The Influence Of Strategic Human Resource Management Commerce Essay Example
The Influence Of Strategic Human Resource Management Commerce Essay Example

The Influence Of Strategic Human Resource Management Commerce Essay Example

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  • Pages: 10 (2743 words)
  • Published: August 1, 2017
  • Type: Essay
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According to Salaman et Al ( 2005 ), the essence of performance management is establishing a framework in which performance by human resources can be directed, monitored, motivated and refined, and that the links in the cycle can be audited. The main theoretical foundation of performance management is social psychology, which considers the ways in which people are motivated to perform. The goal-setting theory, introduced by Locke in 1968, argues that goals pursued by employees can play an important role in motivating superior performance. Strategic human resource management (SHRM) involves aligning the broader objectives of the organization with the behavior of its employees. If managers can intervene to establish or adapt the organization's goals in a way that employees perceive as valuable, they can tap into a source of motivation to perform and direct it towards achievin

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g strategic outcomes. Vroom's anticipation theory (1964) suggests that it is the anticipated satisfaction of valued goals that causes an individual to adjust their behavior in a way that is most likely to lead to goal attainment. In practice, if a person perceives that performing in a certain way will bring about a reward they value, they are more likely to strive to perform in that manner.There are issues in public presentation direction systems, as some dimensions are either unavailable from bing direction information systems or may not be measurable. For example, increasing client satisfaction is recognized as a desired outcome, but there is no equivalent measure to assess this. Another problem lies with quantitative measures and their reliability. Profitability, for instance, is often used as a measure, but accountants argue that profits depend heavily on decisions made by

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managers regarding costs, revenues, and timing of financial reporting.

Controversy surrounds all aspects of performance management, particularly assessments and performance-related pay (PRP). Criticism has been directed towards the methodology and underlying philosophy of these systems. Employees often express dissatisfaction with the methods employed by performance management systems, while managers are hesitant to get involved due to its confrontational nature.

Some argue that if there is already commitment from employees, there is no need for performance management, and its enforcement only leads to reluctant participation from an unhappy workforce (Price 2007).Pettijohn et Al (2001) argue against the viewpoint mentioned above, suggesting that a positive attitude towards assessment can be fostered by providing directors with information on the benefits of participating in the rating process and by giving more consideration to measurement standards. The Advisory, Conciliation and Arbitration Service (ACAS) supports these factors, stating that employees may welcome well-designed and implemented appraisal-related wage strategies as a fairer method of recognizing higher-performing individuals. However, ACAS warns that if such strategies are not properly designed and introduced in an environment where trust is high and there is a willingness to adapt to change, employee relations may suffer (ACAS website 2009).

Regarding SHRM constructs, various factors influence performance. These include planning for future needs and attracting talented individuals who meet the organization's current strategic and operational requirements. It also involves providing a favorable working environment, promoting learning and development, sharing knowledge, increasing motivation, enabling effective performance management that drives commitment, and implementing a rewards strategy that values individuals based on their contributions.The demotivation of employees can occur for various reasons, such as uncertainty about their duties and presentation standards, lack of information regarding

their performance, or the perception of unfair performance evaluations. To avoid this, it is recommended to establish performance requirements in terms of challenging but achievable goals, often referred to as stretch goals. It is also important for managers and employees to have a mutual understanding of these goals and the necessary steps to achieve them. Regular, informative, and easily understandable feedback from managers to employees, along with appropriate positive feedback when deserved, allows for the prompt resolution of any performance issues and the implementation of disciplinary measures if necessary. An important aspect is that managers should receive training in performance review techniques, and employees should be fully informed about how the systems work and have their input on this matter considered (Armstrong 2008). According to Gratton (1999), there are three main perspectives on how performance management can be used to regulate performance: focusing on behavior, skills, or outcomes.Monitoring behavior primarily focuses on implementing top-down centralized processes to closely supervise employee performance and use assessment as a tool for correcting deviations. Another approach is using competence models to control behavior, where competences define desirable behaviors and skills, and the administration sets attainment standards, which are a significant part of the evaluation process. This type of control allows for decentralization and provides objective criteria for evaluation. While employees don't choose the performance targets, they have some discretion in how to achieve them. Companies often combine elements of both approaches. However, these performance management methods are inflexible and less suitable for rapidly changing environments. Beardwell et al (2004) argue that current trends in worker performance management pose challenges in an era where emotional labor and knowledge workers are

crucial for organizational success.There has been an increase in job insecurity due to economic uncertainty and the burden placed on line managers to deal with new issues. To address this, reward schemes can be used to identify performance markers and the scorecard method can be used to set interim targets and individual performance goals. The Work Foundation's research suggests that employers who promote performance management allow employees to identify their own training needs, hold regular team briefings, encourage the development of portable skills, link rewards to service through long-service awards, and facilitate in-house brainstorming sessions or focus groups. This approach recognizes that performance management involves implementing broader HR policies to achieve organizational strategic goals and can be achieved through building a strong psychological contract.According to Beardwell et Al (2004), HR practitioners have focused on creating wage systems that are closely aligned with organizational goals and reflect the strategic role wages play in achieving these objectives. However, recent studies suggest that the employment relationship, specifically the wage/effort component, remains contentious with both sides not fully achieving their goals. Armstrong and Baron (2002) describe a model developed by Guest et Al (2000a) that links strategic human resource management (SHRM) with performance. The model suggests that HR practices affect HR outcomes, which in turn lead to lower absenteeism and labor turnover, increased productivity and quality, and ultimately an increase in sales and profitability. Armstrong and Baron mention Huselid's (1995) research on the impact of HR practices on company performance, which involved analyzing responses from 968 US companies. Overall, Huselid found that adopting high-performance work practices resulted in significant decreases in employee turnover and notable increases in productivity and

profits.Huselid stated that the impact of high-performance work patterns on corporate financial performance is partly due to their effect on employee turnover and productivity. He found little to no evidence that internal or external fit increases company performance. He concluded that the simple acceptance of high-performance practices is more important than ensuring they are internally consistent and aligned with competitive strategy.

McCourt and Eldridge (2003) caution against blindly adopting performance management strategies. They argue that organizations often get the behavior they reward, and that performance indicators should be handled with care. Otherwise, there is a risk that employees will solely focus on their performance indicators to the exclusion of other important aspects.

Torrington et al. (2008) identify three different models of performance. The best practice approach assumes that certain HR policies and practices always lead to high performance, and the challenge is to determine what these are. The contingency or fit approach suggests that different HR policies and practices will be required to achieve high performance in different companies, depending on their business strategy and environment.The resource-based stance of the house suggests that both attacks mentioned are inadequate. It proposes that every administration and its employees should be seen as independent entities and that a unique set of HR policies and practices will result in high performance, specific to that organization. According to this perspective, there is no universal approach, and understanding how individuals and processes contribute to organizational performance can only be done within the context of a particular firm.

When it comes to SHRM, its primary goal is to generate strategic capability by ensuring that the organization has the skilled, committed, and motivated employees necessary to

achieve sustained competitive advantage. Its narrower objective is to provide direction in an often unstable environment so that the business needs of the organization and the individual and collective needs of its employees can be met through the development and implementation of coherent and practical HR policies and programs.

Armstrong and Baron (2002) argue that when considering the integration of business and HR strategies, it should be recognized that business and HR issues impact each other and, in turn, influence overall corporate and business unit strategies. Establishing these connections requires taking into account the fact that strategies must also align with changes in both external and internal environments.Fit may be present in a clip, but when circumstances change, it may no longer exist. Chasing after the status quo excessively can hinder the flexibility needed in disruptive situations. The HR scheme may not be clearly defined in some cases, or it may be in an emergent state, making it difficult to achieve a good fit. Various factors hinder the integration between business and HR strategies, including the diversity of processes, levels, and styles. This is exemplified by the idea that each business unit should tailor its HRM policy to its own product-market conditions and competitive advantage, regardless of the HRM policies pursued by the entire business. Another obstacle to alignment between strategies is the gradual nature of business strategy, making it challenging to pinpoint relevant HR issues. A resource-based strategy can serve as a strong foundation for strategic HRM, with change being particularly important in HRM strategies as they focus on the future and changing past practices through managing implementation of change. The implication is that formulating

and implementing HR strategies primarily involve making decisions about what needs to be changed and managing those changes.According to Bratton and Gold (2001), the resource-based SHRM theoretical model emphasizes a unitary perspective of the post-industrial workplace, where goals are shared and trust is high. They argue that proponents of this model overlook the dynamics of workplace trade unionism in strategic considerations. However, the dynamic model focuses on the importance of workers' contribution to the labor process, knowledge and skills, collaboration, proactive leadership, promoting innovation, and fostering learning, as opposed to a duplicative approach.

Daft (2006) mentions that multinational companies based in the US, to implement strategies globally, must have a global mindset and be aware of implementation challenges. Information, control, and reward systems must align with local cultural values and incentives. The recruitment, training, transfer, promotion, and layoff of international human resources present a range of problems not encountered in North America. As an example, one multinational company formed a task force consisting of US employees to review and revise workforce policies in relation to a new strategy. Employees from various levels and functional areas met for several months and surveyed all US-based facilities to ensure broad input. The final draft was reviewed and approved by top executives.Surprisingly, the simplified work-force manual, reducing policies from 120 to 10, faced opposition and hostility from overseas directors due to their lack of a global perspective. These managers falsely assumed that the international units would unquestioningly accept decisions made by the US central office. This aligns with the findings of Hofstede (1994), who studied how national culture affects organizations and identified significant variations in values and behaviors across countries

in four dimensions: Power distance, Uncertainty avoidance, Individualism versus Collectivism, and Masculinity versus Femininity. These factors, particularly power distance and to some extent uncertainty avoidance, influenced the negative response towards a top-down approach driven by business strategy and strategic human resource management. This implies that not all HR practices are strategically relevant, as exemplified by an HR department focused solely on administrative excellence, which may have little impact on gaining new business or market share. Conversely, for knowledge-intensive companies like professional services firms, recruiting specific human capital can make or break the company's success. There are various approaches to aligning business strategy with SHRM strategy.The best-fit attack argues that integrating the SHRM scheme effectively within both the specific organizational and broader environmental context is crucial for its success. However, this approach tends to overlook employees' involvement and the challenges they may face in aligning their interests with the business strategy. Another model, known as psychological contract, tries to align employees' needs with those of the organization by recognizing that HR practices cannot simply manipulate employee behavior for strategic goals, but must also emphasize shared expectations between employees and employers. The best practice approach contends that specific sets of best practices can lead to performance improvements, drawing from industrial psychology's focus on predicting human performance. However, it should be noted that these best-practice models may not always consider contextual factors, as what works well in one environment may not be effective in another. A combined approach of best fit and best practice has resulted in the development of the best-process model, which emphasizes the strategic value of HR practice implementation processes. This approach does not prioritize

constantly changing current HR practices to align with the latest list of best practices, nor does it advocate for strict alignment with business strategy.The text suggests that HR practices evolve through engagement and are an integral part of the overall organizational strategy. Unlike the traditional approach where HR policies and practices are solely generated and implemented by the HR department, this model emphasizes people management as a shared responsibility throughout the organization (Swart et al 2005). Torrington et al (2008) discuss different models of the relationship between business strategy and Strategic Human Resource Management (SHRM). In the separation model, there is no relationship or explicit HR strategy within the organization, which is still the case in some small businesses. The fit model, on the other hand, recognizes employees' key role in implementing the organizational strategy, and SHRM designs its strategy accordingly. This model reflects organizations that align their business objectives starting from senior management, through various functions, teams, and so on. The dialogue model builds upon this relationship by emphasizing the need for two-way communication and discussions. It acknowledges that what may be demanded in the organization's strategy may not always be feasible, requiring alternative possibilities to be considered. However, top management can limit these discussions if they dictate an HR-driven outcome which should be the responsibility of line management according to SHRM.The dominant positions in this state of affairs tend to be those of top management. The holistic model recognizes that the people within the organization are key to competitive advantage in and of themselves, rather than just a means of implementing organizational strategy. HR strategy becomes critical in this case. This concept applies

to companies where overall strategy extends beyond just competitive strategy. Business strategy can encompass various other strategies, including HRM, with each individual part viewed as a piece of a puzzle. This suggests a shared development and some form of integration, rather than a strict adherence to a predetermined business strategy.

The HR-driven model takes this idea to an extreme, placing human resource strategy in a prime position. The argument here is that if people are the key to competitive advantage, it is necessary to build upon their strengths. This model reflects a resource-based strategic HRM perspective and aligns well with the increasing focus on the concept of 'human capital,' where it is the collective nature and quality of the people within the organization that provide the potential for future competitive advantage.

Decisions

The acceptance of theoretical accounts and beliefs about SHRM can impact the performance of organizations, but this impact is limited and the effectiveness of such influence is still a subject of ongoing debate. In knowledge-intensive industries, SHRM clearly plays a role in planning, selecting, and developing employees for the benefit of the companies, but its impact is less significant in other sectors of employment. The implementation of combined business and HR strategies driven from top-down approach may not be effective in multinational companies, especially when there are cultural differences to consider. The relationship between organizational and business strategies has received considerable attention and various theoretical models have been proposed, but successful practical examples depend on specific circumstances and often face challenges due to the fast-paced nature of modern business.

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