Contemporary Approaches to Human Resource Strategies - Case Study Example

Running Head: HUMAN RESOURCE MANAGEMENT HR Strategies (Name) (Course) (Instructors Name) (Date of submission) Overview Holden Ltd. recognizes that a HR strategy and an action plan are critical in enabling the industry to meet the rapidly changing market demands. Holden Ltd. development project has been a forum for regional and national industry stakeholders. These projects have been working in tandem to establish a shared vision and use their experience and knowledge. HR strategy will assist to successfully and responsively accomplish actionable integrated strategic HR initiatives. Currently, automotive industry has been experiencing unprecedented structural changes globally. This has called for expansion of the scope of Holden Ltd's business management, the company's technological capabilities, and organizational structures which require strategic human resource initiatives. This paper critically analyses theories of HRM and their application in HR strategies in automotive industry. Through research skills the paper identifies factors that influence development of HR strategies through Holden Ltd an automotive company in Australia. Introduction The HRM strategy prompt changes that aim at achieving competitive advantage through the efforts of the employees (Thompson & Heron, 2005). HRM processes take place with the context in the internal and external environment in an organization. According to Wright et al. (2004), SHRM acts as a mindset which can lead to strategic action and reactions. Wright et al. (2004) further indicates that, it does this in its entirety or through a specific human resource strategy. In this paper, we attempt to explore HR strategies in Holden Ltd a company in the automotive industry. The key areas in this study are where, how and when set HR strategies are developed, the criteria for an effective Human resource strategy, the manner in which HR strategies are developed, and implemented. The work relies heavily on on theories and principles of HRM in development of HR strategy. The key role for HR strategy in Holden Ltd has been to articulate the intension of the company on its HRM policies. The company intends to implement these HR strategic policies both in the short run and long term, it bears in mind the dictum of Mason (2006) that the top officials should give an outstanding performance if they want the HR strategy to have a lasting impact in the company. The key goal of HR strategy is to meet both business and physical needs, and it is used in a manner that it provides a sense of direction and purpose. In reference to Mason (2006), they are no dominant strategies it is the realization of the laid strategies that count. In keeping with Mason (2006), different companies have different strategies. There are two types of HR strategies i.e. the general strategy and the specific strategies. The general strategies focus on high working capacity while the latter focus on different aspects of SHRM like learning, reward and development. Institutional Theory In keeping with Baron and Kreps (1999), the HR strategies determine how an organization intends to achieve its policies on human resource management and practices these policies should be integrated with business strategy. Baron and Kreps (1999) also indicate that these are internally consistent bundles of HR practices. According to Mason (2006), a strategy, be it a HR strategy or any managerial strategy must possess two key elements i.e. a plan-action and strategic objectives. This theory depicts both isomorphic and normative pressures that come forth due to economic and social inter-relations between firms. According to Paauwe (2004 p 5) Institutional theory provides a critical foundation for inclusion of SHRM. The theory combined with political forces brings about necessary ingredients to compete in the automotive industry. Holden ltd re-institutionalized the company's HRM in a bid to seek approval of alternative HRM practices as result of pressure from other automotive companies. This has provided an explanation for practices that has been derived from institutional influences as well as political influences. Resource Dependency Theory In reference to Boxall & Purcell (2003), HR strategies require generating SHRM options and implementing appropriate strategic choices. As noted by Boxall & Purcell (2003), choosing a practice to be pursued by an employer is heavily contingent on numerous factors at the organizational level; this entails production strategy, business strategies and cooperation of labor relations, and support of human resource policies. Holden Ltd's processes of developing HR strategies include making of appropriate strategic choices and adopting an approach that is contingent in generating SHRM options. Resource dependency approach captures the evolving from power relations and pressures from the competing businesses and dominant customers. Through the nature of research exchange, evidently, HRM initiatives in Holden ltd reflect the distribution of power and dynamics within the company. It is invariably factual that power can be exerted by different stakeholders, employees, great customers and the top managers. According to Cassell et al (2002), the adoption of new HR practices are imposed from immediate work environment. Emergence of such issues negate contradicts those criticism that have been directed at HRM frameworks that fail due to exaggerated conceptions of strategic approaches. The HR strategies applied by Holden ltd Holden Ltd, HR strategies describe entail a bundle of complementary HR practices that have helped the Holden Ltd's performance. The company has used three key approaches as clarified here in. High-Performance Work Systems (HPWS) Through new institutionalized and resource-based theory, the company has adopted a high-performance working system, Holden Ltd aims at impacting on the performance in quality improvement, productivity, growth and profits, and levels of customer service. High management practices that Holden Ltd engages with include rigorousness recruitment, relevant and extensive training, incentive pay systems, and management of the performance process. These processes influence employee involvement, motivation and skill enhancement. The company has employed these practices that venture on abilities and skills of employees. The HR strategies have been designed to work in ways that allow employee collaboration when solving problems. The company aim at coming up with a strategy that motivates workers to put discretionary effort through offering incentives. High-commitment management in Holden Ltd The company enhances mutual commitment through HR strategies. It aims at eliciting employee commitment such that behavior becomes primarily self-regulated instead of being controlled by external pressures to employees and sanctions. Employee’s relationship with Holden Ltd is based on high level trust. The company has currently concentrated on job design this is something the management has consciously done to improve on the jobs that have a considerable level of intrinsic satisfaction. The company has also come up with a policy of no redundancies and compulsory layoffs. It has permanent employment guarantees and uses casual workers to cushion fluctuations in the labor demand. Holden Ltd has further introduced new forms of assessment and systems of payments than are more specific on merit and profit sharing. High involvement of workers has resulted in to management of quality. Holden Ltd's high-involvement management Holden has set a high-involvement work practice focusing on employee power, decision making and access to information, training and incentives. In accordance to Thompson & Heron (2005), high-involvement entails management systems based involvement and commitment, this is opposed to conventional bureaucratic model that are based on control. Holden Ltd, underlying assumption states that employees should increase their involvement with the company when they are provided with the opportunity to manage their work. This high-involvement practice acts as synergy and has a multiplicative effect. In accordance with Thompson and Heron (2005), high involvement practice involves creating a relationship between employees. Employees in such a system have their opinion on matters that concern them. Holden Ltd is much concerned with collaboration and communication, and it principal aim is to create an atmosphere of a continuous dialogue between the top officials and their subordinates with a purpose of defining expectations and sharing information about the organization objectives, values and mission. This has helped the company to build mutual understanding of what must be achieved and layout for management and development of employees with an objective of ensuring that this is achieved. Holden Ltd's high-involvement practices have expanded beyond its initial concept and included motivation and relevant training. The company has also ventured in Human capital management this has been made possible through finding data, analyzing and reporting on the same. This help in getting value-adding personnel management, investment decisions, operation decision and strategic decision-making. The company is also involved in corporate social responsibility, which is a commitment in managing the organization's business ethically in order to make a positive impact on the entire society and its environs. Holden Ltd, HR strategies aim at organizational development. This includes designing and implementation of programs that are designed to enhance the effectiveness with which the company functions and responds the change. The company also engages the development and implementation of policies that have been designed to facilitate the level of workers engagement with their duties and the company. Holden Ltd also has engaged in knowledge management, and this involves creating, capturing, acquiring and using the attained knowledge to enhance performance. It has also been involved in resourcing activities with an aim of attaining high quality work force. Another key function of the company's HR strategies is talent management and this has ensured that Holden Ltd has talented workforce for it to achieve success. The company is also involved in learning and development and has provided an environment where employees are encouraged to get relevant education and develop their working skills. Some of the long term SHRM objectives include reward, Holden Ltd look forward to developing long-term policies that will further the company's achievement in its business and meet the needs of its stakeholders. Holden Ltd also intensively look at employees well being, catering or its workers risk insurance policies and creating safe working environment. Theoretical approach of HRM for Holden Ltd in HR strategy application According to Wright et al. (2004) an effective HR strategy achieves what it has been set out to achieve. Theory of best fit explains that different HRM approaches is appreciate in light of HR strategies in pursuance. The company lays emphasis on the vertical linkage between human resource management and HR strategies. In references to Mason (2006), it is paramount to derive more situational specific principles and theories for competent management. This approach is imbued with a high level of determinism and has a notion that HR interventions fit in impulsion of HR Strategies. Strategic choices and options There are two approaches that have been analyzed by wright et al. (2004), the outside-in approach and inside out approach. In his research, Wright et al. (2004), made the following observations regarding the approaches; he realized that the most advanced linkage is integrative. Integrative linkage is where those senior HR personnel are part of the top management team. The Senior HR is therefore part of the top management and contributes on issues concerning the development of business strategies. Wright et al. (2004) acknowledges that HR strategies flow from business strategies. These strategies are dominated by financial and market considerations. However, Wright et al., states that there are room for HR to improve at the stage where business strategies are conceived through focusing on resource issues. In this point, of view Holden ltd has dealt with these HR strategies as they arise as formulation and implementation of corporate strategy take center stage. The company has followed several routes to implementation of HR strategies. These several approaches to HR strategies formation correspond to different ways of managing change and varying ways of bringing the human capital part of the business into line with the company’s values, mission and objectives. By working through strategic concerns and clarifying on points of tension, emergent of new ideas and finding consensus over goals is eventually obtained. The company has two major issues it has addressed in development of a HR strategy i.e. achieving a vertical fit and integration and achievement of a horizontal fit (bundling). Achieving vertical fit (Integrating HR strategies and business). In reference from Wight et al. (2004) states that getting fit necessitates acquaintance in business strategy, skills and behavior required in implementation of these strategies. Knowledge in HRM practices requires eliciting those behaviors and skills, it also requires the ability to develop and implement the targeted system of HRM practices. It has been paramount for the company to consider how to integrate HR strategies and business through this in-turn has influence the corporate strategy and the business unit strategy. In establishing these links Holden Ltd put in to consideration the strategies for change with the company integrated with changes in the external and the internal business environment. The management understands that fit may exist at some point; however they are aware that circumstances will change and this situation will no longer exist. The management is also aware that excessive pursuit for fit in a status quo can simply inhibit the flexibility of an approach that is essential in turbulent conditions. Holden Ltd management have recognized factors that hinder the achievement of a constant vertical fit are as follows; Vague business strategy- this could be a strategy that is emergent or in an evolutionary state and it would mean that there is little or it can not fit to the HR strategy. Even with a clear business strategy sometimes it is hard to determine precisely how HR strategy can assist in some ways i.e. a good business is made when there are quantifiable links between business and HR strategy performance in concern. HR specialists may lack strategic capability to make a connection despite the availability of a chance. These specialists need to understand the business drivers have the big picture and appreciate how HR practices and policies can impact on the company. Realization of barriers between the HR manager and the top management has helped Holden Ltd to align it HR strategies. It have realized that the later may be unreceptive because they may not Acknowledge this necessity. On the other hand, the HR may not be in a position to persuade them to listen. The HR are also were realized to be having problems accessing the top management on matters concerning HR strategy. In reference to Thompson & Heron (2005), it is the work of the HR practitioners to solve these issues by knowing the aims and objective of the business and what drives these aims. Holden Ltd has achieved these by understanding how the HR practices have impacted and achieved access to strategic business decision making. The company's management has demonstrated credibility as an integral part of the management of the business. How Holden ltd Implements its HR strategies In Holden Ltd most of the time spent on HR strategic management has been directed to implementation of strategies while just enough time is spent on strategic management. The company has further translated these strategies into programs that have clearly stated deliverables and objectives. It has not been easy to get strategies in action, strategic HRM has been devalued to even mean generalized ideas about HR policies, and it has also been used to explain a short-term plan like retaining the production rate. It is hence noteworthy to emphasis that HR strategies entails more than just programs, plans and policies regarding HR concerns that the department of HRM considers pertinent. It is paramount to note that piecemeal initiatives do not count as strategies. According to Thompson & Heron (2005), the problem with SHRM is that it often creates a gap between what is stated in the strategy and the real strategic action. There have been several factors that have been identified to contribute to the gap between the designed strategy and the way it is implemented. These factors include; Tendency by the long-serving workforce to cling on the status quo. Employees’ tendency to accept only those adjustments that are perceived to relate to their areas of specialization. Initiatives that are ambiguous and complex that are hard for the employees to understand or that can be perceived differently especially in large and diverse companies. It is too hard to be accepted among non-routine initiatives. When the initiative is seen as a threat by the employees When it is consistent with the companies strategies and values. It goes beyond the extent beyond where the management can be trusted. The employees are likely to be hostile to initiatives that conflict with the organization's identity i.e. downsizing a culture. Culture that are bureaucratic and those that lead to inertia. Barriers that have been experienced during implementation of HR strategies There have been several factors that have created barriers to successful implementation of these strategies. Some of the key barriers that have caught up with Holden Ltd are; failure to understand the strategic requirements for business, development of irrelevant and ill-conceived initiatives, and insufficient assessment of environmental factors affecting the contents of the strategies. This has resulted from analysis of best practices that were not comprehensively analyzed and could not fit the requirements of the company. In reference to Thompson & Heron (2005), such problems are compounded when there is insufficient attention to practical implementation. The key role of Holden Ltd's line managers in implementation of the company's strategies is giving utmost attention to the implementation process. Critical approaches to Strategic HR implementation. The company has come up with an implementation program that overcomes these barriers. The program in mention include; a communication program, this program defines Holden Ltd's Strategic HR, the aim and objectives of the strategy and how and these strategies have been planned to commence. The second is a rigorous preliminary analysis to strategic requirements of the company, and the way Holden Ltd has planned to meet them. Holden Ltd is also concerned with involved of persons who are linked with the strategies like the line managers. These managers will help in identifying implementation problems and how to deal with these problems. Reference Armstrong, M & Baron, A (2004). Managing Performance: Performance management in action CIPD, London Baron J.N &, Kreps, D.N (1999).Strategic Human Resources: Frameworks for General Managers. London: Thompson Learning. Brewster, C. (2001). Human resource management: A critical text. London: Thompson Learning. Boxall, P F & Purcell, J. H (2003). 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