Strategic Human Resource Management: Aligning HR Policies With Business Strategy
Theoretical Perspective of Strategic Human Resource Management
Human resource management is one of the most significant strategic approach in managing the staffing level of an organisation in an effective manner. The fundamental purpose of human resource management of an organisation is to strengthen the productivity among the employees which is a critical factor towards satisfying organisational goals (Armstrong and Taylor 2014). This paper intends to discuss about strategic human resource management. The relationship between business strategy and human resource strategy will be discussed. The theoretical perspective of strategic human resource management will also be evaluated. In-depth discussion regarding employment relationship will also be evaluated.
Explaining the relationship between business strategy and the human resource strategy:
The human resources department of the corporate entities is taking intense care towards aligning the business strategy with that of the human resource strategy, which is the key of integrating positive attitude among the staffs. David Guest Model highlights that, there are different HR policies, which are needed to be executed for accelerating the productivity in the workforce. Strategic integration is one of the most significant HR policy gaol, which shows that it is important to integrate HRM in the strategic planning which can help in managing the human resources in a systematic manner (Bailey et al. 2018).
Commitment is another important factor in strengthening organisational productivity. It is the prime responsibility of the higher authority of an organisation to ensure that the employees feel extremely bound towards the organisation and are highly committed towards their roles and responsibilities. Flexibility in the workplace play a significant role in the way of generating motivation among the employees. Thus flexible organisational structure must be maintained (Brewster et al. 2016). This can help in running the internal functionality of an organisation in an effective manner.
Assessing vertical alignment and horizontal integration in an organisation:
Vertical alignment can be referred as the process of can be referred as the process of arranging the staffs from every department with that of the organisational goals and objectives. Vertical alignment, in its simplest form can be referred as the ability of the staffs to understand their designation. This can help the staffs to act accordingly in order to satisfy organisational goals and objectives. Vertical alignment of strategies is also a very important factor which shows that, the strategies are directly related to organisational goal which is associated with that of the fundamental mission, vision and values of an organisation (Marchington et al. 2016). Vertical alignment is basically the configuration of strategies along with the action plan which can have a firm impact on promoting effective decision making process. The process of horizontal alignment requires comprehensive effort throughout the organisation.
Horizontal integration, on the other hand, is referred as the process of controlling the production and distribution of a product. This is basically the process of improving the rate of production. This is one of the major competitive strategies which is the key of acquiescing the business activities in identical value chain. The fundamental aim of horizontal integration is to initiate merger and acquisition with another company that produces same product (Brewster et al. 2016). This is the key of attaining sustainable growth of business. Economies of scale can also be achieved through this strategy by increasing the product line. In addition, with the assistance of this horizontal integration, the corporate entities become able to cope up with the intense competition in the market (Reiche et al. 2016).
Theoretical basis of SHMR:
Relationship between Business Strategy and HR Strategy
Strategic human resource management can be regarded as the comprehensive process of utilising the skills and competency of human resources and thereby accelerate business performance. It is imperative to align the needs and requirements of human resources with that of the business strategy in order to generate motivation among them. The underlying aim of strategic human resource management is to maximise the commitment and productivity among the employees. The Harvard model of human resource management deals with the best fit approach to human resource management (Albrecht et al. 2015). According to this model, the interest among stakeholders plays a significant role in the way of influencing the performance of employees. This model highlights that, the HRM policies and procedures of an organisation must fit with the competitive environment along with strategy. At the same time, the HRM policy must be executed in such a manner which can help in facing critical business related issues. However, Boon et al. (2018) argued that the fit approach generally deals with the internal context of the firm.
The matching model of HRM is one of the most significant theoretical perspective of strategic human resource management. According to this model, the best way of attaining competitive advantage is to align the HR strategy with that of the activities related to management of human resources (Kramar 2014).
This model shows that strategy of employee management differs from one organisation to the other which is entirely dependent on the organisational context. While the best fit approach deals with the alignment of HR policy with that of the business strategy, the contingency approach shows the process of aligning HR policy with that of the employee management activity. This is the key factor of attaining competitive advantage. However, Katzenbach and Smith (2015) contended by saying that the greatest limitation of the matching model of HRM is that it lacks completed approach to human resource strategy. In addition, this model does not consider the strengths and potentials of human resources of an organisation along with the significance of motivating the human resources (Bratton and Gold 2017).
Performance management is regarded as the way of dealing with the performance of employees and take proactive action in order to improve their performance level. This is basically the mode of strengthening the level of productivity among the employees. This performance management technique is being highly used in recent times, in order to assess the extent to which the employees are performing their roles and responsibilities. The underlying objective of performance management is to review the performance of individual employees and thereby supporting them to explore their own strengths along with development needs (Pulakos et al. 2015). Defining company goal is one of the most important approaches, followed by the HR department of an organisation in performance management. With the assistance of goal-tracking software, the HR generally define the goal among the employees. This is helps the employees to understand the objective of their roles and thus work accordingly for the sake of attaining desired result. Providing feedback is another vital performance management technique, used by the HR department. This is the process of checking the activities of employees and thus provide comments based on their performance (Countouris 2016).
Importance of Commitment and Flexibility in the Workforce
This periodic feedback plays a significant role in reinforcing positive behaviour among the employees which is the key of improving their performance level. Peer Review is another significant way of fostering effective performance management. This is the process of allowing the staffs to praise the performance of their colleagues. This exercise supports in building healthy relationship among the staffs and thereby satisfy the organisational goals in a collaboratively manner. Additionally, through this way, the staffs can also amplify their skills by watching the performance of others.
There are multiple shortcomings of traditional performance management mechanism such as conflicting organisational goals and objectives and lack of evaluation of the system. Such loop holes create negative vive among the employees and thereby restrict them to improve their performance level. Therefore, it is recommended for the companies to undertake unique performance management mechanism. The performance management system must be designed in accordance with the accordance with the organisational values and culture. A strong objective of the performance system must be determined. This is the way, through which transparency with the staffs can be maintained. It is recommended for the corporate entities to hire a person, who will have the responsibility of tracking the entire system and thereby ensure that the process is running effectively.
Training is an imperative factor towards refining the skill and competency level among the staffs. Thus a training schedule must be determined. The content of the training and the trainer must also be set. There are certain schemes, which are needed to be used in order to execute the performance management mechanism in an effective manner. Objective setting is one of the most proactive schemes of implementing performance management system. Through this way, the performance of the staffs can be assessed on the basis of predetermined organisational goals and objectives. Rating scale is another vital scheme of performance management which supports in making a list of parameters, based on which the performance is to be evaluated. It is suggested for the firms to hire a proactive reviewer who will be responsible for assessing the extent, to which the employees are showing the listed characteristics.
Discussing the theoretical perspective of employment relationship:
Managing employment relationship is one of the most complicated task to human resource professionals. The managers of an organisation are generally considered as the intersection in between employees and employers. Therefore, the managers hold the responsibility of protecting the interest of both of them. The personality and emotion of employees are different from each other. Therefore, the management of employee relationship is a complex process. Healthy working environment and considerable salary structure are two of the most important factor in generating motivation among the staffs which is the key of managing employment relationship (Rosenbloom 2014). However, strict supervision and penalties can restrict successful management of employment relationship. The distribution of power in between employers and employees is one of the most important factor of employment relationship. It is the prime responsibility of the management of corporate entities to take special care towards the factors such as higher pay structure, training and career development, job security and effective working culture (Harney et al. 2014). These factors can maximise the performance level of the employees. There are multiple theoretical perspectives, which supports in employment relationship in an organisational context. Unitary is one of the most significant theory of employment relationship which shows that the employees and employees have identical interests, values and goals. Therefore, any kind of conflict has nothing to do in an organisation. According to this theory, management holds the super power in an organisation in terms of implementing policies and procedures, which can support in protecting the interest of employees. However, Guan and Frenkel (2018) argued that this theory does not put stress on the trade union. Moreover, this theory also shows that personal clashes and unhealthy communication between employees and employers are the significant factor in conflict in an organisation.
Vertical and Horizontal Alignment of Strategies
Pluralism is another important theoretical perspective of employee relationship which shows that conflict is an inevitable factor in an organisation. Due to the differing interest of different groups. Contrary to the unitary approach, pluralist theory shows the significance of maintaining healthy relationship with the trade union’s representatives in order to protect the interest of employees. This is the key of employing the productivity among the employees. According to this theory, it is the role of management of an organisation to balance the needs and interest of both the employers and employees. Strong and proactive conflict management strategy must also be executed for avoiding any kind of negative vive in an organisation (Analoui 2017). On the contrary, Marxism theory believes that organisational conflict is nothing but the outcome of clashes in between different class of a society. This theory considers employers and employees as capitalists and proletariats respectively. According to the view of Marx, the inclusion of capitalist system affects the productivity among the workers as they cannot control the production of staffs. Contrary to both the unitary and pluralist approach, Marxist theory puts stress on conflict as the outcome of societal clashes (Bolman and Deal 2017).
Employment relationship comprises of certain key players, who play a pivotal role in terms of protecting the requirements of the employees. The players in the employment relationship such as employers, employees, government and employer’s organisation. The employers are considered as the super power in terms of hiring and retaining the employees and take effective action in order to improve productivity among them. At the same time, the employers also hold the responsibility of executing policies and procedures that can protect the needs and requirements of the employees (Tziner 2017).
The employees are highly intended towards healthy working environment and considerable salary structure. They share their perception and grievances to the management. In the same way, the employees are also highly intended towards sharing the decision making power with that of the employers. The government holds the responsibility of regulating the employment relationship by executing laws, rules and agreement. The government executes certain employee friendly policies and procedures, with the assistance of which, the employers become able to create positive working culture in the organisation. Employer Organisations are one of the most significant actors of employment relationship who provide necessary support to the human resource department of an organisation in order to frame the policies in such a manner, which can support in protecting the interest of them (Newell and Scarbrough 2017). Employer’s organisation also holds the duty to make in-depth research and represents the requirements of employees accordingly. They also represents the values and interest of the employers in both national and international domain.
The nature of employment relationship is changing rapidly due to the complicated nature of contemporary industry. Traditionally, the principle of voluntarism was being followed in order to regulate the employment relationship in both UK and Ireland. This voluntarism is nothing but the intervention of law, which shows that transparency must be maintained in between employers and employees in terms of salary structure and terms and conditions of employment. The healthy relationship in between employers and trade union was being considered as the key of implementing collective bargaining approach in both UK and Ireland. Recently, a strong bargaining unit has been implemented to protect the interest of the employees. This can be regarded as the category of workers, being represented by unions. However, there are certain legislations, executed in recent time in order to protect the right of collective bargaining by restricting the right of workers. Such practice is affecting the productivity among them and generating reluctance among them to perform their roles and responsibilities with utmost efficiency (Riccucci 2017).
The Harvard Model of HRM
Union busting is one of the major practices, being executed in recent times in terms of restricting the employees to join in the trade union. Union density is also an emerging trend of employee relationship. This can be regarded as the proportion of the employees of an entire country, who are also the member of trade union. Still, sustainable growth of legislation is one of the major changes of employee relationship (Guest 2017). Employment regulation has been introduced in UK and Ireland in terms of considering wide range of employment factors such as working hour, health and safety policy at workplace, equality, leave policy and agency work, which can have a firm impact on generating satisfaction among the employees. National Minimum Wage policy has also been executed in UK and Ireland in terms of setting a considerable wage for the labours without making any kind of discrimination (GOV.UK. 2018).
These legislations can be considered as a minimum standard of employment that can provide utmost benefit to the employees. In the contemporary scenario, the employees are bestowed with the power of taking legal action against the employers, if their employment rights are breached.
Employee participation can happen at the time, when the employers allow them to take part in decision making process. Employee’s voice is one of the most significant issues. This is the key of considering their expressions and grievances. This can help them to perform the role of industrial citizens with utmost efficiency. Therefore, it is suggested for the companies to execute voice mechanism in order to strengthen employee relationship. This is the way, through which productivity among the employees can also be improved. Direct and indirect participation are two different methods, which can be used by the companies to attain employee participation. Direct participation is regarded as the process of creating provision for the employees to involve in the operational issues such as job performance. It is the prime role of the management to motivate the employees to raise their voice on the work related matters and organise their job accordingly in terms of working with utmost efficiency. This strategy can serve the management of an organisation with the ability to motivate the staffs to show better performance which is very much needed in order to improve organisational productivity. Initiating direct participation can also help the companies to initiate change throughout the organisation, which is highly required in order to cope up with the volatile business environment.
On the contrary, indirect participation is the process of promoting employee engagement, through staff representatives. This is the process of allowing the employees to raise their voice over underlying strategic issues which requires healthy interaction between employees and employers. This can help the management to have eye on the strategic issue and work accordingly to generate a positive vive throughout the workplace.
Conclusion:
Based on the discussion, it can be concluded by saying that the human resource management is highly imperative to protect the interest of employees. Employment relationship is also a significant factor in terms of satisfying needs and requirements of the employees and thereby generate motivation among them. Human resource management is a comprehensive approach which serves an organisation with the ability to attain competitive advantage. The human resource department of an organisation are becoming extremely defined towards implementing proactive business strategy and thereby influencing the bottom line of an organisation. In the intense competitive business environment, the human resources are playing pivotal role towards satisfying organisational goals and objectives. Therefore, the higher authority of an organisation is putting ample stress on the significance of accelerating the productivity among the employees as a significant part of business strategy
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