Shrm and Strategic Fit Essay Example
Shrm and Strategic Fit Essay Example

Shrm and Strategic Fit Essay Example

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  • Pages: 8 (2185 words)
  • Published: September 28, 2017
  • Type: Essay
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Organizations need to decide upon replacing existing staff, providing training to the staff, selecting people who can adapt to the culture of the organization and continuing and inevitable change, promoting, transferring, demoting and releasing people from the workforce when making strategic staffing decisions.Strategic staffing is the process of implementing a plan of action to secure the needed talent through recruitment, selection, promotion and transfer.

Strategic staffing need to be implemented for organizations to get the right people at the right time for achieving the goals and objective of the organization. Nankervis, Compton and Baird (2002, p. 79) stated ‘HR planning is to try to ensure that organizational objectives are met through the effective utilization of the human resource of the organization, taking into account changing circumstances within and outside particular organizations’.The staffing function encompasses the implementation of the HR planning process.

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rategies like internal growth make it vital for organizations to make strategic staffing decisions. Noe, Hollenbeck, Gerhart and Wright (2006, p. 74) mentioned ‘Growth requires that a company constantly hire, transfer, and promote individuals, and expansion into different markets may change the necessary skills that prospective employees must have’. To gain a competitive advantage this makes is important for organizations to realize the staffing needs and make strategic staffing policies in alignment with the organizational strategies.

When staffing process is carried out strategically it ensures managers that the organization’s human resources would consist not only of educated or skilled workforce. Skilled and educated workforce can contribute to the effective and efficient performance and productivity of organizations as this would help organizations to achieve a competitive advantage.

Strategic performance management Noe, Hollenbeck, Gerhart and Wright (2006, p. 330) define

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performance management as ‘the process through which managers ensure that employees activities and outputs are congruent with the organization’s goals’.The aim of performance management is to establish a culture in which employees take responsibility for continuous improvement of business processes and their own skills and contributions.

Performance management is central to gaining competitive advantage. Performance management have three parts, defining performance, measuring performance and feeding back performance. Noe, Hollenbeck, Gerhart and Wright (2006, p. 330) stated ‘performance management measures performance through performance appraisals, which is the only one method of for managing employee performance’.

Performance management has come to encompass much more than just appraisals. ‘A major trend in performance management is that while employee appraisals are the heart of performance management, organizations are now integrating a number of closely related functions including compensation, succession planning and goal management into the performance management process’ Loucks (2007). This holistic approach enables HR professionals to manage talent and supporting strategic goals to achieve competitive advantage.The strategic purpose of performance management links employee activities to organizational goals and objectives.

Performance appraisals can be used to motivate and improve performance of employees. By identifying internal strengths and weaknesses managers can focus on areas where there is need for improvement to make an organization to be productive to achieve the goals and objectives. Anthony, Kacmar and Perrewe (2002, p. 355) mentioned a well designed performance appraisal system can encourage individuals to work together as a team.If this is an organizational goal, it must face several challenges in designing and implementing such a system.

An effective performance management can help managers to implement strategies. Performance evaluations will have greater impact on strategy implementation when evaluators

make meaningful distinctions among different levels of performance. ‘In a highly competitive knowledge-based economy, performance management is taking its place in boardrooms across the country.Faced with pressures including the aging workforce and skills shortage, executives are becoming more involved in the performance management process as they realize that well-executed performance management strategies can help them get better results for the company’ Loucks (2007). As Loucks mentioned the strategic importance of performance management are mounting.

There is need for organizations to follow systems that elicit job performance that is consistent with the organization’s goals and strategies as it helps companies to gain competitive advantage.Strategic human resource development (SHRD) Noe (2005, p. 45) defines strategic training and development as ‘learning-related activities that a company should take to help achieve its business strategy’. SHRD is about improving and widening the skills of employees by training and development, by helping people to grow within the organization, and by allowing them to make better use of their skills and abilities to attain the strategic goals and objectives.The Figure 3 below is a model that shows the processes of strategic planning that begin by identifying business strategy.

Next, strategic training and development initiatives that support the strategy are selected. Interpreting these strategic training and development initiatives into actual training and development activities is the next step of the process. The final step involves the identifying of measures used to determine if training helped contribute to goals related to business strategy. Figure 3: The strategic training and development processSource: Noe (2005, p. 43) The strategic training and development initiatives are based on the business environment, an understanding of the company’s goals and resources, an

insight of potential training and development options. Noe (2005, p.

45) mentioned ‘strategic training and development initiatives provide the company with road map to guide specific training and development activities. They also show how the training function will help the company reach its goals (and in doing so, show how the training function will add value)’.Refer to Appendix 3 for the strategic training and development initiatives and their implications. SHRD’s focus is first on the strategic level, which deals with overall aims and objectives and formulation of plans and policies. Secondly this interconnects to managerial level focusing on the process by which the organization obtains and allocates resources to achieve its strategic objectives.

Finally it is linked to the operational level, the hands on and day to day processes of managing and organizing of work. Leopold, Harris and Watson (2005, p. 59) explained ‘Thus SHRD may be considered as a range of culturally sensitive interventions linked vertically to business goals and strategy, and horizontally to other HR and business activities, to actively encourage and support employee learning, commitment and involvement throughout the organization’. Investigating training needs is used in combination with environmental scanning and assessment of external forces and internal strengths and weaknesses of an organization to anticipate or respond to indentified challenges and opportunities.

Such reactions maybe rooted in the here-and-now of skills deficit analyses and meeting gaps.This is assuring that employee development is ‘fit for purpose’. Leopold, Harris and Watson (2005, p. 353) stated ‘ ‘fit for future’ agenda maybe responding to anticipated skills needed and gaps and is also part of a wider reflection of changes in the labour market, for example attracting potential employees

into areas where there are perceived likelihood of skills shortage’. Leopold, Harris and Watson (2005, p. 353) also stated ‘ Much of the language associated with increasing access to ‘learning opportunities’ through workplace activities is linked to increasing the (for-profit) organization’s competitive advantage.

Language such as enhancing sustainability increasing efficiency and effectiveness; of increasing commitment of employees; of creating learning environment where unique skills of employees can be exploited for current needs and for the long-term survival of the company’. Strategic compensation and reward In the development of a pay system and reward systems, several policies must be made. Three of the most important are pay level policies, pay structure policy and types of rewards offered.

Anthony, Kacmar and Perrewe (2002, p. 398) stated ‘an organization’s pay level is simply the average wage paid for a specific group of jobs.Pay level is important because if influence both organization’s ability to attract and retain competent employees and its competitive position in the product market. Pay level policy refers to how an organization’s pay level compares with its competitor’s pay level’. An organization’s compensation system should be consistent with the overall strategy of the organization. Success depends on displaying consistent strategy supported by complementary organization structures, designs and management process.

The two major strategic initiatives that occur today are growth and retrenchment. Anthony, Kacmar and Perrewe (2002, p. 04) mentioned ‘Firm’s growth mode would focus on employee performance and especially on external performance. This would force firms to pay attention to external competitiveness and equity.

Total compensation packages would be oriented towards incentives and would be driven by recruitment needs’. Figure 4: Framework for strategic pay design Source: Williams (1999) To

develop pay practices intended to become best, an organization must first recognize the importance of building reward and recognition practices within a framework that ultimately addresses both the extrinsic and intrinsic aspects of employee recognition and reward.

Williams (1999) explained the framework using the Figure 3 ‘this framework begins with the organization's strategic business objectives and then considers company culture, values, and performance measurement capabilities as critical elements in the overall design strategy. Programs are designed to motivate performance aligned with critical business objectives and reward contribution and results in ways that are meaningful to employees and consistent with company values’.

When designing a pay system it is vital for organizations to take a note of the relationship between pay and employee performance when planning strategies for achieving and sustaining competitive advantage. Anthony, Kacmar and Perrewe (2002, p. 419) stated ‘equity theory proposes that employees examine the relationship between their outcomes from the job (such as pay, job satisfaction, recognition and promotion) and their inputs (such as education, skill, and effort). Dissatisfaction probably does not occur if positive inequity (the person feels over-rewarded)’. Satisfaction will lead to productivity that is the key to competitive advantage.So it is necessary for organizations to formulate strategic compensation and reward systems and implement it for achieving their goals and objectives.

Refer to Appendix 4 for further understanding of strategic rewarding and how Southwest Airlines design and implement rewarding strategies to achieve its goals and objectives and to be a successful competitor in today’s competitive environments. Importance of SHRM HRM today has taken a wider role in overall organizational strategy. HRM plays a vital role in creating and sustaining competitive advantage of an

organization.There is a growing need for organizations to practice SHRM because of the evolving changes that businesses need to adopt to be successful in achieving its short and long term strategic goals and objectives in the competitive environments that it exists in.

Nankervis, Baird and Compton (2002. p. 22) stated the roles of SHRM to be ‘responsive to highly competitive workplace and global business structures; closely linked to business strategic goals; jointly conceived and implemented by both line and HR managers and focused on quality, customer service, productivity, employee involvement, teamwork and workforce flexibility’.This shows the benefits of SHRM and suggests that by successfully implementing SHRM, the organization goals and objectives can be met to achieve competitive advantage. ‘The bridge between HR strategy and HR functions is the formulation of human resource plan (HRP) that incorporate the desired outcomes of HR strategies, are responsive to continual changes in industry environments and can be operationalized through efficient and effective HR functions’ Nankervis, Baird and Compton (2002. p. 79). For SHRM to be successfully implemented it is necessary to follow a process of SHRP.

SHRP can be said to be the foundation of SHRM. Nankervis, Baird and Compton (2002. p. 79) ‘HRP allows the HRM functions to position itself to take the best advantage of fluctuations in the economy or labour market. The likely effects of future economic, social and legislative conditions, or organizational changes, can be converted from constraints and pressures to challenges and opportunities’. SHRP therefore can help businesses to seek advantages from the limiting factors while implementing strategic plans.

For example if organizations make a decision to downsize, it might lead to loss of specialist staff and

valuable intellectual capital. It might even lead to poor corporate image that lead to breakdown of psychological contract between employers and their staff which result in poor performance and loss of competitiveness. Downsizing is seen as a strategic HR tool to shape the organizations future with a well prepared HR strategy. If SHRP is not followed while implanting strategic plans it can lead an organization to loose its competitive edge.

Nankervis, Baird and Compton (2002. p. 0) mentioned ‘the failure to adequately plan for an organization’s human resource, can result in losses in efficiency and sustainable costs to the organization, through unstaffed vacancies, expensive replacement training, over hiring or fragmented career management’. Nankervis, Baird and Compton (2002. p. 80) also mentioned ‘by SHRP which focused in retraining, multi-skilling, or early retirement campaigns reduces the high financial costs (e. g. outplacement fees, termination and superannuation payments) and the adverse effects on employee morale of poor planned redundancies’.

As effective HRM practices are strategic, contributing to the goals and objectives of organizations, SHRM has shown to enhance organizations performance by contributing to employee and customer satisfaction, innovation, productivity, development of favorable reputation and profitability. Employees today are trying to learn new things and organizations are adapting characteristics of learning organizations to address the issues of globalization and changes revolving around like technological changes. HRM functions are interrelated with one another making it vital for organizations to take a holistic view in strategy formulation and implementation to reach the organizational strategic goals and objectives to achieve and sustain the competitive advantage.

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