Does Strategic Human Resource Management Matter in High-Tech Sector
This report is written on a paper by Azhdar Karami, Brian M. Jones and Nada Kakabadse. They illustrate the importance of Human Resource Management on an SME firm’s performance and hypothesize it to be positively correlated. The second hypothesis was that the human resource is more involved in high performance firms than low performance ones. They interviewed a number of CEO’s in the UK electronics market to gather their views on employee involvement in strategic management.
Research BackgroundIn the recent years, the way HR is managed has changed from a traditional approach to a more strategic one. This is done by managing HR in integration with business strategies. The Human Resources must focus on the business as a whole rather than focusing on functions of it. The Human Resource is more of a strategic asset now so their management has become crucial to the success of any organization.
The Human Resource or the physical assets must have capabilities such as being adaptable and motivated and these must be exploited by management.Also, according to Ulrich (1997), newer capabilities such as innovation, speed, etc must be added to the older ones to improve performance (Ulrich, D). Methodology The population for this study was small and medium sized high-tech UK enterprises. These firms and professionals were well-qualified, well-educated and well-experienced in their field. The sample included 500 SMEs that employed less than 250 employees and had a turnover of less than 50 million pounds in their last financial year.The main tool for findings was a survey questionnaire.
Findings 32 out of the 500 questionnaires were returned out of which 12% respondents were female. First, the results for correlation between HR management and business performance were examined. They were quite strongly correlated; performance had a stronger positive correlation with HR capabilities such as skills, innovation, effectiveness, and training competency. It was found that most CEOs thought of HR capabilities (mentioned above) as a central resource to increased business performance. Consequently, it can be said that increasing their capabilities will enhance performance and so first hypothesis was accepted.The second objective of the study was to find a correlation between human resources involvement in strategic management and business performance.
As per the hypothesis, a positive correlation was seen between HR involvement and high performance firms. This was shown by greater HR involvement in long term planning, strategic formulation and revising and developing HR systems in such firms. Conclusions Since CEOs perceive HR capabilities as a key resource and a source of competitive advantage, and realize the significance of their involvement in strategic planning, this study had many implications for them.Increasing the core competencies (especially the HR) of a firm improves performance so investment towards increasing HR capabilities must be well-planned because it has the power to enhance performance.
It must not be viewed as a cost. Also, this study implies for CEOs of SMEs to increase the involvement of HR in strategic planning to exploit their capabilities and hence, increase business performance. However, readers must be reminded again that all this can be said for SMEs and therefore, these findings must not be generalized to all firms in the high-tech industry.
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