Aligning HR with Organizational Strategy - Literature review Example

Heading: Aligning HR with Organizational Strategy Your name: Course name: Professors’ name: Date Introduction The report focuses on the appropriateness of the Hyman’s argument that market structure determines its management strategic decisions. It also explores ways in which organizations can align their human resource management in their strategic planning. It does so by reflecting on the human resource management’s four linkages that include administrative, one-way, two-way, and integrative linkages. Synopsis 1. The report identifies the problem of the study 2. The report describes some of the causes of the problem 3. The study expounds on some of the solutions to the problem 4. The report provides recommendations to organizations 5. The report provides a conclusion of the study Research base Many organizations, today, see their Human Resource (HR) department as a mere administrative function of the business; hence, they exclude it from the strategic planning team. In fact, in the handful organizations that integrate the HR department in their strategic planning process restrict it to the forecasting function. Sharma (2009, pp. 49-60) argues that that the major reason why the department is not incorporated in the process is because it does not have space in the strategic planning team. Ironically, HR department concerns people who form the integral part of the organization. The problem that the study focuses on is that organizations do not align the HR with their strategic planning. Therefore, it is important to understand identify reasons behind the problem in order to look for its appropriate solutions. Merritt (2007, pp. 15-20) demonstrates the HR’s exclusion in the strategic planning of an organization is caused by its too much focus on the administrative function. Basically, the human resource management department of any company has two functions that involve strategic effectiveness and the administrative effectiveness (, Brush & Ruse (2005, pp. 5-10). To begin with, the strategic effective function develops a firm’s employees in order to contribute effectively in the realization of its objectives. On the other, the administrative effectiveness function deals with the traditional activities that include selection, recruitment, performance, training, compensation, and appraisal (Merritt 2007, pp. 15-20). Therefore, HR ought to understand that both functions are critical in the achievement of the organizational goals. However, it should perfect its administrative activities before focusing on the strategic function. Secondly, HR’s poor personal skills are responsible for its exclusion in strategic planning (Bennett & Brush 2007, pp. 12-17). In most cases, HR has a low reputation of incompetence, inefficiency, and costly. In order to enhance its function, the HR professionals need to change their thoughts and actions. Sharma (2009, pp. 49-60) asserts that a company’s top management should also regard the HR with a lot of confidence that it can handle strategic function of the firm, apart from the administrative one. In addition, the HR personnel should also focus on upgrading themselves. In order to succeed, Bennett & Brush (2007, pp. 12-17) state that organizations ought to incorporate individuals, who are well-conversant with business, can affect culture, and bring positive transformation in their firms. Consequently, the HR’s credibility will be greatly enhanced. Thirdly, Brush & Ruse (2005, pp. 5-10) state that failure to align HR with strategic planning process is caused by the fact that HR cannot be quantified in monetary terms. Since firms do not pay enough attention to it, HR has not accountability. Apart from its administrative duties of processing wages and vacations, the department lacks strategic accountability. Imperatively, Joyce & Woods (2001, pp, 281-285) note that the department cannot perform optimally unless it demonstrates its role in the creation of return on investment (ROI) and organizational value. , Brush & Ruse (2005, pp. 5-10) note that there are no business measures that are necessary in the determination of the HR’s contribution in a firm. Fourthly, Boudreau & Ramstad (2006, pp. 10-15) argue that the department’s lack of alignment with other department objectives is responsible for its exclusion in strategic planning. In order to be fully involved in the strategic planning of the business, HR should align itself with the organization. This implies that its action should be aligned with the overall purpose of an organization. Bennett & Brush (2007, pp. 12-17) argues that there is a need to correct this problem because HR should support the organization in human capital management, which is the most influential part of the firm’s strategic plan. In order to ensure an absolute involvement in the strategic planning, HR should shift its focus away from the traditional administrative duties towards the expansion of its strategic function (Joyce & Woods 2001, pp, 281-285). This does not imply total abandonment of its administrative functions; rather, it should focus on strategic expansion. Effective administrative work enhances HR credibility and becomes a basis upon which strategic impact of the firm is built. In order to achieve this, organization can automate or outsource most of the administrative duties. Making the HR more strategic entails the consideration of the resources. Brush & Ruse (2005, pp. 5-10) propose that the HR department should quantify their value in the firm by the number of hires made, delivery of training courses, and completion of performance reviews. Enhancement of the HR personnel’s skills is another recommendation for this study (Analoui & Karami 2003, pp. 208-212). This involves upgrading of the human resources in order to effectively take part in the organizational growth and strategic planning. This is because HR is a critical in the success of the business. An effective HR has to improve the business with their knowledge, consulting and financial skills. It should also work on its technological competence that is vital in the research on the labor force and the overall strategic planning. Sharma (2009, pp. 49-60) postulates that organizations can also align the HR in the strategic planning process by measuring it from an analysis of its cost and benefit. This implies that the HR should get access to the organization’s strategic planning by measuring their benefits and costs of getting involved in the process. Joyce & Woods (2001, pp, 281-285) further argue that HR plays a vital role in the business success, though many organizations bar it from the strategic planning process. Therefore, HR ought to assess the company’s leadership, competences, culture, learning, and alignment (Brush & Ruse (2005, pp. 5-10). This will provide a strategy of describing the organizational plan’s drivers. In fact, the HR should view these drivers form their perspectives. In every measurement, HR is held responsible for the firm’s preparedness for each constituent of the strategy (Sharma 2009, pp. 49-60). Discussion of the Research The solution to the problem is aligning HR with the strategy of the organization. There is need for HR to expand its administrative role in order to contribute to the organizational value. For proper alignment of the HR in the company strategy, it has to be organized in such a way that it can play a significant role in the strategic planning process. It is for this reason that the department should ensure that employees are aligned with the organizational strategy. According to Wood (2009, pp. 47-50), there are various ways in which an organization can incorporate the HR in its strategic plan. One of the ways of doing it is using one-way linkage. Here, the organization firm’s strategic planning unit develops the plan and communicates it to the HR function. HR’s role has a responsibility of designing systems and programs that are instrumental in the implementation of the strategic plan. Even though the plan cannot fully incorporate the HR in the strategic planning process, it allows the organization to consider the human resources issues in the plan. Secondly, Witzel (2005, pp. 68-70) states that organizations use the two-way linkage, which entails the consideration of the HR in the formulation of the strategic plan. This plan will take place in three chronological steps. In the first step, the strategic planning team communicates the HR about the considered strategies by the organization. Secondly, Wood (2009, pp. 47-50) notes that the HR function analyzes the implications of the strategies on the department. Lastly, upon making the strategic planning decisions, the plan is forwarded to the HR executives for the development of the programs and implementation of the plan. Thirdly, Witzel (2005, pp. 68-70) says that a company can use the integrative linkage that is based on the continuous interaction, instead of the sequential one. In such as case, the HR executive is a significant member of the top management. Moreover, organization allows the HR department to formulate and implement the strategic plan. Wood (2009, pp. 47-50), further says that organizations can also employ the administrative linkage in which HR issues are not part of the strategic planning. Here, HR’s focus is on the daily activities rather than the firm’s strategy. Recommendations 1. HR should avoid too much focus on the administrative duties, but on the expansion of its strategy 2. HR should improve its personnel knowledge and skills 3. HR should use cost-benefit analysis in measuring its value in the organization 4. HR should get aligned with other departmental objectives Conclusion HR is one of the fundamental parts of an organization. However, research shows that the department is not aligned with the organizational strategic plans. Some of the reasons for its exclusion in the strategy include poor competencies of its personnel, too much concentration on the administrative duties, and lack of effective measurement of its performance in business. Therefore, companies can integrate HR in the strategic planning process through the administrative, one-way, two-way, or integrative linkages. Moreover, HR should upgrade the personnel’s skills, use the cost-benefit analysis measure, expand on the strategy, and align itself with other departmental goals. References Analoui, F & Karami, A 2003, Strategic management in small and medium enterprises, Thomson Learning, London. Pp. 208-212. Bennett, D & Brush, M 2007, ‘The Annual Hr Strategic Planning Process: Design and Facilitation Lessons from Corning Incorporated Human Resources’, Organization Development Journal, vol. 25, no.4, pp. 12-17. http://www.questia.com/PM.qst?a=o&d=5037633669 Boudreau, JW & Ramstad, PM 2006, ‘Talentship and HR Measurement and Analysis: From ROI to Strategic Organizational Change’, Human Resource Planning, vol. 29, no. 4, pp. 10-15. http://www.questia.com/PM.qst?a=o&d=5014817299 Brush, MC & Ruse, DH 2005, ‘Driving Strategic Success through Human Capital Planning: How Corning Links Business and HR Strategy to Improve the Value and Impact of Its HR Function’, Human Resource Planning, vol. 28, no.3, pp. 5-10. http://www.questia.com/PM.qst?a=o&d=5023390591 Joyce, P & Woods, A 2001, Strategic management: A fresh approach to developing skills, knowledge and creativity, Kogan Page, London. Pp. 281-285. Merritt, L 2007, ‘Human Capital Management: More than HR with a New Name’, Human Resource Planning, vol. 30, no. 5, pp. 15-20. http://www.questia.com/PM.qst?a=o&d=5021577497 Sharma, SK 2009, Human resource management: a strategic approach to employment, Global India Pub., New Delhi. Pp. 49-60. Witzel, M 2005, The encyclopedia of the history of American management, Thoemmes Continuum, Bristol. Pp. 68-70. Wood, G 2009, Human resource management: a critical approach, Taylor & Francis, New York. Pp. 47-50. Read More