Strategic Human Resource Management - Essay Example

Strategic Human Resource Management Abstract Any organized human activity, which is done in-group or as a team, most times will be constituted in an ‘umbrella’ like structure, called organization. So, Organization is a structure with a ‘collage’ of humans doing their allocated work under the supervision of a leader for the benefit of the organization as well as them. These workers will normally be apportioned into different departments for better arrangement or streamlining of work. Among the many departments, which constitute an organization, the human resources department’s role is omnipresent and crucial. Even though, the workers are apportioned into different departments, they will be overseen by the human resource department only, apart the management team. Therefore, human resource department will make their presence in every aspect of worker’s life in an organization. This paper will look at the human resource department of a fictional company, Galactic Enterprise Furniture by specifically analyzing its Strategic Human Resource Management, its advantages, and the disadvantages. In addition, the paper will discuss a set of recommendations, which will be drafted to fill any gap, between what is actually happening and what is felt to be desirable. Evaluation of the extent to which SHRM (i.e. both HRM and HRD) is being practised effectively. SHRM short for Strategic human resource management is the concept of managing workers in an organization through human resource management (HRM as well as HRD), with main emphasis of attaining strategic goals of the organization. So, SHRM can be defined as “the linking of HRM with strategic goals and objectives in order to improve business performance and develop organizational cultures that foster innovation and flexibility” (Truss & Gratton, 1994). Human Resource management always forms the integral part of the organization and when it becomes a strategic partner in the formulation of the company’s strategies, the concept of Strategic Human Resource Management is initiated. That is, if a company follows SHRM, the activities of the Human Resource Department such as recruiting, training and rewarding personnel will mainly border on achieving the strategic goals of the organization. In short, the HRD should function effectively to produce the best workers, who could produce the best results for the organization. So, this concept of SHRM could produce optimum results for the organization like Galactic Enterprises Group particularly Galactic Office Furniture (GOF) and the employees working in it. However, the struggling financial position of Galactic Enterprises Group (GEG) shows that, the extent of SHRM implementation particularly in Galactic Office Furniture (GOF) falls short. That is, the financial position of GEG has been disappointing particularly in the furniture company. The profits at GOF is falling continuously with each year for the last three years from £9 million to £7 million in the next year and finally to £2 million in the current year. And according to the management, this slide downwards will continue in the coming year as well with the company predicted to make only £1 million in the coming year. This has also resulted in job cut with the number of employees in GOF being reduced from 2,118 to 1,409 in the last five years. In addition, to this situation, there will be no chance of recruiting new staff as well. So, the workings of HRD and its SHRM should take a different direction to deal with the existing staff or employees. That is, with new entrants being minimized or even nullified, the HRD need not put efforts to train the new entrants, integrate them, teach them the organization’s work culture etc, but only need to concentrate on the existing working employees. The working of the existing employees only reflects the point that the extent of SHRM implementation in GOF is not up to the expected levels. In any organization including GOF, the role of factory employees and the sales persons are crucial and both should compliment each other to support the organization’s strategic goals. So, they need to interact and coordinate with each other to prevent any shortfalls in the demand and supply setup of an organization. So, the empirical model, which addresses both the cognitive and incentive aspects to coordination problems, could be implemented (Harvey and Novicevic). But, in Galactic Office Furniture, there seems to be lot of conflicts, with many of the factory managers making life too difficult for the regional sales teams. That is, the factory managers do not respond to sales person’s queries about the products. This lack of information creates a lot of mis communication between the sales team and the customers. Another grouse of the regional sales teams is that, their own sales managers are making no attempt to understand this problem of their staff or sales team. This accentuates their frustration and the HRD are not doing enough to solve these problems, and focus them using SHRM. That is, with these problems, the sales team cannot look at the strategic goals of the GOF, and the SHRM will be failure in this aspect. Another aspect, which impedes the extent of SHRM’s full practise, is the lack of coordination between departments. “Building a regression model (linear- simple or multiple – or curvilinear) to establish the correlation between staffing levels and other related data”. (Mazen and El-Kayaly). Without the efficient and effective coordination between the various departments, organization would not be able to accelerate their growth. In the case with GOF, their departments’ relationship were riddled with problems due the non coordination in the form of non-compliance of certain orders. That is, the finance department had sent a directive to all the departments to maintain a strict budget and prevent over expenditure, to avoid the financial situation from worsening. But, some of the departments did not follow the directive of less spending and thus contributed to financial instability. So, this problem between the departments also contributed to the lack of implementation of SHRM. Because of this problem, the finance director had even sent a communication expressing concern that some senior managers do not fully appreciate the need to 'stick to the budget'. And, when there are no responses from the managers to toe the line, he then sent a memo to all managers stating that, cutting the budget should one of the primary objective for the business. Along with this problem, the finance director is also concerned about some breaches of company regulations that are happening in some departments. Having brought to the attention of the finance management team, they are contemplating the next steps, which also restrict the extent of SHRM practise. Another human resource management problem, which also impedes the proper implementation of SHRM, is the delay in the launch of the new Trial appraisal system. A perfect model for strategic human resource management can be achieved through an effective staff performance appraisal system. (Priti). That is, every employee in an organization will be most motivated by the salary he/she is getting. And, if the salary is up to the expected and favorable levels, he/she would contribute an extra bit to the company’s workings. In the case of Galactic Office Furniture, Salary levels vary from region to region and tend to fall in the bottom half of regional norms. So, the salary levels are not maintained or increased consistently. Consistently in the sense, based on the performance of the worker along with other factors like the workers growth potential for future utility, discipline, ability to learn etc, the salary levels should be raised or maintained. But, these concepts, which can make a potent trial appraisal system and which can encourage the worker to tune with the SHRM, are missing in GOF. The launch of the trial appraisal system is pushed back for various reasons. That is, with the old appraisal system, the employers are not doing enough to motivate and stimulate the workers, which will result in awful performance, so the strategic goals, which are part of SHRM, will also be off the mark. The other stumbling block in the implementation of new trial appraisal system is certain people in higher management like Jim Barratt, General Works Manager. That is, the view among other higher officials is, Barratt really screwing up the launch of the trial appraisal system. So, in the analyzes, it is clear that the extent of SHRM practice gets delayed or blocked due to few officials, who delay the implementation of new trial system, which could have worked as a confidence booster for the workers. In this fast changing modern world, the use of science and technology is crucial and also should be updated with the changing times. “…the modern model of management looks decidedly wobbly” (Heller). Among the scientific inventions and innovations, the use of computer with a network system is critical to the efficient functioning of any organization including Galactic Office Furniture. The main advantage is, it will tremendously aid the already expended workers. That is, it will complement the workers in many activities and will produce positive results, which will help the organization gain profits. The aid of computer will come in the form of calculations, designing, communication etc, so any organization without the modern day computer in a network setup will deprive a whole lot of things for the workers. The same is the case with the GOF, with the executives in the IT department very reluctant to use the modern day computers. That is, the company's computer systems are still mainframe driven with only a handful of personal computers in existence. However, the head of IT is reluctant to change this situation, as he believes that staff will ‘simply play games on PCs’. So, this attitude of the IT also demotivates the workers, who have to slog it out without any aid. The Human Resource Department role in it, will also be limited because of its technical nature. In the final analyzes, the limited usage of computers by the workers will also impede the extent of SHRM’s practise. Advantages of the present situation When the overall situation about the extent of Strategic Human Resource Management practise is analyzed, it presents some advantages. That is, when viewed from the human resources management side, the present situation of not fully extending the SHRM to all levels of the organization has some inbuilt advantages. The first impact will be seen in the financial sector. That is, already the HR budget of GOF is on the higher side and is draining the company’s resources. So, the personnel manager is more concerned about protecting the HR budget than thinking about introducing new budgets for the practise of SHRM. The HR budget for the current year has faced a deficit of £56,000, which is a great drop from the last years and reflects the present struggling financial situation of GOF. In this case, the practice of SHRM cannot be extended to broader and deeper levels, with the financial condition of GOF acting as a dampener. So because of these valid reasons, the non-implementation of SHRM seems to be a advantage, as it can protect the company from worsening financial situation. Also, the non practise of SHRM is not affecting the overall functioning of the organization because all the employees are issued with a job description and are given strictly defined areas of responsibility. This setup will aid the workers to work without any confusion or weightage of added responsibility. That is, if the workers are not defined their roles, they will not be able to focus on their work with diversions coming from various quarters. The workers should be loaded with only up to certain responsibilities and if they are pushed further, it will make them stressed out and the HRD had to work extra hours to bring them to normal condition. Another approach, which does not constitute SHRM, as it does not concentrate on organizational goals and instead mainly concentrates on department’s goals, is the secret bonus scheme for selected managers. The concept of the scheme is, if any department achieves a set of revised targets then a bonus payment equivalent to 20% of annual salary will be payable. But, the important aspect is, manager are prohibited from divulging the existence of this scheme to any other employee. This approach will put bigger onus on the manager and will test their capability. With his/hers managerial skills, the manager has to work on his workers, so that they work efficiently and provide workable solutions. With the HRM fully backing this approach, it may be considered one of the biggest advantages that rose because of the present situation of limited SHRM extension. Disadvantages of the present situation As discussed before, the limited extension of SHRM is seen in different aspects of Galactic Office Furniture. That is, the problems between various departments, which include lack of coordination between manufacturing and sales, finance and other departments, could give rise to lot of disadvantages, which will surely affect the performance of GOF. “it’s a well-known fact that organizations continue to experience difficulty finding a way to fully integrate HR in their strategic planning.” (ioma.com). Firstly, the problem between manufacturing and sales could result in product or service, which does not satisfy the customer’s expectation. That is, the sales people who only interact with the customers will know the customers’ interest, and if theirs views are seriously taken by the manufacturing department; they can provide a quality product or service. But, this lack of coordination in both these departments at GOF will lead to unfocussed workers who will provide substandard furnitures, which will lead to drop in sales, resulting in further drop in profits.” compliance model… guides us in tailoring how we deal with our customers. It takes account of the factors that influence customers decisions and behaviours.” (Butler and Tremain). The same is the case with the misunderstanding between the finance and the other departments. That is, the failure of the other department to follow the finance department’s directive will result in the further erosion of financial resources, which will destabilize the functioning of the company. The delay in the launch of the new trial appraisal system as part of the SHRM will also result in demotivated workers. That is, when workers are not rewarded for their hard work and commitment it will lead to drop in their performance. This along with limited use of computers will put the GOF in struggling condition. Recommendations Actions to be taken The actions that need to be taken to increase the extent of Strategic Human Resource Management is to correct the existing problems that exist between different departments and the workers in those department. The first of the problems that arises between the sales and manufacturing department, should be handled strategically by the HRD with the full backing of both the departments. That is, both the heads of the departments should be invited for a common meeting by HRD, where both their views and concerns should be heard including the sales person’s concern about the superior attitude of the factory managers. Then, the concerns of the sales team should be addressed by asking the concerned factory managers to hear the views of the sales team as well. The next problem of non-compliance of finance department’s directive should also be handled strategically by the HRD by making the various departments aware of the company’s financial status. That is, meetings should be held collectively or individually with the defaulting departments to make them understand, the need to follow the directive. If that doesn’t produce favourable results, then take punitive actions should be taken to make them fall in line. Importantly, the new Trial appraisal system is the one, which should be implemented quickly without any delay. That is, to increase the productivity of GOF and thereby the profits, the workers have function with lot of commitment, dedication and acceleration. For the workers to function this way, the appraisal at regular intervals with good pay increase would provide optimum results. Feasibility The feasibility of all these things happening is also bright. The main reason is, all the actions that are needed to be taken are happening in many organization involving different groups of workers. Also, it is possible to implement it with minimum opposition. Even that opposition will evaporate, when the goals and targets of GOF is brought into the picture Priorities Each action is important in their own right because each action are needed to be taken in different section or department of GOF. Moreover, if all the actions are simultaneously taken, it will produce good results. If one action is needed to be prioritized than others, it has to be solving the friction between the sales team and the factory managers. Because those departments, being crucial to the overall functioning of GOF should be cleared of all impediments. Overcoming barriers to change The hardest thing for a HRD or HR manager to accept is, that his team members aren't going to do things the way he or she wants. In those cases, Managers should take apt decisions to produce success for the organization. “The important step in the strategic management model begins with senior managers evaluating their position in relation to the organization’s current mission and goals.” (Bratton). These barriers to change can be overcome by looking into the ways of tapping the talents that all the employees possess and encouraging them to use it, to their advantage, and to the company's as well. So, getting them to learn about new things, experiment and finally taking risks should be way, it could be done. That is, in any organization human interaction is the bases of its functioning, and that bases can only lead to friction as well. In those times only, Human Resource Management should comes into the picture and try to neutralize the friction and if the strategic element also enters the picture of that conflict, it provide good inputs for the success of the organization. That is, Strategic Human Resource Management always positions the goals or targets of the organization along with the management of workers. This being the case, for the achievement of strategic goals and targets of Galactic Office Furniture, the strategic human resource management of the workers should be the key. So, the work of Strategic HR management includes tuning the workers to function effectively, so that the GOF can turn the downward slide and produce upward results. That is, GOF with the requirement of capital investment of approximately £7 million at two production facilities is predicted to produce an annual profit of £20 million within three years. Reference Butler, David &Tremain, Carolyn. Archive of Speeches and Presentations. Strategic Human Resource Management for the Public Service. Retrieved May 19, 2007 http://www.ird.govt.nz/aboutir/media-centre/smt-speeches/speech-butler-hrinz- ms-may2006.html Bratton, John. Strategic human resource management. Retrieved on May 19, 2007 from http://www.palgrave.com/business/brattonandgold/docs/bgcha02.pdf. Harvey, M. & Novicevic, M. M. (2003). Strategic Global Human Resource Management: Its Role in Global Networks, Research and Practice in Human Resource Management, 11(2), 32-51. Heller, Robert. Management Profile: Achieving success by using personal characteristics to enhance management style. Retrieved May 19, 2007 from http://www.thinkingmanagers.com/management/management-profile.php Ioma.com. Research Reports. Retrieved May 19, 2007 from http://www.ioma.com/issues/SPCRPT/1606154-1.html Mazen, Dr. Sherif & El-Kayaly, A. Dina I. Conceptual Design For a Strategic Human Resources Quality Management System. Retrieved May 19, 2007 from http://unpan1.un.org/intradoc/groups/public/documents/ARADO/UNPAN006257.pdf. Priti, Jain. Strategic human resource development in public libraries in Botswana. Retrieved May 19, 2007 from http://cat.inist.fr/?aModele=afficheN&cpsidt=16998985 Truss, C., & Gratton, L. (1994). Strategic human resource management: A conceptual approach. The International Journal of Human Resource Management, 5(3), p. 663. Read More