Google Companys SHRM Approach - Case Study Example

Analysing Google Company’s SHRM Approach using the Best Fit, Best Approach and RBV Models- A Case Study Introduction The field of Strategic Human Resource Management (SHRM) has accumulated enough resource for research on finding the best-fit and best-approach leading to Human Resource (HR) betterment and competency. The advantage of Best Fit and Best Approach model is to find the right-fit between business strategy and HR practices, which when implemented improves business performance. It is one of the dominant approaches to organizational betterment and crucial for achieving long-tem competitiveness in business (Armstrong and Baron, 2002) The organizational culture at Google is an ideal instance of how an organization links its business strategies to the internal environment to create policies and practices for acquiring a competitive advantage. For analyzing the Best Approach for a global internet-business company such as Google, this essay will describe each SHRM models and its characteristic and enlighten on the critically competent Best Approach framework (Mello, 2014). The reason for selecting Google as a case study is owing to the fact that Google has been a renowned brand in the industry with a rich resource-base. An attractive organization to work with, its planning and development practices are the key to its success and achievements and would be analysed in the light of the above SHRM concepts throughout the discourse (Schuler and Jackson, 2008). Global companies like Google need to be extremely organised, yet flexible in the face of the strict competition from the technologically advancing and complicated environments (Porter, 1991). In all this, the human quotient is one of the most pertinent factors in maintaining organizational decorum. The management of this factor is performed using SHRM principles. Google Company’s case study based analysis would help elucidate the key factors on managing the dualities of flexibility and maintaining organization discipline. A constructive review of all the three models of Best Fit, Best Approach and RBV would help identifying the key factors for success in business performance and the ambiguities, issues with special relevance to a technologically advanced company, such a Google. Best Practice Model, Best Fit Model and RBV Human resource practitioners are always in the search of best approach for business strategies. They understand the market dynamics and present solutions adapted to the market dynamics. With this thought in mind, the strategic human resource management (SHRM) practices in any organization drives the supply-chains and managing the nature of competition. This begins by harnessing the competencies of workers, suppliers and customers to manage the knowledge-building process, prioritising on the intrinsic organizational characteristics of ambiguity, complexity and diversification within an organization (Armstrong & Baron 2002). To begin with, Best fit view is best explained with the help of two model approaches, life cycle model and competitive advantage model (Beardwell and Claydon, 2014). The Best Fit view considers vertical integration by linking appropriate HR practices to the various stages of business life-cycle. The life-cycle model considers the HR policies to differ at different stages along an organization’s growth, to maturity and finally decline. This again helps in predicting what would be the most strategic position to downsize or reduce redundancy to create a more viable model that contributes to sustainable competitive advantage. This could include factors, such as, retain a high-performance staff, optimal recruitment and robust training plans to multi-task (Boxall and Purcell, 2000, Marchington and Wilkinson, 2002). Another model is the competitive advantage model that proclaims that the HR policies work best when applied with a competitive strategy (Marchington and Wilkinson, 2002). This model identifies three strategic types of strategic behaviour that could be linked to HR best practices. They are defenders, prosecutors and analysers. • Operating in small niche market, defenders help produce high quality products and services against high prices. • Prospectors use innovative and more flexible strategies to bring in changes in the product line quite often. • Analysers are again less innovative but efficient and ensure stability by entering the market only when it is risk free. Resource Based View (RBV) is a paradigm shift from the approach of over-reliance on internal resources, used in the Best Fit model. It is particularly important in the context of external environment and considers on achieving uniqueness and sustainable competitiveness by manipulating organization’s resources. The frameworks of VRIO (Value, Rarity, Inimitable, and Organisation) best explain the RBV concept well (Beardwell and Claydon, 2014). • Value deals with the impact of HR by improving customer service and value added stuffs. • Rarity is important to understand the rare characteristics of the firm’s HR resources to increase the competitiveness. • Inimitability deals with acknowledging a firm’s past history and culture to build-up on its unique practices and behaviours to give it a competitive edge. • Organisation is the assimilation of its internal resources into a integrated system that gives a firm value, rarity and inimitability characteristics. The term of Best practice transliterates into a sense of high commitment through a distinctive use of human resource practices which helps firms to modify their settings to improve business. In the aftermath of global economic crisis, most of the multi-national companies are adhering to a policy of cost reduction and maintaining employees on job (Marchington and Wilkinson, 2002) Therefore, the appropriate best practices of all the three above models brings out that a company should focus on strengthening its resource base in terms of through HR activities related to the internal and external resources of a company. Importance of each in Organizational Effectiveness Best Fit approach is suitable for different circumstances of an entire organization, irrespective of the culture, operational process and external environment. That is the reason that most of the critics of SHRM believe the Best Fit approach to be important and vital to an organization’s business performance. The focus is on learning what works and doesn’t, in connection to organizations that is applicable to the general process of adopting a best approach to an organization’s operational excellence (Armstrong, 2006). It begins with the identification of business needs, in the context of technology, culture, process chain and structure et., that needs to be worked upon. Then an approach is developed on the basis of selecting the right mix of best practice ingredients on the basis of the identified business needs (Armstrong, 2006). The advantage of Best Fit model is that it posits HR managers as the first-level strategic partners in the process of management related decision-making. With a wide range, this model discourages the one-size fits all concept of extending the benefits of good judgement available to them (Shield, 2007; Hughes, 2002). Best Practice Approach, on the other hand, begins with a set of HR practices that can be applied across any organizational context to improve performance and deliver beneficial outcomes to the stakeholders, especially employees (Marchington and Wilkinson, 2002). The effect of performance is stronger when all components of management practice are balanced with each other. This model imparts a high-commitment, high-involvement, high-performance work system and mutual gains to HR department for a superior organizational performance (Shields, 2007). Pfeffer (1994) has shown that there are seven important HR practices, such as security in employment, hiring in a selective manner, self-managed teams, good compensation, training and development, knowledge sharing etc are related to better organizational performance (Armstrong, 2006). The resource-based view of this model relates to intangible assets of HR, building better competitiveness. Each of the models of Best Fit, Best Approach and RBV, suggest strategic ways of achieving the business goals by putting the goals in place and supporting and guiding employee behaviour. Google imparts a lot of flexibility to its employees; say for example Google’s work-culture model enables its employees to spend exclusive 20% of their time to think innovatively (John, Nightingale and Girija Swaraj, 2008). This gives an opportunity to the new applicants and helps motivate them to continue in Google. However, they are less stressful on the factor of experience and job titles, as there seem to be many people with similar job title. This indicates that in Google, there is a need for some constructive change in the organizational behaviour (Sullivan 2005). A thorough analysis of the best practices of each of the three models, Best Fit, Best Approach and RBV, will deliberate the key points of building competitiveness in business which could be applied across the organization of Google. Research Questions This essay wishes to find answers to the following questions: • What are the key SHRM strategies adopted by Google in order to achieve its key business goals? • How does the model approach work to gauge more employee participation? • What are the key recommendations to integrate the prospects of the three models, namely, Best-fit, Resource Based View (RBV) and Best Approach, as a way forward for Google Company’s business excellence? Google Company‘s HR Management Google’s HR policies indicate that the company’s business scenario invest in creating a conducive business-environment that is beneficial to this organization as well as its employees. In the present times, there are sever challenges with regard to talent acquisition. Skill-redundancy is a common problem. With these persistent problems, organizations have to rethink the ways of strategically managing its resources and employees (Sullivan, 2008). Google’s market success can be related to its excellent management practices that are products of people analytics and business acumen to support innovation and focus on a rigid people-management approach. The premise of people-analytics revolves around undertaking the impactful and important management decisions to produce superior business results. In fact, a people-cost based approach accounts to 60 % of corporate variable costs, making cost management an important analytical item to strategise (John, Nightingale and Girija Swaraj, 2008). A strategic focus for Google has always been on recruiting the best talent and retaining innovation. This dimension is unique as Google has always been improvising on the traditional dimensions of HRM practices, risk-management, legal compliance and recruitment policies. This stride to reinvent drives the innovation potential of Google company. Another success factor of Google’s powerful people-management is a strong reliance on people-based operations, i.e., building relationships. Google handles a large volume of data and the challenge is to organise the information database to make it attainable and beneficial for use. Google search-engine was founded by Larry Page and Sergey Brin in the year 1998. Google as been gaining immense popularity as a technologically innovative company since then by making rapid advancements on the product front and contemplating on how to build more employee morality. The emphasis on innovation considers employees as an important contributor to company’s success, accruing to a number of 10,674 (2006) across the world (Sullivan, 2006; John, Nightingale and Girija Swaraj, 2008). Key Findings & Recommended Strategies This conceptual paper studies several literatures on SHRM, related to the models of Best Fit, Best Approach and Resource Based View with an intention to provide an insight about the various components associated with efficiency in business performance. Google companys management strategies and its organizational features would be evaluated to suggest the best-fit approach. The major components of Best Practice Model includes dimensions of selective recruitment, internal promotion, job security, training and development , reward over organizational performance and voice of the employees (Marchington and Wilkinson, 2002; Hughes and Julia, 2004) Employment Security – Google’s HR practices imbibe employee motivation and increase productivity. This helps in increasing the revenue turnover for the company. Google acknowledges talent management and is seriously been considered by many personnel as the preferred place to work due to its fun elements and flexible organizational structure. However, there is a serious lag in the number of full-time employees, where 30% of the employees are on a contractual basis (Sullivan, 2005). They are not been given stock options or employee benefits or attending company’s social events and access to intranet. Status Differences – The hierarchy level is quite reduced and the employees freely mingle with the higher management on all issues. This avoids the problems of senior staff playing the ruthless anarchist on its employees. However, there is a confusion regarding seniority due to redundant job titles and confusion about decision-making and control. Disruptive promotional structure – There is no formal structure for promotion and this implicates directly onto employee motivation among the senior an experienced staff. Google is not committed to providing scalability in this case and adopts a Best Fit only. Training and development – Google’s analytical approaches are extremely data-oriented, including HR management. There are opportunities of employee recognition programmes that capacitate and motivate the employees to deliver more. Google invests a lot on Best Approach for employee training and development. Selective Hiring process – Google’s staff hiring policy is intended only for the efficient and academically efficient. There is a ratio of 1 senior recruiter against 14 employees for training and a ration of 1:1 employer and employee relationship helps impart a strict vigil. Google recruitment policy is stringent on the Best Approach (John, Nightingale and Girija Swaraj, 2008). Rewarding System – People at Google are efficient and extremely passionate about the job, mostly with the new entrants. With diverse skills and key passion, there are many incentives and flexible employment schemes. However, the promotional schemes are following the Best Approach in terms of perks, benefits, reimbursements, health benefits etc. The 20 % policy offers a liberal recognition and reward for acknowledging creative innovation (Marc, 2014). The referral bonus programmes awards employees with rewards worth $2000 and other benefit packages. Even the compensation packages are based on pay-for-performance, focussing on providing reward for strong performance and robust training (John, Nightingale and Girija Swaraj, 2008). The Best Fit model stresses on the concept of external-fit as the best-fit approach. As a result, there cannot be a single point factor appropriate in the context of an organization’s best performance. Following the previous descriptions on the two model approaches of Business Life cycle and Cost-Control, one can review the HR scenario at Google. Business Life cycle – Recruitment and selection, compensation, rewards, training and development are the various stages of the model (Marchington & Wilkinson, 2002). According to this model, Google follows the best-fit approach by prioritising on the most academically sound and technically proficient. Incentives and rewarding schemes are fitted to best possible interests of the company and its employees. Cost Control – Google’s corporate policies are designed to the best possible interest of its employees and as a result it has been awarded as the best company to work with in the year 2014 (Marc, 2014). One way of cutting down cost is by curtaining on a rigorous marketing and advertising strategy. Google stresses more on product development and innovation (Marc, 2014). Gaps identified in each model approach The flaw of Best Fit model focuses on the limitation of the search for contingency or matching model of HRM as well as the difficulty in showing their interconnection, and the way that changes in one variable impacting other (Shields, 2007). The major question in the model of best practice approach is on the question of universalism. That is because, how can the same set of resources and routines be utilised to generate a rare, un-inimitable and perfectly efficient business performance. Then again, there is a question of on-size fits all. That is say, whether the same model could be applied to other organizational structures too (Armstrong, 2005). The greatest disadvantage of the resource-based view of developing strategies based on resources is that it might turn out to be disadvantageous and create cost asymmetries and quality compromise (Bridoux, 2004). RBV helps bridge the gap between the conventional HRM theories and the constructs of strategy. By combining all physical, human and organizational resources to add a unique value so that competitors find it difficult to imitate (Barney, 1991) imparts an integrative view to the RBV concept. An internet giant, as Google, would excel as a sustained global internet company by adopting a VRIN concept. The VRIN helps fulfil the criteria of being valuable, rare, imperfect ably imitable and not-substitutable. By considering the principle of economic rent, the company views on the collection of capacities. The view is to develop a coherent and integrative role that focuses on strategic decision making (Schoemaker, 1990). Action Strategies 1. Enhancing Leadership Quality Employee satisfaction is directly related to the feeling on how employees feel about their employers. On being values, retained and regularly praised and rewarded for their endeavours, participation in decision making, employees get a clear vision of the organizational goals. That pertains to imbibing proper leadership skills which are always valued and beneficial to an organization and its employees. 2. Imbibing a Diverse and Disciplined Organizational Culture All people-decisions at Google are based on data and analytics. This has replaced the traditional decision-making approach of HR into an alternative order of what could be interpreted as fact-based or evidence-based decision making. Google’s free-food, the 20% time slot and opportunities of fun-activities help to maintain diversity and a productive environment that keeps employees happy and motivated to deliver more. Employees are a valuable resource for the company. Therefore, Google needs to further develop an interactive and creative yet efficient work-culture for delivering on innovation and employee motivation. 3. Adopting an Integrated Approach to Industrial Best Policy and Organizational Practice Google does not reveal much about its infrastructure and patented technology. It own huge data centres and servers across the world that are difficult to imitate and can assure success and competitive advantage in the market, even at the times of financial depression or market failure. 4. Setting a strategic recruitment and selection policy Other than superior technology and infrastructure, the selection and staffing policy at Google is highly advanced. The focus should be on innovation and widening the skill base. However, quality enhancement requires all-round enhancement of all its resources, including employee security, incentives, compensation, ownership, job designation, multidisciplinary-trainings, pay structure and knowledge sharing. Other than attracting the right talent, retaining them is necessary. In order to maintain high performance and right leadership, HR practices and tools needs to manage its people more skilfully. 5. Investing on induction and Employee Motivation As a way to looking forward, Google company believes in thriving on a robust recruitment policy. They have a world class organization culture and a robust induction programme. By making the responsibilities crystal clear, they invest on personality development and building ambition among new comers. The employee retainability is more practiced at the top-managerial levels. These could be designed to suit the mid-management and other staff of the organization too. 6. Sustainability and competitive advantage Using the RBV, the valuable capabilities and resources are deciphered which would impart a un-imitability and sustainability to Google Company as a ideal internet-based disciplined and efficient organization. Conclusion A close analysis of the various models of SHRM implies to strategic choices that are associated with the various resources of HR. The field of HRM is very diverse and complex and encompasses a board range of dimensions from cognitive to political and economic challenges. To understand the business strategy is important for executive teams and management, understanding the key aspects of each SHRM models is essential and as way forward building on values, capabilities and un-imitability and sustainability is necessary. This is achievable through a RBV model and imbibing the advantages of each of the other models from Best Fit and Best Approach strategies. Reference List Armstrong, M. and Baron, A., 2002. Strategic HRM: The Key To Improved Business Performance. UK: CIPD Publishing Armstrong, M., and Taylor, S., 2014. Armstrongs Handbook Of Human Resource Management Practice. London: Kogan Page Publishers. Beardwell, J. and Claydon, T., 2014. 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