Strategic Human Resource Management - Case Study Example

Human Resource Management Table of Content Strategic Human Resource Management (SHRM) 3 Work force diversity and SHRM 5 Work-Life demand and SHRM 9 SHRM & organisation’s competitive advantage 10 Conclusion 11 Reference 13 Strategic Human Resource Management (SHRM) In the present globalised world, Human Resource Practices of the organisations are changing at fast rate. As such, HRM needs to have a proactive approach instead of maintaining a reactive traditional approach and this thought have given birth to the concept of Strategic Human Resource Management (SHRM). Different authors gave different definition to SHRM, among them the most commonly accepted definition was provided by Taylor in the year 1996. The definition is as follows: “Strategic Human Resource Management (SHRM) is the used to explicitly link HRM with the strategic management processes of the organisation and to emphasis co-ordination or congruence among the various human resource management practices” (Harris et al., 2003, p.135). For an organisation’s success, its human resource plays a vital role, through adopting SHRM the organisation ensures that its people participates in developing strategic direction and corporation goal setting. SHRM also contributes in aligning and integrating the people’s strategy with organisational strategy. Management uses SHRM to create a balance between demand and supply of people, skill, knowledge and values (Turner, 2002, p.47). The main aim of SHRM is to select best HRM practices in the organisation to enhance the performance of work force and to assist them in achieving organisational goal. The SHRM is a chain of activities which starts with identification of organisational goal and mission statement, and includes an analysis of the environment surrounding the organisation. Considering environment strength and opportunities, the strategy for the organisation has to be developed and then this has to be implemented. For implementing the strategy many organisational functions might need to be changed and modified. Later on at regular basis the strategy is evaluated to monitor the alignment of performance with planing (Bratton, n.d., p.4). Figure 1: Steps involve in SHRM (Source: Bratton, n.d., p.4) Work force diversity and SHRM With passage of time diversity in workplace is growing as a matter of concern for the management as well as for the employees. The term work force diversity refers to the diversity within HRM policies and practices to handle the diversified work force. Diversity among the employees can be visible as the difference in the culture to which they belong, nationality, gender, age and many other facts. It can also be characteristic traits which cannot be identified easily, such as value system, personal and professional needs, and so on. The HRM has to pay attention towards management of work force diversity as it directly affects legal, moral as well as business environment of the organisation. It has been found the diversity can be managed by behavioural and emotional reactions and based on this observation, different theories has been developed. These are as follows: The similarity attraction paradigm: this theory was developed by social psychologist Donn Byrne (1961). As per this theory the individuals who are similar with one another in terms of demographic location, culture, age, gender, value system etc attract each other. If the majority of the individuals have one or more common facts they feel more comfortable in the work place. Different researchers conducted work undertaking this theory and found that in practical this theory works quite effectively. One such example was the study conducted by Hinds and colleague in the year 2000. But as per Elvira and Cohen (2001) such similarities may not be effective in controlling many HRM related problems like turnover rate or job dissatisfaction (Dipboye & Colella, 2005, p.39-40). Social identity theory: this theory was developed by Turner & Brown in the year 1978 for explaining intergroup behaviour. This theory explains that individuals can be segregated in different groups on basis of the social ground for studying their intergroup behaviour. The feel of belonging to a particular group (as member) influences the behaviour of many individual like “us women” or “we Australian”. So undertaking the association with a particular group, individuals evaluate themselves. Tajfel concluded that such differentiation hinders interaction between different social groups (Ellemers et al, 1999, p.8-10). But this theory results in discrimination among the groups and the less powerful group suffers a lot in term of self esteem. Social categorisation theory: Turner, the founder of this theory claimed that when individuals are identified and grouped on basis of their behaviour, traits or value system, it results to a group having unique identity. For example for Asian students, one tries to point out certain unique features of that group and often the stereotype behaviour is superimposed on all the members belonging to this group. Research conducted by different scholars indicate such groups have common goals but as concluded by Kramer Brewer (1984) development of sub group leads to higher degree of conflict among the members and they lose their group identity (Bicchieri, 2006, p.160-162). Work place diversity has its own positive and negative impact in the organisation. If the management can handle work place diversity in an effective manner it will result in more innovative work environment, the employees can share their past experience and become more adaptive. It has been noticed that when customers from different geographical parts and communicating in different language find the employees who are from the common geographical place and sharing the same value system, they feel more comfortable and the level of their satisfaction get enhanced. During the brain storming activity the management can get different ideas and view from a diversified work force. But if the management fails to adopt proper human resource practices and policies, it leads to great problem for the human resource department and the effect is visible on the whole organisation. People find themselves misfit, they feel there is no one to understand their point of view and degree of job satisfaction decreases. There emerges barriers in communication channels, people become more resistance to change and deny to adopt any new policy which they feel will be beneficial for the other groups. Rate of turnover and grievances goes high, the level of motivation falls and the overall productivity of the work force declines. So while developing the human resource policies and practices, management undertakes SHRM to first identify the organisation goal and then it try to develop those policies which will take care of the work place diversity without hindering the work environment and also the productivity of the work force (Taylor et.al., 2008, p.237-238). After undertaking several studies conducted in different organisation, it was concluded that the human resource management have the sole responsibility of handling work place diversity, so the HR department should work with other department to develop an affective diversity training programme. The data collected from other department will be highly beneficial and can be used effectively to design the required training sessions. So the SHRM can prove itself highly effective in managing work place diversity and creating a more healthy internal environment (Kochan et. al., 2003, p.3-19). Figure 2: The effect of work place diversity on organisation (Source: Kochan et. al., 2003, p.6) Work-Life demand and SHRM With the changing environmental condition, work culture and nature of work companies are hiring employees who have to manage different responsibilities. The change in the work place environment has resulted in longer working hours, more mental and physical pressure on the employees, higher responsibility and growing amount of stress. The result is burn out among the employee, higher rate of turnover, more employee-management problems, and lower rate of job satisfaction. Employees are often found to complain that they have very less time for their personal life and other activities. The high rate of globalisation can be considered as one of the vital cause for misbalance in work-life and in the near future this will grow further. Undertaking all these facts the management in different organisation are trying to adopt more innovative approaches to handle work-life demand and SHRM can play an effective role in handling this growing problem. After understanding the requirement of each and every employee, more flexible working time schedule can be offered and to motivate the employee rewards can be distributed as per performance. Flexibility can be also provided in the nature of work and the location. Different medical benefits and leave structure can be part of the SHRM policies. But many HR managers believe such policies might result in negative internal environment as it leads to change in prevailing organisational culture (Ryan & Kossek, n.d. p.4-10). Figure 3: process of Work-Life adoption, implementation & execution (Source: Ryan & Kossek, n.d. p.41) SHRM & organisation’s competitive advantage Day by day companies are facing higher competition from their rival in different markets. This is due to the fact that government of different countries are making the policies and legal matters more lenient for attracting foreign companies. This reduces the barriers for new entrants and the prevailing companies in the market are facing higher competition. To retain the market share and to maintain the position, each and every department should come together and have to actively participate. The employees are an important resource for the organisation; hence through effective human resource management the companies can gain competitive advantage. The management often uses their human resource for retaining the core competency and gaining competitive position in the market. Different researches have been conducted to find out the role of SHRM in organisation’s competitive position. The results revealed by Walton, 1985 indicated that SHRM leads to high commitment among the employees and the productivity of the organisation both in terms of quality and quantity increases. According to Lawler, 1986 SHRM results in high involvement of work force with the management and as per Osterman, 1994 the employees’ performance goes high by many folds if management can maintain an effective SHRM practices (Hunter, 1995, p.8). Conclusion With the growing rate of globalisation two main problems which the human resource department is facing are work place diversity and work-life balance. Those days are gone where HRM follows reactive approach to the human resource problems, in the present era decisions have to be taken before hand and so there is a high demand for SHRM. SHRM being a proactive approach, it analyses the external and internal market environment, the threat and opportunities and the core competency of the organisation. After analysing the environment, the management tries to develop its employees to achieve the organisational goal. As the organisation enters in the new country, their work force becomes diversified and it results in more human resource related problems. The clash between the culture, ethics and value system often reduce the work efficiency and job satisfaction. Different scholars gave many theories to handle such deviation but none of them are fully effective and suffers from one or the other drawbacks. So the management have to use its own experience for developing the most appropriate human resource policies. In the same way, with growing work load the work-life balance is getting misbalanced and peoples are suffering with problems like low morale, burnout, and lower rate of motivation, boredom which directly hampers the work quality. So with appropriate SHRM, HR managers can adopt more creative and innovative approach. Hence it can be concluded that through affective approach toward SHRM, companies can manage growing problem in human resource and can retain its competitive position. Reference Bicchieri, C. (2006). The grammar of society: the nature and dynamics of social norms. Cambridge University Press. Bratton, J. (No date). Strategic human resource management. Retrieved January 04, 2010 from http://www.palgrave.com/business/brattonandgold/docs/bgcha02.pdf. Dipboye, R. L. & Colella, A. (2005). Discrimination at work: the psychological and organizational bases. Routledge. Ellemers, N., Spears, R. & Doosje, B. (1999). Social identity: context, commitment, content. Wiley-Blackwell. Harris, H., Brewster, C. & Sparrow, P. (2003). International human resource management. IPD Publishing. Hunter, W. L. (February 1995). How Will Competition Change Human Resource Management in Retail Banking? A Strategic Perspective. Financial Institutions Center. Retrieved January 04, 2010 from http://fic.wharton.upenn.edu/fic/papers/95/9504.pdf. Kochan, T. et al. (Nodate). The effects of diversity on business performance: report of the diversity research network. Retrieved January 04, 2010 from http://www.chrs.rutgers.edu/pub_documents/38.pdf. Ryan, M. A. & Kossek, E. E. No date. Work-Life Policy Implementation: Breaking Down Or Creating Barriers To Inclusiveness? Retrieved January 04, 2010 from http://www.polisci.msu.edu/kossek/hrmj_version_with_Ellen%27s_edits.pdf. Taylor, T., Doherty, A. & McGraw, P. (2008). Managing people in sport organizations: a strategic human resource management perspective. Butterworth-Heinemann. Turner, P. Chartered Institute of Personnel and Development. (2002). HR forecasting and planning. CIPD Publishing. Read More