Role of Strategic Human Resources Management in Individual and Organizational Performance - Essay Example

ROLE OF SHRD IN INDIVIDUAL AND ORGANIZATIONAL PERFORMANCE (Student Name) (Institution) (Course Number) (Date) Introduction Human resource development is one of the key things that determine the productivity the workers within an organization, thus, the overall performance of the organization. Apart from the organizational capital and the information technology capital, human resource development is considered as one of the intangible possessions of a company that determines the value creating process of the company. Gulcin Cribb (2006, p. 3), in attempting to explain the importance of human resource development in an organization, mentions that the most valuable asset of the 21st century institutions is the knowledge and productivity of the employees. This is opposed to the last centuries, in which organizations only valued their production equipment. Human resource development is defined as the aspect of an organization management that deals with the training of the employees and their development. It involves the initiative by an organization to train its employees with the aim of expanding their knowledge, education, abilities and the skills of their employees to increase the overall organizational performance. Human resource development processes commonly commence following the employment of new workers in an organization and lasts throughout the employee’s contract with the organization. This is mainly because organizations hire workers with only basic skills and little experience, hence the need for training to enable them to perform the work effectively. Gibb (2011, p. 17) argues that the performance of individuals within an organization depends on the cognitive capacity which determines the intelligence of a person, the capabilities which defines the inherent or learnt ability of a person to perform the job roles as well as the performances of organizations in the competitive market environments, human resource development becomes a key priority. Moreover, organization are increasingly seeing the importance of investing in their employees as a way of improving corporate performance. This paper examines strategic human resource development and its role in improving the performance of individuals and the overall organizational performance. Discussion Strategic Human Resource Development Companies are increasingly recognizing that carefully selected human resource development practices can have significant effects on the employees as well as the organizations in general. However, for human resource development to impact positively in an organization, there is the need to divert from a process centered and administrative to a strategic approach, which involves the inclusion of leadership in the development of the employees of an organization. Strategic human resource development, is, therefore, defined as an array of organizational practices that focus on learning, training and career development (Garavan and Carbery, 2012, p. 2-10). Strategic HRD requires that the experts of learning and development in organizations think differently about the practical requisites and activities of HRD as a set of organizational practices. The basis of strategic HRD is the fact that the specialists should have skills and abilities that enable them to be strategic players and partners in businesses rather than just responding to the situations in a business environment. Strategic human resource development is important in organizational development because it helps in achieving the strategic goals of the organizations. This is mainly because it operates in line with the strategic goals of organizations. While highlighting the organizational view, strategic HRD aims to establish a connection between human resource development and the organizational goals and objectives. It, therefore, uses a range of strategies in ensuring excellent performance of an organization. Consequently, the concept of strategic human resource development requires that the practitioners recognize the need for strategic HRD in an organization and facilitate change by helping the organization in developing flexibility and execution capabilities. Features of Strategic Human Resource Development Strategic human resource management is a vital part of organizational management and differs with the conventional human resource development practices. One of the key features of strategic HRD is its concern with the long- term development of the organizational resources. Organizational success depends largely on the human capital. Strategic HRD is not only concern with the training of the new recruits in an organization but also with the continuous learning and education of all the other employees. This way, the employees are able to improve their skills and gain insight to new developments in the market such as the introduction of new technologies in the market. The long term development also includes the social responsibilities of the workers. This way, the employees are able to perform the duties delegated to them effectively as well as completing them within the stipulated time. Another characteristic of the strategic human resource development is the orientation with the goals and the objectives of an organization. Unlike the conventional approaches to human resource development which were process oriented and administratively approached, strategic human resource development requires that strategic goals and objectives of an organization are reached. By setting the strategic goals of a company and ensuring that the learning processes of the employees are linked to these goals, it is easy for the employees to become strategic players in the achievement of the goals and objectives of the organization. This alignment of strategic human resource development with the goals of an organization makes it even easier for the employees to work together towards the success of the organization. Moreover, strategic human resource development differs from the traditional approaches to human resource development in that it largely incorporates practice (Tseng and McLean, 2007, p. 1-8). The authors, further argue that the concept of strategic human resource development covers wider perspectives than the other styles such as the return on investment (ROI), workforce scorecard and the human resource management. The workforce scorecard, for instance, is mainly used in determining the strategic performance of the employees of an organization rather than the influence of the human resource practices in the success of an organization. Similarly, the ROI is also used as a determination of the financial return of the company rather than the role played by the human resource development practices in its contribution. Additionally, strategic human resource development also deals with learning in an organization to increase performance (Šiugždinienė, 2008, p. 4-10). With the increasing market competition, there is the need for organizations to gain competitive market advantage to remain relevant. Strategic human resource development helps organizations in the market development by increasing performance. Strategic human resource management helps the employees in improving their work w skills through constant training sessions. Business organizations, constant training of the employees also is important in improving the management and the communication skills of the employees. This way the increased learning processes provided by organizations to the employees result in performance, the ultimate aim of any organization. Furthermore, the other important feature of strategic human resource development is the integration with the other human resource management activities (Šiugždinienė, 2008, p. 7), argues that strategic human resource development is part of the wider human resource management and is thus integrated with the other human resources activities. According to the author, the desired proficiencies and behaviors in an organization are achieved through strategic human resource development. However, he sees the need of supporting and strengthening them with the other spheres of human resource development such as evaluation, selection, communication, and reward. SHRD Contribution to Individual and Organizational Performance-Theories Various theories try to explain the contributions of the strategic human resource development to the performance of the individual employees and the organization as a whole. However, the creation of a link between the strategic human resource development and the individual and organizational performance is strongly opposed by some researchers and experts. One of the theories developed to explain the link between SHRD and performance in organizations is the human capital theory. The human capital theory suggests that venturing in education, training and experience can have a wide range of benefits to individuals including wage and job benefits (Biddle 2014, p. 15). According to the theory, strategic human resource development is considered as an investment in the human capital, yet the decision to participate in the training and acquire more skills is vested on the individuals. The theory is embedded in the argument that the investment, whether in formal or informal training and education increases the output of the individuals and their performance (Erosa, 2010, p. 23). It also draws a clear line between general and specific training investments. General training is considered as having a career values and is significant in the labor market while specific training is inapplicable beyond the organization. Another theory that explains the importance of strategic human resource development both to individuals and the organizations is the resource based theory. According to this theory, the difference in the human resource arrangements in the different organizations explains why firms contribute differently to organizational performance (Groen and Spender, 2010, p. 5). The theory further explains that the long term effectiveness of an organization depends on the permanency of its human resources, the ease of maintaining or substituting them and the ability of the organization to differentiate itself from the other competitors within the same industry. According to the theory, the competitive advantage of the organization is largely dependent on the human resources, which incorporate the use of strategic human resource development in the progression of institution-specific proficiencies and the generation of industry specific knowledge, thus helping in the creation of strategic value. The theory lays emphasis on the need for organizations to instrument specific strategic human resource development plans, with the aim of increasing their competitive advantage in the industry markets by enhancing commitment and competition of human resources. The theory requires continuous implementation of a variety of SHRD practices such as leadership development, job training, technical competence development and social networking strategies (Othman et al., 2014, p. 22). The other theory that explains the importance of the strategic human resource development in both individual and organizational performance is the behavioral theory. The theory suggests that the continuous use of strategic human resource development practices and tools within the organization in nurturing the desired behavior in the organization, hence helping the organization in achieving the desired goals and objectives (Kantabutra, 2009, p. 319-327). The theory is based on the recognition that different organizations have different goals and objectives hence the need for different HRD strategies for the realization of these goals. According to this approach, the emphasis is laid on an external fit highlighting the likelihood of SHRD. Among the factors that are considered in this context are; technology, organizational size, ownership, location, and sector. Contributions of SHRD to Organizational Performance Strategic human resource development is an important tool that is used to improve the performance and hence the general market competitiveness of the organizations. One of the important contributions of SHRD to organizational performance is through proactive management. SHRD differs from the conventional human resource development practices in that it promotes proactive management. The other human resource development plans are reactive, always responding to situations after they occur. Through the proactive change management, strategic human resource development practices can help organizations in surviving the increasingly unstable and competitive global environment. With the inclusion of elements such as strategic thinking, participation, evaluation, strategic hiring, training and credibility (Caliskan, 2010, p. 100-116). This way SHRD provides the employees with the road maps for creation of value and performance within the organizations where they work. Another contribution of the strategic human resource development to organizational performance is the achievement of the organizational goals and objectives (Hu, 2007, p. 2-7). In many organizations today, the strategic human resource development practices are aligned to the organizational goals and objectives. This is because the SHRD practices are important in the achievement of the predetermined goals and objectives of the organization. According to the literature, the integration of the strategic human resource development practices in the planning of businesses is important because it is a contributor to the achievement of corporate goals and increases the employee awareness of the mission of the organization. Although the integration of the SHRD into the business plan of an organization is important in helping it achieve its goals, the participation of the top management in the implementation of SHRD practices is important. Awareness of the external environment such as the business threats and opportunities is also important in the success of SHRD within an organization. The other important contribution of the strategic HRD in organizational development is the development of new initiatives that move an organization from one level to another in terms of business. Organizational learning for instance, involves the improvement of the organizations through the development of technological, commercial and productive initiatives (Becker and Huselid, 2006, p. 895-925). This can be achieved by devising ways in which information can reach the various employees within an organization rather than storing more information in the databases. By ensuring that information reaches as many employees as possible within the organization, the organizational performance is improved since the employees make informed choices based on the knowledge acquired. The organizational learning process consists of; information acquisition, information dissemination, shared interpretation and development of organizational memory. Furthermore, strategic human resource management in an organization is important because it has a direct effect on the leadership of a given organization, hence the ability to influence the overall performance of the organization. SHRD has strong leadership aspects that influence management and innovation of an organization. According to the specific SHRD view on leadership, SHRD has a strong effect on the leadership of an organization and moderates its relation with the organizational learning. Apart from the effect it has on the management of organizations hence improving the performances of those organizations, strategic human resource management, the strategic HRD has the capacity to influence organizational culture. In many organizations, conflicts associated with corporate culture are as a result of the poor management of racial and gender identities, which are the central points of the corporate culture. By incorporating organizational learning in corporate entities as part of the strategic human resource development practices, there is the development of the ability to influence culture. This results in the development of the ability to influence culture, hence provision of a conducive working environment for the employees (Manole et al., 2011, p. 1-15). This results in an increase in the overall output of the employees and hence increased organizational performance. Contributions of SHRD to Individual Performance Aside from the contributions of the SHRD to organizational performance, it also has significant contributions to the individual employees working within an organization. One of the benefits of these tools and practices is the promotion of innovation among the employees. Engaging the employees in corporate learning through training and strategic thinking skills is important in enabling them develop better problem solving skills (Hyland et al., 2005, p. 4-10). This puts the employees in a position to make informed decisions when encountered with situations that require quick problem solving skills. This leads to improvement of the individuals in dealing with the everyday experiences in the workplace hence overall performance improvement. Another way in which strategic human resource development helps in promotion through the promotion of good behavior at work. To achieve the predetermined goals and objectives of organizations, there is the need to incorporate SHRD into business plans. Different goals need different behavior to achieve. This means that the employees have to adhere to certain behavior rules within the organization. Many organizations, for instance, shun individual work but encourage team building as a strategy to meet the organizational needs. This means the individuals will work together to achieve the desired goals, improving their communication skills and interaction with others, thus registering personal improvement as well as the improved performance of the organization. Organizational performance depends on the employees. This is because the employees are the biggest assets of organizations. It is, therefore, important that the organizations handle them well. One way of handling employees in the organizations is through the SHRD practices. These practices encourage the motivation of the workers. As a result, the employees are encouraged to increase their overall outputs, which in turn have a direct impact on the performance of the organization. Conclusion With reference to the above discussion, it is clear that the strategic human resource development (SHRD) has significant contributions in the performance of individuals and the performance of the organization at large. In the wake of increased global instability and competitiveness, it is important for companies to implement SHRD practices in their organizations to enable them gain competitive market advantage. Moreover, it is important for companies to develop greater flexibility in the workplace to improve the performance of the workers, hence organizational performance. References Becker, B. E, and Huselid, M. A. (2006). Strategic Human Resources Management. Where do we go from here? Journal of Management, vol 32, p. 895-925. Biddle, J. (2014). Walter Heller and the Introduction of the Human Capital theory, p. 15. Caliskan, N. E. (2010). The impact of Strategic Human Resource Management on Organizational performance. Journal of Naval Science and Engineering, p. 100-116. Cribb, G. (2006). Human Resource Development: A Strategic Approach. Bond University, p. 3. Erosa, A. (2010). How Important is Human Capital? A Quantitative Theory. New York University, p. 23. Garavan, T, M and Carbery, R. (2012). Strategic Human Resource Development, p. 2-10. Gibb, S. (2011). Human Resource Development. Edinburgh Business School. Herriot-Watt University, p. 17. Groen, J. A and Spender, J. C. (2010). The Resource-Based View. A Review of its Assessment and Critique, p. 5. Hu, P. (2007). Theorizing Strategic Human Resource Development: Linking Financial Development and Sustainable Competitive Advantage, p. 2-7. Hyland, P, Milia, L. D, and Becker, K. (2005). The Role of Human Resource Development in Continuous Improvement. Central Queensland University, p. 4-10. Kantabutra, S. (2009). Toward a Behavioral Theory of Vision in Organizational Settings. Leadership and Organizational Development Journal, vol 30, p. 319-327. Manole, C, Alpopi, C, and Colesca, S. E. (2011). The Role of Human Resource Development in the Management of Organizational Crisis, p. 1-15. Othman, R, Arshad, R, Aris, A. N and Arif, M. (2014). Organizational Resources and Sustained Competitive Advantage of Cooperative Organizations in Malaysia, p. 22. Šiugždinienė, J. (2008). Enabling Characteristics of the Strategic Human Resource Development System, p. 4-10. Tseng, C, C and McLean, G. N. (2007). Strategic HRD Practices as Key Factors in Organizational Learning. University of Minnesota, p. 1-8. Read More