Strategic Human Resource Management - Essay Example

The strategic human resource management refers to the concept that HRM activities are part of strategic plan and contribute to the accomplishment of the overall organizational mission. Traditional HRM is more focused on employee behavior, appraisal, and training while strategic orientation is more integrated into the organizational structure. HRM is linked to management, decision-making processes and cultural diversification. The integration of strategic HRM has numerous benefits including improved implementation of the change, alignment of values and goals, and integrative ability to counter the market situations. In addition, the traditional employees’ motivators have changed and individuals are given more decision-making power. As the result, the role of HRM is also changing. HRM is already recognized to have influence in overall organization effectiveness. Human Resource strategy is focused on integrating different HR practice into businesses to provide competitive advantage. “HRM cannot be viewed as the separate function of business unit because the alignment of HR processes with business strategies is of primary importance” (Armstrong 2002). Despite of technological advances, the knowledge and skills of employees are the key source of organizational efficiency. According to the statistics in UK, the HR specialists have the seat on the Board of Directors in almost every company. Thus, the HR department has the significant level of influence within an organization. As many as 54 percent of HR managers in UK are involve in the development of overall company strategy. Having the right people on the right positions determines the organizational success. Companies are become more oriented to global markets and as the result, the personnel becomes culturally diverse. Ensuring “the productive cooperation of multicultural individuals is vital for strategy accomplishment” (Tyson 1995). If the company wants to succeed, having flexible, effective workforce is the first step to start with. For this reason, there is the tendency to outsource HR activities to professional agencies. Recruitment, training, consultations, team building and even downsizing are the services provided by outside professionals. Despite of the increasing need to implement strategic Human Resource Management, there are several concerns that challenge the transition from traditional to strategic functioning. Globalization has increased to need in “well-educated, trained and flexible workforce” and “individuals possessing these skills have higher expectations in terms of recognition as well as responsibility” (Purcell 2003). Such employees plays the central role in achieving the organizational objectives and, as the result, the strategic HR should focus on developing the policies fulfilling the needs of these employees. It can be very expensive for the companies. In addition to being either the low cost leader or product differentiator, having the well-educated committed workforce is a significant strategic advantage for company of any size. Only competence employees help the business unit to respond quickly to the changing needs of customers and the actions of competitors. The strategic HRM emphasizes the “employee skills, organization culture and universal management systems”, which makes the organizations “more responsive to the market and enables to improve the quality of the service or product” (Marchington 2003). Strategic HRM shapes the workforce to meet the strategic objective through improving performance, developing unifying culture fostering flexibility. HR departments are the partners not only in developing the strategies but also in implementing these strategies through recruitment, training and motivating employees. The new emerging role of strategic HR is environmental scanning: analysis of market threats and opportunities. Informational function of strategic HR is to provide the external and internal information about the strengths and weaknesses and, as the result, the company’s vulnerability. In addition, the HRM provides the individuals who might be of primary importance to overall strategy development and planning. HRM is not the passive participant in organizational operations and does not simply react to the other business process. Strategic HR managers, on the contrary, “utilize the workforce potential to meet the objectives” (Taylor 2005). They develop the performance evaluation and reward distribution systems motivating the employees to execute the strategies. There is the two-sided relation between HRM and business strategy – the business strategy is developed taking into account the potential of workforce, while the HR managers translate the strategy into priority of HR department. Strategies HR managers develop the policies working for strategy realization. There are three reasons to utilize strategy and HR: business are able to adopt to change faster and more successfully, the customer demands are met better and financial gains are achieved through successful execution of the strategy. In few words, the strategic HRM is vital for utilizing the human resources for the overall company advantage and successful accomplishment of the strategy. How can the strategic HRM aid the goal achievement? The answer is easier than it might seem – HR manager ensures that the employees support the organization strategy and are motivated to meet the set goals. Personnel should be able to perform for the goal achievement and be rewarded for their contribution. One of the essential elements is corporate culture (shared values and beliefs). Strategic HRM is focused on “encouraging the employees to have faith and trust in organization” (Mabey 1998). The strategic approach to HRM is about implementing the policies which ensure that the employee’s skills and knowledge contribute to the goal achievement. Maximizing the effectiveness of Human Resource Management is about implementation of appropriate practices and ensuring that HR managers are capable of attracting talented personnel. There is the relationship between strategic HRM and employment productivity, financial well-being of the company and market value. For example, the competitor has initiated the intensive marketing campaign and managed to gain the portion of company X market share. Company X has to react and try to preserve their customer’s loyalty. Unfortunately, the existing workforce did not manage to come up with the alternative campaign and the market share significantly reduced. As the result, the company X appeared in a very difficult situation. The root of the problem is not the success of competitor’s campaign, but the failure of company X Human Resource department. If the timely collection of external information was done and talented employees hired, the company X would be able to meet the challenge effectively. In conclusion, connecting workforce to the strategy results in long-term benefits and helps to meet the demands of customers better. The talented employees are valuable and important for the overall company success, however, they are scarce. Strategic HRM has the function to create the attractive working environment, identify the right people and recruit them to join the company. Workforce has become the most important asset in any company because it is the only source of service and knowledge. Globalization forces the companies to struggle twice harder to succeed or at least remain on the same level. Different challenges place the greater demand for successful employees able to contribute to the company strategy. Strategic HRM is an important element because the organizations first look at the available resources, including human, while developing the strategy. Word Count: 1141 References Armstrong, M & Baron, A. 2002, Strategic HRM: The Key to Improved Business Performance, Chartered Institute of Personnel & Development Publishing. Mabey, C & Salaman, G 1998, Human Resource Management: A Strategic Introduction (Management, Organizations & Business), Chartered Institute of Personnel & Development Publishing. Marchington, M & Wilkinson, A 2005, Human Resource Management at Work, Chartered Institute of Personnel & Development Publishing. Purcell, J & Boxall, P 2003, Strategy and Human Resource Management (Management, Work & Organizations), Palgrave Macmillan Publishing. Taylor, S 2005, People Resourcing, Chartered Institute of Personnel & Development Publishing. Tyson, S 1995, Strategic Prospects for HRM, Chartered Institute of Personnel & Development Publishing. Read More