recruitment and many similar activities follow. These sets of activities differ from one organization to another and deciding the combination as well as the criteria on which all employees should fall is also decided upon by a group of HR experts. To understand the importance of hiring the right person for the right post, one can imagine if this is not done. For instance if an engineer is hired as the assistant to account manager then the probability of the job being carried out appropriately will be very low. Moreover will he not only waste his own and other people’s time in learning how to carry out the job, he will still not be able to do the work very well and thus will be very frustrated at the end of the day. This means that the organization’s efficiency and effectiveness both will be affected. This is however a very extreme case as this problem can be smaller and more subtle. For example that person might not fit in the corporate culture of that organization and thus might be unable to produce the output to his fullest potential (Blyton 1998). Therefore, the role that the human resource management department plays here is hiring the right people who would row the boat of the firm in the right direction towards the overall goals of the organization. No matter how technological advanced an organization is, it still needs its human capital to run it and carry out the various functions, thus we can easily refer to the HR department as the support of the backbone of an organization. Training Once this procedure is successfully carried out the next responsibility that arises is training the new recruits. The importance of training for both old and new employees has increased tremendously. The responsibility of the HR department is to recognize the training requirements of different individuals and then plan the training programs within the organization or sign up for training programs being held elsewhere. This responsibility has become more complicated with the increasing number of training programs being held all around the world. HR heads now even need to decide which is the best form of training, is it classroom training, on the job, seminars, workshops, online training and many others. They even need to consider the financial feasibility of the program and decide whether the time invested in it will be worth the same. Moreover employees’ expectations regarding the training they will receive from the side of the organization that they have been working for has also increased, which adds on to the pressure of HR managers as to which programs they can select for them. Training is what increases the efficiency of an employee. He learns to do his job better and faster. Training programs can be job specific and may include technical training which obviously will teach the employees to carry out their responsibilities in a better way. On the other hand, there are general training programs such as team working, creativity, conflict management and many others that are required by all the employees of the firm. They however also increase the efficiency of the business, although in a more indirect way. They save time that is wasted during conflict and adjustment with peers and this time can be more successfully employed in doing more creative and productive work. Therefore this function of the HR department makes sure that the employees are capable enough to form a vision that would be beneficial for the whole organization and at the same time derive a strategy that would help them achieve the targets in the most efficient way. Motivating However this does not end the struggle of an HR department as then they have target in motivating their employees. Motivation can be explained in very simple terms by saying that it is the need to see the job completed and that too in an admirable way. Motivation has been the topic of discussion since the industrial revolution and organizations are still coming up with new and unique ways of motivating their employees. There are several different types of motivation strategies that exist already, however each and every strategy is not beneficial in all situations and circumstances, and sometimes it can backfire or may simply not be effective. Here we can take the example of a pizza outlet that is used for motivating its pizza delivery employees deriving the motivation strategy with the guy who makes the maximum deliveries will get a bonus. This is somewhat like the piece rate which is a broadly known and accepted motivation technique. However, the result of this motivational technique was more gruesome then pleasant. The rate of accidents of delivery motor bikes increased and compensation costs of the firm increased along with that. This is a very extreme example of an action backfiring. We can even state the example of a motivation strategy that is not very effective. An organization started giving free tickets of soccer matches to employees who performed better then the set target without realizing that there was a large group of female employees and many others who were not interested in soccer and thus it did not motivate them to perform better than the regular ones. Therefore, motivating employees includes a range of activities within itself. Firstly, it is important to recognize what factors will motivate employees and recognize which level are individual employees within the Maslow’s hierarchy. Once this is done it is important to decide what should be the technique employed to motivate them and if motivation is only to arrive within the certain performance criteria than what is the different criterion that needs to be set. It is then also important to tell employees about it and make them aware of the same. All these steps have importance in their own self and none of the steps can be missed out otherwise the desired effect or result will not be obtained. This is a very tedious task and becomes more complex as the number of employees increase because a level of equality needs to be maintained otherwise there will be an increase in the amount of dissatisfaction and mistrust which would have detrimental effects on the productivity of several employees. Motivation, as already known increases the efficiency of employees and ensures that the workers are fully satisfied with their work so that they put in their levels best and work as hard as they possibly can. However this is not the only benefit of motivation, it creates loyalty for the firm, and it helps in retaining good employees over a long period of time which has several benefits in return, for instance the reduction in initial training costs. Further it even helps in attracting new eligible employees and sometimes the cream of the labor force. Many firms try to set goals and then motivate their employees to fulfill those goals and reach the finish line. They try to make the employees feel like they are the owners of the firm so that they carry out their respective jobs with utmost sincerity and commitment (Roach 1997). All this is made possible by the HR department of the organization that invests time and money in deriving the right policy and implement that to have the optimum results from it. Therefore we can easily say that an organization will not be able to achieve its strategic goals in the right time if it does not have a motivated workforce. This is the responsibility of the HR department that has received the greatest attention in the past few years and many books and programs have been devoted towards motivating the workforce in different organizations. Evaluating the Workforce For the purpose of motivational rewards, deciding on whom to promote, setting a role model, encouraging competition and checking whether people are performing up to the set standard, the HR department needs to carry out a thorough analysis of the working regimes of individual employees. This first requires setting up a standard of performance for each post and job. Not only should this be set in terms of the amount of work done but also the way it is done, time consumed and usage of other resources. This task becomes more complex when the job becomes more qualitative and additionally abstract. Once this is done the next step involved is to measure the performance of each and every individual. Now here once again there are many ways of doing this. Sometimes only looking at the output is not enough as this does not tell the activities involved in producing that output. Therefore many firms conduct 360 degree feedback. Once this is done then the performance is compared to the set targets and for this, over-achievement rewards are given and for under-achievement a more thorough analysis is conducted as to why this happened and thus proper steps need to be taken to ensure better performance the next time. These measures may include training, feedback, warning, or some other kinds of changes (Peterson 2002). Employees are willingly seeking feedback now whether it is appreciation or even constructive criticism. They find it motivating when their performance is judged and a feedback regarding it is provided to them. In the implementation of a strategic plan, we often study about the step that involves checking to ensure that we are moving on the right track towards the achievement of goals. This assessment is a part of that checking only. It ensures that every individual employee is playing its role well in achieving the overall goals of the organization. If this is not done, then employees will never find out whether they are doing their work well or not, or are they even on the right track? This way many resources might be wasted when an individual fails to move on the right path. Hence this step is as important strategically as any other activity. Setting up a Pay Scale Money is the biggest factor because of which most employees work. There are many other factors that affect the work and job satisfaction of different employees but money is one of the most important factors that attracts people at work and make them commit to their respective jobs. Occupation is usually the source of living and thus the financial aspect of any job is very important. This management also comes in the domain of the human resource management. Before deciding on the pay of an individual or finalizing a raise in pay, many factors need to be considered so as to be fair and to avoid favoritism or perception of it in the workplace. This task includes both qualitative and quantitative data analysis. Pay brackets are formed considering the amount of work and effort required, and the general pay for that post in the market. However sometimes individual characteristics and performance are also considered. Once this is done, a contract is signed with that pay scale in black and white (Guest 1994). This is very important as there are legal consequences if there are any problems with the pay or any unnecessary delays for that matter of fact. As this has a huge financial aspect it is very important that it fits within the overall strategy of the organization and that the firm has enough resources to fulfill this obligation. Here we can even emphasize the point that the human resource department works hand in hand with other departments such as the finance and accounting department, in this case, to fulfill its own obligations and also theirs. Human resource is a supporting body for other functional sectors of the firm as it provides and takes care of the resources needed by all other departments and that is indeed the human capital (Kay 1995). Dealing with Conflict and Other Problems The market place has changed tremendously over the years. There is cut throat competition, fast changing requirements and circumstances, more aware and smart customers and many other factors that increase the level of stress for all employees. This is increased by the changing competition for jobs due to the surplus in the rate of unemployment. An individual is constantly under the load of responsibilities and worries. This has, in turn, increased other problems such as work place conflict, nervous breakdowns, decrease in productivity and creativity, and absenteeism. These problems may sound small but when summed up becomes a serious issue for the organization and hampers its progress to a great extent. These factors act as barriers in the path of the firm achieving its targets and goals and thus need to be accounted for and dealt with. Through proper counseling, training and intervening, many HR departments have decreased the level of stress and a number of organizational conflicts. The heads are responsible for recognizing the early symptoms of these problems and diagnosing them at the early stage as these could be deemed as deadly at a later stage. Once this is done it is best to make the people realize the true problem so that they can do something about it (Hopkins 1998). The solution to these problems has many benefits such as reduction in unnecessary wastage of time, grudges amongst employees, need for serious steps and also better team and group working realms. Another important aspect that is a part of the human capital management is the dismissal of employees. This has become important because of the present day laws associated with hiring and firing and the recent downsizing trend due to the deteriorating economic conditions. It is very important to realize who are the trouble makers and who can the company do better without. In case of downsizing, it is important that the right policy is adopted in order to avoid any legal consequences. This is usually a very difficult task to tell someone that he/she is being dismissed or laid-off however it becomes unavoidable under certain circumstances. Thus this is one of the most difficult tasks of the HR managers (Iles 2001). Importance of the Human Resource Management The importance of the human resource management as a strategic tool can be determined by studying the survey of Shell employees back in the year 1999 which clearly showed that they believed the human resource management is crucial for the eventual business success. We have already discussed the various functions of an HR department and these functions are more or less unavoidable thus if human resource department did not exist then these functions would have to be carried out by managers of other functional departments which will restrain them from performing their own jobs. Moreover having a human resource department helps in itself to improve the image of the company as it portrays that the firm actually cares about its employees and is ready to invest as much as is required to take good care of them. Further, there is a need for a neutral body that would work for the interest of all the departments and thus can act as a mediator if some kind of conflict arises. Therefore this body is also a unifying factor. Conclusion In the end, we can simply state that the human resource management has a strategic implication and it must be built within the corporate and strategic plans of the organization. As it is all about constantly finding ways of utilizing the most important asset of an organization which is the human resource so as to achieve the targets in the most efficient and effective way (Hollinshead 1995). All the activities involved are crucial and vital for the survival and success of the business in the market place of today and that these activities can be best carried out if the same work in coordination with other sectors of the overall business. Bibliography BARR, Pamela S. (2000). When Firms Change Direction. Oxford University Press BLYTON, Paul. (1998). The Dynamics of Employee Relations. Basingstoke Macmillan GUEST, D. (1994). Human Resource Management, Trade Unions and Industrial Relations in Human Resource Management. Routledge HANDY, Charles. (1993). Understanding Organizations. Penguin Publishers HOLLINSHEAD, Graham. (1995). Human Resource Management. Pitman HOPKINS, Shirley. (1998). Diversity Leadership: A Mandate for the 21st Century Workforce. 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