Strategic Human Resource Management in Australia - Example

Strategic Human Resource Management (SHRM) in Australia Barriers to SHRM in organizations Today many firms utilize human resources as a competitive tool. This happens when the policies of managing people are integrated with the firm’s culture and strategic business planning. Under this approach according to Sanchez & Levine (2009), congruence between organizational goals and human resource policies is emphasized. Strategic human resource management (SHRM) helps to provide this congruence. SHRM is believed to enhance the effectiveness of the firm since it advocates for taking into account human resource considerations when business strategy is being chosen (Arthur & Boyles, 2007). SHRM is a human resource system, which integrates the demands of business strategy. Boon, Paauwe, Boselie, & Hartog (2009) says that it entails a pattern of well-planned human resource activities, which enables a firm to attain its business goals. Thus, SHRM integrates traditional human resource management activities in the strategic planning and implementation of the firm’s business goals. SHRM can be said to refer to the process, which links Hr practice to business strategy, or the process by which firms seek to link human resources needs to the strategic needs of the firm. It is argued that SHRM is forward thinking proactive and creative process, which supports business goals. Strategic human resources differ from traditional functions of HRM in that it focuses on human resource programs with long-term objectives (Brown, Metz, Cregan, & Kulik, 2009). Unlike traditional HRM, which focuses on internal human resource issues, SHRM focus is directed toward addressing and solving problems, which affect people management programs in the end and more often globally (Arthur & Boyles, 2007). Thus, SHRM primarily aims at increasing the productivity of employees by focusing on business obstacles that occur outside of human resources (Kong, 2010). Thus, the basic function of strategic human resource manager is to identify key HR areas where strategies can be implemented in the end to improve productivity and motivation of employees. SHRM is thought to be of great benefit to a firm. First, it helps the firm to identify and analyze external opportunities and threats that can determine its success. It also helps to clarify the business vision and strategy for future operations (Sanchez & Levine, 2009). SHRM also enables a firm to acquire competitive intelligence, which may be essential for strategic planning process. The SHRM is furthermore used for recruiting, retaining, and motivating employees of a firm. Moreover, SHRM helps firms to develop and retain highly talented workforce in addition to ensuring that issues related to the development of its people are addressed systematically (Boon et al., 2009). The firm is also able to receive information concerning the firm’s internal strengths and weakness when it embraces SHRM (Kong, 2010). The organization is also placed in a better position of attaining the expectation of its customers effectively when it implements SHRM. SHRM enables a firm to attain high productivity in addition to ensuring competency in the business surplus. In spite the benefits of SHRM, there are various complex SHRM barriers, which hinder its implementation in organizations. The major barrier to implementation of SHRM is the lack of support of the HRM by the top management. It is widely believed that the support of top management is crucial for effective HRM. However, research has shown that such support is rarely witnessed many firms and hence it impedes the implementation of SHRM practice (Sanchez & Levine, 2009). This shows that HRM is often ignored when strategic business decisions are being made. Therefore, there is no material condition for long run strategic decisions, which places HRM as an essential function in the corporate strategy (Arthur & Boyles, 2007). This lack of support from top management implies that there is no commitment from top management for the firm to adopt a HRM practice that is meaningful and effective (Brown et al., 2009). This lack of support may also be because of the inability of HR managers to demonstrate the benefits of adopting a strategic HRM practice to the organization. Another barrier to implementation of SHRM in an organization is the inability of some HRM employees to undertake the additional more proactive roles that encompass SHRM (Boon et al., 2009). Research has shown that most HRM staff in Australian firms view their jobs as a routine administration and that they lack the necessary skills, knowledge, credibility, and influence to develop and implement a HRM program which integrates the strategic goals of the firm and the management of human resources (Chen & Huang, 2009). The lack of proven evidence about the long-term effect of HRM programs to a firm is another barrier to implementation of SHRM in a firm (Sanchez & Levine, 2009). This lack of evidence makes many members of a firm to be skeptical concerning the benefits of major HRM initiatives such as SHRM, which requires integration of human resource practice within the firm’s strategic business goal. This skepticism may be held by both top and middle management team within a firm. Thus, the management may not be able to discern tangible and positive performance outcome related to adoption of SHRM within the firm. Therefore, the commitment of the management to such initiative wanes and hence impedes the implementation of the envisioned HRM practice. Failure to understand the strategic needs of a business is another impediment to the implementation of strategic HRM (Arthur & Boyles, 2007). This results in most of the HR strategic initiatives being seen as irrelevant and counter productive. Implementation of SHRM in a firm may also fail if one initiative is taken in isolation without consideration of its implication to other areas of HR practice or if a holistic approach is not adopted. Implementation of SHRM involves change in the way decisions and the running of the firm is done. This is bound to encounter resistance from upper management and other players in the firm including the employees (Sanchez & Levine, 2009). This implies that structure for managing change ought to be in place to reduce resistance that may accompany implementation of the SHRM in a firm. Poor vertical communication, that is, up and down communication is also a barrier to effective implementation of SHRM. Since the HRM has no representation in the upper management, lack of proper communication to upper management may result in misunderstanding, which can lead to inability of the HR to communicate their strategies to the upper management (Sanchez & Levine, 2009). This inability can often result in poor perception of the proposal and subsequent rejection of lack of support from the upper management (Kong, 2010). Inability of the HRM to communicate effectively to line management and other employees may impede their efforts of convincing them to be part of the initiative and hence poor adoption or lack of it. Top down management style that is common in most Australian firms is also a barrier to implementation of SHRM (Boon et al., 2009). As noted above most firms lacks a representative of the HRM department in the upper management team hence it is often difficult for an initiative from HRM team, which is deemed lower in the management ladder to win the support of the upper management. Why barriers to SHRM exist Lack of support from top management may be due to two main reasons. The first reason is that many firms HRM department lacks any representation among the top management team within the firm. Lack of representation among senior management indicates that the HRM has no power and influence on the decisions being implemented at the firm and hence implementation of SHRM, which could be meaningful and effective for the firm, may not be attainable (Sanchez & Levine, 2009). In such instances where there is no HRM representation among the firm’s senior management, the main concern of the top management is their power and to maintain control over the firm (Arthur & Boyles, 2007). Thus the top management is least interested about the real needs of the organization such as enhancement of HRM via implementation of SHRM practice which may influence the strategy of the firm and allow greater devolution of power and control to line management especially concerning the management of employees. Another reason that may explain lack of support from top management of the SHRM practice adoption is that most of them take a short-term perspective on HRM. Most senior managers of firms believe that there is little evidence that HRM has a long term and positive effect on the performance of an individual or the organization. The failure to understand the strategic needs of the business often results from inadequate assessment of the cultural and environmental factors that affect the strategy contents (Arthur & Boyles, 2007). The initiative may be deemed irrelevant because it might be current fad or it has involved bad analysis of the best practice, which is not in line with the firm’s requirements. Resistance to change among different players often occurs due to lack of acceptance of the initiative by all concerned parties including top management (Sanchez & Levine, 2009). Inability to attain ownership among line managers could be another obstacle to implementing SHRM practice in a firm (Kong, 2010). Furthermore, the lack of development of line managers’ skills to help them implementing the SHRM presents a major obstacle to acceptance of SHRM initiative. Barriers to implementation of SHRM exist because of poor inter-functional or inter-unit coordination. SHRM requires that HRM coordinate with other units within the firm (Lengnick-Hall, Lengnick-Hall, Andrade, & Drake, 2009). Poor coordination may result in inter departmental conflicts which may impede efforts directed toward winning the support of all employees aimed at implementing the SHRM. SHRM are also vulnerable to changes in legislation and hence such legislation may impe3de implementation of SHRM (Arthur & Boyles, 2007). Labor laws, which protect the workers, may be counter efforts of a firm to implement SHRM initiative, which require employees say to have ability to multitask (Kong, 2010). Trade unions and labor unions may impede efforts aimed to measure performance of workers. Barriers to implementation of SHRM initiative may result from varying legislation and cultural context in which the firm operates (Sanchez & Levine, 2009). This implies that there can be no universal SHRM model, which can be applied to all firms. Thus, a firm in Australia may not adopt a SHRM initiative similar to another country because of the variations that exist in national regulatory systems, labor markets and institutional and cultural contexts in which the firm operates. How to overcome barriers to SHRM In order to overcome barriers to implementation of SHRM, HR managers should act on two areas in a sincere manner. First, HR managers must acquire the essential knowledge and skills of SHRM and related areas (Sanchez & Levine, 2009). Secondly, the HR managers should be involved in the development of SHRM programs, which have clear value linkages with the firm’s operations for both long and short-term period and implement them in a more systematic manner. The design of value added HRM programs and increased competence of HR managers will enhance the credibility and effectiveness of the SHRM program put in place. Barriers to implementation of SHRM could also be overcome by conducting a rigorous initial analysis (Chen & Huang, 2009). This analysis should cover the business needs, internal and external environmental factors, and corporate culture. This helps to reduce cases where the strategy adopted by the HRM department is not in line with the business strategy. The formulation of the strategy should involve setting out the rationale for the strategy and its aims clearly set out (Boon et al., 2009). This formulation will help the HRM to explain to top management the costs and other benefits of implementing the SHRM. As result, it will reduce cases where senior management does not value the HRM strategy. The HRM department should also seek to gain support to enable it to implement SHRM in the firm (Chen & Huang, 2009). This could involve obtaining support from the top management, line managers, employees and trade unions (Sanchez & Levine, 2009). To be able to win the support of all these stakeholders the HRM ought to clearly communicate their intentions and their rationale and ensure that all interested parties are involved in the formulation of the strategic plans. This will minimize cases of resistance during implementation process and all parties will own the initiative as their own. Prior to implementing SHRM an assessment of possible barrier should be done to identify barriers to its implementation (Chen & Huang, 2009). Those barriers related to indifference, lack of support processes or resources and resistance to change need to be particularly assessed (Sanchez & Levine, 2009). Only when it is ascertained that the initiative will receive a reasonable degree of support and that the required resources for the SHRM initiative are available should those involved begin implementing the initiative. Since implementation of SHRM involves change, those involved in its implementation should manage change. The change management process will aid in gaining acceptance for the SHRM initiative (Arthur & Boyles, 2007). Thus the HRM team should be involved actively in managing change by involving all parties in the process of implementation highlighting the benefits to the firm, employees and top management of the new initiative and reducing cases of debates. The HRM should prepare action plans for implementing SHRM (Chen & Huang, 2009). This will help in spelling out what ought to be done, who are to be involved and when it should be accomplished. Such action plan will indicate stages of implementing the SHRM program, the resources needed at each stage and the completion dates. This will also show the required consultation, communication, involvement and training programs (Sanchez & Levine, 2009). It will also state how monitoring of progress will be done and how success will be measured against objectives. This will provide upper management team with an overview of the expected outcomes and help in winning their support. To avoid problems that may arise during implementation of SHRM, which may result in its failure, the management of implementation, process should do in accordance to action plan. It should also involve progress monitoring and solving problems as they arise. To avoid cases of losing focus during the implementation process that may impede the whole process of implementing SHRM initiative, the program results ought to be followed up and evaluated (Boon et al., 2009). The evaluation process will help to point out what need to be amended in the original proposal, provision of supporting process, intensified communication, additional support to line managers and training or acquisition of more resources. Follow up and evaluation process should entail focus group discussions, interviews, and attitude surveys. The HRM should also be involved in promotion of quality of working life strategy (Arthur & Boyles, 2007). These will help them to develop an understanding between them and the employees based on partnership. This will promote development in areas such as health and safety, skill formation, job design and working hours. As a result, the HRM will be able to win the support of employees in the implementation of SHRM. In addition the HR team should adopt a strategy, which changes the role for unions from being a militant force to becoming a friend of the firm, which is involved in provision of financial, social, and legal support to members (Chen & Huang, 2009). This will allow unions to attract more members, which enhance the effectiveness and negotiation power of employees. By doing so, the HRM will be able to avoid legal obstacles as it implements SHRM initiative from the union groups. Promotion of formal and informal work related learning by HRM during formulation of SHRM could also reduce barriers to implementation of SHRM initiative. This helps HR managers to attain the substantive HRM goals of flexibility, commitment, and quality. This can strengthen the core competencies of the firm’s labor and foster the ability of employees to adopt the SHRM initiative being implemented. Reference Arthur, J., & Boyles, T. (2007). Validating the human resource system structure: A levels-based strategic HRM approach. Human Resource Management Review, 17(1), pp. 77-92 Boon, C., Paauwe, J., Boselie, P., & Hartog, D. (2009). Institutional pressures and HRM: developing institutional fit. Personnel Review, 38(5), pp. 492 – 508 Brown, M., Metz, I., Cregan, C., & Kulik, C. (2009). Irreconcilable differences? Strategic human resource management and employee well-being. Asia Pacific Journal of Human Resources, 47(3), pp. 270-294 Chen, C., & Huang, J. (2009). Strategic human resource practices and innovation performance — The mediating role of knowledge management capacity. Journal of Business Research, 62(1), pp. 104-114 Kong, E. (2010). Developing organisational knowledge and learning capabilities: synergistic relationships of human capital, strategic human resource management and human resource management. The International Journal of Learning, 17(5), pp. 63-80. ISSN 1447-9494 Lengnick-Hall, M., Lengnick-Hall, C., Andrade, L., & Drake B. (2009). Strategic human resource management: The evolution of the field. Human Resource Management Review, 19(2), pp. 64-85 Sanchez, J., & Levine, E. (2009). What is (or should be) the difference between competency modeling and traditional job analysis? Human Resource Management Review, 19(2), pp. 53-63 Read More