Strategic Human Resource Management
The modern world of business is currently experiencing a number of changes which have resulted in the transformation of the structures and cultures of many business organizations. These current trends can only accelerate the rate of change experienced in today’s business world. The success and the future of any business organization will thus entirely depend on the implementation of a human resource strategy working towards the achievement of the strategic objectives of the business organization.
A strategic approach to human resource management entails that the management processes link the human resource policies and activities with the set strategic goals of a business organization. To achieve a successful strategic approach to human resource management, a business organization must first determine its operational factors that affect the establishment of a strategic approach to human resource management in order to understand how a successful human resource strategy is formulated. Secondly, a business organization must establish the human resource practices of different human resource strategy models.
Lastly, it’s important for a business organization to examine the levels of organizational performance of other business firms employing a strategic approach to human resource. Human resource management is also viewed as a strategic business partner that can actively participate in the formulation and implementation of strategies to achieve the desired results. In this vein, human resource management procedures must continually strive to achieve great results from their practices and their laid down strategies as well as establishing people strategies in line with the objectives of the business organization.
Human resource planning and development, job analysis and recruitment selection, employee appraisal and motivation, career planning and development, employee compensation and benefits as well as employee health and safety are the major areas of consideration in any business organization that aims towards increasing the value of the employees as well as enhancing their productivity in line with the establishment of a sustainable human resource management strategy.
To achieve this end, there exists a dire need for the human resource department to establish the means of working hand in hand with other major departments within the business organization such as; administration, accounts and finance, production, sales and marketing, supplies as well as the information technology department. Strategic human resource management and administration The administration department is responsible for the supervision of the entire business organization.
It comprises of business administration managers and other senior personnel who make decisions to facilitate the smooth and successful running of the entire business organization. Effective strategic human resource management links human resource management policies with the strategic aims and objectives of a business organization. The administration, on the other hand, organizes the staff and other resources towards the achievement of the organization’s aims and objectives, Purcell (2001).
The two departments cooperate in various areas to enhance the success of strategic human resource management. Henri Fayol (1841-1925), in his five elements of administration, identifies a set of administrative duties and functions undertaken by the administrative department to achieve the strategic goals of an organization: •Planning involves the making of decisions in advance concerning the activities to be undertaken, the means of doing the activities, time frame for completing these activities and the employees intended to perform these activities.
In line with the strategic human resource management, planning (both long term and short term) involves the formulation of strategic goals and objectives and the identification of the required human resource to accomplish these goals. •Organizing entails the identification of duties and tasks to be performed and the delegation of these responsibilities to the various departments within an organization.
Organizing is an important element in strategic human resource management as it involves the allocation of responsibilities across an organization’s departments and this eventually translates to departmental coordination in the achievement of the strategic goals and objectives. •Staffing involves the recruitment of the required human resource to undertake the available duties and responsibilities. Here, the staff needs, job descriptions as well as the required qualifications are addressed.
Staffing is crucial to strategic human resource management as it ensures that the most efficient human resource is hired to accomplish the organization’s strategic goals. •Directing refers to leading the employees towards the achievement of the goals of the organization. When directing, the administrator must have the required skills and ability to motivate all the employees towards a common goal. In line with strategic human resource management, an efficient director must be in a position to balance his or her output between the needs of the staff and the economic as well as financial goals of the organization.
Controlling entails the measuring of quality in all departments of the organization and identification of any slight deviation from the strategic goals of the organization. Efficient control measures facilitate quality and satisfactory performance from all the employees by ensuring that all the employees are kept in the most conducive environment. The best control practices in strategic human resource management include taking necessary and timely actions on errors arising, measurement of employee performance as well as managing all information promptly.
Hayton (2003) observes that the administration department plays a very significant role in organizing the staff and other resources towards the achievement of an organization’s strategic goals. To this end, business organizations should foster a more established support mechanism between the administration and the human resource departments to facilitate effective strategic human resource management. Strategic human resource management and production In a business organization, the production department transforms all inputs into finished products through processing.
This department is controlled by a production manager who ensures effective processing of all raw materials. Huselid and Becker (1996) note that in line with strategic human resource management, all employees involved with production are strategic resources and thus should be managed with the aim of achieving the stipulated corporate goals of the organization. The production and planning department is very crucial to any business organization which strategically aims to produce high quality goods to meet the expected standards of the customers.
This department formulates and inspects standards within the production process. To ensure that goods produced are in line with the strategic goals, the quality as well as quantity of production is closely monitored by the production manager (Kazmi and Ahmad, 2001). Wright et al. (1994) argue that human resource management, in any business organization, is the basis for any competitive advantage. To this effect, business organizations must ensure that their human resources are managed effectively to add the required value in production.
It is also crucial that the right procedures be employed not only the in selection of highly qualified and effective production employees but also in the provision of regular training to ensure that the employees keep at pace with the formulated strategic production goals. In the competitive business world today, strategic human resource management plays a major role in an organization by ensuring that human resources aren’t easily copied by other competing firms.
Inventory activities such as nurturing long term human resource talents, regular training as well as team work can never be easily copied by other competitors and thus go a long way in ensuring that strategic production goals are efficiently achieved (Wright et al. , 1994). A business organization depends entirely on the production department to design and test new products. Fields et al. (2000) argue that the production department conducts research on new products and modifies the existing products to meet the set strategic goals.
In this department, the technical support team deals with improvement of working practices, and it liaises with the human resource department in ensuring that the best human resource is employed to facilitate production to the desired quality levels. Strategic human resource management and accounts The accounting department prepares accounts, makes financial decisions and keeps records of the income and expenditure of an organization.
Managers in this department work closely with their human resource counterparts in formulating and sustaining the human resource strategy to improve the general performance of the entire organization. The two departments collaborate in areas such as; formulating budgets, strategic planning, making decisions and establishing performance bonus schemes among many others areas. Mandell and Klein (2007) observe that the human resource contribution in any business organization should always aim at value addition. To achieve this goal, the budgeting process must be incorporated effectively into the human esource strategy.
This ensures that the accounts and human resource departments work together in budget formulation and evaluation of the expected costs to demonstrate the contribution of staff investment towards the achievement of strategic goals. By adopting a profit oriented approach, both departments demonstrate a high level of knowledge and capability towards supporting the organizational strategic objectives. The accounts department facilitates workplace financial educational programs which aim at improving the financial competency of the employees.
Financial competency empowers the employees with the skills and knowledge to make sound decisions in financial matters and in turn affects employees’ job commitment, performance and satisfaction. Kim (2007) observes that employees who are well informed financially experience less stress at work, enjoy more comfortable life at home and are the most productive towards achieving the strategic objectives in any business organization. From the business’ perspective, financial incompetency affects productivity, competencies, legal ability as well as benefit costs thus affecting the business negatively.
Hilgert et al. (2003) argue that an effective accounts department in achieving the strategic human resource objectives empowers the employees with quality and financially beneficial programs to guide them towards making financially sound decisions. However, in some cases where the organization might be unaware of the employees’ financial incompetency, the human resource managers must shoulder the obligation to inform the decision makers and ensure the right course of action is taken to address the problem timely.
The accounts department facilitates the establishment and sustainability of performance related bonus schemes to empower employees financially and enhance their productivity. Volpe et al. (2006) note that poor financial decisions affect retirement programs leading to reduced chances for new and more innovative leadership talents. In such a case, the business organization operates under a high turnover risk among old leaders who can hardly advance in their careers.
The inability of employees to retire also ffects promotion opportunities for other younger employees and in turn frustrates them, leading to reduced performance among excellent employees. In the same breadth, business productivity is always affected by the poor performance of the employees who are financially stressed and frustrated by their inability to retire due to increased financial needs. Strategic human resource management and information technology support In the contemporary business world it has been argued that people are the most important resources for a business organization.
This makes the management of human resources a vital component of every business organization. As such, every business organization has to ensure that its human resource department is as efficient as possible (Boon 2005). This efficiency can be achieved through a good collaboration between the organizations information technology support and the HR department. The information technology department deals with the management of information within a business firm. The activities within the department revolve around issues of privacy policies as well as information management controls.
In the current business world, a business that fails to efficiently protect its business knowledge base risks humiliation from its competitors in the market (Ketchen et al. , 2006). As such, the human resource department requires the services of the services of a committed IT support team to manage their sensitive information. Human resource information systems reduce costs for business organizations that seek to create competitive advantage through cost leadership at the market. An automated system of registering workers whenever they arrive at work and leave can save time and money.
A human resource department that focuses on cost leadership can cut their cost of production through a reasonable investment in information technology. On the other hand, strategic human resource management may choose to invest in product differentiation (Fleetwood and Hesketh, 2007). In this case, the information technology department can assist the human resource department to create an effective value chain analysis. For instance the information technology support can help the organization create relevant information systems within the firm that can enhance the business organizations to meet quality demands.
These systems could include better training systems or simulations, better employee participation systems and greater security systems among many others. HRM application software can save a lot of time and still aid the HR department to create efficiency within the organization. These application packages may include payroll modules which ensure that employee payment functions are undertaken efficiently without unnecessary errors, time wastage and labor management systems which help the department in cost accounting by retrieving ready data from the systems about how the organization utilizes the available labor.
Others such as human resource management module and benefit administration module can efficiently help human resource officers to monitor employee participation in welfare activities such as health schemes and pension schemes among others without necessarily having to allocate someone the responsibility of manually doing so (Godard 2004). Human resource systems also convert information within the HR department into a digital format. As such, this information can be readily integrated into the organization’s knowledge management systems.
A business organization can thus benefit from a wide area of rich information when it comes to the process of decision making, especially by the senior management. Business organizations need to be innovative in terms of their business process as well as in terms of the services and products they offer to the market and as such, the human resource departments requires the support of the IT department to come up with efficient employee organization models that allow active participation and timely performance of business tasks (Guest 1997).
The current business environment remains very dynamic and a business that fails to diversify and develop services for the market risks collapse. Information technology is thus no longer an option for the human resource department but a compulsory integral part if strategic human resource goals are to be achieved. Greater employee participation, clearly defined jobs and clear internal career ladders within the HR department can only be planned and implemented through the use of IT support.
Strategic Human Resource Management and Marketing Any successful business markets itself internally even before it begins external marketing. It is a generally accepted idea that satisfied employees are a good source for satisfied customers. Scholars have asserted that internal marketing is a sensitive area for business organizations to focus on (Boswell, 2002). This can only be achieved through efficient internal communication and a good human resource management. For a business organization, satisfied employees are a pre-condition for satisfied customers. This is even more sensitive for the employees working as service personnel.
This particular group of employees is in contact with the business’s customers on a daily basis and can thus make a big difference for business organizations. Strategic human resource functions should therefore be integrated with marketing strategies to achieve this goal. It therefore becomes very important for a business to strive to ensure that its employees are a people who are proud to be associated with the organization. An organization’s employees can provide the most impressive picture of the services offered in the organization (Legge, 2001).
For instance, the service personnel in a gas filling station are the sole contacts between the customer and the business organization. As the such, the first impression a customer gets from the service offered by the customer and how the customer presents her/himself determines whether the customer comes back for the service or not. The argument therefore is that an organization’s employees should be seen as its first market. The business organization should therefore handle its employees in very cautious manner.
This should is not only limited to service personnel, because even the employees who are not in contact with the customers can also greatly influence the service offered. In simple words, if all employees perform their jobs well they add value to the service being offered. Internal marketing therefore becomes a synonym of human resource management. In this case, it helps managers to understand and appreciate their employees. This creates highly trained staff, who are motivated to serve any of the organization’s customers well and who feel they are the critical link between the business and the customers.
On the other hand, the human resource should attract, train and retain talent that can provide quality service. Internal marketing of the organization is also highly dependent on internal communication in the business organization. The lower level employees must be kept actively involved in issues of the business (Godard 2004). Development of various business models should be left to employee communities or groups of employees to formulate. This gives employees a feeling of ownership in business’s decision making process.
It also makes the process of implementation easier since the employees are familiar with the policies and as such, occasions where the customers feel like some business decisions are being imposed on them may not arise. HRM therefore becomes a strategic undertaking to bring organizations as well people together with intent of meeting the goals of both. Strategic human resource management therefore requires an integrated approach whereby by it cuts across the general activities of marketing in order to meet the organizational goals.
In other words while the marketing department strives to market the organization externally, the human resource office strives to market the organization among its employees through various welfare as well participatory platforms. As such, issues of salaries or health schemes can be negotiated openly with the employees (Boon 2005). This eases unnecessary pressure within the work place and fosters direction of resources that would have otherwise wasted to productive utilization within the organization.
Strategic Human Resource Management and Purchasing and Supplies The supplies department is concerned with issues of acquiring goods and services required for the process of production. As such the supplies department can immensely influence the production of goods and services within the organization. The department procures capital goods, as well as other support raw materials for the process of production. The human resource department is therefore expected to communicate with the supplies department to ensure that the capital goods procured meet the available skills among the employees.
A failure to effectively liaise with respective departments and provide a comprehensive skills audit of the employees can lead to a massive waste of organizational resources (Wall & Wood, 2005). The human resource department must therefore work closely with the supplies department to ensure that their long term goals for the organization are in harmony. The supplies department on one hand looks up to the human resources department to develop skills and knowhow to run the acquired capital goods in the organization.
As such in playing their roles strategic human resource managers should in constant consultations with supplies department when trying to strategically position the organization either technologically or when deciding to improve on the already existing ones. Current trends clearly show that failure by the human resource department to effectively collaborate with the procurement departments can lead to bigger costs in production. Hitherto, human resource executives were used to their own supply base and negotiation of their deals independently as such procurement department were deemed as juniors in the process of resource management.
The two departments must sit down together and strategize on how their input can be optimal other than act like two competitors in the same organization Human resource management is related to the supply chain in two major ways, given that supply chain management seeks to establish efficient and effective flows of materials and information within business organizations. It therefore influences the interactions and outcomes of people within business organizations as well with other business organizations.
As such, firms that rely on supply chain management for their competitive advantage are continually applying the best human resource practices to optimize on available resources. Therefore, the human resource architecture and the supply chain are intertwined incase of companies that want to strategically focus on creating competitive advantage (Fleetwood& Hesketh 2007). Identifying skills required in the future and bridging the gap between the current skills and future demands can only be efficiently done where the human resource managers liaise with the supplies partners.
As such, both departments can efficiently come with a strategic plan formed in their alliance. In this way both departments can increase their productivity within the organization. It is my view that an alliance of the two is for the good of the business organization because, while HR provides the human capital required, the Supplies department provides the capital goods for production. Conclusion Human resource management concerns itself with issues of internal succession, formal staff trainings, employment security and employee participation as well as issues of performance and compensation of staff.
As such, the duties of human resource manager cut across all the departments of business organization. Business organizations that seek to use strategic human resource management should therefore establish a harmony of objectives across all departments within the organization. It is the view of this paper that managers in various departments within the organization should operate as partners with a common goal to achieve rather appear as competitors in parallel operation.
Since the human resource department is charged with the role of building the infrastructure upon which all departments are established it must ensure that there is efficient communication system that allows movement of information freely within the organization. When roles are clearly defined and each staff member, regardless of the department he works in knows his duties well achieving the strategic organizational goals become easy. Strategic human resource management is therefore a collective undertaking by all departments within the firm which no department should try to own alone.